More on Scotland and Intellectual Property

Scotland's position in the British Isles, Europe and the World
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In "What would an independent Scottish government do about Intellectual Property?" I discussed what the Scottish government said it would do about intellectual property if Scotland seceded from the United Kingdom. Today I will consider what the white paper did not say.

The Current Situation
Scotland like the rest of the UK protects intellectual assets (brands, designs, technology and works of art and literature) by a bundle of laws some of which derive from statute such as patents, copyrights and trade marks, some from European Union regulations such as Community designs and trade marks, and some such as confidentiality and passing off from common law. Some of those rights have to be registered with the Intellectual Property Office in Newport, others with the Office for Harmonization in the Internal Market ("OHIM) and European patents with the European Patent Office ("EPO") in Munich. Intellectual property claims are brought in the Court of Session in Edinburgh under Chapter 55 of the Court of Session Rules. There is a designated intellectual property judge in the Court of Session who hears cases that would be brought in the Patents Court and the rest of the Chancery Division in England including the Intellectual Property Enterprise Court ("IPEC") but there is no equivalent to IPEC and certainly nothing like IPEC's small claims track.

UK Statutes
The Registered Designs Act 1949, the Patents Act 1977, the Copyright, Designs and Patents Act 1988 and the Trade Marks Act 1994 apply to Scotland as they do to England and Wales though some provisions apply only to Scotland. Each of those Acts confers monopolies or other exclusive rights that apply throughout the UK. If a judge of the High Court or Court of Session forbids the infringement of one of those monopolies or exclusive rights his or her order applies to the whole of the United Kingdom and is not confined to the territorial jurisdiction of his or her court.

EU Intellectual Property Rights
The Community Trade Mark Regulation (Council Regulation (EC) No 207/2009 of 26 February 2009on the Community trade mark), the Community Design (Council Regulation (EC) of 12 December 2001 on Community designs) and the Community Plant Varieties Regulation (Council Regulation (EC) of 27 July 1994 on Community plant variety rights) create rights that apply throughout the EU. Those rights are enforced in the courts of the member states whose jurisdiction extends throughout the EU. The Court of Session is one of several courts in the UK to be designated as Community trade mark and Community design courts and it is also the court in which actions under the Community Plant Varieties Regulation would be brought against a person domiciled in Scotland by virtue of art 101 of that regulation.

Scottish Common Law
The law of confidence in Scotland developed differently from the law of confidence in England (see Scottish Law Commission's report on breach of confidence, Dec 1984) but the practical effect seems to be the same. That also appears to be true of the law of passing off William Grant & Sons Ltd and Others v Glen Catrine Bonded Warehouse Ltd and Others [2001] ScotCS 116 (16 May 2001).

Effects of Scottish Secession
Were Scotland to secede from the UK there would be diplomatic, institutional and legislative consequences. As for the first of these the new state would have to negotiate continuing membership of, or accession to, the World Trade Organization ("WTO"), the World Intellectual Property Organization ("WIPO") and the European Union. It would also have to.accede to the usual international intellectual property treaties and the European Patent Convention ("EPC"), The second of those consequences is that the territory for which the Intellectual Property Office can grant monopolies will diminish and the Supreme Court will cease to hear appeals from the Court of Session.  The third is that legislation would be required to preserve and adapt the UK intellectual property statutes until they are repealed by a Scottish legislature and to introduce the new Scottish utility model referred to in my previous article.

Diplomatic Consequences
It is unlikely that a secessionist government would face difficulty in joining the WTO or WIPO despite the misgivings of countries like Belgium and Spain which also face the possibility of national dismemberment. Their voices would be stronger in the European Union and European Patent Organization but it is unlikely that they would be able to prevent Scottish accession altogether if all the other countries including England were in favour. Of course, it is always possible for Scotland to decide not to stay in or re-join the EU particularly if it were forced to adopt the euro as the price of continuing membership or accession. As Mr Nigel Farage MEP noted in a recent radio broadcast, Scotland has returned one UKIP candidate to the European Parliament and Euroscepticism in Scotland is not far behind that in the rest of the UK. It is not a given that Scotland will be a member of the EU on the day it secedes from the Union.

Institutional Consequences
If Scotland secedes it  may be possible to establish a single patent office for the whole of the former United Kingdom ("FUK") on the lines of the Benelux Office for Intellectual Property but that will depend on whether the the remainder of the the FUK sees any advantage in such an arrangement. If not, Scotland would have to establish its own patent office to issue its own patents, trade marks and registered designs including any British registered rights that are preserved as Scottish rights after secession.  Such an office would in any case be required to grant Scottish utility models.  Such an establishment will require the recruitment of examiners, training of hearing officers and the like which will cost money and that money will probably be raised from renewal fees and other charges on proprietors of Scottish patents, trade marks and registered designs. As I can see no reason for the IPO's expenses to diminish significantly on Scottish secession its fees are also unlikely to diminish. One immediate consequence of secession will be an increase in the costs of prosecuting and maintaining patent, trade mark and registered design protection throughout the FUK.

As there will be separate monopolies for Scotland and the remainder of the UK the jurisdiction of the intellectual property judge in Edinburgh and the Patents and Enterprise Judges in London in relation to statutory intellectual property rights will shrink to their respective territorial jurisdictions. Accordingly, it will be necessary to bring separate actions in Edinburgh and London to enforce throughout the FUK a right that can presently be enforced by litigation in either city. That is bound to increase significantly the costs of enforcement as well as the costs of prosecution and maintenance of IP rights.

Yet another institutional consequence is that the Court of Session will be the final court of appeal for intellectual property cases in Scotland. That has the advantage of taking away a layer of appeal which should reduce costs but it will remove the possibility of correcting the errors of the court below. The possibility of such error is greater in Scotland than it is in England for the simple reason that there is less IP litigation in Scotland and thus less opportunity to acquire the experience of the Patent and Enterprise Judges in England.

Legislative Changes
The legislation providing for secession will probably provide for the continuance of UK statutes including the he intellectual property enactments mutatis mutandis for the time being. However, new legislation would be required to establish a Scottish patent office and utility models. If Scotland leaves the EU even temporarily the Community trade mark, design and plant varieties regulations would cease to apply. That would be inconvenient for those with accrued rights or obligations under those regulations.

Conclusion
Although as a graduate of Scotland's oldest university and one of the UK's best I fervently hope that Scottish voters will decide not to partition our island on Thursday contingency plans have to be made in case they do. Scottish secession will affect the North of England more than the rest of the country because we shall again be on the frontier. For that reason I shall be following events less than 200 miles away with more interest than most English intellectual property lawyers. Should anyone wish to discuss this article or any issue arising out of Scottish secession he or she may call me during office hours on 020 7404 5252 or message me through my contact form.

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