March 2022 Update: Brexit and IP law

This update covers the implications of the UK’s withdrawal from the European Union for intellectual property since the 5th edition of Contemporary Intellectual Property was published in September 2019.

Contents:

Overview (Chapter 1)

Under the European Union (Withdrawal) Act 2018 (EUWA), the European Communities Act 1972 (ECA) was repealed on 1 January 2021 – the end of the implementation period. 1 The ECA had provided the main legislative mechanism through which EU law took effect in the UK.  The EUWA provided that EU-derived domestic legislation (say, the provisions of the Registered Designs Act 1949 (as amended) which had been updated to give effect to the EU Designs Directive) 2 continued in domestic law. 3 The EUWA also provided that direct EU legislation (such as Regulations – here of interest for IP and competition) also continued as part of domestic law. 4

Specific issues arose for EU IP rights such as EU trade marks or Community designs, as they are defined in the relevant EU Regulations as covering the territory of the EU. As explained further in the relevant sections below, this meant that those EU-wide IP rights would no longer cover the UK after Brexit took effect. This was addressed in the withdrawal agreement reached in 2019 between the EU and UK, with a transition period to 31 December 2020 (2019 Withdrawal Agreement). 5 In essence, this provided that any such registered EU rights were to be transformed into comparable registered and enforceable national rights in the UK and that IP rights which were exhausted (through the free movement/IP interface) before the end of the transition period would be exhausted in the EU and also in the UK. 6    

In the case of IP rights which had always been national, the EU had harmonised a number of key aspects of IP (though this was less so in respect of patents) and a substantial part of UK IP law was now derived from, or is framed in light of, EU legislation and decisions of the CJEU.  Looking forward, the UK courts have discretion as to whether they ‘have regard to anything done on or after exit day by the European Court, another EU entity or the EU so far as it is relevant to any matter before the court or tribunal’. 7 Some areas of IP may, therefore,  follow a different direction to the developing European Union jurisprudence, as preliminary references to the CJEU will no longer be possible from courts in the UK and courts in the UK are no longer required to follow new decisions of the CJEU. Further, by The European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, 8 existing CJEU decisions can now be departed from by appellate courts: the Court of Appeal in England and Wales, the Inner House in Scotland, the Court of Appeal in Northern Ireland, and the UK Supreme Court.

Yet it should be borne in mind that much of this EU law, although not all, builds on and implements international treaties to which both the UK and other EU member states are party (eg Berne, Rome, WCT, WPPT, TRIPS) and so there is less flexibility than might initially appear. Further, under such treaties, member countries provide copyright protection for works originating in or made by nationals of other countries under the ‘national treatment’ rule.

The importance of these international agreements is confirmed in the Trade and Cooperation Agreement between the EU and the UK which came into force on 1 May 2021 (TCA). 9 The TCA’s objective is “to facilitate the production, provision and commercialisation of innovative and creative products and services… by reducing distortions and impediments to … trade, thereby contributing to a more sustainable and inclusive economy; and ensure an adequate and effective level of protection and enforcement of intellectual property rights”. 10

At a general level, the agreement  “complements and specifies” the obligations of parties under TRIPS and any other IP treaties to which the UK and EU may be parties. 11 National treatment obligations are affirmed regarding some agreements (with these obligations covering rights management information and the circumvention of technical protection measures) 12 and ,unless otherwise stated, the UK or the EU can provide more extension protection and enforcement paths. 13  So once again, this is an agreement in relation to IP with minimal levels of protection which encourages a maximalist approach.  

The EU and the UK are to cooperate regarding implementation, including exchanges of information and experience regarding enforcement, protection and training, 14 and the EU and UK agree to facilitate voluntary and practical initiatives to reduce infringement. 15  

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Copyright (Chapters 2–7)

Chapter 2

Most of EU-derived domestic legislation in relation to copyright, and related CJEU case law delivered prior to the end of the transition period, will continue to be applicable in domestic law, as ‘retained EU law’. 16 Much of this EU-derived law builds  and implements on minimum standards of protection provided in relevant international treaties to which both the UK and other EEA member states are party. As such, there are no major changes to UK copyright law from 1 January 2021, 17 and reciprocal protection remains in place under the UK’s continued membership of the main international treaties on copyright. Specific changes, applicable from the end of the transition period, that are worth noting are set out below.

UK copyright law is likely to diverge from EU copyright law in the near future, as the UK is neither required to, nor does the UK government intend to, implement the provisions of the EU Directive on Copyright and related rights in the Digital Single Market 2019. 18 CJEU case law has played an important role in harmonising some of the key concepts within copyright and in the medium term, divergence may also result where the relevant UK courts choose to adopt a different path that is less aligned with the interpretation or approach under future CJEU jurisprudence.

Chapter 3

The rules on subsistence of copyright protection remain unchanged. Although references to EEA have been removed, 19  in relation to qualification for copyright protection, 20 reciprocal protection will continue under the terms of relevant international treaties as both the UK and EEA countries are party to them.

The rules on duration of copyright protection remain unchanged but the preferential treatment previously given to EEA works has been removed. 21 From 1 January 2021, for the purpose of copyright duration, EEA works are treated in the same way as non-EEA works i.e. the duration of copyright is that to which the work is entitled in the country of origin, provided this does not exceed the period provided in the UK. 22 However, this will not have any immediate impact on UK or EEA works because of previous harmonization of the term of protection.

Chapter 4

The scope of protection for copyright works remains largely unchanged, except that references to EEA have been removed or corrected. 23 Reciprocal protection will continue under the terms of relevant international treaties as both the UK and EEA countries are party to them.

The public communication right is a restricted act where CJEU jurisprudence has had a major influence. The recent Court of Appeal decision in TuneIn Inc v Warner Music 24 provides an early indication as to how UK courts might deal with retained EU law, and how they might view post-Brexit CJEU judgments on previously harmonised aspects of copyright law. In this case, the defendant contended that the court should exercise its power to depart from retained CJEU jurisprudence on the public communication right. However, it was held that in the circumstances of the case, it would be undesirable for the court to depart from retained EU law on the subject. 25 Arnold LJ also found that a recent CJEU decision on the subject given after the end of the transition period and not part of retained EU law, and consequently not binding on the UK courts, to be still highly persuasive. 26 It remains to be seen whether UK courts will continue mostly to follow retained EU law, or whether they will closely align with post-Brexit CJEU judgments on copyright issues.

Chapter 5

The scope of copyright exceptions remains largely unchanged, unless noted otherwise in this update (e.g. the orphan works exception). Reciprocal protection will continue under the terms of relevant international copyright treaties as both the UK and EEA countries are party to them.

The UK’s implementation of both the EU Marrakesh Treaty Directive and Regulation has been retained in UK law. 27 Although the UK was only party to the Marrakesh Treaty via the EU, it has ratified the treaty in its own capacity since leaving the EU 28 and the treaty entered in force with respect to the UK on 1 January 2021. 29

Chapter 6

The UK has retained the resale right as enacted under the Artists’ Resale Right Regulations 2006, except that references to EEA have been removed and replaced by the United Kingdom. 30 Consequently, the UK government guidance notes the following implication: “Nationals of the UK and other countries that provide reciprocal treatment for UK nationals (including EU member states) will continue to receive resale rights in the UK and those countries. This is in accordance with the Berne Convention and provisions in the UK/EU TCA.” 31

The EU Collective Rights Management Directive requires CMOs in the EEA to represent, on request, right holders from any EEA member state unless there are objectively justified reasons not to do so. 32 After the end of transition period, EEA CMOs are not required to represent UK right holders or to represent the catalogues of UK CMOs for online licensing of musical rights. 33 However, the TCA calls for promotion of cooperation between CMOs. 34 Obligations on UK CMOs, resulting from the implementation of the Collective Rights Management Directive, have been retained.

The UK exception on orphan works, 35 created as a result of the EU Orphan Works Directive 2012, has been repealed from the end of the transition period. 36 This means that UK cultural heritage institutions (CHIs) are not able to rely on the exception for orphan works made available online in the UK and EEA, both before and after the transition. UK CHIs who to wish to make orphan works available online would need to pursue other options such as seeking a licence under the UK’s orphan works licensing scheme 37, or relying on other copyright exceptions as and where applicable.

Chapter 7

The sui generis database right has been retained domestically. As such, from 1 January 2021, only UK citizens, residents, and businesses are eligible for new database rights in the UK. 38 However, UK citizens, residents, and businesses are no longer eligible to receive database right protection in the EEA for databases created after the transition period. Consequently, the UK government guidance notes the following implication: “UK owners of databases created on or after 1 January 2021 should consider whether they can rely on alternative means of protection in the EEA – for example licensing agreements or copyright, where applicable.” 39 Database rights that existed in the UK and EEA prior to 1 January 2021 will continue to exist until the end of their duration, as they are guaranteed by the 2019 Withdrawal Agreement. 40

Similar to the protection of copyright, the scope of performers’ rights will remain largely unchanged. Although specific reference to EEA has been removed 41 from qualification for performers’ rights, 42 reciprocal protection will continue under the terms of relevant international treaties as both the UK and EEA countries are party to them.

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Designs (Chapters 8–9)

Chapter 8

The law relating to UK national registered designs will continue unchanged unless the Registered Designs Act 1949 is amended or a UK appellate court re-interprets any existing relevant CJEU case law, as noted above.

The major Brexit-related issue in terms of registered design protection is the impact of Brexit on the registered Community design system. Registered Community designs are defined in Community Design Regulation 6/2002/EC as taking effect 'throughout the Community’ (Art 1(3)) and from the end of the Brexit transition period, that no longer includes the UK. As a result, from 1 January 2021, registered Community designs no longer cover the territory of the UK. This loss of protection in the UK affects all registered Community design rightholders.

This issue was addressed in the 2019 Withdrawal Agreement which, in essence, provided that all holders of a Community design registered or granted before the end of the transition period would, free of charge, become holders of a comparable registered design in the UK. 43 This has now been put into effect through amendment to the RDA 1949. 44 Holders of Community design applications pending as at 1 January 2021 were required to re-file in the UK (including paying the standard UK filing fees), although if re-filed within 9 months of the end of the transition period the original Community design filing date could be retained. 45

Chapter 9

As a ‘home-grown’ form of IP protection, UK unregistered design right under Part III of the Copyright, Designs and Patents Act is unaffected by Brexit. However, unregistered Community designs faced the same problem as registered Community designs (above) in terms of loss of territorial coverage of the UK. This issue was resolved by providing that the holder of any unregistered Community design subsisting as at 1 January 2021 would become the holder of a comparable right in UK law, called the ‘continuing unregistered Community design’, which would last for a period of time at least equal to the remaining period of protection of the original unregistered Community design. 46

As a category of IP right, continuing unregistered Community designs will exist for only a relatively short period of time: their maximum duration can be at most three years from the end of the transition period, so most will soon expire. However, going beyond the requirements of the 2019 Withdrawal Agreement, to ensure that UK law continues to recognize a form of design right comparable to the unregistered Community design, the UK has also created a new form of unregistered design protection, called the ‘supplementary unregistered design’, in terms essentially the same as Community UDR protection but instead covering just the UK. 47 

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Patents (Chapters 10–12)

Under the TCA, 48  the EU and the UK are to ensure consistency with the Doha Declaration and complement article 31 bis and the Annex regarding compulsory licensing and import and export. There shall be extensions of periods of protection for plant and medicinal products to take into account the amount of of time needed to get regulatory protection. 49 

The agreement does not refer to the United Patent Court (UPC).  The UK withdrew its ratification  of the UPC Agreement in July 2020. 50

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Trade marks (Chapters 13–15)

The position for registered trade marks is similar to that outlined above in relation to registered designs. The law relating to UK national registered trade marks will continue unchanged unless the Trade Marks Act 1994 is amended, or a UK appellate court re-interprets relevant existing CJEU case law. The most significant Brexit-related issue is the impact on the European Union Trade Mark or ‘EUTM’ (previously called the ‘Community trade mark’ or ‘CTM’). EUTMs are defined in EU Trade Mark Regulation 2017/1001/EU as taking effect 'throughout the Union’ (Art 1(2)). As for registered Community designs, the corresponding loss of territorial protection in the UK was resolved in the 2019 Withdrawal Agreement by providing that holders of EUTMs registered or granted before the end of the transition period would become holders of comparable registered trade marks in the UK free of charge. 51 This has been effected by amendment to the TMA 1994. 52  Holders of EUTM applications pending as at 1 January 2021 were required to re-file in the UK (including paying UK filing fees), but retained the original EUTM filing date if the application was re-filed within 9 months of the end of the transition period. 53

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Passing off, breach of confidence, and information (Chapters 16–18)

Chapter 16

The tort of passing off is a common law action and is therefore unlikely to be affected by the withdrawal of the United Kingdom from the European Union  

Chapter 17

The implications of the United Kingdom’s withdrawal from the European Union on the law of breach of confidence are likely to be limited. The substance of breach of confidence as a common law action is unlikely to be affected. The Trade Secrets Directive (Directive 2016/943) forms part of retained EU law. The UK regulations giving effect to the Directive – Trade Secrets (Enforcement, etc.) Regulations 2018 54 – came into force on 9 June 2018, before the end of the implementation period on 1 January 2021. The UK did not implement all of the Directive’s provisions and the enforcement provisions implemented did not, in any event, fundamentally change UK law.

Trade secrets are also considered in the TCA, 55 and the definition reproduces that within the Trade Secrets Directive. Looking forward, it is possible that divergence will occur between the UK and the EU Member States in the regulation of trade secrets.

Chapter 18

The implications of the United Kingdom’s withdrawal from the European Union are likely to be limited in the context of passing off, as noted above, and misuse of private information. While the related protections offered by data protection law are outside the scope of the chapter, it is relevant to note that the EU General Data Protection Regulation (GDPR) remains as part of retained EU law within the UK. In any event, the Data Protection Act 2018 (DPA) had already largely incorporated the requirements of the GDPR, while the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations) 56 made some modifications to the UK GDPR as well as the DPA.

While the TCA 57 states that the “parties affirm their commitment to ensuring a high level of data protection”, the UK may now diverge from the EU in its approach to data protection. In September 2021, the UK government launched a public consultation on the creation of a new regime for data protection, called “Data: a new direction”, and it is still to be seen whether there will be substantial changes to data protection law in the UK.

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Free movement of goods and competition (Chapters 19–20)

Chapter 19

The 2019 Withdrawal Agreement provides that the parties can establish their own regimes for exhaustion of rights. The TCA makes this explicit, confirming “the freedom of the parties to determine whether and under what conditions the exhaustion of intellectual property rights applies”. 58

The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 59 came into effect at the end of the implementation period. The regulations provide that the ability to bring an action relating to the exhaustion of rights before 1 January 2021 will continue. The Regulations also amended copyright, registered designs and trade mark legislation to ensure that goods and services placed on the market in the UK or the European Economic Area, called the ‘UK-EEA area’, are covered by the exhaustion rules. This means that the owners of IP rights placing goods and services on the market in the EEA are not then able to control distribution within the UK.

The Intellectual Property Office held a consultation on the future exhaustion regime in the UK in 2021. As of January 2022, having determined that the outcome of the consultation was insufficient to identify an appropriate course of action, no decision has been taken on the reform of the exhaustion regime.

The question also remains whether the UK may, or ought to, recognize international exhaustion (meaning that where the owner of IP rights has marketed goods anywhere outside of the UK, the owner cannot then prevent distribution within the UK).

Chapter 20

In the TCA, the UK and EU agreed 60 to have legislation addressing anticompetitive agreements  and abuse of a dominant position. Exemptions are permitted in pursuit of legitimate public policy objective, providing they are transparent and proportionate.

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IP enforcement (Chapter 21)

Much of the law relating to enforcement of IP rights in the UK is domestic in origin and unaffected by Brexit. The IP Enforcement Directive was implemented into UK law by the Intellectual Property (Enforcement, etc.) Regulations 2006 61;the relevant law will continue unchanged unless the 2006 Regulations are amended or relevant CJEU case law is re-interpreted by the UK appellate courts.

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1 EUWA 2018, s1.

2 The updating had been done by statutory instrument under the ECA.

3 EUWA 2018, s2(1), 7(1).

4 EUWA 2018, s3(1).

5 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, EUR-Lex - 12019W/TXT(02) - EN - EUR-Lex (europa.eu) (‘2019 Withdrawal Agreement’), see Preamble para 5, 2 and Art 126. New Withdrawal Agreement and Political Declaration - GOV.UK (www.gov.uk)

6Articles 54(1), (3)-(6), 55-9, and see also art 60 regarding patent supplementary protection certificates and 61 regarding exhaustion of rights. 

7 EUWA 2018, 6(2)

8 SI 2020/1525

9 The EU-UK Trade and Cooperation Agreement | European Commission (europa.eu)

10 Article 219

11 Article 220, see also 222 and 272

12 Article 224

13 Article 220.

14 Article 273

15 Article 274; See also the Trade Specialised Committee on Intellectual Property (art 8(1)(g)

16 ss.2 and 6, European Union (Withdrawal) Act 2018.

17 Except that the Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 have removed or corrected various references to the EU, EEA, or member states within domestic copyright legislation in the UK, as relevant.

18 UK Parliament, ‘Copyright: EU Action’, Question for Department for Business, Energy and Industrial Strategy, 16 January 2020 available at https://questions-statements.parliament.uk/written-questions/detail/2020-01-16/4371

19 See, eg, regs.14-16, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

20 See, eg, ss.154-156, CDPA 1988.

21 regs.4-8, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

22 See, eg, s.12(6), CDPA 1988.

23 See, eg, reg.4 Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019.

24 [2021] EWCA Civ 441.

25 [2021] EWCA Civ 441 at paras 73-89, 182-184, and 196- 202.

26 [2021] EWCA Civ 441 at para 91.

27 References to member state of the EU, as relevant, have been removed, through reg.9, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

28 UK Government, Guidance on ‘Marrakesh Treaty’ (2 May 2019) available at https://www.gov.uk/guidance/the-marrakesh-treaty

29 WIPO, Marrakesh Notification No. 75, Ratification by the United Kingdom of Great Britain and Northern Ireland (1 October 2020) available at https://www.wipo.int/treaties/en/notifications/marrakesh/treaty_marrakesh_75.html

30 reg.29, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

31 UK Government, Guidance on ‘Protecting Copyright in the UK and EU’ (30 January 2020) available at https://www.gov.uk/guidance/protecting-copyright-in-the-uk-and-eu#artists-resale-right

32 UK Government, Guidance on ‘Collective rights management in the EU’ (30 January 2020) available at https://www.gov.uk/guidance/collective-rights-management-in-the-eu

33 UK Government, Guidance on ‘Collective rights management in the EU’ (30 January 2020) available at https://www.gov.uk/guidance/collective-rights-management-in-the-eu

34 Article 232, UK EU Trade and Cooperation Agreement, 30 December 2020.

35 ss. 44B and 76A, and Schedule ZA1, CDPA 1988.

36 regs.11, 12, and 23 Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

37 This UK licensing scheme remains in place with only a minor amendment in that diligent search does not require a search of relevant EUIPO databases. See reg.31, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

38 References to EEA, as relevant, have been removed and replaced by United Kingdom, through reg.28, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

39 UK government, Guidance on ‘Sui generis database rights’ (30 January 2020) available at https://www.gov.uk/guidance/sui-generis-database-rights

40 Article 58, Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as endorsed by leaders at a special meeting of the European Council on 25 November 2018.

41 reg.22, Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019.

42 s.206, CDPA 1988.

43 Withdrawal Agreement 2019, Art 54(1)(b).

44 RDA 1949, section 12A and Schedule 1A.

45 Withdrawal Agreement 2019, Art 59; RDA 1949, section 12A and Schedule 1A.

46 Withdrawal Agreement 2019, Art 57; Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019/638, reg 4.

47 Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019/638, reg 3.

48 Article 250

49 Article 251

50 Written statements - Written questions, answers and statements - UK Parliament

51 Withdrawal Agreement 2019, Art 54(1)(b).

52 TMA 1994, section 52A and Schedule 2A.

53 Withdrawal Agreement 2019, Art 59; TMA 1994, section 52A and Schedule 2A (as amended).

54 SI 2018/597

55 Article 252

56 SI 2019/419

57 Article 769

58 Article 223

59 SI 2019/265

60 Art 359

61 SI 2006/1028