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!

Intellectual Property Bill

The Intellectual Property Bill  is hardly news any more, and plenty has been written not only about it but about proposed amendments too. At 23 sections, it's a pretty short bill, and its brevity is closely associated with my first gripe about it - in fact, my first two gripes: why does it use the increasingly anachronistic appellation "intellectual property" in the first place, and secondly why use in the title an expression which already causes so much damage and confusion when in fact it touches on only two of the four main legal rights that fall under the very flexible heading, "intellectual property"? Why could it not have been called the Patents and Designs Bill, so its title would have reflected its subject matter? I was about to write that we had a Patents and Designs Act not long ago, and fortunately checked before I committed myself on that - fortunately, because I find that the only Patents and Designs Act on the statute book in fact dates from 1907, which even by my extensive definition cannot be considered "not long ago". Ah, there was another - in 1919 - which appears in the table of statutes in my copy of Morris and Quest, but I don't think that makes a big difference.

That gives away a large part of what I wanted to say about the Bill, too. Part 1 is headed "Designs" and Part 2, "Patents". Part 3, as is pretty usual with these things (it's probably in a word-processing template in Parliamentary Counsel's office) is headed "Miscellaneous" and Part 4 is "General".

Turning first to Part 1 (and I don't propose to say much about the other Parts), design law has been the worst can of worms in the intellectual property area (see, in the right context the expression has its uses) since at least Jill Knight MP's Design Copyright Act 1968, which cannot even be found on legislation.gov.uk - and at the same time my favourite. Repealing section 52 of the 1988 Act, one of the keystones in the dam which held back copyright and stopped it flooding the field of designs, was bad enough - I sense a classic bit of special pleading, and a lack of evidence-based policy-making, but then the same could be said of Part 3 of the 1988 Act which was written to keep car parts makers happy. Now the new Bill will mess about with some of the key concepts of Part 3, and the rules about ownership, and also tinker with infringements of registered Community designs.

First of all, the meaning of design. The Bill will delete the words "any aspect of" from the definition that is found in section 213(2) and also in section 51(3) (another important part of that dam), which tells us that the word "design" means "the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article." Shouldn't the words "the design of" be omitted too, to make the definition vaguely grammatical?

My good friend Jane Lambert, on her excellent NIPC blog, explains the ramifications so there is no point in me doing so too. Suffice to say that the government apprehends that design right owners tend to overstate the extent of their protection, which on the wording of the definition covers the design of trivial elements as well as important ones. If that's a problem, it's one that has been around since 1988. I can see why it might be desirable to tighten up the wording: I have always found the scope of UKUDR, as we should now refer to it, confusing, focusing as it does on the whole design of an article (by contrast with registered designs which protect novel features of a design) but then inviting us to look at parts of the article. But I do think the way to deal with the problem would have been to take out that reference to "part", and leave it to the courts to decide whether an infringer has taken a substantial part of the design.

Moving on, we come to the definition of "original", which the 1988 Act tells us does not include anything that is commonplace. Sounds reasonable, doesn't it? If something is commonplace, it can't be original. Whether a design be commonplace will now be determined by looking at qualifying countries, not the whole world: the definition will, after amendment, read

A design is not “original” for the purposes of this Part if it is commonplace in a qualifying country in the design field in question at the time of its creation and "qualifying country” has the meaning given in section 217(3).

Paragraph 10 of the Explanatory Notes (a document which, back in 1987 when the Copyright, Designs and Patents Bill was before Parliament, was worth its weight in gold, but now thanks to the Internet is instantly downloadable and indeed weightless) says that "there remains confusion as to the geographical coverage over which that meaning applies", a grammatically highly suspect proposition - and obviously composed by someone with a dangerous addiction to compound prepositions. "The amendment", it goes on, anthropomorphising it quite unnecessarily, "aims to remove that confusion by specifying that the meaning of “commonplace” applies to those countries defined under section 217 (3)". The Impact Assessment indicates that the rationale for this change is to achieve consistency with the Registered Designs Act 1949 (version 3). But the RDA deals with novelty, not originality (that, you may remember, was one of the big problems with version 1, which purported to deal with both), and “novelty” is measured across the whole of the European Economic Area. UKUDR applies to the EEA, and not many other places, so the Bill will achieve a degree of consistency in the geographical extent of the measurement: but because the measurement is of different attributes, making the geographical area the same is as pointless as comparing Cheddar chalk with Cheddar cheese.

Next, ownership of the design. UDR always differed from copyright in that when a design was commissioned UDR would belong to the commissioner - unlike in the copyright world, where the rights would remain with the creator. Given the nature of design work, this arrangement always seemed to me to make sense. Now, however, designers are the darlings of the IP system, and policy (evidence-based, I hope) demands that they retain the rights to their work. Well, things change over the course of 25 years, and we are no longer talking about designs for Morris Marina exhaust pipes (OK, we never were in the context of UDR, but you see what I mean), we are talking about designs for cool tablet computers. Perhaps this is a valid development.

There are also changes to some exceptions to infringement provisions: design right will not be infringed by private acts, experiments and teaching, and for things done on visiting ships and aircraft. I fear that allowing experimental use will open Pandora's box, as designs don't have to be used in experiments in the same way that patents do - unless, for example, you're trying to build a bouncing bomb, but who does that these days? Perhaps I am wrong, but I can't get very excited about these provisions. The provisions about registered designs are a bit boring too, and it's late, so I will leave them to another time - if indeed I think it's worth telling you more.

Trade Marks and Registered Designs (Amendment) Rules 2013 (SI 2013 no 444)

This statutory instrument makes a few small amendments to the Rules, including providing that where a time limit has to be measured from the date on which an event occurs, the day on which that event occurs is not included when computing how much time has passed. It was made a few weeks ago, and came into force on 31 March.

Queen’s Speech: Intellectual Property Bill

Actually, more of a Patents and Designs Bill, and it is unfortunate that it's entitled “intellectual property” – hardly a precise enough expression to use in legislation.  But whatever they call it, the Bill will implement changes to the design laws that the Government announced recently in response to a consultation it carried out.  These include introducing criminal penalties for infringing registered designs (but not, thank goodness, unregistered design right).  The concept of what is commonplace for unregistered design right purposes will be tied to a specific geographical area, and the first owner of unregistered design right will be the designer even where the design is commissioned.

The Bill also contains provisions to create a new opinions service, like the one the Patent Office already offers in relation to patents, covering registered designs.  It will also provide for appeals from decisions of the Designs Registry to go to an appointed person rather than to the High Court.

As far as patents are concerned, the Bill will create a framework for establishing part of the central division of the Unified Patent Court in the first instance in London, and local divisions elsewhere in the UK.

There is more to be said about the Bill, and I plan to come back to expand this post in the future.