Posts

How Will Plans to End Free Movement Affect EU Workforce?

The Home Office has recently issued a factsheet indicating that freedom of movement as it currently stands will end on 31 October 2019 and that arrangements for people coming to the UK for longer periods for work or study will change. What does this mean in practice and how should employers prepare?

A draft Immigration Bill drafted published by Theresa May’s government had already envisaged an end to free movement following a no-deal exit. However, to avoid a “cliff-edge” until a new immigration system could be put in place, the Home Office planned to introduce transitional arrangements for EU, EEA and Swiss citizens and their family members arriving in the UK between exit date and 31 December 2020. Those coming to the UK for short visits for any reason would be able to enter as they can now and stay for up to three months for each entry. Those wishing to stay in the UK for longer would need to apply to the Home Office for EU temporary leave to remain within three months of arrival (giving 36 months’ permission to live, work and study) after which they would need to apply under the UK’s future immigration system (expected to be introduced from January 2021).

The Home Office announcement and further reports now indicate the shelving of these transitional arrangements to be replaced by a new immigration system immediately applicable to new arrivals following a no-deal exit. There is very unlikely to be the time and resource to put in place such a system or the legislation which will underpin it. The Home Office is already stretched and the UK’s current Points Based System took nearly four years to design and implement. We may, therefore, still end up with some form of transitional registration system but the Government’s current direction of travel suggests this is likely to be more onerous than the EU temporary leave envisaged under Theresa May. Employers who had good reason to believe that they would be able to continue to recruit from the EU with relative ease until the end of 2020 (even in a no-deal scenario), should prepare for the possibility of new hires arriving the EU from 31 October 2019 needing some form of immigration permission prior to starting work. Exactly what this will entail, including the qualifying criteria, cost and application process, remains to be seen and we will providing updates as matters develop.

In any event, the Government has made clear that an immediate end to free movement following a no-deal exit will not affect the ability of EU, EEA and Swiss citizens and their families already resident in the UK by 31 October 2019 to continue living and working here, as long as they apply for status under the EU Settlement Scheme before 31 December 2020. Nonetheless, as a precaution, employers should support their affected employees to obtain (or apply for) pre-settled or settled status under the Scheme before 31 October 2019 (or at least prior to their next trip outside the UK) to reduce difficulties on re-entry by having to prove their prior UK residence by some other means. Current average processing times under the Scheme are reasonably quick – between one and four days. Those travelling outside the UK after 31 October and before they have been granted status would be well-advised to take with them some proof that they are already resident in the UK (ideally in line with the documentary evidence recommended by the Home Office when applying under the Scheme such as recent UK payslips, an employer letter or utility bill).

Brexit and the implications for your Intellectual Property Rights

What will the Brexit mean for your intellectual property (IP) rights? Will Britain leave the European Union (EU) without a deal? Or will the Prime Minister manage to get the British Parliament to vote in favour of a Plan B-deal? The Brexit will have consequences for trademark rights, design rights, copyright and patent rights that involve the UK and the EU. Start prepping to protect your IP before Brexit!

The Brexit does not just impact organizations doing business in or with the UK from a commercial trade perspective (e.g. customs and import). You should also think about the ‘crown jewels’ of your organization (e.g. trademark rights, design rights, copyrights or patent rights) covering the European Union.

Brexit will impact every company having intellectual property, licenses and distribution agreements within the EU or UK scope.

Although the uncertainty about the Brexit remains, you should know that whatever happens, you should start preparations. For instance, what happens with the UK coverage of your EU trade mark and design registrations? Should you amend the territorial scope in your intellectual property contracts? A mere reference to the ‘EU’ may become difficult to interpret. This blog outlines the potential implications concerning your intellectual property rights following a Brexit.

Impact of Brexit on European Trade Marks and Designs

EU trade marks and designs are granted by the EU Intellectual Property Office (EUIPO). Currently, companies and individuals owning a registered EU trade mark or design have their trade mark or design right protected across all EU member states including the UK.

After the Brexit, existing EU trade mark and design registrations will no longer include protection in the UK. However, even in case of a ‘no deal-scenario’, the UK government ensured that the rights in all existing registered EU trade marks and designs will continue to be protected and enforceable in the UK by providing an equivalent trade mark or design registered nationally in the UK.

If you have pending applications for trademark or design rights in the EU at the Brexit date, you may refile your application with the UK Intellectual Property Office under the same terms for a UK equivalent right. For a period of 9 months from exit, the UK government will recognize filing dates and claims to earlier priority and UK seniority recorded on the corresponding EU application.

Impact of Brexit on Copyrights

Various international treaties (such as, the Berner Convention and the WIPO Copyright Treaty) govern the protection of copyright. Under these rules, countries provide cross border copyright protection. These rules are luckily not dependent on the UK’s membership of the EU. As a consequence, copyright protection in the UK for EU protected works will largely remain unchanged.

What about database rights and other EU specific IP legislation?

The EU copyright system is based on EU legislation so it only extends to EU member states. Although the protection rights under EU legislation will be preserved in UK law, cross-border IP protection mechanisms will be different. For example, in the event of a no deal-Brexit, there will be no obligation for EU member states to provide database rights to UK businesses. As a result, owners of UK database rights may find their rights unenforceable in the EU. So companies may need to consider other forms of protection for their databases.

Impact of Brexit on Patents and supplementary protection certificates

Only a few areas of UK patent law are derived from EU legislation. Probably the most important issue here is patented pharmaceutical products and chemical compounds. EU law provides for an additional period of protection after a patent has lapsed, the so-called ‘supplementary protection certificate’.

In addition, EU law provides for compulsory licenses to be granted for UK manufacture of a patented medicine for export to a country with a public health need. Also, EU law demonstrates that certain studies, trials and tests using a patented pharmaceutical product will not be regarded as an infringement of the patent.

Luckily, regardless of the Brexit, any relevant EU legislation (including its implementation in UK law) will remain. This means that the supplementary protection certificates, compulsory licenses and exempted studies and trials will be kept under UK law.

What about the Unitary Patent?

Under the European patent regime, a European patent application essentially forms a bundle of national applications. Each application needs to be validated per EU member state. The Unitary Patent will be one inseparable right covering 26 EU countries. The UK is one of those 26 countries. They ratified the Unitary Patent system only in April 2018 which indicates their desire to be part of this system in spite of Brexit.

However, the Unitary Patent protection cannot be separated from the general principle of the EU’s Internal Market. As a consequence, and especially in the event of a ‘no deal-Brexit’, it is questionable whether the Unitary Patent protection will remain applicable to the UK once it has left the EU. If not, it means that businesses seeking patent protection in the UK will still need to commit to the national UK patent system.

Exhaustion of IP rights after Brexit

Another topic for your business to consider, is the so-called exhaustion of intellectual property rights. ‘Exhaustion’ limits intellectual property rights. Once an IP protected product has been legitimately put on the market anywhere in the EU, the IP rights (e.g. prevent the resell or other commercial use) over such product can no longer be exercised because these rights are exhausted.

In a ‘no deal-scenario’, products rightfully placed on the UK market after Brexit, will not be considered exhausted in the EU. As a result, if your company exports products from the UK to the EU you may still require the IP owner’s consent.

To discuss potential effects of the Brexit on your IP rights, please do not hesitate to contact Lukas Witsenburg from Penrose. Email: l.witsenburg@penrose.law or telephone: +31 (0)20-240 0710.

Record numbers of UK lawyers register in Ireland

UK law firms have ramped up preparation for Brexit by registering a record number of solicitors in Ireland but confusion remains about how many of them will be able to practise in Ireland and the wider EU after Britain leaves.

The Law Society of Ireland said its solicitors roll had received 1,560 applications in the year to date — more than 31 times the average annual rate in the years before the 2016 EU referendum.

Some 3,706 lawyers from England, Wales, Scotland and Northern Ireland have been registered since the beginning of 2016 as City firms scrabble to insulate themselves from Brexit’s effects.

Those include UK lawyers potentially losing rights of audience in European courts and seeing their ability to advise on European legal matters curtailed.

In August the Law Society of England and Wales warned that the legal sector in the UK could face a £3.5bn hit as a result of a no-deal Brexit.

“Typically, major international commercial law firms are the source of these transfers, in some cases hundreds from one firm,” said Ken Murphy, director-general of the Law Society of Ireland. “It is an extraordinary development.”

Elite UK firms Allen & Overy and Linklaters have among the largest numbers of lawyers signed up to the Irish roll, according to the Irish Law Society, with 287 and 250 respectively. Latham & Watkins has registered 155.

However, only 981 UK lawyers hold a “practising certificate” which allows them to work in Ireland, according to the Law Society. Firms said they were waiting for the outcome of Brexit to determine whether to pay the annual cost of £2,650 per person required to take the final test.

One top-tier UK law firm said only a “handful” of the hundreds of lawyers registered in Ireland had practising certificates, because of the cost and “the lack of clarity as to whether this will actually function as a workaround in a no-deal Brexit scenario.”

In March the Law Commission in Ireland announced new hurdles for lawyers hoping to rely on Irish practising certificates after Brexit, including requiring firms to have a base in Ireland and indemnity insurance issued within the country.

Catherine Hudson, head of risk at Fieldfisher, said: “This was a surprise. A lot of people applied to be on the register in Ireland because they thought it would be a good plan B. But then the Irish Law Society published a note putting constraints on their practising certificates, suggesting they were concerned not to be used as a flag of convenience for people with no real professional connection to the republic.”

A number of firms including DLA Piper, Covington & Burling and Simmons & Simmons have opened offices in Dublin, and avoided those issues. Others, such as Fieldfisher, have merged with Irish firms to gain a permanent foothold.

DLA Piper launched a Dublin office in May and has so far recruited 11 partners, many poached from top-tier Irish firms.

Lawyers said the shift would create a more active transfer market and potential pay inflation in the traditionally conservative Irish legal market.

However Barry Devereux, managing partner of Irish firm McCann FitzGerald, said: “The large Irish law firms have always competed fiercely with each other, both for talent and for clients, so I don’t expect the entrance of US or UK law firms to have an enormous impact.”

No deal Brexit disastrous for aspiring lawyers, Law Society warn

Disruptive departure could damage UK’s ability to attract and retain world’s top legal talent

A no deal Brexit will be disastrous for those seeking to enter the legal profession, a new report produced by the Law Society has warned.

The professional body, which represents 140,000 practising solicitors in England and Wales, has raised fresh concerns over the impact “Brexit disruption” will have on law graduates and junior lawyers’ moving around Europe.

According to the Law Society’s UK-EU future partnership and legal services report, published this morning, a no deal Brexit could also damage the UK’s ability to attract and retain the world’s top legal talent. It said:

“This has an impact on the attractiveness of qualifying in England and Wales. Their rights to provide services under their home title, to establish and practise in Europe and to requalify in host state law will all become more complex under an FTA [free trade agreement] or in case of a no-deal Brexit.”

The report added: “The prospective candidates from the EU may no longer be attracted to studying in the UK and getting an English and Welsh qualification since they cannot use it in their home country to the same degree as under the current regime.”

Aspiring lawyers wouldn’t be the only ones left worse off from a no deal departure. According to the Law Society’s president, Simon Davis, a crash-out Brexit could cost Britain’s legal services sector an eyewatering £3.5 billion, nearly 10% higher than under an “orderly Brexit”.

The 2019 Legal Cheek Firms Most List

The UK stands as the EU’s largest exporter of legal services. According to Davis, the sector contributed £27 billion to the UK economy in 2018 and produced a trade surplus of £4.4 billion in 2017 — this largely the result of the UK’s access to European markets through directives. Davis continued:

“That is why we are urging the UK government to negotiate a future agreement that enables broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU.”

Newly-installed Prime Minister Boris Johnson has pledged to negotiate a better exit agreement with the EU, but maintains the UK will leave on 31 October with or without a deal.

This isn’t the first time the Law Society has shared its bleak Brexit fears. Last year, Chancery Lane’s number crunchers predicted that a no deal scenario could cost the legal market up to £3 billion by 2025, with growth slumping to 1.1%.

Brexit: PM under fire over new Brexit plan

Theresa May will make the case for her new Brexit plan in Parliament later, amid signs that Conservative opposition to her leadership is hardening.

The prime minister will outline changes to the Withdrawal Agreement Bill – including a promise to give MPs a vote on holding another referendum.

But shadow Brexit secretary Sir Keir Starmer said the offer was “too weak”.

Some senior Tories will today ask party bosses for a rule change to allow a no-confidence vote in her leadership.

Environment Secretary Michael Gove defended the PM’s plan, urging MPs to “take a little bit of time and step back” to “reflect” on the detail of the bill – due to be published later today.

Fellow cabinet minister and prominent Brexiteer Andrea Leadsom said she was “looking very carefully at the legislation” and “making sure that it delivers Brexit”.

MPs have rejected the withdrawal agreement negotiated with the EU three times, and attempts to find a formal compromise with Labour have failed.

On Tuesday, the prime minister asked MPs to take “one last chance” to deliver a negotiated exit – or risk Brexit not happening at all.

But several Tory MPs have criticised her plan. Among them, Nigel Evans will today urge party bosses on the 1922 committee to change party rules to allow for an immediate vote of no-confidence in Mrs May.

Because the PM survived such a vote in December, the current rules say she cannot face another for 12 months.

The committee has said ‘no’ to such a change before.

But the Conservative Home website has urged people not to vote for the party in Thursday’s European elections if Mrs May is still in post “by the end of today”.

ECJ rules EU and Canada trade agreement follows EU laws

The European Court of Justice (ECJ) ruled on Tuesday that the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU follows EU laws. The court decision was requested by Belgium and was focused on the section of CETA that concerns resolution of investment disputes between investors and states.

CETA will establish a Investment Court System (ICS) to handle disputes between investors and states. The system will include a Tribunal, an Appellate Tribunal, and a multilateral investment tribunal. The Tribunal will include 15 members: five from Canada, five from EU member states and five from third countries.

Belgium filed the request for a decision from the ECJ because the ECJ has exclusive jurisdiction over the definitive interpretation of EU law. The ECJ found that CETA did not violate this principle as long as the CETA Tribunals do not attempt to interpret EU laws.

Belgium was also concerned that the Investor-State Dispute Settlement (ISDS) mechanism would violate the EU’s principle of equal treatment in regards to treatment of a suit raised by a Canadian investor against an EU enterprise. The ECJ found that the equal treatment provision is not violated for a non-EU investor making a suit against an EU member state. The ECJ also found that EU law permits annulment of a fine by an EU member state if the CETA Tribunal finds a defect.

The EU Charter of Fundamental Rights also gives the right of access to an independent tribunal, which Belgium believed may be violated by the establishment of the CETA Tribunal. The concern was based on the fees and costs associated with the Tribunal which may make it difficult for small enterprises to bring a claim. The Commission has committed to providing co-financing for small and medium-sized entities before the Tribunal. The ECJ found these commitments to be sufficient to meet EU law.

Brexit Hits UK Law Firms in South Korea

The five U.K. firms present in Seoul—Clifford Chance, Herbert Smith Freehills, Linklaters, Stephenson Harwood and Allen & Overy—will have to either re-register their office licenses or close their offices, at least temporarily.

A group of U.K.-based law firms in South Korea are anxious about the future of their offices in Seoul, as a no-deal Brexit could force them to close their offices temporarily.