Intellectual property investment – the future of the UK economy and effects of Brexit

Following the UK’s withdrawal from the European Union, it has become more important than ever to make the UK appealing to both investors and businesses. The current investments made in UK research and development in all sectors, from which companies derive valuable intellectual property, make a significant contribution to the strength of the UK economy. Therefore, the possible effects of Brexit on intellectual property investment could be critical for the future health of the UK economy.

Intellectual property is the result of creativity, such as inventions, literary and artistic works, designs, trademarks in the form of symbols, names, logos and images used in commerce. Intellectual property protection gives the owner the right to stop others from using, making, selling or importing the protected property without permission from the owner of the intellectual property right. Intellectual property rights can be used to distinguish businesses from their competitors and are often used to enhance a business’s brand, marketing strategy, competitiveness and company value.

Intellectual property rights can therefore be used to both protect revenue, by enforcement via the laws that prevent competitors from infringing the rights, or to produce revenue, through sale or licensing of the rights, often globally. As a result, intellectual property rights are among the most important and valuable assets owned by many businesses. Good robust intellectual property protection thereby enables a business to earn both recognition and reward for its innovation and creativity.

In the UK, some intellectual property is automatically protected by common law, such as copyright, unregistered design rights, unregistered trademarks, database protection and trade secrets. These will be unaffected by Brexit as the laws that protect them are already national laws rather than European. There are further types of protection that a business can apply to register, such as patents, registered trademarks or registered design rights. Although these can be applied for on a national level, most companies avail themselves of the European-wide rights that are available through the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) to protect patents, trademarks and designs.

These offices will continue to function after Brexit and while European patents and European-qualified UK patent attorneys will be unaffected (the European Patent Convention and the European Patent Office are independent of the EU and have always had a number of non-EU members such as Switzerland, Norway and Turkey), European registered designs, trademarks and trademark attorneys face some uncertainty. This will be particularly acute during the period when the EUIPO and the UK national body that represents European-qualified UK trademark attorneys negotiate the status of UK designations in European trademarks and designs, and what rights trademarks attorneys will have to represent their clients before the EUIPO.

Each of the aforementioned forms of protection has different costs and lengths of protection. The cost of obtaining and maintaining intellectual property rights varies greatly depending on the type of protection, but can be very roughly estimated in the range of £1000 to £10,000 for unregistered rights, which still require management, through to £10,000 to £100,000 for patent rights. Some of these patent costs accrue early in the application process, but significantly more is required to overcome objections at national and regional patent offices, followed by increasing yearly renewal fees payable in each territory, so the total cost to obtain a patent ‘globally’ on one invention across its 20-year life can be several hundreds of thousands of pounds. These costs are not likely to increase after we leave the EU, at least for patents, as the system will be unaffected. For trademarks and designs, it is possible that a separate UK registration will be required, but this is not expected to add dramatically to the cost of protection.