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The EU/UK Trade and Cooperation Agreement and Intellectual Property Rights

Posted on 21 January 2021

The EU/UK Trade and Cooperation Agreement (TCA), in force from 1 January 2021, contains a number of provisions relating to the protection and enforcement of intellectual property (IP) rights. Whilst certain of these bear close scrutiny, and are highlighted below, perhaps the more significant Brexit-related document for IP rights was the Withdrawal Agreement agreed between the UK and EU in October 2019. It was the Withdrawal Agreement that, for example, preserved existing EU trade mark and design registrations in the UK, with the UKIPO creating over two million comparable UK rights based on such registrations on 1 January 2021. We discuss the impact of the Withdrawal Agreement, and related steps taken by the UK Government and UKIPO to ensure minimal disruption in relation to IP rights in this checklist and our short animation explains the key steps rights owners should take now that the transition period has ended.

What does the TCA say about IP?

Title V of Part Two of the TCA (Part Two covers Trade, Transport, Fisheries and other Arrangements) sets out a number of provisions relating to IP. In terms of scope, the TCA IP provisions complement and further specify the rights and obligations of the UK and EU under various international treaties and agreements to which they are already parties (such as the TRIPS Agreement, Berne Convention etc.). However, either the UK or EU may introduce more extensive protection and enforcement of IP rights than set out in the TCA, provided that those measures do not contravene the provisions in Title V.

The IP provisions in the TCA are therefore largely as to be expected in a trade agreement, and reflect provisions already contained in both EU and UK law. Accordingly, there are unlikely to be any significant changes to UK IP law and practice as a result of the TCA but there key points of interest:

Parallel trade and exhaustion of intellectual property rights

The TCA provides that nothing it contains affects the freedom of the parties to determine whether and under what conditions exhaustion of IP rights applies. Under the Withdrawal Agreement, IP rights that were exhausted in the UK or the EU before 31 December 2020 remain exhausted in both territories. Where goods have been placed on the EEA market on or after 1 January 2021, the UK has – for now at least – decided to unilaterally maintain EEA-exhaustion for imports into the UK, meaning nothing will change for such imports, at least in the short term. However, for goods placed on the market in the UK, the EEA exhaustion regime will not apply for exports into the EEA, and so EU IP rights in respect of such goods will not be exhausted. Accordingly, consent will be required for parallel traded exports from the UK to the EEA.

The UKIPO has recently confirmed that the Government will hold a consultation in early 2021 on how to manage future parallel trade into the UK. This will no doubt engender a spectrum of views between rights holders and parallel traders.

Copyright

The TCA contains a series of provisions relating to rights of authors, performers, producers of phonograms, broadcasting organisations, and covers issues such as term of protection (where there is some flexibility for the UK in relation to certain types of work), continued application of artist's resale right (which might have been a candidate to be abolished in a no deal situation), collective management of rights, protection of technological measures, and rights management information.

The provision relating to exceptions and limitations to copyright infringement is relatively brief, referring to the application of the three step test for authorial works (i.e., those special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rights holders). There is scope therefore for the UK to consider the regime for exceptions to copyright infringement in due course.

Trade Marks

The provisions in the TCA relating to trade marks are largely reflective of the current regime, as provided for in the Trade Marks Directive and implemented in the UK Trade Marks Act 1994. It appears unlikely that there will be any significant changes to UK trade marks law and practice, beyond the changes that have already been made to reflect the provisions in the Withdrawal Agreement preserving existing registrations and dealing with the implications of those provisions. However, over time, it is perhaps inevitable that interpretation of trade mark law by the EU and UK courts will start to diverge.

Designs

The TCA provides that each party should provide for the protection of independently created designs that are new and original. It is worth noting the use of the word 'original' here, as opposed to 'individual character' as in the existing legislation – the TCA goes on to provide that a party may consider that a design with individual character is original.

In relation to unregistered rights, the TCA provides that each party will confer unregistered design protection for at least three years from the date on which the design was first made available to the public in the territory of the relevant party. As discussed in our Brexit IP checklist, the UK has created a 'Supplementary Unregistered Design Right' for new designs on or from 1 January 2021, which mirrors the EU's Unregistered Community Design. However, as the UK and EU failed to agree on reciprocity in relation to the rules of first disclosure, designers face a potential gap in protection due to uncertainties over the proper interpretation of the rules relating to where a design must be disclosed.

Interestingly, the TCA provides that each party shall ensure that designs are also protectable through copyright, albeit the level of originality required is to be determined by each party. It will be interesting to see how the line of case law developed by the CJEU culminating in cases such as Cofemel (discussed in our update here) and Brompton (discussed here) delineating copyright protection for functional design will be interpreted by the UK Courts going forward.

As part of its recently announced Action Plan on Intellectual Property, the EU is considering modernising the EU design framework, so potential divergence may arise as a result of this exercise in the future.

Trade secrets

The TCA contains provisions relating to procedures and remedies for trade secret holders to prevent, and obtain redress for, acquisition, use, or disclosure of a trade secret carried out in a manner contrary to honest commercial practices. The Trade Secrets Directive took effect in the EU in June 2018 but again is under review in the EU's IP Action Plan. Whilst the UK had long been considered a favourable and robust jurisdiction to enforce trade secrets by way of breach of confidence actions under the common law, the UK Government decided that certain aspects of the Trade Secrets Directive did require specific legislation. A few years down the line, cases are now starting to come before the UK Courts where the parties are additionally relying upon the Trade Secrets (Enforcement, etc.) Regulations 2018.

Enforcement of IP rights

The TCA requires the parties to provide in their respective laws measures, procedures and remedies that are necessary to ensure the enforcement of IP rights (reflecting the provisions in the IP Enforcement Directive), and also in relation to measures at the border concerning counterfeit goods. The TCA does not however deal generally with civil justice co-operation and issues relating to jurisdiction, enforcement and service of proceedings. Whilst the UK applied to accede to the Lugano Convention in its own right in April 2020, the EU is yet to agree to this, though it is hoped that this will now take place in the short term, given the TCA having been agreed.

Geographical indications

Under the Withdrawal Agreement, all product names protected in the EU as geographical indications (GI) as at 31 December 2020 will remain protected under both the EU and UK's new GI schemes. Going forward, however, no agreement has been reached in relation to GIs; instead, the TCA provides that the UK and EU may use reasonable endeavours to agree rules for the protection and effective domestic enforcement of their geographical indications.

What next?

The TCA has been implemented into UK law by the EU (Future Relationship) Act 2020. Over time, interesting questions may arise generally in relation to interpretation of UK domestic law, as a result of the TCA's provisions (though this seems unlikely in relation to the IP provisions). It is therefore also unlikely that there will be significant divergence, at least at the outset, in relation to protection and enforcement of IP rights between the UK and EU, but that divergent interpretations of relevant provisions may arise over time. A key issue to monitor in the short term is the UK's planned approach on exhaustion of rights, and we will provide an update on that once the UK Government consultation is published.

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