Brexit to Introduce Legal Uncertainty and Increased Costs for UK Trademarks and Patents, Experts Warn

Two weeks after the United Kingdom’s referendum decision to leave the European Union, intellectual property lawyers have begun to clarify the potential ramifications of Brexit on patents and trademarks. Discussions during a 7 July webinar and expert interviews reveal that Brexit will likely delay the implementation of the EU unitary patent and the unified patent court (UPC), while creating significant uncertainty and increased costs for trademark owners.

Philip Cupitt, a European patent lawyer at Finnegan’s London office, emphasized that although Brexit is not finalized and any changes would not take effect before 2018 or 2019, law firms are already advising clients to reconsider their IP strategies, particularly concerning trademarks.

Cupitt noted that UK and EU patent rights will remain unchanged in the immediate term. The UK will continue to be a member of the European Patent Convention (EPC), which operates independently of the EU. Despite some speculation, there appears to be no political momentum for the UK to withdraw from the EPC. British European patent attorneys will retain the ability to represent clients before the European Patent Office (EPO).

Supporting this, attorneys from Lewis Silkin in London highlighted that the EPO is not an EU institution. Under the EPO framework, a granted European patent effectively becomes a bundle of national patents in the countries selected by the patent owner. Existing UK patents, whether granted by the EPO or the UK Intellectual Property Office (UKIPO), will remain valid. Applicants will continue to have the option to seek UK patent protection through either the EPO or UKIPO.

Cupitt further clarified that the UK’s patent system operates separately from the EU’s and that the UK will maintain membership in international agreements such as the Patent Cooperation Treaty, the Paris Convention, and the World Trade Organization.

However, Brexit is expected to delay the launch of the EU unitary patent and the UPC, as the UPC cannot enter into force without UK ratification of the UPC agreement—a scenario deemed unlikely in the near term. Consequently, the UPC’s commencement may be postponed until around 2019.

Post-Brexit, unitary patents will no longer cover the UK, although UK companies may still hold unitary patents alongside European patents. Brexit may also result in London losing its role as the host city for the UPC’s central division court, necessitating amendments to the UPC agreement to relocate the court. The unified court will exclude British judges and staff, but most UK patent attorneys will remain eligible to represent litigants there.

The pharmaceutical sector faces additional uncertainty, as UK law currently relies on EU legislation in areas such as marketing authorization, supplemental protection certificates, data exclusivity, and biotechnological invention protections. While the future trajectory of UK law is unclear, Cupitt anticipates that the UK will continue to maintain robust protections for pharmaceutical companies.

Trademark rights are poised for significant change. Clare Cornell, a trademark and patent attorney at Finnegan London, explained that EU trademark (EUTM) rights will cease to have legal effect in the UK following Brexit. She expects that EU trademarks will need to be converted into UK national registrations through a conversion procedure yet to be defined. This process is not anticipated to result in loss of rights.

Cornell advised trademark owners to actively use their marks in both the UK and other EU member states before Brexit, as use exclusively in the UK will not suffice to maintain EU trademark rights after the UK’s departure.

Lewis Silkin’s analysis draws parallels with trademark transitions following the dissolution of the Soviet Union and Yugoslavia. The firm suggests that the UK portion of existing EU trademarks or registered Community designs will likely be replaced by corresponding UK national trademarks or designs. However, this approach raises concerns regarding official and professional fees, procedural complexities, and timing for replacing EUTMs and designs.

Enforcement of trademarks post-Brexit also presents challenges. Jennifer Lee Taylor, an IP attorney at Morrison Foerster in San Francisco, observed that currently, a UK entity can seek an EU-wide injunction if its rights are infringed by an entity outside the UK. After Brexit, such relief would be limited to the UK unless the complainant can pursue enforcement in an EU member state.

Taylor further noted the potential for conflicting trademark rights arising from UK registrations filed years ago and future recognition of EU-registered marks in the UK. She recommended that companies, which have historically favored EU trademarks over national registrations, now consider filing for UK trademarks to safeguard their interests.

The financial implications are significant. Taylor estimated that obtaining EU trademark protection across all 28 member states costs approximately $3,000, roughly equivalent to filing in just two national jurisdictions. Many businesses with valuable brands protected solely by EU trademarks are now weighing the costs and benefits of additional UK registrations.

James Sweeting, an IP litigator at Lewis Silkin, highlighted the broader legal uncertainty surrounding the disentanglement of UK law from EU legislation. He acknowledged that no clear resolution exists yet, and much will depend on the nature of the UK’s exit. Potential scenarios include remaining in the European Economic Area or negotiating agreements that allow some influence of the European Court of Justice (ECJ) in the UK—though the latter is considered unlikely. Questions remain about whether past ECJ decisions will continue to influence UK courts, given their foundational role in English jurisprudence on EU law.

In summary, Brexit introduces complex challenges for intellectual property rights in the UK, particularly affecting trademarks and the future of patent litigation. Legal experts urge rights holders to proactively adapt their strategies to mitigate risks associated with regulatory changes and increased costs.