OpenStreetMap identifies catastrophic effect of Brexit on database right

The Guardian today reports that the open-source mapping project OpenStreetMap, described as "Wikipedia-for-maps", is contemplating relocating from the UK to somewhere that is still in the EU. Although there seem to be manifold reasons, one of them (and I should have thought a pretty important one) is the fact that databases of UK origin will no longer enjoy protection in EU27.

What we know (and possibly love) as database right in the UK is, of course, a creature of EU law. Actually, it's old enough to be EC law: Directive of the European Parliament and of the Council 96/9/EC on the legal protection of databases, implemented by the Copyright and Rights in Databases Regulations 1997, SI 1997 No 3032. Those regulations were amended in 2003 and further amended in the blizzard of secondary legislation that was caused by Brexit, by the Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019, SI 2019 No 605 (Regulation 28 is the place to look, if you are interested). I wrote about all this not long ago, here, but it bears repeating in this new context.

The amendments are not complicated, although it takes a lot of legislative verbiage to convey what they are doing: where the original legislation mentioned the EEA, it now refers to the UK. This means that where previously a connection with the EEA (being a national of an EEA Member State, or incorporated in one, or habitually resident in one - I am going from memory here, so please check the legislation if it's important for you) meant your database qualified for protection in the UK, from now on (for databases created after IP completion day, as 11pm on 31 December 2020 is called - "completion" being a form of Newspeak and actually denoting something very different) you have to show the same connection with the UK. For databases created before IP completion day, protection continues on the old basis and for the original term, but I imagine that will cause all kinds of interesting problems when the proprietor finds it convenient to argue that there has been a substantial change in the database such that protection can start running again - only to find that it potentially means the database no longer qualifies for protection.

Anyway, that's the other side of the OpenStreetMap coin. What OSM are worried about is the treatment of databases of UK origin in the EEA, and of course with the UK no longer being in the EEA, UK databases (if I may call them that) no longer enjoy the protection of the sui generis right created by the Directive. Pre-existing databases will still be protected, by virtue of Article 58 of the Withdrawal Agreement, but given the nature of databases that is a wasting asset. Arguably, the OSM database is a pre-existing one and (the OpenStreetMap Foundation being incorporated in England) it therefore enjoys continuing protection, but the term is only 15 years: the saving grace, for database makers, is that a substantial change to the database "which would result in the database being considered to be a substantial new investment" qualifies the resulting database for protection. Never having had to think about it particularly before, I had reduced that rule to "a substantial new investment in the database keeps the 15 term running", but clearly that is too simplistic: in fact, a substantial new investment means you have a new database which is protected for 15 years, and that makes it abundantly clear why OpenStreetMap are unhappy.

Parallel imports and trade marks after B****t

 As everyone knows (well, perhaps not quite everyone), the doctrine of exhaustion tells us that once the owner of intellectual property rights of any type has put goods on a market, those rights are exhausted and cannot be used to control subsequent dealings with those actual goods. In the USA, the first sale doctrine does the same job, and it's an important job where a number of separate jurisdictions form a single market. It has always been an important component of EU law, too, needed to ensure that national intellectual property rights could not be used to partition the single market.

In EU trade mark law, it has therefore been a defence to an infringement action, enshrined in the Directive and the Regulation, subject to some exceptions, to say that the accused goods were placed on the market in the EEA by the trade mark owner or with its consent. Where that is the case, it will usually be impossible for the trade mark owner to use (say) a French trade mark to stop parallel imports entering France from (say) Germany. You could say that trade mark law gives the trade mark owner one bite of the cherry: the subtext (always important to understand) says that the same price should be charged in all the countries of the EU, so there is no incentive for parallel importers. Given that purchasing power in Germany and (say, again) Bulgaria is far from equal, the trade mark owner is highly unlikely to obey the subtext, and it will hurt to obey the letter of the law; but I put that down to politics rather than economics (like so much of the EU).

Up to the end of last year (rounded up to the nearest whole day), the UK was part of this arrangement. Section 12 of the Trade Marks Act 1994 embodied the principle of exhaustion, providing a defence to an infringement action where goods were brought into the UK from another EU Member State. Now of course goods coming into the UK would be leaving the EU, but (in an example of definitely not taking back control) the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019 (SI 2019/265) preserves this EEA-wide exhaustion principle. Goods imported into the UK from the EEA will still not infringe - unless there is a legitimate reason for the trade mark owner to oppose the goods entering free circulation in the UK, such as repackaging. There has been some changing of the words of s.12 (recognising that when you talk about the EEA the UK is no longer included) but no change of substance.

I'm probably missing something, because I can't see who benefits from this. Not the manufacturer whose goods are in circulation in the EEA, who must be charging more in the UK otherwise parallel traders wouldn't be interested. Not the UK distributor, who faces cut-price competition from the parallel traders. Not the government, which is losing a bit of VAT. Not even, really, UK consumers, who are unlikely to save very much as the parallel traders are going to undercut the legitimate channels by the smallest amount possible. Only the parallel traders are going to benefit - perhaps the government justifies this by calling them "arbitrageurs" to make it sound as if they are doing something socially useful, rather than just being parasites. Them, and maybe the NHS who are the main customer for parallel imports of pharmaceuticals.

I wonder, though, whether there are any parallel imports entering the UK now? Apart from the delays which the government minimises or denies, there's import duty and VAT to think about and it could be that parallel importing into the UK isn't worth it any longer.

I also wonder how long it will be before the government revisits this part of trade mark law, and decides that there are more votes to be had from moving to an international exhaustion doctrine. It already floated the idea, some 20 years ago, and attracted little or no support from its EU partners - whose support it no longer needs. Cheap jeans for the masses might be seen as a good platform for re-election, and a way to deliver a B****t dividend that is unlikely to arise in any other way.

UK will not implement Digital Single Market Copyright Directive

In a written answer today to a question from Jo Stevens MP (Cardiff North), Rt Hon Chris Skidmore MP, Minister of State for Universities and Science, has told us what is hardly a surprise:

The deadline for implementing the EU Copyright Directive [that's 2019/790] is 7 June 2021. The United Kingdom will leave the European Union on 31 January 2020 and the Implementation Period will end on 31 December 2020. The Government has committed not to extend the Implementation Period. Therefore, the United Kingdom will not be required to implement the Directive, and the Government has no plans to do so. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.

That's the domestic policy process that in 1988 put in place new legislation that had been needed since at least the Whitford Report ten years earlier. Meanwhile the carefully-considered changes to copyright law (whether you like them or not) that the Directive contains seem destined to pass us by. No "link tax", no change to the law on content-sharing, none of the other good things copyright owners were going to get from the Directive - Google and other platforms must be very happy.

Numbering of "comparable" UK trade marks

The UK-only trade marks that will, if leaving the EU ever becomes a reality, be carved out of existing EU trade marks are being called "comparable" trade marks. It seems like an odd choice of word, but compared with the madness that is Brexit this is a minor quibble. The Patent Office has published a notice about how these will be numbered:

In order to identify comparable UK rights and distinguish them from existing UK trade marks, the number allocated to the comparable mark will be the last 8 digits of the EUTMprefixed with UK009.
The following examples show how comparable UK trade marks will be numbered:

Existing EU trade mark	Comparable UK trade mark
000000977	UK00900000977
000025197	UK00900025197
000340513	UK00900340513
017867542	UK00917867542

By retaining the EUTM number, we aim to keep the administrative process to a minimum.

Of course the best way to "keep the administrative process to a minimum" (let's read that as if it had the word "burden" in place of "process" - one does not keep processes to a minimum, and in any case it is surely more accurate to say it's as small as possible, not a minimum) would be to stop the nonsense altogether, but our Prime Minister is clearly dead set on it. As a numbering scheme this makes sense and is pretty simple - it reminds me of how when the 1994 Act came into operation the Registry started with number 2,000,000, which meant losing only a few numbers but provided a nice easy way to recognise "new Act" trade marks.

I wonder what will happen to comparable UK trade marks when the country rejoins the EU in a few years' time? Is the government planning for that contingency yet?

The effect of a "no-deal" departure from the EU

Yesterday's vote in the House of Commons, a record-breaking defeat for a government, leaves us with no clearer idea of what might happen at the end of March. By default, according to the law as it stands, we leave the EU on 29 March, and as there is no withdrawal agreement we will leave with nothing to govern our relationship with the EU. The chances of that changing are fairly good, given that Parliament (which is trying to wrest control of the process from the government - ironic, given that "taking back control" was supposedly at the heart of the whole idea of leaving the EU) has put in place provisions that make it pretty well impossible to crash out without a deal.

The most likely alternatives at present seem to be an extension beyond 29 March of the notice period given under Article 50 TFEU, or withdrawal of that notice (which the Court of Justice has kindly indicated can be done unilaterally, although only if it is in good faith - that is, not simply to delay matters). Neither of those requires consideration at present, because the status quo would be preserved.

The government has published guidance on what will happen in a variety of areas if there is no deal. One of its briefings concerns trade marks and designs. Originally these documents said that a "no-deal" withdrawal was unlikely: more recent editions seem to lack that reassurance. Ho hum. Although it does say: "We expect to negotiate a successful deal with the EU."

Of particular interest to trade mark and registered design owners is what will be the effect of their EU trade marks if no deal is reached. After all, for years they have been encouraged to believe that all they needed was protection at the EU level and many allowed their UK national rights to fall away, to save renewal fees. The answer is:

The government will ensure that the property rights in all existing registered EU trade marks and registered Community designs will continue to be protected and to be enforceable in the UK by providing an equivalent trade mark or design registered in the UK.

Note that this says nothing about charges. Under the draft withdrawal agreement, there would have been no charge for this: will the government be able to resist an opportunity to raise some revenue, especially when so much would come from foreign companies? Perhaps the financial arrangements of the Patent Office (or Intellectual Property Office as it prefers to be called) remove any attraction to this course of action - it might not benefit the Treasury.

Right holders with an existing EU trade mark or registered Community design will have a new UK equivalent right granted that will come into force at the point of the UK’s exit from the EU. The new UK right will be provided with minimal administrative burden. The trade mark or design will then be treated as if it had been applied for and registered under UK law.

And if a new corresponding trade mark has not been used in the UK in the past five years - will it immediately be liable to revocation? Will the proprietor be able to rely on the reputation acquired by the trade mark in other EU countries, when suing an infringer in the UK? The rejected withdrawal agreement dealt with these points, but the guidance says nothing. Logically, leaving the EU should mean that the new trade mark's past counts for nothing - the five year non-use period should start from scratch, and any reputation acquired elsewhere in the EU should be irrelevant.

This means that these trade marks and designs:

• will be subject to renewal in the UK
• can form the basis for proceedings before the UK Courts and the Intellectual Property Office’s Tribunal
• can be assigned and licensed independently from the EU right

No surprise there.

After exit, business, organisations and individuals with EU trade mark and Community design applications which are ongoing at the date of exit will be able to refile with the Intellectual Property Office under the same terms for a UK equivalent right, using the normal application process for registered trade marks and registered designs in the UK.

Was that even worth saying?

This means that for a period of 9 months from exit, the government will recognise filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application. Right holders taking this step will need to meet the cost of refiling the application in accordance with the UK application fee structure.

 Does this actually follow? I would have thought that if the normal application process were followed there would be a 12-month priority period, although seniority (being a pecularily EU thing) is a different matter. Anyway, this "special priority period" could be useful for applications for EU rights outstanding on the key date (29 March 2019 or such other date as might emerge) because it could enable an applicant whose EU application is opposed to salvage UK protection while retaining the priority date.

These same provisions will apply to international registrations designating the EU filed with the World Intellectual Property Organisation. This ensures that there is continued protection in the UK from March 2019 onwards for trade marks and registered designs (filed through the Madrid and Hague Systems, and designating the EU as the area where they apply).

That seems reasonable, if "reasonable" is a word that can be used in connection with any of this.

Two other points are worth mentioning: first, without an agreement to govern withdrawal the rights of UK lawyers to represent clients before the EUIPO will be in the gift of the European Union rather than based on a sound legal right; and second, EU TM owners might need to find themselves an address for service in the "residual" EU after the UK leaves. More headaches for small businesses.

You might find it useful to listen to this presentation which I published a while ago on the IPso Jure YouTube channel, although it is now to be treated with care!

.eu domain names after UK withdrawal

Some 317,000 domain names in the .eu top level domain (TLD) are registered to UK holders, who look likely to be inconvenienced (at least) by the UK's withdrawal from the EU. The regulatory framework for the .eu TLD, principally Regulation (EC) No 733/2002, does not permit .eu domain names to be registered by non-EU registrants, as Article 4(2)(b) (as interpreted by the Court of Justice in Case C-276/11 Pie Optiek) makes clear. The Commission's Notice to Stakeholders dated 27 March 2018 makes clear that "[a]s of the withdrawal date, undertakings and organisations that are established in the United Kingdom but not in the EU and natural persons who reside in the United Kingdom will no longer be eligible to register .eu domain names or, if they are .eu registrants, to renew .eu domain names registered before the withdrawal date." So that seems like three different ways to say the same thing.

UK registrants will not be eligible to have .eu domain name registrations after E-Day. They will neither be able to register nor renew them. It is not clear whether they will be able to hang on to them until they become due for renewal: EurID can revoke registrations on its own initiative but there are doubts about whether it has sufficient capacity to do much about so many registrations.

There are further ramifications for the .eu TLD arising from the UK's withdrawal. UK rights will no longer count against bad faith registrations - so UK registered trade marks will not give protection against others registering .eu domain names. So long as businesses maintain EU trade marks as well as UK ones, this will not be a problem, but it could be a persuasive reason for registering more trade marks.

Finally, agreements with registrars handling .eu domain registrations will no longer be able to designate UK law, courts, or dispute bodies in their dispute resolution procedures. UK-based registrars will be excluded from handling .eu TLD registrations anyway, but for other registrars who are still in business after E-day this will mean that they might have to change their contract terms.

Trade marks after B****t

If and when the UK leaves the EU, which still cannot be considered a certainty, trade mark practice will change dramatically. The law will remain mostly unchanged, as having implemented the trade marks directive the Trade Marks Act 1992 stands on its own merits, but this conceals some radical changes to the way UK trade mark owners will have to protect themselves. While the directive will survive in the guise of the Act, the same is not true of the EU trade marks regulation: what will happen there will depend on the terms on which the UK leaves.

The draft withdrawal agreement covers much of the ground, of course, but it's just that: a draft. Every day the chances of a "no deal" departure seem to grow, so while it's obviously important to consider the draft agreement we've got to remember that the UK could still be crashing out with no agreement on these important points.

From "exit day", 29 March 2019 (the name comes from the European Union (Withdrawal) Act 2018, a surprisingly concise piece of legislation considering it rewrites most of the statute book), EU trade marks (and Registered Community Designs, a topic for another day) will cease to give protection here. That's pretty obvious. According to the draft agreement, a magical process will be put in place to carve out from existing EU trade marks the rights that apply in the UK, creating equivalent registered and enforceable rights or "corresponding" UK trade marks and the government (in the draft withdrawal agreement) promises that this will be without charge. Whether the temptation to raise some revenue from the exercise proves too much, only time will tell.

Non-UK owners of corresponding trade marks will, presumably, need a correspondence address in the UK: and by the same token UK owners of EU trade marks will need correspondence addresses in the EU27. Of course before red tape can be abolished more has to be created, and additional costs must be imposed on business before they can enjoy savings! And UK practitioners will no longer be able to represent clients before the EUIPO, so clients will need new representatives and will, of course, incur additional expenses. The UK professions will lose important export business, too, and being deprived of the right to pursue part of my practice is enough to make me unhappy, and justifiably I think.

EU trade mark applications that remain pending on E-Day will not be dealt with automatically. Corresponding trade marks will not be available - UK trade marks will have to be obtained separately. Applicants will be given a nine-month priority period during which they will be able to file in the UK and claim priority from the earlier EU trade mark application. One thing that might help trade mark owners here is that if their EU application faces a potential opposition but is OK in the UK, they can wait and take advantage of the priority period to file a UK application.

If an EU trade mark is subject to invalidation or revocation proceedings on exit day, and is later cancelled, the corresponding trade mark rights in the UK will be lost too unless the grounds for cancellation do not apply in the UK (which might be because there is a conflicting trade mark in Malta or the trade mark is descriptive in Estonian, or something like that which would count against an EU trade mark but not a UK one). New secondary legislation will be needed to achieve this. Where the EU trade mark from which the corresponding trade mark is derived enjoys priority from an earlier trade mark, or has the seniority of an earlier UK trade mark (this refers to the process by which trade mark owners were allowed effectively to backdate their EU trade mark to the date of national trade marks, so they could then allow them to lapse - which would never have been a great idea, in fact) the corresponding trade mark will benefit from the priority or seniority.

What if the EU trade mark has not been used in the UK in the past five years? Then it will be immune to challenge on those grounds until the end of the transition period (31 December 2020). Similarly, during the transition period owners of EU trade marks will be able to rely on a reputation in the EU for the purposes of UK infringement proceedings, but after the end of the transition period their reputation will have to be in the UK.

I have been advising clients that it would be a good idea to go for UK national trade marks even if they have EU ones for some time already. The application of the rules about use and reputations if the trade mark has not been used widely in the EU make relying on UK trade marks rather uncertain already, and withdrawal is not going to make it any easier.

There are questions still to be dealt with concerning the treatment in the UK of internationals designating the EU, especially if they have not been granted protection by E-Day. These are for the UK to sort out - nothing to do with Brussels.

One aspect of the Trade Marks Act which will change is section 12, which deals with exhaustion of trade mark rights. That's a topic for another posting, I think.

No B****t dividend for authors

In the Public Lending Right Scheme 1982 (Amendment) (EU Exit) Regulations 2018 which were published on 13 August (they have not yet been laid before Parliament), the Government has paved the way for public lending right to carry on unchanged after the UK leaves the EU. As PLR is not a creature of EU law, you might wonder why this is necessary: the answer is that the Regulations will ensure that UK-resident authors will still be eligible to register for PLR after the UK is no longer a member of the EEA. This requires an amendment of the definition of "eligible person", effected by these regulations - made under the Henry VIII powers given by the European Union (Withdrawal) Act 2018.

The amendment inserts the words "the United Kingdom or" before "EEA", meaning that the geographical extent of the scheme remains the same - authors resident in other EEA countries (or, from "exit day", authors in EEA countries) will be eligible. Since PLR is distributed out of a set fund, the amount available per loan depends on how many eligible authors there are. Leaving the EU might have meant a huge reduction in their numbers - but it won't, and my PLR statements will probably continue to tell me that I haven't earned enough to justify the writing of a cheque. Still, it's not the sort of windfall I'd have wanted.