Brexit: the new EU IP Landscape
29 July 2016
Following Britain’s vote to leave the EU, many businesses are concerned about what the impact will be on their IP portfolio. Our team of experts, joined by former shadow Foreign Secretary Douglas Alexander, talk you through the impact of Brexit on the EU IP landscape.
Presenter: Ladies and Gentleman thank you for standing by and welcome to the Pinsent Masons Brexit – the new EU IP landscape webinar. Before we begin I must advise you that today’s webinar is being recorded and that all participants are currently in the listening only mode for the duration of the call. Our presentation today will be followed by a question and answer session. To submit a question to the presenters please type it into the Q&A panel at the bottom right hand corner of your screens and click the send button to submit your question to the queue. We will answer as many questions as possible at the end of the session. Finally if you experience any technical difficulties during today’s web seminar please press *0 on your telephone keypad or send a chat message to web support. Now without any further delay I would like to hand the conference over to one of your speakers today Deborah Bould – please go ahead.
Deborah Bould: Hello everybody and welcome. Thank you very much for joining our webinar today on the new European IP landscape after the UK’s vote to leave the EU. My name is Deborah Bould and I am a partner in the Pinsent Masons London IP team and I specialist in patent litigation. I am delighted to be joined today by my partner Adrian Murray who is also based in London and is a Patent and Trademark Attorney, by my partner Emmanuel Gougé who is based in Paris and heads our French IP Practice and by my partner Mark Holtorf who is based in Munich and leads our German IP Practice. I am also delighted to be joined by Douglas Alexander, a former UK Labour Member of Parliament and strategic advisor to Pinsent Masons who I know will bring invaluable political insight to our discussions today. Amongst the various senior positions he has held Douglas was Minister for Europe and Minister for Trade and Investment under Tony Blair’s government and was Shadow Foreign Secretary under Ed Miliband’s leadership.
Politics has a heightened importance in the strange new world that we find ourselves in after the Brexit vote and I am sure that Douglas’ insights will be of great interest to you. We will be covering two areas of IP today where Brexit will be most keenly felt in the world of IP. First, in relation to registered IP rights and second, the planned new unitary patents package. Adrian will speak about the impact on registered IP rights and Emmanuel, Mark and I will speak about the unitary patent package which is currently on hold to give the French, German and UK views respectively. We have been keeping our ears to the ground to find out what government industry and IP professionals’ organisations want to happen and then Douglas will also help us with insights on what is politically realistic rather than what is desirable.
We will expect to speak for about 35 minutes with 10 minutes of questions at the end. I’ll hand over to our first speaker Adrian Murray.
Adrian Murray: Thank you Deborah.
The purpose of my part of the talk is to take a high level whistle stop trip through the various different types of registered IP rights, what the current regime is now and how we envisage that it may change post-Brexit. Also having a bit about what people should be doing and thinking about now and in the longer term. So the first intellectual property registered rights I will cover are European Union Trademarks and Community Registered Designs. These essentially apply for centrally granted and centrally renewed. They are unitary rights having affecting all members states of the EU. If companies do not wish to go for full European Union country protection they can apply nationally for their trademarks and registered designs which are granted nationally and are renewed nationally. However, community rights tend to be more cost-effective and administratively straight-forward because companies don’t have to apply for several applications for several different countries in different languages at the same time. You can get single pan-European protection for your trademark or your new design via a single application process. That’s the current system. So what we expect to change post-Brexit. What’s going to happen to these pan-European rights? Well obviously the UK won’t be part of the EU and so it’s envisaged that the EU rights will no longer cover the UK. Does that mean that the right-holders will lose protection in the UK? I think the answer to that is probably not. However, there are a number of possibilities about how the entry into force in the UK are parallel trademark and registered design rights will come into effect.
I have outlined the three most probably on this slide. Firstly, there is automatic Brexit mission in the UK so by that I mean that community rights will be recognised in the UK as if the UK had not left the EU and those rights will be recognised within the UK.
Second is the automatic creation of parallel UK registrations so for this scenario on a given date UK registrations providing the same level of coverage as the EU rights would come into effect without the owner of the community right having to do anything.
The third option is a variation on point 2 which is a similar creation of parallel UK trademark and design registrations but requiring the owner of the community right to do something opt-in or apply for re-registration in the UK of their community right.
With option three if the applicants have to do something there is the risk of missing a deadline or some of the requirement being missed meaning that there is the potential for the right no being registered in the UK and therefore my advise to registered right holders is to keep a very keen eye out for any news in terms of when they have to do things to re-register the rights in the UK to ensure that no opportunities are missed. For number three as well, it is quite likely I think that some form of fees will have to be paid for re-registration of community rights in the UK. Currently I think there are 1.2 million community trademarks on the books and obviously it is quite an administrative burden for the UK Trademark Registry to introduce 1.2 million UK trademark registrations onto their books so who is going to pay for that? I think it is reasonably likely to expect that the right-holders will be asked to pay for that and therefore companies having large trademark portfolios who would be interested in re-registering their rights in the UK should factor this into their forecasting of costs for managing their trademark portfolios in the coming years.
So, moving onto Patent, there is much less change envisaged for this type of Intellectual Property right. As many people will know, like trademarks and registered design there is a single European application system however this is not governed by EU law, it is governed by the European Patent office. European Patent Applications are applied for via a single application which is lodged at the European Patent Office and designates the member states of the EPO and to be clear it is not just the EU member states which are member states of the EPO. Countries such as Switzerland, Turkey and Norway are also members of the European Patent Organisation and those countries are covered by European Patents.
So what happens? You file your application and once it has been granted, in order for it to come into effect formal steps needs to be taken in the territory of interest known as validating the patent. Post-Brexit the system will work in the same way. The biggest change will be once the Unified Patent System comes into effect and I will leave Deborah and some of the other speakers to talk about the Unified Patent System in a little bit more detail, however, under the new system if a company wants protection across the EU then they will be able to obtain a Single Unified Patent which covers all participating EU members states and this will be achieved by a single validation step rather than having to validate the patent in each EU member state of interest. Obviously post-Brexit, once the Unified Patent comes into force, it is unlikely that that will cover the UK but this does not mean that it is going to be problematic to obtain protection in the UK but one will simply have to validate in the UK in addition to their Unified Patent.
The next Intellectual Property right I will cover very briefly because I know quite a few people on the call won’t have focused in Live Sciences or Agrochemicals but supplementary protection certificates are governed by EU law. Not I think it is highly unlikely that post-Brexit it will cease to be possible to obtain Supplementary Protection Certificates principally because of the importance of the Live Sciences Industry to the UK economy.
I have outlined two scenarios here which might dictate how the SPC Regulation is applied post-Brexit. Firstly, if we join the EFTA and the EEA which I would refer to as the Norwegian model then the SPC Regulation should apply in its current form so there is no change there except that referrals in terms of interpretation of the statute will be made to the EFTA courts rather the CJU. Alternatively, the Swiss model if we join the EFTA but not the EEA then the UK will need to enact its own SPC Regulation however this will be seen by many as an opportunity to iron out some of the difficulties with the SPC statute that currently exist.
So as I said, this was a whistle stop tour. There is lots more I could have said but time-constraints exist. I’d like to conclude with some conclusions.
Firstly, in terms of a practical tip, I think it is important for companies to review their trademark portfolio to identify registrations that are not susceptible to post-Brexit non-use challenge. Very briefly, trademark registrations can be challenged if that trademark has not been used within a jurisdiction for 5 years or companies or brands which are used exclusively within the UK post-Brexit that use will not be enough to save a community registered right therefore a community trade mark which has only been used in the UK might be susceptible to challenge post-Brexit.
Something else, if companies are thinking about applying for new trade marks and registered designs across Europe, one possibility would be to apply for an EU wide right and sort it out in terms of the UK via a conversion route once that’s clarified. However, given that there is still uncertainties as to how that conversion will work and what it will cost, my advice would be for clarity sake to apply simultaneously now for UK and European protection.
The next is I think, from my discussions that I have been involved with the UK and EU institutions given in IP are in listening mode. I think I will pass on to Douglas to cover this in a bit more detail later on but I think there is a potential for influencing decisions regarding how the transition given rights to coverage in the UK will be handled as well as the potential to improve the SPC Regulation and lastly as mentioned before, I think its important for IP holders especially trade mark and registered design right holders to pay close attention to transitional provisions regarding IP registrations to ensure that deadlines are not missed and rights lost.
Deborah Bould: OK so now we turn to our second topic, the Unitary Patent Package. So what is it?
The planned Unitary Patent Package is made up of two elements as Adrian has mentioned there is a European patent with unitary affect which would actually cover up to 25 EU member states and second, there is a unified patent court with divisions in various countries including three central divisional seats in London, Munich and Paris.
The Unitary Patent Package has been a major project that has been pursued for decades and before the Brexit vote, was just nearing completion. We were expecting unitary patents to launch on the 1st January 2017 and for the unified Patent Court to launch in Spring next year. So on this slid you can see a map of Europe and its colour coded to explain which countries are in or out of the Unitary Patent Package. There is an International Agreement which is the Unified Patent Court Agreement which has been negotiated by a subset of EU member states.
So in blue you can see the 10 countries that have ratified the Agreement and France is the largest of these countries, in yellow you can see the countries that have approved it but not yet ratified which include the UK and Germany. In red you can see the three EU countries who are not participating namely Spain, Poland and Croatia and in black you can see the other countries that are members of the European Patent Convention that Adrian mentioned where you can get a European patent but these countries are ones where you can’t participate in the unitary patent system as things currently stand.
So what is the impact of Brexit? There have been a range of reactions amongst the IP community to the Brexit voters that impact the unitary patent package and I have included three points on this slid. First, we’ve got the quotes from the President of the European Patent Office Benoît Battistelli who I think is possibly a little head in the sand. He is saying in the best case scenario, the UK can go ahead as soon as possible with ratification. Member states may allow the continued participation of the UK even after Brexit takes effect and by contrast, the IP Federation who represent major manufactures like Airbus, Dyson, Rolls-Royce and Unilever have put out a Brexit policy position statement and they say, we support the unitary patent and the unified patent court with the UK participating on the current terms but without a guarantee of continued UK participation post Brexit, the UK should not ratify the UPC Agreement at present and then we have an even more extreme quote at the end from Joff Wide who many of you will know is the editor of International Asset Management Magazine and he said that it would be politically wrong and morally indefensible to ignore the Brexit vote and plough on with the UPC.
So as I’ve mentioned, the Unitary Patent Project is on hold at the moment and this is because the Unified Patent Court Agreement needs at least 13 member states to ratify it and three of those must include the UK, France and Germany. The UK ratification is critical here and on the slid I have put in four scenarios which I think could play out. Down the right hand side of the slide and this is really from a UK perspective. I’ve tried to rank them in order of likelihood. So the most likely I think is that the UK holds off ratifying until Brexit terms are agreed which allow the UK to continue to participate in the Unitary Patent Package. The second is that the UK does not ratify and either overly or covertly tries to kill the project and third, the UK does not ratify after Brexit the other member states carry on without the UK and effectively Italy would step into the UK’s shoes in this scenario because they are the country with the next largest volume of patents filed in the European Union. Fourth, we’ve got the UK ratifying soon and then negotiating to try and stay part of the Unitary Patent Package as part of the Brexit agreement terms. This may or may not be successful; control of the outcome will rest with Europe because the defaults picture is the UK dropping out on Brexit. So you can see that the top three likely outcomes do not involve the UK ratifying anytime soon. Let me handover to Emmanuel now to speak about the French perspective.
Emmanuel Gougé: Thank you Deborah. The French perspective and also published starting with the voice of the Preparatory Committee. Recently in Paris a few weeks ago, the Chair of the Preparatory Committee was giving a short speech, Alexandra Ramsay. I think that so far, the official voice of the Preparatory Committee is that although they regret the outcome of the Brexit in relation to the impact on the UPC going on officially, the voice is just saying that legally and technically nothing has changed as long as the Brexit is not affected. So therefore, the Preparatory Committee say that there is no plan for changing things and going forward will try to bring the project in place. So I think that’s at least what they say officially and they will wait until they know what the position of the UK is in that respect. Now I think what could be interesting is to look at what we can hear in Europe as to the impact of the Brexit on this project. What we can hear at least from the industry and from the various stakeholders is that the majority is that they do not want to go for a system that would not include the UK. So that certainly is the majority of the business perspective and probably because that was quoted by a number of people including Rowan Freeland in the Conference in Paris, without the UK, the UPC package could or would probably loss at least 30% of its value. So that’s one aspect and the second one is also a legal one. Can we go for the patent package without the UK and the answer is probably no and the reason for this lies in Article 84 of the UPCA, the Article on signature and ratification was saying that member states only shall ratify the Agreement. So for the time being, the UK is a member state so it could possibly ratify but the issue is also that this Article, although it does not say clearly, implies that a contracting member state must remain a EU member state. So I think that’s one of the concerns of the stakeholder of the industry over here in France would be or they will see that there is a main political issue there how to keep the UK in the system and again if we go back to Article 84 of the Agreement what do we see. There would be two possible ways and again that’s the legal aspect and not the political one. One aspect is the re-ratification of the UPCA because obviously there would be a need for an amended agreement. In which case if there is an amended agreement it means that the countries that are already ratified would need to re-ratify and some countries like Denmark could possibly include or involve a referendum or possibly no need for re-ratification providing in the exit agreement the exit agreement refers to or actually stipulates the modification of Article 84 in which case that could be done by the administrative company. That’s one possibility obviously this is pure speculation at this stage but I think what we will see and that will also be the case for the unitary patent that that would lead into a situation whereby if the UK would still be in the system without being in the European Union one problem it raises is that it would still be bound by ECJ decision so that there would be a mix of international law obviously and also of EU law and that could also from a political perspective probably be problematic but that’s more a pure UK issue. As I said about the unitary patents, here again there would need to be an extension to the UK which would result then into a kind of double system, a unitary patent for the member states and a unitary patent which would derive from an international agreement concerning the UK, so now the French Industry expressed their views recently at the same conference I was mentioning, the French representative for the MEDEF, the French Industry confederation were saying that arguably he would like to see the ratification of the UPCA by the UK as soon as possible, saying that he was fully aware that politically that would probably be difficult so that’s mainly what can be said as to the position of the industry there regardless of them as being one within which they would like the UK to be part of. I’ll pass on to my German colleague Mark Holtorf for the German perspective.
Mark Holtorf: Thank you very much Emmanuel. Hello everybody and welcome from my side as Deborah mentioned earlier, I’m a partner in our Munich office and I’m heading the German IP team and therefore I would like to inform you about the recent developments and views in Germany post-Brexit.
So let’s start with an update on the ratification process in Germany, and let me raise the question why Germany hasn’t ratified yet. The reason is, unofficially at least, that Germany was supposed to be the last of the 13 countries but also the last of the 3 countries, England, UK and Germany to ratify the UPC Agreement. The reason was that Germany was supposed to wait until everything is in place with regard to the technical requirements but also to the legal requirements and then the stuff for the unitary patent package so that at the time when Germany would ratify everything and actually go live afterwards.
How’s the situation now? Germany has two chamber system when it comes to the ratification of these types of international agreements as the UPC Agreement. The first chamber is at the Federal Council which is the representation of the Federal State in Germany as the draft law for the ratification path, the Federal Council without changes, the draft law is now in the parliament and it already passed the first reading and it’s now in the sub-divisions of the parliament which is exactly the way it should be and the ratification in Germany is expected after the Summer break so some time in Autumn irrespective of the situation in the UK. Together with the ratification law Germany will also enact a second law which will deal with the changes to the German national law in particular the changes are relevant with regard to the German patent law, so in Germany in terms of ratification everything is on track.
So let me then give you some insights from a patent conference that was held a few days actually ago here in Munich at the EPO. It was a quite big conference with about 200 participants from government but also from unitary patent systems, patent attorneys, lawyers. Mr Battistelli gave the opening speech and he, I would even say expressed his view that he expects the UK to ratify very soon now. This was his view, as Deborah mentioned this is probably the most unlikely situation but anyway this is what he emphasised. His alternative scenario if this is not going to happen was that he expects Italy to replace the UK and Mr Battistelli mentioned that he would think that in this scenario a delay of 2 to 3 years would be reasonable. For the time being all the preparation for launching the system will however continue, this is too, for the IT preparations, this is too for human resources, this is too for training of the individuals, by the way about 840 applications to become staff in the unitary patent system have been files. Two thirds of these applications were for technical jobs and about one third for legal jobs.
So what’s the view of the German Industry and the German legal community post-Brexit with regard to the unitary patent package? I think the view of the German Industry can be summarised by looking at what we call the voice of the German Industry which is the German Federal Industry Association and they express officially that they very much hope that the UK will ratify as soon as possible so they have the same position as Mr Battistelli which is probably not very surprising because Germany as an export nation, the German Industry is very much interested in obtaining international patent protection for relatively low cost and with low administrative burden. The German legal community is a little bit more sceptical for example the German Association of Patent Attorneys expect at least a significant delay and the Association of Munich Patent Professionals even takes the view that Brexit could be the end of the unitary patent system.
Deborah Bould: Okay, thank you very much Mark. Shall we move onto the UK political issues and we’ll bring Douglas Alexander into the discussions at this point, just very briefly the government and the UK Intellectual Property Office are playing catch up here really as Adrian’s already mentioned because no planning was done for Brexit in advance of the vote in many areas including IP. They are very much in listening mode. Baroness Neville Rolfe who was the former minister for intellectual property has now got a broader role in the new Department of Business Energy and Industrial Strategy had some meetings on the 14th of July and she was taking soundings from industry and IP practitioners. TechUK was one of the organisations there and they represent a lot of the TechUK industry in the UK. They want to open up the unitary patent package to European patent convention member states so that would enable the UK to participate after Brexit and it would allow other countries like Norway and Switzerland to join if they wanted to. TechUK is open to other methods of keeping the UK in the unitary patent package as well but it’s urged Baroness Neville Rolfe not to ratify and then leave the unitary patent package on Brexit. Rowan Freeland of Simmons & Simmons who many of you will know is trying to coordinate across UK Industry and IP professional organisations with a view to try to providing government with a single view, that may well be a challenge though, I’ve already mentioned the IP Federation statement, that was in the quotes previously. They broadly agree with TechUK but there is an important point of difference. The IP Federation want the unitary patent package to launch without the UK if a deal isn’t possible. We’re not aware of any of our sciences industry bodies yet taking a position but we hear that some major pharmaceutical businesses want to kill the unitary patent package if the UK can’t be a part of it so again that’s another contrasting position so Douglas not straight forward what’s your take on the political realities of the situation?
Douglas Alexander: Thank you Deborah and thank you to colleagues for their perspectives on the policy choices that as a community are going to be faced after the vote on the 23rd of June.
We really have been through a month of unprecedented political turbulence in the United Kingdom since that vote and I suppose the first point that I would want to emphasise to us today is that politics will continue to matter to the emerging IP landscape here in the UK in a way that is frankly unfamiliar to us from past experience and so in the next few minutes I’d like to offer a perspective on the political context that will shape the policy choices over the months and years ahead here in the United Kingdom.
Perhaps the most immediate manifestation of the consequences of the Brexit vote on 23rd of June was a huge increase in the degree of regulatory uncertainty here in the United Kingdom but there were really three kinds of instability that have crept in to the British dialogue and discourse since the 23rd of June.
Firstly, political uncertainty, we’ve had a change of Prime Ministers and a new government formed under the leadership of Theresa May. Secondly, here in the UK a heightened degree of constitutional instability with uncertainty in relation to both Northern Ireland and Scotland but thirdly and most relevantly here deep uncertainty over the character of the United Kingdom’s future relationship with Europe. The section 50 negotiations that will ultimately frame the terms of Britain’s exit actually involves three simultaneous negotiations.
Firstly, Britain’s withdrawal from the European Union. Secondly, the establishment of new relationships not just in relation to IP but much more broadly with the European Union, with the United Kingdom on the outside and thirdly, key and new relationships involving Britain and the rest of the world so there is at the moment within the British government deep uncertainty both on the issue of timing and on the ultimate destination of those negotiations and in part the divisions on the destination reflect the range of views that were expressed within the leave campaign that ultimately succeeded on the 23rd of June.
Amidst all of those uncertainties as to the destination however I think there is an enduring and pretty straight forward truth which is what is most economically attractive for the United Kingdom is the most politically unpalatable given the character of the leave vote in particular the emphasis on free movement of labour. The easy assumption that we will somehow continue to enjoy all of the benefits of full access to the single market but on the other hand be able to constrain free movement is going to be very severely tested in the months ahead in relation to the negotiations, so amidst all of that general uncertainty here in the United Kingdom what do we know that is relevant to the emerging IP landscape.
Firstly, of course we know the new government we’ve got Theresa May who was herself a remain campaigner although she was described in the British newspapers as a Rino, remain in name only [laughter] leading the British government at the moment. She made a conscious choice to promote 3 leave campaigners to the most relevant ministries to the Brexit negotiations: Boris Johnson to be the leader of the Foreign and Commonwealth Office; David Davis to be the Secretary of State responsible for exiting Britain from the European Union and thirdly, Liam Fox leading the new Department for International Trade. That’s largely been written up in the British press as being a very clever piece of politics essentially suggesting if you break it then you own it, that she has very clearly given responsibility for the negotiations to 3 campaigners whose commitment to Brexit is beyond reproach. I would caution against that fairly broad consensus that that’s been a very smart move on Theresa May’s part for the following reason: the last 3 conservative Prime Ministers have all seen their premiership end on the anvil of Europe because the conservative party remains deeply divided on the issue of Europe and I think another way of thinking about the position of those 3 ministers who will be critical to our exit negotiations is to recognise that there continues to be a very uneasy coalition even within the new government between remain campaigners and leave campaigners, so it’s going to be critical in terms of how those 3 ministries work together as to the character of the deal that is ultimately struck. Already we are seeing bureaucratic turf wars between those 3 departments. There is an emerging turf war between the Brexit department led by David Davis and the Foreign and Commonwealth office led by Boris Johnson with the foreign office leading a rear guard action to hold onto a significant number of its European specialists who David Davis proposed should be transferred en masse into the new Brexit ministry. Similarly, Liam Fox has already started travelling internationally and suggesting that the United Kingdom will pull out of the EU customs union but that has been questioned by others within government not least Theresa May who said only yesterday that she remained with an open mind on the issue as to whether Britain should leave the EU customs union, so I think in the immediate weeks ahead we can anticipate that a fair amount of bad blood within the British government is going to be spent both in building the capability of the British government to undertake these negotiations and also to resolving exactly where the responsibility lies.
Just to give you an illustrative example as a former trade investment and foreign affairs minister we had about 20 full time trade negotiators when I held that brief and represented the United Kingdom at the WTO talks back in 2008 in Geneva. The European Commission has about 600 full time equivalent trade negotiators so one of the many ironies of where Britain finds itself is that the permanent secretary in number 10 Jeremy Heywood is presently scouring the globe for trade negotiators after a campaign that seemed very keen to stop immigrants coming into the United Kingdom in an uncontrolled fashion and secondly, a campaign that esteemed experts saying as a country we had enough of experts is presently scouring the globe looking for trade expertise to be able to conduct these negotiations.
The second point that we know already is that the Prime Minister is engaged in high level discussions with her European counterparts trying to establish the parameters of the formal negotiations that will follow. She was yesterday in Slovenia and the day before in Poland talking to her counterparts. She’s already travelled in the last week to Italy, to France and to Germany. Frankly the fact that she is a new Prime Minister is to Britain’s negotiating advantage. She’s not somebody who has generated past resentment in other European capitals and as a clean skin has the benefit of the doubt with other European leaders and in that sense she is at the moment trying to informally scope the ground that will inform the formal process of section 50 negotiations in due course. At the same time as the ground is being cleared here in the United Kingdom, within Europe a similar exercise is underway within the last couple of days we’ve had the announcement that Michel Barnier the former European Commission Vice President and former Foreign Minister of France has been appointed by the European Commission to lead their negotiations. That reflects the fact that there is itself a turf war not dissimilar to the one between the Foreign Office and Brexit Ministry within the British government, a turf war presently underway within the European Commission and the European Council as to which will be the lead body for the Brexit negotiations under article 50 when they commence in the new year. I think it would be helpful for you to think that there is broadly a divide a in Brussels between the pragmatists and the federalists. The federalists are broadly in the ascendency within the commission led by Jean Clause Juncker and Martin Schulz in the European Parliament. The pragmatists are being lead by Chancellor Merkel in Germany and by Donald Tusk, the president of the council and who prevails between the pragmatists in the council and the federalists within the commission, time will tell but the council have already appointed a Belgian diplomat, Didier Seeuws to lead the council’s negotiations so whether it is Seeuws or whether it is Barnier who ultimately sits down opposite David Davis will be one of the guides as to where the balance of responsibility lies within Brussels in the negotiations.
The next point I’m afraid will offer little comfort to those seeking immediate certainty which is that the degree of uncertainty we have all been cast into since the 23rd of June is going to endure for some considerable time. I would invite you to think of this not as an acute period of uncertainty but I’m afraid a chronic period of uncertainty and there’s going to have to be business strategies developed to reflect the fact that there will be continuing uncertainty in the IP landscape for some time to come. At the first meeting of the new British government cabinet, David Davis, the minister charged with responsibility for exit emphasised 2 points to his new cabinet colleagues.
Firstly, he emphasised that he wished the Brexit negotiations to be coordinated and to be undertaken in parallel with negotiations on new trade deals with other countries outside of the European Union and secondly, he urged his new cabinet colleagues to write to him following the meeting setting out what they were most worried about and what they say as the greatest opportunities represented by the prospect of Brexit. That gives you a fair indication that even within the British government at the moment they’re still engaged in a scoping exercise to understand the parameters of the policy challenge that they are now confronting so what specifically does this uncertainty within the political landscape anticipate for intellectual property. As we’ve already heard the intellectual property brief continues to be held within the Business Energy and Industry ministry. The ministerial responsibility held at minister of state level by Lucy Neville Rolfe and secretary of state level by Greg Clark the Secretary of State and the first responsibility therefore of the industry and of those involved in the industry will be to come to a clear view as to what matters most to the intellectual property community in order in turn to make representations to those individuals as we’ve already heard the IP Federation has made clear initially 2 clear priorities to government.
Firstly, that all accrued and pending intellectual property rights must be preserved in the United Kingdom post-Brexit and secondly that the UK must provide for the ability to obtain equivalent UK rights in the United Kingdom post-Brexit.
Now of course as we’ve heard the position of unified patent court and the location of the branch of the central division in London remains deeply uncertain as a consequence of the vote on the 23rd of June. My personal view echoing what we’ve already heard is that without a guarantee of continued British participation post-Brexit the UK government will not ratify the UPC at the moment. Bringing the UPC into effect and subsequently being forced to leave the system would only increase the uncertainty and indeed compromise the UK’s subsequent negotiating position and I broadly agree with the 4 scenarios and indeed the hierarchy of those 4 scenarios that Deborah set out. I think in some ways the idea of immediate ratification and then subsequent negotiations I think is the least likely of the outcomes in relation to Britain’s attitude to the UPC. It may be as we’ve heard that the United Kingdom Government seeks to encourage the involvement of the European Patent Convention convening States, the non-EU states if you like, Switzerland, Norway and ultimately the United Kingdom to seek to engage within the UPC other that is something that our colleagues in France, Germany and elsewhere will contemplate. I think again is going to be directly effected by politics but extend far beyond the IP landscape and in that sense I think its only sensible to contemplate what the scenarios are for the UPC as it emerges as to what the broader attitudes towards the European Union is towards Britain’s negotiating position as it emerges in the coming months.
What will the next few months look like, I think in some way’s that’s the most helpful point of conclusion I can offer you.
The British Prime Minister, Theresa May has indicated that Article 50, the formal process of existing the European Union will not be initiated until the new year and so my sense is in the coming months in the Autumn the kind of informal negotiations at a bilateral level that have already begun with Theresa May’s tour of European capitals will be taken forward in purely negotiating terms that makes sense. She will be keen to establish if you like the boundary conditions, get a sense of what other capitals are looking for, try and agree in broad terms a timetable and a destination to which those negotiations will work before formally triggering the Article 50 procedure.
So as Emmanuel said, for the time being in terms of the UPC legally and technically, nothing has changed and the proprietary committee is continuing its work in that uncertain landscape. More broadly, during this period and indeed during the process of Article 50 negotiations Britain will continue to be a full member of the European Union albeit that we will be excluded from those deliberations relative to the Article 50 negotiations. So in that sense what is the challenge and indeed the opportunity for the IP Community in the coming months and years.
Firstly, I think we have to take up the challenge that David Davis offered to his new cabinet colleagues which is to effectively influence those new ministers and ministries as they frame their opportunities and their threat list that in turn will be passed to the Brexit negotiators through sponsor ministries, the business energy and industry ministry and also directly through the Brexit ministry. I think it is important that there is communication in the months ahead making clear as to what the priorities of this community are as we anticipate British exit from Europe. That can take many forms but I think also the work of trade bodies whether it’s the IP Federation Tec UK, Universities UK as well as the work that Roland Freeland is undertaking that Deborah mentioned is going to be important and its also the case that the IPO here in the United Kingdom is already actively seeking comments on Brexit and indeed suggestions in terms of what matters to the community at the moment.
Let me end with a more overtly political point however, while formally that process and those opportunities exit I think there is a very real risk that unless the community gets its act together we will find the concerns of the community squeezed by other sectors in the weeks, months and years ahead. There is absolutely no doubt that equivalent trade bodies are already undertaking similar exercises given the salience here in the United Kingdom for example of the financial services sector and in particular the banks. There is no doubt that if you are in the insurance sector you are already mindful of the salience of the issues in relation to passporting for the banks and so you are working hard to raise the salience of your issues. So while on one hand I think formally and legally, the present situation will continue for some weeks, months and indeed years, there is a real urgency to take forward the kind of work that we are engaging in today in making sure that the policy concerns of the IP community are brought to the attention of the negotiators at a very early stage. Deborah.
Deborah Bould: Thank you Douglas. Well that’s fascinating. Thank you very much indeed and that ties in neatly with the conclusions that we have drawn to. Which was essentially while there are ideas crystallizing at this stage since the Brexit vote clearly it’s not clear yet. We can’t ignore politics its going to be absolutely vital and it’s also vital that we get cracking as you say Douglas to try to make sure that there is a great opportunity here to make sure our voice is heard as an IP community and if we can come together then that will be excellent. So I don’t know whether there are any questions from our attendees. Please do send them through and we are very happy to answer questions. Otherwise, I don’t know whether anyone in the room has any questions for us while we are waiting.
Unknown I’ve got one for Douglas actually. The unified patent system there’s going to be an element of primacy of European Law. I was wondering what your views were on how that squares with the Brexit vote and I guess the personalities involved in that in not wanting to concede sovereignty to Europe.
Douglas Alexander: Well if we look back on the campaign that preceded the vote on the 23rd June and you look at the coalition of support that came together to provide a clear if not overwhelming majority in favour of leave there were really two issues that were very salient. One was the issue of immigration and the free movement of workers but the second was this issue of parliamentary sovereignty and I think it will be very difficult both given the composition of the present government and indeed its own support and more broadly the terms on which the leave vote was secured for either the issue of free movement of labour or the issue of sovereignty to appear to be completed ignored. One of the real challenges that we face as a country of the consequence of the vote is if you like the politics and the economics are now pulling in different directions that the political momentum is towards outcomes which many in the business community regard as economically disadvantageous. There is a very wise observer of the conservative party James Forsythe who writes for the Spectator who wrote a peace earlier this week suggesting that in the minds of those most committed to Brexit within the parliamentary conservative party there would be three tests that would be set for Theresa May’s Government. One of those tests would be on the issue of free movement of labour. A second test would be around the issue of parliamentary sovereignty, would the united Kingdom be able to unequivocally set its own laws and adjudicate on its own laws and thirdly would the United Kingdom be able negotiate and sign its own trade deals internationally and he suggested that as far as those Brexit minded members of parliament were concerned those were all red lines and in that sense, I think that is quite an accurate guide as to the thinking within the parliamentary conservative party and I think will weigh heavily on David Davis’s mind as the Secretary of State charged with the Brexit negotiations. So I think that in our own field of IP law that’s a very acute example of a much broader dilemma which is that the expectations when Theresa May said in seeking the Prime Ministership Brexit means Brexit is now going to be tested in many ways its a brilliant sound bite because it helped secure her the leadership of the Conservative party and indeed the premiership and on the other hand it means absolutely nothing and truthfully whether Brexit means Brexit in time will be revealed as meaning we are unwilling to accept the jurisdiction of the ECG or the broader legal effect of the achieved beyond that which was agreed prior to the conclusion of Section 50 is going to be revealed. My instinct is that this is certainly the appetite of a significant number of tory MPs in the Comms at the moment.
Deborah Bould: Thank you Douglas and we have one other question as well. Which I think is aimed at Adrian which is setting aside the eventual impact on the unitary patent situation. It sounds as though IP stays pretty much as is however we all need to pay much more attention to how and what the developments are for trademarks in the post Brexit period. Is that a fair summary?
Adrian Murray: Yes, I think that is correct. We are subject to saying registered designs as well as those completely engaged in the development of aesthetic intellectual property right. I think the trademark and registered designs and the right where something will definitely change and part of the job is to watch and hear and try and influence how those things change and there are things that you can do now in the short term to mitigate against risk down the line. On the Patent side there is not a huge amount that is going to change with the exception of the unified patent system that Deborah has already covered. SPC as well I’ll briefly mention again one of the questions that I think will be very interesting is whether there is the opportunity to essentially reshape the SPC regulation because those who followed SPC case law will no doubt realise and understand that the majority of the case law that has gone up to the courts of justice of the European Union in recent years has been about clarifying what the law actually says so any chance that we could potentially take the good bits and get rid of the bad bits of the SPC regulation would be a good thing for industry in life sciences sector. Yes I agree trademark and designs are the short term. Intellectual property rights where we know that something is going to change.
Deborah Bould: Yes I think that concludes our Webinar today and I want to thank our speakers very much indeed and also thank you all for joining us.
That concludes the Webinar for today thank you all for your participation, you may now disconnect.