European Union: Brexit And Intellectual Property Disputes: What Lies Ahead?

With the UK's transition period with the European Union coming to an end, a number of procedural changes will be taking effect in the new year, which will affect those pursuing or defending intellectual property disputes.

The United Kingdom left the EU on 31 January 2020, with a withdrawal agreement in place bridging the legal regimes that apply before and after the end of the UK-EU transition period, which expires on 31 December 2020.

Holders of intellectual property rights have now received useful clarification as to the impact of Brexit on existing intellectual property rights and on future applications (see guidance provided by the Intellectual Property Office).

However, a number of potential or confirmed changes may affect the ways in which parties will be able to advance intellectual property disputes, with further clarity and confirmation awaited in certain instances.

The key changes affecting those bringing or defending intellectual property proceedings are as follows.

Legal representation

For those who wish to either register a new EU trademark or commence fresh EU trademark proceedings after 1 January 2021, it is worth noting that UK legal representatives will no longer be able to represent clients to the EU Intellectual Property Office (EUIPO). Applicants will instead need to appoint an EEA attorney to represent them.

UK legal representatives can, however, continue to represent their clients before the EUIPO in cases that are ongoing as at 1 January 2021.

In the event of parallel proceedings in the UK and the EU, this is likely to result in an increased cost to litigants, who will now be required to instruct legal representatives in both jurisdictions.

Changes to address for service

The UK Intellectual Property Office (UKIPO) is due to report back following a consultation earlier this year in relation to its proposal to change the address for service rules.

As matters stand, in any patent, trademark, or design applications or proceedings, an address for service outside of the UK or Channel Islands is acceptable, provided that it is within the EEA. However, the UKIPO is proposing to restrict the address for service to the UK or Channel islands from 2021. International businesses issuing applications or proceedings in relation to UK intellectual property rights would therefore be unable to take such action without instructing a representative based in the UK.

As at the time of writing, the results of the consultation are unknown, and we await further clarification on the proposed change with interest.

Power of the courts to depart from retained EU case law

Perhaps the most controversial of the changes affecting litigation relates to the powers of domestic courts post-expiry of the transition period.

From 1 January 2021, a new body of UK law, known as 'retained EU law', will be created, based on the EU law that applied previously. Without further legislation, only the Supreme Court and the High Court of Justiciary in Scotland (HCJ) would be able to depart from retained EU case law.

However, in new regulations that are currently in draft form (the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020), it is proposed that a number of further courts will not be bound by EU case law from 1 January 2021, including, in England and Wales, the Court of Appeal. The Regulations provide that, for these appellate courts, in deciding whether to depart from retained EU case law, the test to be applied is simply a consideration of whether it is 'right to do so'. The Regulations do not specify any further factors for consideration by the courts.

Interestingly, these changes were proposed following a consultation by the government in which respondents voiced concerns about the extension of the powers in question beyond that of the Supreme Court. The regulations would apply to other areas of law, and not just intellectual property disputes, but the Chartered Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys published a response to the consultation noting the likely impact on intellectual property infringement claims in particular. The response submitted that such an approach would simply lead to larger numbers of appeals and to piecemeal changes to the law that would lead to uncertainty and inconsistency, affecting SMEs in particular.

As at the time of writing, the draft Regulations have not yet been approved. However, in the event that both the Supreme Court and Court of Appeal in England and Wales have the ability to set new judicial precedent in relation to EU case law, we will likely see an increase in appeals and a resulting period of some uncertainty on particularly contentious or ambiguous aspects of EU case law.

What next?

As with the broader position on Brexit, the impact remains somewhat unclear in relation to intellectual property disputes from 1 January 2021.

Regardless of which appellate courts are granted the power to depart from EU case law, we are likely to see the emergence of a significant body of case law over the coming years in relation to the interpretation of EU intellectual property laws domestically, with an inevitable degree of uncertainty arising for litigants as a result.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.