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Brexit roundup - IP, commercial contracts, data, IT and employment law

30 June 2016

On 23 June 2016, the UK voted to leave the European Union. This decision marks the first step in a long process of change. In this legal update, our specialist teams focus on what practical steps you can take to minimise risk now as well as looking at potential challenges in the future.

Your intellectual property following the 'Brexit' referendum

Holders of EU intellectual property rights should understand the potential implications of the 'Leave' vote upon their portfolios.

The European Patent Office (which is independent of the EU) will continue to be responsible for granting applications for EP patents. Businesses will still be able to obtain patent protection across the EU, including the UK. However, following exit from the EU, it is unlikely the UK will participate in the Unitary Patent Court system.

Existing Unitary EU trade marks (EUTMs) and Registered Community Designs (RCDs) will continue to be valid in the remaining EU member states following Brexit but, unless a novel arrangement is made for the UK, such rights will no longer have any effect in the UK. New provisions are anticipated to give EUTM and RCD owners national protection in the UK instead.

Those that do not already have a UK national trade mark for their key brands may wish to consider applying for one to avoid uncertainty. For new trade mark and registered design applications, where the UK is a key market, it may be worth investing the additional costs and applying for both a UK national right and an EU unitary right; the RCD and EUTM, which cover all EU member states, will often continue to be good value.

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Brexit - key points businesses should consider for commercial contracts

Businesses operating in the UK should consider their existing agreements and contractual templates and identify any areas of material risk in the light of the Brexit vote.

Potential high risk arrangements include international contracts entailing currency exposure, pan-European licensing arrangements, material financing arrangements, long term international supply or service arrangements and contracts predicated on access to the single market.

Key areas to consider in connection with your existing contracts and templates include:
  • currency risk
  • risk of legislative change
  • references to EU law concepts and territorial references
  • termination and force majeure
  • assignment and transfer (where relevant)
  • dispute resolution.
Due diligence around solvency of counterparties, and associated solvency related contractual provisions, will be key as companies continue to do business in an uncertain economic environment.


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Brexit – the impact on data protection

The EU General Data Protection Regulation (GDPR) is expected to come into force in EU member states in May 2018. If the UK is a member of the EU at that point it is possible that the GDPR will, from May 2018 to the exit, have direct effect on businesses established in the UK. If that is the position, UK businesses will be required to comply with the GDPR.

Once the UK leaves the EU, the GDPR will no longer have direct effect on UK businesses which are only established in the UK. If a UK business does have an establishment in another EU member state the GDPR could apply to the UK business as a consequence of its linkage to the EU based business. In any event, post-Brexit, the GDPR will expressly apply to any UK businesses which offer goods or services to individuals in the EU or monitor individuals in the EU.

Any transfers from the EU to the UK (as a non-EU state) will only be permissible, without further legal justification, if the UK can demonstrate that it offers adequate protection for personal data. In the absence of adequacy, any EU business transferring personal data to the UK would need additional legal justification e.g. individuals’ consent, EU model contracts or binding corporate rules.

Until we have more clarity on the exit process, we would suggest that businesses:
  1. keep up to date on statements from the Information Commissioner and the Department of Culture, Media and Sport
  2. undertake at least a high level audit of compliance with the UK’s current DPA
  3. review where the business and any group companies are established 
  4. check whether the activities of the UK business include offering goods and services to, or monitoring the activities of, EU individuals.

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Brexit – what will change for IT, e-commerce and digital services?

Businesses will need to be alive to the potential impact on e-commerce and the provision of digital and electronic services. This is currently governed by the Electronic Commerce Directive.

The EU has been working towards a Digital Single Market to reflect the physical single market, with the aim of allowing better access to the same online goods and services at reduced costs, promoting common data protection laws, and increasing the adoption and acceptance of digital services.

The UK’s exit from the EU could mean that UK businesses would not be able to participate in the Digital Single Market as freely as they have to date, or may find that they are disadvantaged online compared to EU based suppliers. Regulations which favour EU over non-EU businesses for instance could be imposed within EU countries.

Brexit – potential implications for UK employment law

A recent government document has suggested that there could be “up to a decade or more of uncertainty” dealing with an exit, future arrangements with the EU and trade deals with countries outside the EU. Sarah Hooton looks at the likely implications for UK employment law.

Click here to read the full article

Brexit and beyond: navigating the challenges ahead

Our Brexit hub provides useful information on the key areas that are likely to be affected by Brexit, the priority issues for any business or organisation and practical guidance to help you navigate the challenges ahead.

Visit the Brexit hub >

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Declan Cushley

Declan Cushley

Partner and Head of IP and Commercial Group

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