International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019

Debate between Baroness Bowles of Berkhamsted and Lord Henley

Tuesday 12th March 2019 Grand Committee

[Baroness Bowles of Berkhamsted]

I have a couple of comments. The Minister referred to this being done under the withdrawal Act, and that is quite correct. There is no problem with the way in which Regulation 7 and things around it operate. That is a copy-and-paste job and exactly what the withdrawal Act provides for. I do not think that that Act requires there to be any delegation or sub-delegation. It enables such things to happen but does not require them. But it is in there and at this stage we are unlikely to resist the statutory instrument going through.

However, given everything that has been said, the next statutory instrument, which is also affirmative, will have to contain constraints and requirements ensuring proper, not-captured behaviour for there to be the confidence to allow it to go through. There is no problem with the Secretary of State doing an endorsement. There are people who can assist and advise, and the Secretary of State can perfectly well organise consultations and those kinds of things, so I would not consider delay of the next stage sacrosanct. Given the whole situation, the nature of this debate and the concerns from all who have spoken, I hope that that message about the next stage can be taken to the Secretary of State. I would be very unhappy about trying to pass something in the next month or so without there being many more safeguards.

[Lord Henley]

At this stage, all I can say is that I note what the noble Baroness has said. Regarding when the next SI will appear—whether it will be in the next month or so—I cannot say, but I will certainly keep her informed and let her know exactly what our thinking is.

Trade Marks (Amendment etc.) (EU Exit) Regulations 2018

Debate between Baroness Bowles of Berkhamsted and Lord Henley

Wednesday 6th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, as with earlier instruments on exhaustion and patents, this was debated on 14 January in Grand Committee, where noble Lords raised questions about the consultation and impact assessment process. Noble Lords also put some questions on technical points specific to this SI, seeking clarification on ongoing proceedings, costs and priority dates of pending applications. I repeat my thanks to all noble Lords who shared their time and expertise with the Committee on those matters. I addressed many of the points raised in my letter of 21 January to Members of the Committee. I hope that my answers were helpful and have met the expectations of noble Lords who took part.

The Government have laid these regulations to ensure continued protection in the UK for EU trademarks, thereby providing businesses with maximum security, clarity and certainty. Under current law, businesses can obtain an EU trademark, which, as a unitary right, provides protection across the whole of the EU. When we leave the EU, that protection will no longer extend to the UK. To address this, the Government will create a comparable UK trademark for every EU right that is registered on and before exit day. These comparable trademarks will inherit earlier filing and priority dates recorded against the corresponding EU trademarks and will be fully independent UK rights that can be challenged, assigned, licensed or renewed separately from the original EU trademark. Each comparable trademark will be created automatically and free of charge, meaning that a minimum administrative burden will be placed on rights holders. Those not seeking to hold comparable UK trademarks will be able to opt out by notifying the IPO. The instrument also sets out the Government’s approach for accommodating the 85,000 trademark applications which are pending before the EU Intellectual Property Office on exit day.

A number of technical issues were raised both during and after Grand Committee. Given my answers in my letter to noble Lords, I shall focus on those outstanding concerns which were raised subsequent to my letter. The noble Baroness, Lady Bowles, inquired in Grand Committee about the effect of priority dates on pending applications and compatibility with the Paris convention. I was pleased to have a meeting with the noble Baroness and trademark legal professionals to discuss these and other matters that she raised. At that meeting I clarified that we believe the instrument is compatible with the UK’s obligations under the provisions of the Paris Convention for the Protection of Industrial Property, which contain rules on claiming international priority.

I remain confident that the chosen approach provides the most practical means for preserving the rights of pending EU trademark applications. In respect of issues identified with the conversion of EU trademarks, I have also confirmed to the noble Baroness that such rights will be preserved via provisions contained in the Interpretation Act 1978. A copy of my letter, which addresses the noble Baroness’s concerns on both the Paris convention and conversion rights, will be placed in the Libraries of both Houses. I found our discussions on these two issues most helpful, and was grateful to the noble Baroness for her valuable insight as a trademark and patent attorney. Building on those discussions, I will ensure that her points are reflected in business guidance to be published by the IPO closer to exit day.

In conclusion, these regulations are vital to ensure that businesses do not lose their trademark protection in the UK, and to ensure the continued effectiveness of our domestic trademark system if we do not secure a deal with the EU. I hope noble Lords will support the draft regulations, which I believe provide businesses with clarity and certainty regarding their intellectual property. I beg to move.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, first, I declare my interests. I am a retired European patent and trademark attorney, but, if I were to un-retire, I would find myself among those unfortunates who, going forward, would no longer be able to practise before the EUIPO in respect of trademarks and designs. This matter—that a part of professionals’ representation is cut off—is not one we have discussed before. My noble friend Lord Clement-Jones was interested to hear what the Minister had to say on the issue, and to confirm my interpretation that current UK representatives will no longer be representatives is correct.

This SI largely replicates the provision in the withdrawal agreement, so it is not really a no-deal SI; it is the shape of the SI that will happen in due course—if there is a deal—possibly with some minor changes to dates and other things, but I could not see anything that differed from what one would expect under the withdrawal agreement.

As the noble Lord, Lord Henley, has explained, I had a long meeting with him and officials from the department and the IPO; I thank them very much for their time and for listening to my views and those of some representatives. I apologise to the noble Lord, Lord Adonis, but I did a little secret consultation myself, just to make sure that, being retired, I had not lost the plot. What I wanted was a statement that there would be continuity of rights at the point of Brexit so that, although the SI was internally consistent under UK law—it gave clear instructions as to what our courts would decide—it would also neatly fit within the usual conventions. That required only an assertion, which we have effectively had, that the rights continue—rather than dying and, in some way, being resurrected.

The letter that the noble Lord, Lord Henley, has now placed in the Library, and which was addressed to me on 4 February, is interesting. First, he deals with the priority rights that I discussed in the Moses Room in Grand Committee. The second issue I raised was about an EU trademark application that was refused before Brexit but, under the rules, it can be converted to a national application by applying at the EU end for three months. There was concern that there is no mention of what happened to those applications and to that conversion right. Was is lost or was it not? Some representatives thought that it was lost.

The letter refers to the Interpretation Act, and it is worth pointing out what that Act says. It confirms that an Act that repeals an enactment does not affect,

“any right, privilege, obligation or liability acquired, accrued or incurred under that enactment”.

The letter goes on to say that the EU trademark regulation will constitute EU retained law for the purposes of the European Union (Withdrawal) Act 2018; and that pursuant to the power in that Act, it is repealed and replaced by the UK regulation. This solves the problem. There is a definite assertion here that the right to convert will be retained but the conversion will be done entirely before the UK IPO, instead of starting it off in the EU. This general application of the Interpretation Act would apply to any regulations, not just these; it might be applied to those on patents that we have just discussed. That is one reason why I asked that the letter be put in the Library. It is possible that we contemplated this when we were going round the loop of the withdrawal Act, but I had misplaced it in my mind, and that might be the case for other noble Lords.

I am satisfied that it is “job done” on the confirmation of continuity and the issues I sought reassurance on. I am also grateful to the Minister for explaining that the Government will take into account the various other measures we raised, which are much more to do with practice.

The salient point here is that some 60% of trademark applications are made by individuals for their own businesses, without professional assistance. So it is quite important that the advice the IPO is able to give keeps them up to speed with changes that they might not be aware of, such as that they still have the conversion right and for how long.

There is still a matter to be dealt with: for nine months, there are latent rights hanging about. If you file a trademark application, it might look like the way is clear and then, all of a sudden, it is not, because people want to continue with the one they have under the EU. The question is how the IPO is to deal with notification, so that an applicant knows the full picture before making decisions that might be otherwise prejudicial to their rights when deciding whether to go ahead and have notice sent to people or to withdraw their application. My proposal was that they have to have the right to be able to suspend until that nine-month period is over, if it looks as though there is something in their way. Obviously, this is not a matter for this statutory instrument, but it will turn out to be a matter of concern if a significant number of those 85,000 applications are continued with. From what I can gather, it is likely that more than half will be, so intervening applicants will have a difficult nine months to navigate.

Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Debate between Baroness Bowles of Berkhamsted and Lord Henley

Monday 14th January 2019 Grand Committee

[Lord Henley]

What I am trying to deal with is the question about how we get a no deal. If there is to be no deal, we want businesses to be in as similar a position to their present one as is possible. I can speak only for the orders that I am dealing with today and tomorrow, but I imagine this will be true of a whole raft of orders coming from other departments. What we are trying to do is put those businesses in a position whereby they can cope as far as is possible with no deal. Meanwhile, as part of the ongoing, sensitive negotiations over the withdrawal agreement—and on this I can assure all noble Lords there will be consultation until the cows come home—we will try to make sure that all these matters can be dealt with. I give an assurance that the IPO has engaged with legal and business stakeholders as far as possible on the drafting of this statutory instrument and what it achieves, and will continue to do so on anything that is needed in the event of a deal—because in the event of a deal, I imagine we will be here again. I look forward to debating these matters with the noble Lords, Lord Warner and Lord Adonis, the noble Baroness, Lady Kingsmill, and others so that we can get it right.

These regulations relate to the no-deal option. We are trying to ensure that in the event of no deal, as with the technical notices we have put out, businesses know what the position will be. Obviously it will be slightly different from where we are at present. That is the inevitable result of no deal. But no deal is still on the table, and until we know that my right honourable friend’s deal has been accepted by another place, I am not in a position to go any further: that is why we want to prepare for the no deal.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I did not come to Grand Committee today expecting to speak on intellectual property. I am here to do financial services but, since I spent the best part of 40 years as a European patent attorney, it is hard not to intervene a little. I remember very well from when I started my training the famous Wella case on exhaustion of rights and parallel imports from the US, and what would happen when we had the single market and exhaustion of rights within the EU. It was a very complicated subject, a wonderful training ground and, I am sure, a huge earner for the lawyers who dealt with it. As patent attorneys, we tended to stay out of things.

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[Lord Henley]

I accept that the noble Lord is right that business would consider a no-deal situation to have major implications. In relation to this issue, I believe that what we have set out in our no-deal regulations will have very little impact. That is the type of clarity that we are trying to give business.

[Baroness Bowles of Berkhamsted]

The point about the impact assessment concerns me. The noble Lord, Lord Bates, who is eagerly awaiting our later exchanges, knows that I have been here before. Forgive me if I am paraphrasing the Minister, but what seems to have been said is that, when the impact assessments are done, they relate to the impact of the legal instrument. That impact is often deemed to be relatively minimal. However, if you deal with the consequences on business of the legal instrument, the impact is much larger. I always thought that the whole point of impact assessments was that they dealt with the predictable consequences. The regulations that we are dealing with may be simple to understand, because there is not anything for business to do, but their impact means that businesses may have to compete on an unlevel playing field. There is a direct consequence of the legal instrument but that would appear to be excluded. That does not really seem to be the right way in which to measure it.

Maybe as a relative newcomer, I cannot start saying, “You’ve got to do your impact assessments differently”, but this issue needs to be looked at in the round because it can be used in a completely disingenuous way. I know it has been churned out this way under pressure, but this could continue throughout every statutory instrument, whether it is to do with Brexit or not. It is a laughing stock, really. I think about how some MEPs used to criticise EU impact assessments, but I never found anything that was just to do with the assessment of the legal instrument; they always dealt with consequences. So why do ours not?

Patents (Amendment) (EU Exit) Regulations 2018

Debate between Baroness Bowles of Berkhamsted and Lord Henley

Monday 14th January 2019 Grand Committee

[Lord Henley]

I think that the noble Lord would not expect me to respond quite as positively as he wishes. It might be an overuse of paper to write to every Member of the House. I will write to the noble Lord and other appropriate Peers, and make sure that a copy of my letter is, as always, available in the Library. The noble Lord and I understand that procedure well. A copy of this debate will be available in Hansard. Even if it is not the same Hansard in which reports of the Chamber appear, I understand that it is still Hansard and open to all noble Lords to read. If we want to be really modern about these things, it is also available for the noble Lord to read online.

[Baroness Bowles of Berkhamsted]

I have two points before the Minister sits down. First, I do not think he replied to my point about whether there was any intended alignment with the supplementary protection certificates and parallel import points. The Minister may wish to come back to me on that. Secondly, the unified patent court and its relationship to the ECJ has been mentioned. That is inevitable. The unified patent court is an international court. The European patent is not an EU invention—it is external to it—but it has been agreed under the convention to which the UK is a party that it recognises the judgments of the ECJ. As I understand it, our own Intellectual Property Office would therefore have to take those judgments into account. Whatever convolutions there may be, we will not get away from the influence of ECJ decisions, whether or not the unified patent court comes into being.

[Lord Henley]

My Lords, I will write to the noble Baroness on both those points.