Friday, October 7, 2016

EU and the United Kingdom - Hard Brexit

     Last week, Prime Minister Teresa May provided a glimpse concerning how the United Kingdom will manage its laws, which consists of U.K. and European Union (EU) laws [link].  EU laws consist of regulations, which are similar to a law and applies in all EU states; directive, which sets out rules that EU states must adopt into their national laws; and decisions, which affect only a certain issue or country [link].

     First, a Great Repeal Bill will repeal the 1972 European Communities Act which made EU law automatically binding in the UK, made EU law take precedence, and made the European Court of Justice the court of last appeal.

     Second, most EU laws will be transposed into domestic laws on exit day, and then the government can choose which laws it wishes to replace.  Domesticating EU law is important because it is estimated that somewhere between 15-55% of UK laws are influenced by EU law [link 1, link 2].  Domestication also is important because it provides businesses with some certainty about the state of the laws in the UK that probably will exist on exit day.

    However, the UK appears to be demanding greater immigration controls, which conflicts with the EU's open migration policy.  This demand likely will affect the UK's ability to participate fully in the EU market and, thus, to negotiate trade bills with the EU by exit day.  This latter result creates great uncertainty about how current and future intellectual property rights and programs will be handled.

     For example, European patents are not at risk because they were created by the European Patent Convention, which is separate from the EU.  However, the UK had signed up to participate in the forthcoming Unified Patent Court (UPC) which would have exclusive jurisdiction over European patents. Unfortunately, the UPC is limited to members of the EU, and the UK had not yet assented to the UPC. Thus, there are questions about whether the UPC will be formed and whether the UK will be a part.

     As another example, through the Madrid System (Agreement and Protocol), a person could register a trademark for the EU that would cover the UK.  That won't be true after the UK leaves the EU.  Additionally, what happens to the previously registered trademarks through the Madrid System that covered the EU, and the UK?

    Similarly, as a member of the EU, the UK was a part of the EU IPO (formerly OHIM).  Thus, trademarks and design marks registered with the EU IPO covered the UK.  But, they won't after the UK leaves.  Again, what happens to the marks that previously covered the UK?  Will the UK grandfather those registered marks into its own books?    

- Henry Park

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