IP and the Retained EU Law (Revocation and Reform) Bill 2022-23

Also known as the 'Brexit Freedoms Bill', the Retained EU Law (Revocation and Reform) Bill 2022-23 (the Bill) had been promised by our late Queen in her 2022 Speech. It has been causing a significant amount of controversy since the government introduced it in September 2022 and is currently making its way through Parliament at quite a hefty pace. The Bill is an ambitious piece of post-Brexit legislation, which aims to revoke (or 'sunset'), restate, replace or update certain retained EU law, all by a very tight deadline of 31 December 2023.

Why is it necessary?

• Retained EU law (REUL) (i.e. EU-derived legislation) is a category of domestic law created at the end of the transition period preserved by the EU (Withdrawal) Act 2018. It was introduced as a stopgap to avoid any gaping holes in the law following the UK's exit from the EU, but it was never intended to be permanent.
• The government's plan was always to introduce UK domestic legislation over time to gradually amend, revoke and replace retained EU law.
• The Bill is perhaps intended to accelerate the process and focus minds on divergence otherwise there is a risk of drifting on for years without making progress and Brexit meant Brexit!

Main aspects of the Bill

• To 'sunset' the majority of REUL in the UK, by Statutory Instrument (SI), by 31 December 2023 (N.B. there is a mechanism which allows postponement of the 'sunset' of specified pieces of legislation to 23 June 2026).
• This means that all REUL contained in domestic secondary legislation and retained direct EU legislation will expire on this date, unless preserved. (N.B. REUL means: EU-derived subordinate legislation (e.g. SIs, retained direct EU legislation (e.g. regulations) and directly effective rights (e.g. treaty provisions). N.B. Acts of Parliament are exempt from the sunset provisions).
• To abolish the special status of EU law and formally abolish the principle of supremacy and other general principles of EU law after 2023.
• To rename any remaining REUL after 2023 ‘assimilated law’, at which point it will no longer be necessary to interpret assimilated law in accordance with corresponding EU law.
• To grant delegated powers to UK ministers and devolved authorities to revoke, restate, replace or update REUL/assimilated law by SI.
• To make it easier for UK domestic courts to depart from retained EU case law.

What does the Bill mean for IP?

• There is no question that EU law has had a huge impact on the UK IP legal system, such as the harmonisation of trade marks, copyright and designs, which will all be affected.
• Luckily, primary domestic IP legislation is unaffected by the sunset provisions of the Bill  so, for example, the Copyright, Designs and Patents Act 1988, the Trade Marks Act 1994 and the Registered Designs Act 1949 will all remain in place, unless amended or replaced by domestic legislation passed by Parliament in the normal way.
• However, these Acts will still be impacted as there will be no obligation to interpret them in accordance with EU law and we may therefore see divergence sooner rather than later e.g. between the meaning of provisions in the TMA 1994 and their EU counterparts in the Trade Marks Directive (EU) 2015/2436.
• Secondary domestic legislation is subject to the sunset provisions however, so significant pieces of IP legislation may well be at risk of automatic revocation by 31 December 2023.
• The Government has produced an interactive public ‘Retained EU Law Dashboard’ to explore the relevant pieces of REUL – over 3000 pieces of REUL, across 300 unique policy areas and 21 sectors of the UK economy.
• Of these, the UKIPO has identified 82 pieces of IP-related legislation that potentially fall within the scope of the provisions of the Bill, including e.g. the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) and the Trade Secrets (Enforcement etc) Regulations 2018 (SI 2018/597). The UKIPO had initially identified 63 pieces of legislation, which then increased to 70 and it has now crept up to 82. They may yet identify more but this really does highlight how much work needs to be done, given this is just one of many areas of law to be reviewed and new pieces of legislation are still being identified.
• It is not yet clear what the government's precise plans are in the IP arena. The UKIPO stated in a press release that they must decide whether retained EU law, in the scope of the sunset provision, should be allowed to lapse, or whether to retain, replace or reform it, but that they will want to consider options for reform, which are beneficial to innovation and growth.

What does the Bill mean for IP case law?

There is no doubt that EU case law has played a huge part in developing UK IP law.

As a reminder, the current general rule is that lower level domestic courts are bound by CJEU case law handed down before IP completion date (31 December 2020) but are not bound by any CJEU case law handed down handed down afterwards but a court may have regard, at its discretion, to EU case law handed down after completion date, if relevant, so it can be persuasive.

Certain higher courts e.g. the Supreme Court and the Court of Appeal can depart using the same test the Supreme Court uses if it wishes to depart from its own case law – which is ‘where it appears right to do so’, but exercising caution and taking into account the damage to legal certainty.

The new Bill still allows the Court of Appeal and Supreme Court to depart from relevant EU case law but it also introduces a new, easier, and broader test: (i) the fact that decisions of a foreign court are not usually binding; (ii) any changes of circumstances that are relevant to retained EU law have occurred; and (iii) the extent to which retained EU case law acts to restrict the proper development of domestic law.

In addition, there is a new preliminary reference procedure for the lower courts (ironically, similar to the EU reference procedure!), including the IPEC, which allows them to ask either the Court of Appeal or Supreme Court for permission to depart. Also, no court (whichever level) will be required to interpret domestic legislation in line with EU law so there may be departure from EU case law in that respect.

The result of these new provisions is that departures from IP case law will be able to happen in practice at lower level courts, which may mean that divergence is hastened. The question remains though how willing UK IP judges will be to diverge. We have already seen the judges' reluctance to depart in the Court of Appeal case in TuneIn v Warner Music. Whichever route they pursue, however, will be crucial in the development of UK IP case law.

Current status of the Bill

At the time of writing, the Bill is making its way through the House of Lords and there has been some push back, as expected. A Parliamentary press release on 9 March 2023 confirmed that the Bill competed its Committee stage (which is the first chance for line-by-line scrutiny of the Bill) in the House of Lords on 8 March 2023. It will now move to the report stage, a third reading in the House of Lords and then some further consideration of any amendments and finally, Royal Assent.

The House of Lords could decide to extend the sunset date or water down some of the provisions. Press reports that emerged in the New Year had certainly hinted that the House of Lords might seek to push back the sunset provisions to take effect later than the end of 2023. Press reports indicated that opposition parties put forward amendments including proposals for a sectoral approach to the sunset clause and greater parliamentary oversight, but these were rejected following debate. A small number of government amendments appear to have been adopted which just make technical changes to the Bill. It remains to be seen whether we are yet to see any further substantial amendments to address the widespread concerns about the Bill.

Comment

Despite much resistance, the Bill is moving forward. It will be interesting to see if any significant concessions are made before the current 31 December 2023 deadline. Many opposition groups are continuing to lobby and campaign against the Bill. As recently as 23 February 2023, the Law Society issued a press release expressing its grave concerns:

"The Retained EU Law Bill could have a devastating impact on legal certainty in the UK and negatively impact its status as an internationally competitive business environment. We’re especially concerned about the: speed of the changes, level of scrutiny, confusion for businesses and consumers, risks to trade agreements with the EU. The speed at which government intends to review retained EU law is a recipe for bad law-making…..and we recommend the government extends the timeline for reform and removes the deadline of 31 December 2023".

Many others, including the Scottish Government and Welsh Government, echo this concern and the government’s independent Regulatory Policy Committee has criticised the government’s Impact Assessment on the Bill, describing it as ‘not fit for purpose’.

The UKIPO has said that that it recognises the importance of stability and certainty in the area of IP. Interestingly, the office acknowledged that the December 2023 deadline means that they will have to work at an 'unprecedented pace' to 'understand the change, advise ministers on decisions they will need to take, and implement these using the powers in the Bill'. The UK government has also made it clear that it wants the UK to continue to be recognised as 'having one of the best IP systems in the world' and they want to be transparent about what they expect to achieve. These important considerations will certainly be key when making decisions on retained EU law in this area.

We will be closely monitoring the Bill's ongoing journey through Parliament and will update as and when necessary.  If you would like any advice on how this Bill may impact your business, please do not hesitate to get in touch.