The Retained EU Law (Revocation and Reform) Bill 2022 is currently proceeding through the legislative process, having been introduced to Parliament on 22 September 2022 and completing its Committee stage in the House of Commons on 29 November. Despite a damning opinion from the Regulatory Policy Committee that the Bill's Impact Assessment was not fit for purpose (including for its assessment on the Bill's impact on small and micro businesses), Government departments are continuing the process of identifying and reviewing all retained EU laws in scope of the Bill. This includes the Intellectual Property Office (UKIPO) which has published guidance on the implications of the Bill for IP, along with a list of the (currently) 70 IP laws that it has identified as being in scope as retained EU law. This number has already been subject to upward revision.
The key aim of the Bill is to overhaul 'retained EU law', i.e., the category of domestic law created at the end of the Brexit transition period and which consists of EU-derived legislation that was preserved in the domestic legal framework through the European (Withdrawal) Act 2018. The Bill also has the effect of ending the supremacy of retained EU legislation over domestic UK legislation passed before the end of the Brexit transition period where they are incompatible.
Will IP laws be 'sunsetted'?
Assuming that the Bill passes in its current form, it will, by default, lead to certain retained EU laws in being 'sunsetted' on 31 December 2023 (or potentially on a longstop date of 23 June 2026). This means that those relevant retained EU laws will, unless they are expressly retained (or replaced, or reformed), automatically expire on the sunset date – with the potential that a significant number of IP laws will simply fall away, with potentially nothing to replace them.
The list of IP laws identified as retained EU laws by the UKIPO currently numbers 70 – from an overall identified total of around 4000 distinct sources of retained EU laws. (Originally the list on the Government's dashboard was put at around 2400, but a further 1400 were then 'found' by the National Audit Office). Laws that will be in scope of the sunsetting provision fall into a number of categories but the vast majority are Regulations made under section 2(2) of the European Communities Act 1972 (ECA) (including such Regulations made during the Brexit transition period), and retained direct EU legislation (e.g. EU Regulations).
It is important to note, however, that the sunset provision does not apply to anything contained in primary legislation – though it may, of course, have been no more than chance as to whether a particular provision of EU law was implemented into UK law through amendments to primary legislation, or through secondary legislation such as Regulations. Whilst such primary legislation will remain on the statute book, it may in due course be amended where considered appropriate.
The sunset regime will therefore potentially include important and significant pieces of legislation across all of the IP rights. It could include, for example, amongst others, laws relating to protection of databases, artist's resale right, creation of the Supplementary Unregistered Design Right, trade secrets protection and Supplementary Protection Certificates. It also potentially includes laws relating to the enforcement of IP rights – for example, the safe harbours provided for online intermediaries under the E-Commerce Directive (raised by Meta in its submission to the Bill Committee as a point of concern). It will interact with many related areas such as medicines regulation, e-commerce, geographical indications, competition law and Customs regulation.
Of course, it seems very unlikely that these laws will simply disappear on the sunset date, not least given the provisions in the EU/UK Trade and Co-operation Agreement (and other trade agreements), and the various international IP obligations that the UK is subject to. However, the process does introduce an element of uncertainty as to what the UK's IP laws may look like at the end of the process. It is possible that there will be some revisions to those IP laws that were retained at the end of the Brexit process.
What will happen to EU IP case law?
The Bill aims to make it easier for the Court of Appeal and Supreme Court to depart from retained EU case law (i.e., those decisions of the Court of Justice of the European Union/General Court) handed down before 31 December 2020. The Bill provides a new statutory test for the Court of Appeal/Supreme Court when determining whether to depart from retained EU case law, requiring them to have regard to three factors:
- The fact that decisions of a foreign court are not (unless otherwise provided) binding;
- Any changes in circumstances which are relevant to the retained EU case law; and
- The extent to which the retained EU case law restricts the proper development of domestic law.
Ostensibly, the approach set out in the Bill is said to take into account the approach adopted by the Court of Appeal in the TuneIn case when it was asked to depart from CJEU case law on the 'communication to the public' right under copyright law and declined to do so. Indeed, the Master of the Rolls described it as a 'paradigm case in which it would be inappropriate' to depart from retained EU case law. However, that decision does not mention the factors now set out in the Bill (and of course the Court in that case declined to depart from the CJEU case law).
The Bill also includes a reference procedure to allow lower courts, e.g. the High Court, to seek to depart from retained EU case law by setting out a mechanism for them to refer points of retained EU case law to an appeal court. The court could then issue a binding decision as to whether the relevant EU case law could be departed from. Clearly, this will be seen as giving parties an opportunity to seek to challenge EU case law where it suits their case to do so.
Interestingly, the UKIPO has confirmed that as part of is review process it is also reviewing the significant amount of EU case law precedent within the IP system – much of which is fundamental to the operation of IP rights, including the very definition of a trade mark. It notes that: "in selected areas, we may seek to codify precedent by converting and consolidating relevant case law into legislation to ensure the continued functioning of the Intellectual Property framework".
The UKIPO has said that it will want to consider options for reform which are beneficial for innovation and growth, but recognises that the end-2023 deadline requires it to work at pace to conduct the necessary reviews and make and implement relevant proposals. Clearly, this will be an intense process, with potentially limited scope for consultation with stakeholders. It will also no doubt impact on the UKIPO's timescales for other projects, such as the proposed consultation on the UK's framework for the protection of designs (in circumstances where the EU has recently announced that it is updating EU design laws). It will also be interesting to see the impact on other policy areas such as exhaustion of IP rights (essentially put on hold in January 2022) and AI (with the UKIPO recently suggesting a further consultation will be forthcoming in relation to its proposed revised exception for text and data mining).