Latest News

Brexit Effect on IP

-By Sushant Arora, Partner, Mumbai Office

What is Brexit

BREXIT or Britains Exit is a term used to denote exit of Britain from European Union (EU), which presently is a Union of 28 independent countries forming a unified economy.

Historical perspective about Britain / Great Britain / United Kingdom

We know that England, Scotland and Wales(the erstwhile countries of Europe) along with certain small islands (but not the Channel Island and the Isle of Man) merged into each other to form what came to be known as the Great Britain. While Wales merged into / united with England in the year 1536 under Henry VIII, the term Great Britain came into being only in the year 1603 when England and Scotland became a single kingdom under King James VI of Scotland. This Union of1603 was merely a union of 2 crowns, and not a political union; since both England and Scotland had different parliaments until about 1707 when Scottish Parliament met for the last time and decided to merge itself into the parliament of England, under the aegis of Queen Anne. It was only on 1st May, 1707 when the 2 parliaments (of England and Scotland) merged to create what is now known as the Great Britain. However, the term United Kingdom came into being only in 1922 when Northern Ireland decided to and merged with the Great Britain.

Brexit Referendum

In a recently concluded Referendum, all the people of United Kingdom together voted to decide whether or not they should remain in the European Union. The results of this voting varied. While the overall population has ended up voting for exiting EU, the people of Scotland have voted against the exit, as they want to remain a part of the EU. Only time will tell as to whether the people of Scotland areable to force their exit from UK to become an independent country in order to remain in EU. In the alternative, if Scotland is not able to declare its independence, it too shall depart from EU, being a part of the UK. These developments are awaited.

Now that Britain has voted to leave the EU, it will no longer have to contribute billions of pounds every year towards the European Union’s budget. As such, the British economy is likely to improve on account of this saving. It is also felt that Britain is likely to take back control of its borders in order to curb immigration and increase security. As a result, Britain will no longer accept free movement of people from Europe. This may improve UKs ability to fight cross-border crime and terrorism.

As a result of this BEXIT vote, the Prime Minister of UK Mr. David Cameron had to resign to give way for the new Prime Minister Mrs. Theresa May, who has, so far, delayed triggering Article 50 of the EU.

As of now, the British Parliament shall have to first repeal the Communities Act, 1972 before Britain can formally commence Advice Notice to the EU under Article 50 of the Consolidated Treaty on European Union. The invocation of this Article 50 would actually start the timer on for the 2 years of Exit Talks before Britain (or the UK) is finally expelled from the Political Bloc of EU. With this exit, Britain shall now have to make new Trade Agreements with the rest of the world.

Other Effects

Just like the people of Scotland may force themselves into becoming an independent republic, the government of Spain may call for taking control of Gibraltar. It is also expected that the people of Ireland (an independent country) may like to unite with the Northern Ireland (which is hitherto a part of the UK).

Brexit Effect on IP Registrations of EU

European Union Intellectual Property Office (EUIPO) is the trademark and design Registry for the internal market of the current EU. It is based in Alicante, Spain.

As per the current practice, any person, living in any part of the world (and not necessarily the EU), may make just One Single Application to apply for register his Trademark / Design in all the 28 member countries of EU. This One Single Common Application is required to be filed with EUIPO. Presently, it costs around 850/- and is filed in just one of the EU languages that the Applicant may choose.Once processed and accepted, the relevant Trademark / Design gets registered in all the 28 EU countries.

However, if any suchperson is doing business with only one of the EU countries, (and has no intention of applying for registration in all the 28 countries of EU), it can approach the National Office of that country for any such Trademark / Design registration, through an application in the national language of that country. This type of registration shall be limited to that country.

The above mentioned National and the EU systems are not conceived to compete against each other; but to complement each other. The EU system is thus a cost effective and easy way to register one’s Design and Trademark in all 28 member countries namely, Austria, Bulgaria, Belgium, Croatia, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom (Britain).

Post Brexit, the said EUIPO is likely to delete the name of Britain as its Member Country, which would mean that any such EU registration would then be effective only in 27 EU countries (instead of present 28). Britain would then be outside the EU and one shall consequently have to apply through National Channel of Britain for getting IP Rights in Britain.

It is yet to be seen as to whether the existing EU registrations would remain valid and in force in the UK post Brexit i.e. the actual departure of Britain 2 year hence. The National Registry of the UK shall have to formulate rules in this regard. These and related facts would be more clear after Britain formally invokes Article 50 of EU Treaty and the EU officially gets seized of the matter relating to exit of Britain from EU.