Licensed to Brexit

With Brexit moving closer, this is an opportune time to give your intellectual property licenses a health check to ensure that they are future-proofed.

Territory:

The most obvious consequence of Brexit for licensing is where the territory refers to the European Union. There is no clear ruling on how this will be interpreted by the courts once the UK leaves the EU. Interestingly, similar issues applied to the definition of the European Union in older agreements where they fell to be interpreted after additional countries joined the EU. For whatever reason, to our knowledge this issue hasn’t come before the courts so there is no definitive guidance. We would recommend that in new agreements where the territory is to be the EU, that it should be specified what exactly is intended. This could be “the European Union as it is constituted from time to time” (thus excluding the UK after Brexit) or “the European Union as it is constituted at the date of this Agreement” (so continuing to include the UK for pre-Brexit agreements). Another possibly better solution is to simply name the counties intended to be covered. This would be consistent with agreements covering other supranational territories (in the same way as you would usually not refer to a territory as “Asia” or in “Africa” without naming the countries).

For agreements which are already in place referring to the European Union, it is a commercial decision whether to revisit them now or wait until Brexit actually occurs to do so. In any event, it would be prudent to agree what is intended rather than waiting for a dispute to occur. This doesn’t necessarily involve a new formal agreement: a side letter would usually suffice.

EU trade marks:

When Brexit occurs, the unitary EU rights (EUTMs and RCDs) will cease to cover the UK. Some reregistration or revalidation procedure is expected but ultimately IP rights holders who choose to retain UK protection will end up with one registration covering the remaining EU countries and one registration covering just the UK. Existing licences which refer to the EUTM may not extend to the new UK registration. This can be considered in advance for new licences. One option would be to use “patent licence” type language referring to any divisions, extensions, continuations, reregistrations, revalidations or other registrations which derive from the EUTM. For existing licences again it is a commercial decision whether to deal with it now or wait for Brexit to occur. It might help the clarity of any amendments to wait until the terminology of the new procedure is agreed.

Two further issues to bear in mind are choice of law (the law of England and Wales will start to depart from EU law as soon as Brexit occurs) and parallel imports (once the UK leaves the EU then unless there is a customs agreement, goods first put on the market in the UK cannot necessarily be freely imported into the EU and vice versa).

These are just the main issues relating to one particular area of IP and the implications of Brexit are deep and far-reaching. Follow us for more insights as the process continues.

If you would like to learn more on this issue, please contact Niamh Hall, European Trade Mark Attorney.

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