Implications of the UK General Election on Brexit

As our regular readers will be aware, on 23 June 2016, the UK voted in a referendum to leave the European Union (EU), by a relatively narrow margin of 51.9% to 48.1%. The Government initiated the official withdrawal process on 29 March 2017, providing for a 2-year period to allow for the negotiation of a withdrawal agreement, so that the UK was due to leave the EU on 29 March 2019.

With the UK having been tied to the EU for over 40 years, Brexit, as it quickly became known, would clearly have wide ranging implications both within the UK and on its external relationships with other countries. As a result, the withdrawal process has been difficult and controversial, and has resulted in extensions being sought from and granted by the EU, and deadlock in Parliament.

The present position is that the EU has granted an extension until 31 January 2020, at which point, in the absence of a further extension, the UK will leave the EU, either with or without a deal, the latter being referred to as a no-deal Brexit. In relation to the field of intellectual property, while patents are unaffected, the main effect of a no-deal Brexit would be on EU registered trade marks and registered Community designs, since membership of the EU is required to allow an EU trade mark or design to have effect in the UK. The Government has made significant preparations to allow for the continuity of registered trade mark and design protection in the UK after Brexit. More information on this can be found on our website.

In an attempt to break the current deadlock, the Government called a General Election on 12 December. The result of this election will affect the way in which the UK leaves the EU, or even whether it leaves at all. Although there are a number of different scenarios depending on the outcome of the election, the prospect of a no-deal Brexit on 31 January 2020 is now very remote, which should give a great deal of comfort to trade mark owners.

If it wins the election with a sufficient majority, the Conservative party, which forms the current government, would seek to leave the EU on 31 January on the basis of the latest withdrawal agreement which has been negotiated with and accepted by the EU. This would lead to a transition period until at least the end of 2020 during which the new government would seek to negotiate a trade agreement with the EU. During this transition period, there would be no change in the protection provided by EU trade marks and designs. At the end of that period, the impact on these EU rights would very much depend on the trade deal that had been reached, but the transition to any new system should be much more measured and predictable than under a no-deal scenario.

If the Conservative party does not win the election, then the most likely outcome is that there would be a coalition government supporting a renegotiation of the deal with the EU, with a view to achieving a closer alignment, or potentially even remaining in the EU, following a further referendum to be held during 2020. Although this would require the EU to grant a further extension beyond 31 January, it is difficult to see why it would refuse to do so in these circumstances.

In summary, whatever the result of the election, it is likely that the status quo in relation to EU trade marks and designs will prevail for a further year at least, and that subsequently, even if the UK does leave the EU, this will be on the basis of a trade deal that provides a predictable and smooth transition for trade mark and design owners.