What Will Brexit Mean for Downstream IP?

What Will Brexit Mean for Downstream IP?
Brexit could affect design and trademark protections, enforcement for downstream patent holders.

Refiners, petrochemical manufacturers and others in the downstream oil and gas industry have invested considerable time and money developing myriad process and other technologies, and they vigorously protect their intellectual property (IP) rights to prevent the unauthorized use of these inventions. Not doing so could adversely affect their operations and balance sheets.

"Patent infringement can directly impact businesses and even put a halt to their activities," Leythem Wall, London-based partner with the global IP law firm Finnegan Europe LLP told Rigzone. "Ultimately, a patent is a negative right which gives its holder the right to prevent a third party from carrying out an activity such as manufacture, sale, offering for sale, importing or stockpiling a product which is covered by a patent."

Leythem Wall
Leythem Wall, Finnegan Europe LLP
Partner, Finnegan Europe LLP

Downstream companies also hold specialized "process patents" that, in addition to prohibiting the above activities, exert IP rights over the fuels, chemicals and other products created with their patented technologies, added Wall.

"Remedies available to an owner for infringement of their patent rights include injunctions and monetary damages, including punitive damages in some jurisdictions," he continued. "As well as the potential financial cost of being found to infringe a patent, the reputational damage can be just as costly."

In the United Kingdom, downstream patent holders face another issue that could affect their IP rights: the U.K.'s pending departure from the European Union (EU), better known as "Brexit." Wall recently gave Rigzone some perspective on what Brexit will mean for refiners, petrochemical manufacturers and other downstream patent owners. Read on for his insights.

Rigzone: What are some key issues regarding IP rights that Brexit negotiators will need to address to provide clarity for downstream businesses?

Leythem Wall: Until withdrawal from the EU is completed, all European rights will continue to have effect in the U.K. As things stand Brexit will not affect procurement of patent rights. European patents granted by the European Patent Office (EPO), which is not an EU institution, will still be able to cover the U.K.

However, EU design protection (Community Designs) and EU trademark protection (Community Trademarks) may be affected and will cease to be effective in the U.K. Therefore a key issue that Brexit negotiators will need to consider is a potential transitional procedure which will enable such EU rights to be converted into U.K. national rights following departure from the EU. 

Rigzone: What are some of the major considerations around patent infringements for downstream businesses post-Brexit?

Wall: While current patent rights and procurement will not change in Europe, one thing that may be affected after the U.K. leaves the EU is the proposed Unified Patent Court (UPC) system. Currently, European patents can only be enforced in courts nationally.

This can therefore be expensive, and due to slight differences in national laws, potentially lead to inconsistent decisions. In order to address this issue of costly "fragmentation," the majority of EU states, including the U.K., entered into an agreement for a single centralized litigation forum in Europe, known as the UPC). As opposed to a number of different national courts deciding for individual countries where there is pan-European patent infringement, a single court will be able to issue a single decision covering the majority of EU states.

However, with the U.K. leaving the EU this has severely delayed the UPC coming into force and it is not yet clear if the U.K. would continue to participate in the system post-Brexit. Regardless of the U.K.'s involvement, this will still represent a significant development in European patent litigation of which businesses, whether, potential infringers or rights holders, will need to be fully aware.

Rigzone: In a general sense, how can businesses protect themselves from patent infringements?


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