Amid all of the recent debate concerning Scottish independence, there has been little talk of intellectual property (IP). This is not simply a disappointment to legal geeks. It has serious implications for the future protection of Scottish IP rights.
Scotland is undoubtedly a highly creative, productive and successful nation – from kilts, bagpipes and whisky, to biosciences, engineering, manufacturing and financial services. Brands, designs, inventions and other forms of intellectual property are crucial to many if not all of its businesses.
However, the Institute of Trade Mark Attorneys has warned that Scotland will have to “act urgently” to protect its intellectual property from infringement and counterfeiting if it becomes independent, because existing UK and EU intellectual property rights would cease to apply or be enforceable in an independent Scotland "without appropriate transitional and permanent provisions for a separate register of Scottish IP rights."
The most obvious impact would be on registered rights like trade marks. Currently granted through UK and EU bodies there would need to be a swift move towards either an independent granting and administration body, or a system of recognition of UK-granted rights. This might lead to a situation where Scotland had little or no control over the granting process and the evolving law around validity and infringement.
In addition to the mechanics of registration, there is the elaborate system of mutual recognition of IP rights that has been built up over years of international treaty making. The government paper ‘Devolution and the implications of Scottish independence’ explains that ‘an independent Scottish state would also have to work through its position on thousands of international treaties and agreements to which the UK is currently party and which would default to the continuing UK.’ For Scottish businesses to benefit from full international protection of their rights, they would need to become party to these treaties, or find workable transitional arrangements, in time for separate statehood.
In 2013 the Scottish National Party declared in its white paper on independence: "We will ensure continuity of the legal framework for protecting intellectual property rights. Independence will also allow Scotland to offer a simpler and cheaper, more business-friendly model than the current UK system, which is bureaucratic and expensive, especially for small firms.”
Unfortunately what this means is yet to be fleshed out.
If there is a “yes” vote, there will be a 16-month transitional period before independence. And if membership of the EU, the European Patent Convention, WIPO and the range of other IP treaties is not successfully negotiated during this period, and if arrangements are not put in place with the UK’s Intellectual Property Office and/or a Scottish IPO established, intellectual property owners in Scotland could face a bumpy ride trying to enforce their rights post-independence.
After Ireland left the United Kingdom in 1921, the Irish Industrial and Commercial Property (Protection) Act of 1927 provided that proprietors of existing UK trade marks and registered designs were entitled, on payment of a fee and within 6 months of the commencement of that Act, to register their UK trade mark or design as an Irish trade mark or design (without any change in the priority date).
Application of a similar procedure for Scotland leaving the UK and the EU would place the onus on proprietors to apply to take active steps for all of their registered IP rights, failing which they would lose protection in Scotland, not to mention elsehwere. Clearly this could place a significant cost and administrative burden on IP owners.
Parties to UK- or Europe-wide agency or distribution agreements, or any other agreement containing a UK- or Europe-wide licence of IP rights, would have to consider the terms of the agreement and the implications of Scottish independence – both in terms of the rights granted and the scope of the licence and the permitted activities.
Cutting costs and ‘red tape’ is a mantra of the 'yes' campaign, yet it seems likely that businesses in Scotland will face increased costs, years of uncertainty and administrative and legal burdens in order to continue to protect and enforce their IP in the future in the way that they do now.