101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 69 Business: Exhaustion of IP rights Purpose If the UK leaves the EU in March 2019 without a deal, find out in this notice how this would affect the exhaustion of intellectual property rights. Before 29 March 2019 Intellectual property rights give the business, organisation or individual that holds the rights (the right holder) certain exclusive entitlements, which include the right to control distribution of a protected product. The exhaustion of intellectual property (IP) rights refers to the loss of the right to control distribution and resale of that product after it has been placed on the market within a specified territory by, or with the permission of, the right holder. The UK is currently part of a regional European Economic Area (EEA) exhaustion scheme, meaning that IP rights are considered exhausted once they have been put on the market anywhere in the EEA with the rights holder’s permission. After March 2019 if there’s no deal In this scenario the UK will continue to recognise the EEA regional exhaustion regime from exit day to provide continuity in the immediate term for businesses and consumers. This approach means there will be no change to the rules affecting imports of goods into the UK, and businesses that undertake this activity may continue unaffected. Ongoing UK recognition of the EEA regional exhaustion area will ensure that parallel imports of goods, such as pharmaceuticals, can continue from the EEA. A parallel import is a non-counterfeit product which is imported into a country where the intellectual property rights in that product have already been exhausted. While there will be no change for the importation of goods into the UK, there may however be restrictions on the parallel import of goods from the UK to the EEA. Businesses undertaking such activities may need to check with EU right holders to see if permission is needed. The government is currently considering all options for how the exhaustion regime should operate after this temporary period. The government is undertaking a research programme to support this decision . Information relevant to specific areas can be found here . Implications Intellectual property-protected goods placed on the EEA market by, or with the consent of, the right holder after the UK has exited the EU will continue to be considered exhausted in the UK. This means that parallel imports of these goods from the EEA to the UK will be able to continue unaffected. Goods placed on the UK market by or with the consent of the right holder after the UK has exited the EU will not however be considered exhausted in the EEA. This means that businesses exporting these goods from the UK to the EEA might need the right holder’s consent. Actions for businesses and other stakeholders Businesses may find that they need the right holder’s consent to export intellectual property-protected goods that have been legitimately put on the market in the UK to the EEA. Businesses may wish to seek legal advice on how this arrangement could affect their business model or intellectual property rights.