UK Retained EU Law Bill’s impact on intellectual property

Retained EU Law Bill

The Bill (42 pages / 1.86MB PDF) is the latest step in the implementation of Brexit and is intended to deepen its impact more quickly. If passed by MPs, it will allow ministers to replace ‘retained EU law’ – EU law that was incorporated into the UK legal system after Brexit under the European Union (Withdrawal) Act 2018 – with new domestic legislation more easily. The Bill would see large parts of retained EU law revoked automatically on 31 December 2023, referred to as ‘sunsetting’, unless ministers decide to preserve or replace them beforehand.

Impact on intellectual property

EU law has had a profound impact on the UK legal system relating to IP, including harmonisation around trade mark, design and copyright law. These areas of law, therefore, fall within the scope of the Bill.

Primary domestic IP legislation is preserved by the Bill and falls outside the sunset provisions. This means, for example, that the 1994 Trade Marks Act and the 1949 Registered Designs Act will remain, unless and until replaced by domestic legislation in the usual way. There will, however, be no requirement for the courts to interpret these pieces of domestic legislation consistently with their EU counterparts. This leaves scope for divergence between the meaning and effect of, for example, the Trade Marks Act and the Trade Marks Directive (EU) 2015/2436.

Domestic secondary legislation is, however, subject to the sunset provisions. This means that a number of genuinely significant pieces of legislation relating to trade marks, designs, copyright and even database rights are at risk of automatic revocation at the end of 2023. Among others, the 1997 Copyright and Rights in Databases Regulations, the 2018 Trade Secrets (Enforcement, etc.) Regulations and the 2006 Intellectual Property (Enforcement, etc.) Regulations are caught. We await government announcements on what it intends to do in relation to each individual piece of IP legislation in this category.

It is not currently clear exactly how many, and which, pieces of trade mark, design and copyright legislation are impacted by the Bill. The government’s own retained EU law dashboard does not appear to be comprehensive and so cannot be relied upon as providing a complete picture at this stage.

IP case law

Case law is integral to the development of the law around trade marks, designs and copyright. The Bill enables the Court of Appeal and the Supreme Court to depart from any relevant EU case law. That is no change to the existing post-Brexit position. However, what is new is that all courts will no longer be required to interpret domestic legislation consistently with EU law provisions, and so may depart from EU case law in that respect. In addition, the preliminary reference procedure in the Bill will give other case law departures effect in the High Court, including the Intellectual Property Enterprise Court (IPEC). While these lower courts cannot of their own volition depart from EU case law, they can be given permission to do so by the higher courts.

Legal divergence on Brexit was anticipated and the Bill potentially hastens that. However, whether UK IP judges will choose to diverge on legislative interpretation and case law remains to be seen. The evidence so far is that they may prefer continuity and consistency between the UK and the EU in the interests of legal certainty and leave reforms to the UK parliament. In a recent ruling, for example, the Court of Appeal stressed that the power to depart from retained EU case law should be exercised “with caution”.

The approach judges choose to take will be pivotal in the future development of the law. There may be some uncertainty for several years after the Bill is enacted until the courts’ new approach becomes clear. Clarity is currently needed, for example, on whether the EU test of originality for subsistence of copyright set out in the 2019 Cofemel decision should trump the UK closed category approach to copyright protection, which can sometimes require a work to have artistic merit for copyright protection to arise. In a recent decision involving rowing machine manufacturer WaterRower, the IPEC declined to decide the point – but it was widely believed that the UK would, in time, openly adopt the EU test. That is now called into question.

Next steps

So far, the profound effects of the Bill appear to have been drowned out by the overall political turmoil the UK is facing. The Bill has yet to become law and it will not be easy for the government to take it through all stages of the UK parliamentary process successfully. The House of Lords could, for example, seek to extend the sunset date or water down other aspects of the Bill.

The Bill is unlikely to become law in any form before mid-2023, leaving the government very little time before the sunset ‘cliff edge’ to make decisions about the future of a large body of legislation. There may be, therefore, moves to preserve legislation en masse, indefinitely or temporarily, to avoid legal black holes until a more thorough review process can be undertaken.

Further developments are expected as the Bill progresses through parliament, along with clarity from the UK Intellectual Property Office (UKIPO) around which legislation is affected and what its approach to revocation or preservation is likely to be. Businesses should consider in the meantime whether they wish to make representations to the UKIPO to seek to influence its decision-making on these issues.

A version of this article was first published by ILO.