BREXIT - Future Exhaustion of IP Rights Regime in the UK - January 2022 Update
By Simon Miles, ECTA International Trade Committee Member
Following the closure of the UK government’s consultation on 31 August 2021 seeking views from stakeholders on the most appropriate IP rights exhaustion regime in the UK following Brexit, the UK government has now published its summary of the responses received (see here), but has decided that it cannot arrive at a decision based on the criteria originally set out.
In the update posted on 18 January 2022, the UK government has concluded that following its initial analysis, there is not enough data available to understand the economic impact of any of the alternatives to the existing UK+ regime. The government has announced that it will develop the policy framework further, reconsider the evidence and make a decision at a later date, but does not give a timeframe for when this will happen. Whilst this is a little unsatisfactory, it is surely sensible to once again maintain the status quo taking into account the importance of the subject matter and the relatively short period of time since Brexit in which to gather data.
The public consultation
The consultation was considered necessary by stakeholders because after Brexit on 31 December 2020 the UK chose to retain the EEA’s regional exhaustion regime with regards to imports of goods into the UK from the EEA - EU rights holders continue to be free to export goods into the UK. However, it has become an asymmetric system because the EU has not reciprocated. IP rights in goods first placed on the market in the UK are no longer considered exhausted in the EEA. This means that owners of UK IP rights are not able to prevent parallel imports from the EEA into the UK, but owners of EEA rights will be able to prevent goods put on the market in the UK from being sold in the EU.
The public consultation was launched for the purpose of obtaining the views of respondents on the most appropriate exhaustion of IP rights regime for the UK. Four options were outlined during the consultation, a unilateral EEA (UK+) regime, a national regime, an international regime and a mixed regime. Respondents were asked to provide their views and supporting evidence on what regime should be implemented, and how that implementation would take place.
The consultation responses
The UK government’s summary sets out the main views of the respondents to the questions posed in the consultation, as well as the views of interested parties in ministerial meetings and meetings with UK Intellectual Property Office officials during the consultation period.
In relation to what is considered the most appropriate of the four options it was clear that most respondents favoured the current position. There is some suggestion that this has something to do with the respondents’ familiarity with the current rules notwithstanding the lack of reciprocity relating to parallel imports between the EEA and the UK.
Over a third of respondents favoured a national exhaustion regime believing that competition would be boosted which would provide UK businesses with a competitive advantage over their EEA competitors because it would permit parallel imports from anywhere in the World. An international exhaustion regime was not popular with respondents – over half actively opposed it. This might be explained by the fact that the pharmaceutical and creative industries provided the heaviest number of responses. Only a small proportion of respondents favoured a mixed exhaustion regime and around a quarter of respondents expressed no preference.
It is clearly a complex situation which requires further analysis. The parallel trade of legitimate physical goods takes into account many different stakeholders. Views are obviously going to differ, for example between those whose livelihoods were dependent on commercialising parallel traded goods and rights holders. Interestingly, most respondents were unable to provide estimates on the scale of parallel imports either at business or sector level, and obtaining reliable figures was deemed difficult due to volatility or data not being tracked. Further, respondents explained that supply chain management for a given product could involve a complex national or international chain of stakeholders and provided mechanisms by which they exerted control over supply chains. Additionally, the position is obviously complicated by other factors which had an impact, such as international price differentials resulting from market landscape and government price controls.
Many respondents were in agreement that there would need to be a period of time to embed any changes. That period would depend on the extent of the change, the impact on supply chains and any regulatory impact.
In light of all of this, the UK government considers it is reasonable for further consideration to be given to the subject.
NEW OBSERVATORY PAPER: IPR-INTENSIVE INDUSTRIES AND ECONOMIC PERFORMANCE IN LATIN AMERICAN COUNTRIES
The EUIPO Observatory has just released the paper ‘IPR-intensive industries and economic performance in Latin American countries’, a compilation of the main findings of previous studies in five Latin American countries (Mexico, Argentina, Peru, Chile and Uruguay) covering trade marks, patent, design- and copyright-intensive industries, as well as a comparison with the EU’s main results.
In particular, the paper highlights the different situations regarding IPR registration, compares the contribution of IPR-intensive industries to the most relevant economic indicators, and analyses the distinguishing features of IPR-intensive industries in the five Latin American countries.
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SAVE THE DATE - ECTA Alicante Round Table (Online, 17 February 2022)
The ECTA Alicante Round Table is coming up soon in a fully virtual format, mark the date in your calendars!
17 February 2022 (Online, 16.30-18.30 CET) – ‘ECTAPOLY: Testing the Limits of Good Faith!’
Fabio Angelini, ECTA Copyright Committee Chair, Bugnion S.p.A. (IT) will moderate this year’s round table, discussing the topic with great speakers and the audience in a very unusual and interactive format, in the form of a board game!
As part of the EUIPO’s digital transformation programmes (particularly the Digital Evolution Programme), the Office has recently launched its first in-house image search tool, made available via eSearch plus.
The Office is also working to implement it in its flagship tools, TMview and Designview, to let users search by image in the world’s largest trade mark and design databases. The EUIPO will also offer the service to other IP Offices in the European Union Intellectual Property Network (EUIPN) to integrate this functionality with their own system.