15 July 2020

by Deirdre Moynihan

Brexit: Intellectual Property and Software Code Post-Brexit Transition

Brexit is pervasive and will impact all aspects of life and society in the UK, including our intellectual property rights. In this section, we look at what we know about Brexit’s effects on software and algos and how it may affect rightsholders and users based in the UK and elsewhere in the EU.

UK law applicable to software and algos is currently an amalgamation of:

  • UK legislation,
  • directly effective EU legislation,
  • UK legislation implementing non directly effective EU law,
  • UK legislation implementing international treaty obligations,
  • the common law, and
  • judge-made case law from courts and tribunals (including the UK courts, the Court of Justice of the European Union (‘CJEU’) and various patent and trade-mark tribunals).

Sources of EU copyright-related laws

From a copyright perspective, EU derived laws have their origins in the following 11 directives and 2 regulations:

  • Directive on the harmonisation of certain aspects of copyright and related rights in the information society (‘InfoSoc Directive), 22 May 2001,
  • Directive on rental right and lending right and on certain rights related to copyright in the field of intellectual property (‘Rental and Lending Directive’), 12 December 2006,
  • Directive on the resale right for the benefit of the author of an original work of art (‘Resale Right Directive’), 27 September 2001,
  • Directive on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (‘Satellite and Cable Directive’), 27 September 1993,
  • Directive on the legal protection of computer programs (‘Software Directive’), 23 April 2009,
  • Directive on the enforcement of intellectual property right (‘IPRED’), 29 April 2004,
  • Directive on the legal protection of databases (‘Database Directive’), 11 March 1996,
  • Directive on the term of protection of copyright and certain related rights amending theprevious 2006 Directive (‘Term Directive’), 27 September 2011,
  • Directive on certain permitted uses of orphan works (‘Orphan Works Directive’), 25 October 2012,
  • Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (‘CRM Directive’), 26 February 2014,
  • Directive on certain permitted uses of certain works and other subject matter protected by copyright and related rights for the benefit of persons who are blind, visually impaired or otherwise print-disabled (‘Directive implementing the Marrakech Treaty in the EU’), 13 September 2017,
  • Regulation on the cross-border exchange between the Union and third countries of accessible format copies of certain works and other subject matter protected by copyright and related rights for the benefit of persons who are blind, visually impaired or otherwise print-disabled (‘Regulation implementing the Marrakech Treaty in the EU’), 13 September 2017,
  • Regulation on cross-border portability of online content services in the internal market (‘Portability Regulation’), 14 June 2017, and
  • Three additional instruments (Directive 87/54/EC,Council Decision 94/824/EC and Council Decision 96/644/EC) which harmonise the legal protection of topographies of semiconductor products.

In addition, the E-commerce Directive and the Conditional Access Directive also contain provisions which are relevant to the exercise and the enforcement of copyright.

Implementation into UK law

Many aspects of these directives have been tested in the European Union courts over the years and harmonization has predominantly occurred piecemeal as a result of the judicial interpretation of these directives by the CJEU rather than by virtue of the text of the directives themselves.

These directives have, to a greater or lesser extent, been implemented into UK law and the decisions of the CJEU on the interpretation of these directives are currently binding on the UK.

Nothing changes until 31 December 2020. Under the terms of the Withdrawal Agreement, the UK intellectual property rights system continues as normal to the end of this year: afterwards, however, there are a number of points to be aware of when considering the status of existing or new IP rights: (a) what happens to existing law/existing rights, (b) what happens to rights created on and from 1 January 2021 and (c) how the UK government proposes to address new EU law.

‘Retained EU Law’

At a high-level, the general position with respect to EU law in the UK post-Brexit is as follows. For present purposes, we’ve simplified this by concentrating on those aspects most relevant to IP rights rather than describe all nuances related to the Withdrawal Agreement terms.

The starting point on 1 January 2021 is that existing EU law is incorporated into UK law: the European Union (Withdrawal Agreement) Act 2020 (and amendments it made to the European Union (Withdrawal) Act 2018), operates to covert the body of EU law (directives, decisions, case law, general principles of EU law) in effect at the end of the transition period into UK law (‘retained EU law’).

Then, from 1 January 2021 onwards and unless otherwise agreed as part of any new trade relationship: (1) the UK courts will no longer be subject to new decisions of the CJEU (except in a limited number of areas related to the Withdrawal Agreement), (2) the UK Supreme Court may, from that point onwards, choose to depart from retained EU law provided that any decision to do so is decided on the same basis as if the Supreme Court is deciding the same question in relation to its own case law, and (3) the UK government has the right to set out in regulations the circumstances in which retained EU law will no longer apply in the UK.

At the time of writing (16 April 2020), there’s no indication that the UK government will make changes to retained EU law applicable to IP rights, however it remains to be seen if UK law will continue to follow the same path or whether the UK will start to diverge from EU law.

IP rights created on or after 1 January 2021

On 1 January 2021 and in the absence of any trade deal, new rules will apply to certain copyrights, the sui generis database right, and the principle of exhaustion. There are also changes to how the other directives and regulations listed above will work post-Brexit – these are outside the scope of this specific section, however advice and guidance is available from the UK’s Intellectual Property Office[1].

  • copyright: generally speaking, the rules applicable to most copyrighted works will remain the same because the rights originate in international copyright treaties such as the Berne Convention and TRIPS. It’s unlikely therefore that core copyright law will change in the UK and EU and UK works will continue to be eligible for copyright protection in the other jurisdiction(s) on the basis of the reciprocity rules set out in the Berne Convention.
  • sui generis database right (introduced by the Database Directive): for new databases created after 1 January 2021, UK citizens, residents and businesses will not be eligible to receive or hold database rights in the European Economic Area (‘EEA’) and only UK citizens, residents and businesses will be eligible for database rights in the UK. This means that existing rightsholders may need to acquire licensees or take steps to protect databases contractually. Database copyright is unaffected by these changes.
  • online content sharing services will no longer be obligated to provide content ordinarily available in the UK to UK individuals located temporarily in another EU country. Similarly, EU based individuals may be restricted from viewing local EU content when in the UK.
  • exhaustion of rights: exhaustion of rights is a key aspect of parallel trade rules in the EU. It means that where a product that is protected by IP rights has been placed on the market in any EU member state with the permission of the rightsholder, the rightsholder’s rights to restrict resale or distribution in another territory are “exhausted” and local IP rights owned by the rightsholder in the second country cannot be used to prevent that resale or distribution. In a post-Brexit world, products placed on the UK market that are then parallel imported into the EU may no longer be considered exhausted in the EU and permission to do so may be required from the rightsholder (the position is not the same for items placed on the market in the EEA and then imported into the UK – per The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019, products placed on the market in the EEA will be considered exhausted for the purposes of resale into the UK). This could have significant consequences for businesses and supply chains and businesses should review and assess the likely impact of this change on their supply and distribution models.

New EU legislation

The UK government has already stated that it does not currently plan to replicate the terms of the recently approved Directive on Copyright in the Digital Single Market into UK law (see section G above). This Directive introduces controversial rules on “upload filters” and new rules on text and data mining. The UK government in January 2020 stated that:

“the Government has no plans to [implement the Directive into UK law]. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process”[2].

Given the broad discretion and scope for different interpretations of various aspects of the Directive and the fact that most businesses who operate internationally are obliged to comply with the Directive’s terms in any event, it’s currently difficult to assess the impact of the UK government’s approach on business and industry.

 

This blog was first published as part of the white paper which you can read in full here: Algo IP: Rights in Code – 2020 Update

 

[1] See https://www.gov.uk/guidance/changes-to-copyright-law-after-the-transition-period for more information.

[2] https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2020-01-16/4371.

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