Dr. Morton Douglas

Brexit: Consequences for Intellectual Property Rights

Great Britain has decided to leave the European Union. With its departure, the country will lose its status as an EU member state. The scope of protection for the European Union trademark and community designs will no longer extend to the British territory. This may result in protection gaps. Furthermore, there may be impediments to the free movement of goods.

The fate of protection right with union wide applicability

European Union trademarks and community designs are protected in all EU member states and therefore have a great advantage for applicants compared to national property rights with a limited territorial scope of protection. After the execution of the Brexit, the European Union trademarks and community design regulations will no longer apply to Great Britain. Therefore, the question will arise, to what extend the universal property rights will in future grant protection with regard to territory.

Therefore, the exit agreement which has now to be negotiated between the European Union and Great Britain will have to also take into consideration the future of these rights. The objective will be to recover complete national sovereignty on the one hand, while at the same time considering the owners’ of European Union trademark and community designs trust in the scope of protection of their marks.

The continued applicability of union wide property rights after the execution of the Brexit must be excluded, since this would be inconsistent with the main objective of a departure of Great Britain from the European Union. The European Union cannot and will not allow such cherry picking, as this may set a negative example for other member states, in which the calls for a referendum for an exit are becoming louder.

It is therefore more probable that a certain time limit will be set for owners of property rights, within which they can apply for the continued applicability of their EU wide property rights in Great Britain, which will result in a parallel but independent national property right. The splitting up of property rights has occurred several times in the recent past, e.g. when Czechoslovakia and Yugoslavia split up. Furthermore, European Union Trademark law is already familiar with converting a European Union trademark into national law.

Since these transformation processes are always costly, it is recommended to take the changed political situation into account when applying for property rights in Great Britain and to apply for immediate protection in Great Britain. Whereas this can be achieved without significant efforts in trademark law via the Madrid Agreement, the protection of registered designs will require a greater effort in future, since Great Britain is not a member of the Hague Convention.

In any case, the costs for the obtainment of property rights will increase in Europe due to the Brexit.


Whereas universal property rights already exist in the field of trademarks and designs, standard rights in the field of patents were supposed to be introduced shortly. After decades of struggling for a universal patent system, the implementation of such a system will most likely be postponed for an uncertain time due to the Brexit. Therefore, companies must continue to choose the costlier option via national property rights.

Drafting and interpretation of license agreements

The changed legal situation will have consequences for license agreements and all continuing obligations. For already existing license agreements which were entered into for the territory of the European Union, the territorial reach will have to be evaluated by interpreting the contract. In general, it may be expected that the contract will include Great Britain even after execution of the exit. In this case the grantor of the license will have to make sure that property rights exist for this territory. A different conclusion may be reached if the basis of the contract is the European Union as a political unit.

Regulations with regard to payments, taxes, transport expenses and customs will have to be determined through interpretation and adjusted accordingly.
With regard to new license agreements, it is recommended to include explicit regulations with regard to Great Britain and the time of its departure from the European Union, even if the change has currently not yet been executed.

The interpretation of prior rights agreements and coexistence agreements which are entered into with effect in the European Union and are often used in trademark law will prove to be more difficult. Whether these contracts will be effective in Great Britain after its departure from the EU can only be decided on an individual basis, by taking into account where the trademarks were registered at the time of conclusion of the contract.

Therefore, the Brexit must be taken into immediate account when drafting a contract. Furthermore, it may also be advisable to take into consideration the splitting up of Great Britain in the event of the contemplated departure of Scotland and North Ireland.

Restrictions in trade with Great Britain due to property rights?

In addition to the necessity to take action due to the Brexit with regard to the territorial scope of universal European property rights, the outcome of the referendum in Great Britain poses numerous questions with regard to free trade, also with regard to goods covered by IP rights. Whereas the European domestic market prohibits owners of intellectual property rights to restrict free trade via their intellectual property rights, this is generally possible with regard to imports from outside the EU.

Most certainly, this question will also be subject of the exit negotiations. Currently, the Union Trademark regulation allows the trademark owner to stop the import into the EU of goods which carry his or her brand name and have been put on the market outside the EEA for the first time, to prevent parallel imports from non-EU countries where only lower prices can be achieved. Great Britain, just as e.g. Norway, is a member of the EEA. Therefore, in the field of trademark law, the legal possibilities will depend on whether Great Britain plans to also leave the EEA or not.

However, in the field of community designs law and patent law, all imports from outside the EU can be stopped via intellectual property rights. Insofar as exceptions are not negotiated in connection with the exit negotiations, owners of design rights can stop parallel imports from Great Britain into the EU. Therefore different pricing schemes can be established in the different markets.


The Brexit has a direct influence on Union Trademark law and community design law. However, owners of property rights to not have to take immediate action, first the EU and Great Britain have to agree on the scope and timeframe of the Brexit. On the other hand, license agreements and other agreements, which refer to the European Union as a geographical unit will have to be reviewed immediately.

Morton Douglas

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