What impact will a BREXIT without a withdrawal agreement as of March 30, 2019, have on your IP assets, in particular patents, trademarks & designs, domain names?

Paris, January 19, 2019 – UK MPs overwhelmingly rejected the negotiated exit agreement of the EU by 432 votes against 202 on Tuesday January 15, 2019.

A Brexit becoming effective on March 30, 2019¹ without a withdrawal agreement, is now the most likely scenario.

Of course, anything is possible, including a change of British government and/or a new referendum.

Pragmatically, the BREXIT date can be postponed. Article 50 of the Treaty on European Union provides, for example, that the European Council, in agreement with the Member State concerned, in this case the United Kingdom, may decide to extend this period. This nevertheless requires the unanimity of the Council.

A new withdrawal agreement may still be found. However, given the European Council’s political declaration of December 13, 2018, according to which “[t]he Union stands by this agreement and intends to proceed with its ratification. It is not open for renegotiation”, the margin of maneuver seems quite narrow.

It is therefore now worth considering a possible “hard” exit of the United Kingdom from the EU. On the morning of March 30, 2019, the United Kingdom would wake up as a third-party country with regard to the European Union.

Such an exit, without a transitional period or supervision in particular re-establishing borders and customs duties, would obviously have substantial effects in some areas, for example regarding the circulation of persons and of products such as drug supplies.

Would such a hard exit have patent effects?

At the beginning of 2019, we can say that no, a BREXIT would not have a direct effect on the field of patents².

A BREXIT would clearly also have no direct effect on any patents filed outside the United Kingdom.

A BREXIT would also have no direct effect on patents applicable in the United Kingdom, as the BREXIT would only have an impact on securities governed by the EU law, while patent titles currently applicable in the United Kingdom are not subject to EU law.

National patent applications filed in the United Kingdom and national patents granted in the United Kingdom are in no way affected by BREXIT. They will continue to be examined, issued and maintained in force in accordance with the unchanged national rules applicable in the United Kingdom. The exercise of resulting rights is not otherwise affected and will continue to be implemented according to known rules.

European Patents are granted by the European Patent Office (EPO), which is an organ of the European Patent Organization, supranational and independent of the European Union. European patents designating the United Kingdom are therefore also not impacted by a possible BREXIT. They will therefore be examined and granted by the European Patent Office, in accordance with the unchanged provisions of the European Patent Convention. The validation and maintenance in force of European patents granted by the EPO in the United Kingdom and that designate the United Kingdom, will remain subject to national provisions in effect in the United Kingdom.

However, the BREXIT could have an impact on the Unified Patent court and indirectly on the Unitary patent.

The International Agreement signed in Brussels on February 19, 2013 relating to a Unified Patent Court could theoretically enter into force as soon as it is ratified by Germany, since 16 states have already ratified this agreement, including France and the United Kingdom.

However, the entry into force of this Agreement in the short-term is very uncertain. It will probably not occur before 2020.

On one hand, it seems impossible for Germany to proceed with this ratification before the Constitutional Court has ruled on an appeal submitted in June 2017³.

On the other hand, if the United Kingdom leaves the European Union on March 30, 2019, it is mathematically impossible for the Unified Patent Court to enter into force before that date⁴.

The majority of informed observers agree that the text of this Agreement will need to be adapted to this hypothesis.

What about industrial property rights governed by EU law (CCP, trademarks & designs, plant variety certificates, geographical indications) in case of BREXIT without a withdrawal agreement?

The measures announced by the current UK government regarding impacted securities governed by an EU Regulation can be found in a guide accessible here. They consist schematically of introducing into the British law provisions necessary to ensure the continuity of rights deriving from Community titles. It is to be hoped that in the event of a change of government, this same system, which is in the interest of all rightholders, is continued.

This guide deals in particular with questions of supplementary protection certificates derived from British national patents in the pharmaceutical or agrochemical field, plant variety certificates, trademarks & designs, and geographical indications.

This guide also provides for the retention of provisions resulting from earlier transpositions of European Directives in UK law.

And for your domain names?

As a reminder, the registration of a domain name in <.eu> is subject to a residence or establishment requirement within the European Union. This local presence requirement is also applied for the following extensions: <.bg>, <.fr>, <.hu>, <.it>, <.se>, and <.sk>.

Thus, the exit of the United Kingdom from the European Union will impact companies established in the United Kingdom and/or individuals residing there, which will no longer be eligible for registration of domain names in these extensions. Similarly, companies and individuals domiciled in the UK will no longer be able to renew their registered domain names prior to withdrawal (in the aforementioned extensions) and may even see these names expunged by the registers in charge of these extensions.

What measures to consider in the immediate future?

It is essential to take the time to analyze your portfolio of intellectual property titles.

For patents, no urgent action seems necessary except to monitor the entry into force of the Unified Patent Court and its possible application in the United Kingdom.

However, for community-level securities and domain names, the future situation needs to be anticipated in order to secure your portfolio and take the necessary measures in the event that BREXIT becomes effective on March 30, 2019, without a transition period.

Naturally, all of REGIMBEAU’s teams follow these questions carefully, and are at your disposal to answer your questions and accompany you on any issues that may arise.

¹ BREXIT is officially scheduled at 23:00 GMT (London time) on March 29, 2019, thus at midnight on March 29, Luxembourg and Paris time.
² However, the BREXIT will abolish the free circulation of goods between the United Kingdom and the European Union and should therefore change so-called “parallel import” practices to or from the United Kingdom.9
³ The action brought before the German Constitutional Court in June 2017 was published in mid-August 2018. This action, brought by a German lawyer, Ingve Stjerna, seeks to oppose the ratification of the Agreement on a Unified Patent Court. It maintains that this Agreement would be contrary to the German Constitution in that it would affect the sovereignty of Germany. The complaint further argues that the Bundestag’s vote to ratify the Agreement would not have received a sufficient number of votes.
⁴ According to the provisions of Article 89 of the Agreement on a Unified patent Court, this Agreement shall enter into force no earlier than the first day of the fourth month following the deposit of the instrument of ratification by Germany, which now leads at the earliest to May 1, 2019.