Brexit and technology transfer: The view from Blake Morgan

Posted by Simon Stokes on
Now that the dust is settling on the UK's decision to leave the EU, our clients are asking what this means for them. Technology transfer will be affected by Brexit as the legal regime underpinning the protection and exploitation of intellectual property and data is heavily shaped by European law.  

There will be no dramatic change overnight.  The hard work begins now to assess the implications of the decision - and there are a lot of legalities to work through. In the meantime, it is business as usual however we give our initial thoughts on some specific areas below.

Intellectual property and data privacy

The vote to leave the EU raises many questions about what happens with the UK and its future relationship with the EU patent trade mark and design system.

For the moment it is business as usual and trade mark and design owners should not panic – European Union Trade Marks and Registered Community Designs remain valid in the UK and there is no immediate loss of IP protection.

Once the UK formally gives notice to exit the EU, negotiations will begin on the status of EU trade marks in the UK and whether any transitional provisions will be required to grandfather across EU trade mark and registered design rights into the UK.

The European Patent is not derived from the EU regime and therefore will be unaffected.  However, the position regarding the forthcoming European Unitary patent is less clear.  The UK had intended to participate and host a court, however only member EU states can participate in this system.

Copyright and trade secret protection is based on domestic law but with elements of EU harmonisation.  For example the recent Trade Secrets Directive will harmonise EU law in this area from 9 June 2018.  It is as yet unclear to what extent EU harmonisation will continue to affect these unregistered UK IP rights.

So far as data protection is concerned there is a risk that the legal transfer of data to the UK under EU rules could no longer be valid once the exit is complete nor is it clear that the UK will be free to adopt a more business friendly data protection regime than exists within the EU as some hope – most likely the UK will follow the international trend set by the EU in having a high standard of data privacy similar to the new EU "GDPR" regime in order to be able to continue to trade with the EU

If you have any queries please contact Simon Stokes or Jill Bainbridge.

Competition law

UK competition law is currently modelled on EU competition law, regarding technology transfer, R&D agreements and other commercial agreements and practices. However, although UK competition law (which applies for matters of national impact only) follows EU law, it exists under specific UK legislation which will remain in place until varied or revoked by the UK government in due course. In addition, competition law in most national jurisdictions (even outside the EU) tends to follow similar economic precepts on the control of anti-competitive agreements, market power (dominance) and mergers, and so although the UK will have the opportunity to diverge from the EU following Brexit, we are unlikely to see really significant changes to our national competition regime, at least in the near term. In any event, following Brexit, UK entities involved in agreements, or conduct that have a cross-border dimension with the EU will have to assess difficult questions as to whether those agreements or practices affect trade in the EU: if so, they would continue to fall within the on-going EU regime and would remain within the EU's jurisdiction. 

The disentangling of UK competition law from EU competition law is going to be a significant legal challenge, and will also be affected by the nature of the UK's future negotiated relationship with the EU (for example, EEA membership would be substantially the same as continuing EU membership as far as competition law is concerned).  In the meantime, when drafting and negotiating agreements it is safest to proceed on the basis that EU competition law principles will continue to apply in the UK for the foreseeable future. 

If you have any queries on competition law please contact Edmund Forey or Simon Stokes.

Litigation and contract enforcement

There may be issues enforcing judgements or choice of law clauses in contracts given that Brussels I Recast allows civil or commercial judgements by a Court in any EU Member State to be 'passported' to all other EU Member States using a standard certificate and without Court recognition in another EU Member State. The Lugano Convention (between EU Member States, Switzerland, Norway and Iceland) allows mutual enforcement of judgements with Court recognition.

If, post-Brexit, the UK is neither an EU Member State nor a party to the Lugano Convention, there is a risk that recognition of judgements between Ireland and the UK, for example, may become more cumbersome, restrictive and expensive.  This issue may be raised at the start of a dispute when considering applicable law and choice of forum and could lead to parallel litigation.

If you have any queries please contact Jill Bainbridge.

Education

The higher education sector is presently reliant on the EU as a reliable source of funding, in the form of students, research grants and capital finance.  It now faces a challenging future, given the uncertain nature of the relationship between the UK and the EU. In the next five years, we may well see a more innovative approach to funding and collaboration required, with institutions looking further afield for support, or collaborations with the private sector.

In the meantime, nothing will happen immediately as EU law will still apply in the UK until terms have been agreed for its withdrawal from the EU.  So many facets of regulation which impact on Higher Education, such as State Aid, would remain in place for at least two years.  If the UK is to remain in the EEA, then those rules may continue to apply indefinitely.

If you have any queries please contact Emyr Lewis.

This piece is just a summary of the issues your technology business may face. If you have any queries please contact Simon Stokes or Martin Kay.

Click here to download our free Brexit guide.

About the Authors

Leading the firm's technology practice in London, Simon specialises in information technology law, including outsourcing, cloud services, protecting software IP and licensing of market leading data analytics software.

Simon Stokes
Email Simon
020 7814 5482

View Profile

Martin heads the Corporate team in London and advises corporate clients and not-for-profit and public bodies, including universities, on a range of corporate and commercial issues.

Martin Kay
Email Martin
020 7814 6919

View Profile