Law Times

Page 12 September 26, 2016 • Law timeS www.lawtimesnews.com Any change will come slowly: lawyer Clients assured to keep calm after Brexit vote BY MICHAEL MCKIERNAN For Law Times C anadian companies with European intel- lectual property should keep calm and carry on protecting their rights in the wake of the U.K.'s decision to leave the European Union, law- yers say. Jason Hynes, a partner at Bereskin and Parr LLP, says the result of the Brexit vote this summer caught him by surprise, but he has tried to reassure pan- icked clients about the possible consequences. "There's not going to be riot- ing in the streets, particularly on the IP side, where things move at a slower pace than other parts of the law. "Any change is going to come slowly," says Hynes, who is based in the firm's Waterloo, Ont. office. Michael House, who prac- tises in Toronto with intellec- tual property boutique Deeth Williams Wall LLP, remains confident that the parties can manage an orderly transition and that any changes that do ultimately occur to IP laws will not be too drastic. "I'd say it's probable that the worst-case scenario is that it will be more expensive to get the same kind of rights you can get now through all EU member states," House says. "Once the U.K. leaves, you'll have to separately apply there for the same type of protection, but substantively, I don't expect it to affect what intellectual property holders have to do or the rights available to them." Over the short term, the vote will have a minimal impact, he says, since the Treaty on Euro- pean Union gives the U.K. at least two years to negotiate the terms of its departure following invocation of article 50, which formally kick-starts the exit process. In the meantime, current EU legislation will remain in force; potentially in perpetuity, ac- cording to some British political commentators who harbour lin- gering doubts that the clause will ever be triggered. Still, House says that's little consolation for clients who would rather know exactly what they need to prepare for in the future. "Clients hate uncertainty, but there are no really clear answers right now. "It's all going to be highly de- pendent on the negotiated settle- ment arrived at between the EU and the U.K., which we won't know for two years at least," House says. According to House, Brexit will cause the biggest headaches to clients with licensing and dis- tribution agreements that use the EU to define the territory applicable to the contract. If and when the U.K. ulti- mately departs, it could raise questions about whether or not the agreements still apply to its jurisdiction. "Rights-holders should re- view their agreements and try to amend them if they can," House says. "It's a matter of interpreta- tion, but it's still a concern, be- cause you don't want to be off- side in terms of your contractual obligations. "I think parties should be aware of the issues and try to ne- gotiate beforehand in an attempt to address whatever sort of exit scenario might occur." Trademark holders will face some of the biggest upheavals in the event the U.K. follows through with Brexit, since the U.K. will no longer take part in the European Union trademark system, which allows brands to register marks in all EU member states with a single application. "The EUTM provides signifi- cant savings in costs. "There's less work for lawyers, and it's more streamlined for cli- ents. If you have to file separately in the U.K., costs will necessarily increase. There's no way to avoid that," Hynes says. For current EUTM holders who still need U.K. coverage, there's more than mere conve- nience at stake, since their cur- rent protection will not extend beyond Brexit. Alison Hayman, a partner in the intellectual property prac- tice group at Cassels Brock and Blackwell LLP, says it's likely that a transitional procedure will allow brands to transfer EUTM rights without loss of priority. "That seems to be the consen- sus from the U.K. trademark bar, who have made quite an effort to reassure brand owners and calm the markets. "It would certainly be the more commerce-friendly op- tion, rather than creating chaos by making it a first-come-first- serve situation at the U.K. Intel- lectual Property Office," Hay- man says. Historical precedent suggests the U.K. and EU will negotiate a grandfathering process for ex- isting trademark owners. Still, such a solution will require legislative action, and with things up in the air, some brands are taking no chances, according to Hynes. Despite the existence of the EUTM, each individual mem- ber state retains its own IP office where companies can register their trademarks country by country. "Any time there is uncer- tainty, lawyers like to say there is a conservative option. A few law firms are recommending that companies file in the U.K. now, which is safer, but will also in- crease cost," Hynes says. LT Alison Hayman says it's likely a transitional procedure will allow brands to transfer European Union Trademark rights without loss of priority. FOCUS Innovative businesses choose Smart & Biggar — the recognized leader in intellectual property • • • O t t a w a / To r o n t o / M o n t r e a l / V a n c o u v e r / C a l g a r y s m a r t - b i g g a r . c a U N PA R A L L E L E D I P • Canadian Trademark Contentious Firm of the Year (Managing Intellectual Property's 2016 North America Awards) Highest ranking (Band 1) in Canadian intellectual property law (Chambers Global – The World's Leading Lawyers for Business, 2016 Edition) Canadian Specialty IP Firm of the Year Award (Managing Intellectual Property's 2016 North America Awards) Canada's Intellectual Property Litigation Firm of the Year for two consecutive years (Benchmark Canada 2016 Awards) Untitled-6 1 2016-09-20 2:55 PM

• Cover