Now more than ever, technology is influencing the way we do business, communicate, move through and around the world, access and manage our homes, receive and administer healthcare, make purchases, secure information, and protect our most valuable property. Morrison Foerster keeps pace with this rapidly evolving landscape across our internationally recognized corporate, finance, intellectual property, and litigation practices. MoFo Tech brings together our insights relating to fields such as blockchain and distributed ledger, cloud and as-a-service technologies, driverless cars, drones, fintech, computer hardware and software, the Internet of Things, semiconductors, and telecommunications. The MoFo Tech blog offers real-time, in-depth analyses of the trends and complex issues shaping the global technology industry.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Scott Llewellyn’s practice focuses on complex litigation in federal and state courts around the country, with an emphasis on patent and trade secret disputes. Over the past decade, he has worked on some of the most significant, high–profile IP cases involving technology for televisions, smartphones, and self–driving cars, relying on 40 years of experience with computer hardware and software. Scott also has significant experience with business divorce cases before courts and arbitrators, involving a mix of trade secret, patent, tort, and contract claims relating to technology development and implementation.Scott also has successfully tried general commercial arbitration and agency matters, briefed and argued various appeals in federal appellate court, and tried more than 20 cases for the Denver City Attorney’s office, most of them jury trials.Scott also has an active pro bono practice, having worked on a variety of criminal and immigration appeals, and having represented Colorado criminal defense and mental health organizations in high–profile suits against the state of Colorado for violations of the constitutional rights of defendants.At MoFo, Scott serves on the board of the Morrison & Foerster Foundation. In the broader legal community, he serves on the boards of the Colorado Lawyers Committee and Drop in the Bucket (a charity that builds wells and sanitation systems in sub–Saharan Africa).After law school, Scott clerked for the Honorable Clarence A. Brimmer, District of Wyoming, and the Honorable Diarmuid F. O’Scannlain, Ninth Circuit. He was also previously an adjunct professor at the Georgetown University Law Center.

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Partner

Scott Llewellyn’s practice involves complex litigation before state and federal courts around the country, with an emphasis on patent and trade secret disputes for high-tech companies, to which he brings more than 35 years of experience with computer hardware and software, in particular relating to the processing and transmission of audio, video, voice, and other types of data. Mr. Llewellyn has also tried commercial arbitration and agency matters; briefed and argued various appeals in federal appellate court; and tried more than 20 cases for the Denver city attorney’s office, most of them jury trials.

Scott F. Llewellyn

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MoFo Tech brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry, covering fields such as blockchain and distributed ledger, cloud and SaaS technologies, driverless cars, drones, FinTech, computer hardware and software, the IoT, semiconductors, and telecommunications.

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MoFo Tech brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry, covering fields such as blockchain and distributed ledger, cloud and SaaS technologies, driverless cars, drones, FinTech, computer hardware and software, the IoT, semiconductors, and telecommunications.

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Japan’s Approach to AI Regulation in 2025

Federal Circuit Clarifies Requirements for Prior Art Under Pre-AIA 35 U.S.C. § 102(e)

AI Agent as a Service in Medtech - Key Considerations for Commercial Contracts

D.C. Circuit Holds that Works Created Solely by AI are Not Copyrightable

Navigating Inventorship in the Era of AI-Assisted Drug Discovery

The European Commission has stated that it wants to establish the EU as a leader in the AI industry in order to, among other things, discontinue non-EU companies’ dominance of the EU tech market. Nevertheless, the Commission’s goals for increasing the use of AI in the EU are vague, the Commission has failed to clarify how the EU should go about achieving tasks that are indispensable to the AI industry’s success, and a “European AI Alliance” intended to encourage relevant stakeholders to share best practices and carry out other activities related to the AI industry’s development isn’t scheduled to take place until July 2019.

Autodesk

HM Revenue and Customs

Home Office, Department for Communities and Local Government, Department of Health

Intel

ITworx

lastminute.com

NYSE-listed health tech company

One of UK's largest public EV charging networks

Phoenix Group

Telenor

UK Border Agency

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Senior Counsel

Alistair Maughan co-leads Morrison & Foerster's European Technology & Commercial Practice.

Alistair Maughan

Alistair advises on the deployment of new technology platforms involving, for example, the internet of things, AI and machine-learning, and blockchain and distributed ledger technology.

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Can the EU become a leader in AI Technology?

Don’t Get Caught by the Phisherman’s Hook This Tax Season

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The European Commission has stated that it wants to establish the EU as a leader in the AI industry in order to, among other things, discontinue non-EU companie

Can the EU become a leader in AI Technology?

On 28 June 2018, the United Kingdom Prudential Regulation Authority (PRA) published a letter to the CEOs of banks, insurance companies and designated investment firms to communicate the PRA’s expectations regarding firms’ exposure to crypto-assets. In particular, the letter flagged the risks associated with crypto-assets and each firm’s responsibility to comply with the PRA’s Fundamental Rules 3, 5 and 7.The letter highlighted several risk mitigation strategies and systems that the PRA considers necessary to protect against exposure to crypto-assets. The PRA also outlined their expectations with regard to classifications of crypto-assets and reminded firms to continue to update the PRA of any planned crypto-asset exposure or activity. Discussions around the prudential treatment of crypto-assets are currently ongoing among authorities (both nationally and internationally) and the PRA will communicate any supervisory or policy updates in due course.

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UK PRA's 'Dear CEO' Letter on Exposure to Crypto-Assets

UK Regulations: Urgent Action Required from Loan-Based Crowdfunding Platforms

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On 28 June 2018, the United Kingdom Prudential Regulation  Authority (PRA) published a letter to the CEOs of banks, insurance  companies and designated investme

UK PRA's 'Dear CEO' Letter on Exposure to Crypto-Assets

Just over a month after the EU General Data Protection Regulation (GDPR) took effect, California passed its own sweeping privacy legislation, the California Consumer Privacy Act of 2018.The Act stands to affect countless global companies doing business in California, many of which recently devoted extensive time and resources to GDPR compliance. These companies must now determine what additional steps are necessary to comply with the Act by the time it takes effect on January 1, 2020.Join Socially Aware contributors Christine Lyon and Julie O’Neill on Thursday, September 20, 2018, for a deep dive into the key similarities and differences between the GDPR and the Act, as well as practical steps companies can take to assess gaps and chart a path to compliance. The areas they expect to cover include:<ul><li>Notice requirements</li><li>Access and portability</li><li>Deletion</li><li>Opt-outs</li><li>Discrimination</li></ul>

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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Privacy Across the Atlantic: Comparing the EU GDPR and California Consumer Privacy Act of 2018 - A Morrison & Foerster Data Protection Webinar

Biometric Information as Personal Information In A Brave New World of Regulatory Compliance

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Just over a month after the EU General Data Protection Regulation (GDPR) took effect, California passed its own sweeping privacy legislation, the California Con

Privacy Across the Atlantic: Comparing the EU GDPR and California Consumer Privacy Act of 2018 - A Morrison & Foerster Data Protection Webinar

On 7 August, 2018, the UK’s Financial Conduct Authority (FCA) announced that it has, in collaboration with 11 other financial regulators and related organisations, including the Monetary Authority of Singapore and the Hong Kong Monetary Authority, created the Global Financial Innovation Network (GFIN) to provide a more efficient way for innovative firms operating in multiple jurisdictions to interact with regulators. The GFIN encourages innovative financial services firms, financial services regulators, technology companies, technology providers, trade bodies, accelerators, consumer groups and other stakeholders to read and respond to the various questions it poses in the consultation document.

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Announcing the Global Financial Innovation Network

Why Should Your Startup Care About Intellectual Property?

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On 7 August, 2018, the UK’s Financial Conduct Authority (FCA) announced that it has, in collaboration with 11 other financial regulators and related organisatio

Announcing the Global Financial Innovation Network

Many states and localities are concerned that the proliferation of streaming services is shrinking tax revenues previously received from sales of traditional forms of entertainment.  Those concerns are not unfounded.  The rapid development of streaming services has drastically changed how people watch “television.”  It is now estimated that over 56 million U.S. adults either have cancelled or never subscribed to traditional cable or satellite television service, while the number of Americans who subscribe to Netflix now equals the number of Americans who have a traditional television service subscription.  Meanwhile, streaming music services now generate the majority of the industry’s revenue.Thus, it is not surprising that many jurisdictions have taken a variety of approaches to subject sales of streaming services to sales taxes and excise taxes.  And now that the U.S. Supreme Court has ruled that there is no physical presence requirement for a state to impose a sales tax collection obligation on sellers, all companies offering streaming services should pay even closer attention to the state and local tax landscape—even if the streaming service is only a small part of a larger business.  Notably, in a state or locality that imposes sales taxes or excise taxes on streaming services, a company’s otherwise non-taxable services may become taxable if the company decides to include a streaming service as part of a bundled offering for a single price, even if the streaming service is not used or desired by a particular purchaser.Some jurisdictions, including Pennsylvania, have passed legislation amending their sales tax laws to specifically tax streaming services.  However, similar legislative efforts have proven less successful in other jurisdictions.  For example, a proposal in Virginia to expand the state’s communications sales tax to streaming entertainment services was overwhelmingly rejected by a Virginia House of Delegates committee earlier this year.  Meanwhile, the general unpopularity of taxes on streaming television services has inspired legislative proposals to explicitly exclude such services from tax.Taxing authorities in other jurisdictions have attempted to apply existing sales tax and excise tax laws to reach streaming services by issuing guidance such as letter rulings and publications.  For example, in a 2018 Private Letter Ruling, the Texas Comptroller found that a streaming video service was subject to sales tax as a “cable television service.”  The Florida Department of Revenue has issued guidance stating that, while sales and rentals of streaming videos are not subject to sales tax, rentals of streaming videos are subject to the State’s communications services tax as a “video service.”  Even more confusing, the Florida guidance states that sales (as opposed to rentals) of streaming videos are not subject to Florida’s communications services tax because the sales would qualify as a nontaxable “information service.”  Localities are also attempting to tax streaming services, even when the state is not.  For example, although Illinois does not currently impose tax on streaming services, the City of Chicago’s Comptroller released guidance stating that the City’s excise tax on admission fees or other charges paid for the privilege to enter, witness, view, or participate in “amusements” applies to certain streaming services. Any company that offers streaming services should be aware of the taxing authority’s position in each jurisdiction where the company has customers, even if the company has no other “presence” in that jurisdiction.  Importantly, however, companies should also be aware that a taxing authority’s position is subject to challenge.  Judicial challenges of taxes on streaming services are ongoing in Chicago and Pennsylvania.  Notably, at least one state’s attempt to impose existing taxes on streaming services was rejected.  In Kentucky, a state circuit court overturned the Department of Revenue’s audit assessment that subjected a streaming service company’s revenues from Kentucky customers to the same excise taxes applicable to traditional pay television providers. If your company offers a streaming service, now is the time to closely examine your tax compliance efforts.  In the wake of the U.S. Supreme Court’s recent decision in South Dakota v. Wayfair, Inc., which overruled over 50 years of precedent and found that the U.S. Constitution does not require a physical presence in a taxing state in order for the state to impose a sales and use tax collection obligation on an out-of-state seller, jurisdictions will likely be more aggressive in seeking sales tax from companies offering purportedly taxable services over the Internet.  And don’t forget that continued vigilance will be necessary, as jurisdictions continue to investigate whether or how to subject streaming services to sales taxes and excise taxes.

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Of Counsel

Rebecca Midori Ulich-Balinskas is of counsel in the Tax Group and is based in Morrison Foerster’s New York office. Her practice focuses on U.S. federal, state and local tax transactional and controversy matters.

Rebecca Balinskas

Rebecca M. Balinskas

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If Your Company Offers Streaming Services, You Should Be Aware that States and Localities Are Taking Different Approaches to Taxing Such Services

The FCC “Opts-In” to Consumer Privacy with New Rules for Internet Service Providers

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Many states and localities are concerned that the proliferation of streaming services is shrinking tax revenues previously received from sales of traditional fo

If Your Company Offers Streaming Services, You Should Be Aware that States and Localities Are Taking Different Approaches to Taxing Such Services

Two key federal government announcements were made on July 31, 2018 related to fintech issues. First, the U.S. Department of the Treasury issued a press release announcing a report entitled “Nonbank Financials, Fintech, and Innovation.” The Report is the fourth and final in a series of reports prepared by Treasury in response to President Trump’s February 2017 Executive Order 13772. In addition, the Office of the Comptroller of the Currency announced that it would begin accepting applications for special purpose national bank charters from fintech companies that are engaged in the business of banking, but do not take deposits. This alert reviews these important developments.Read our <a href="https://protect-us.mimecast.com/s/-RC7CVO0oWIZlQX3typ6xo">client alert</a>.

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Co-Chair of Financial Services Group

Jeremy Mandell is the co-chair of our Financial Services Practice Group. His practice focuses on financial services regulation, with particular attention to payment

Jeremy R. Mandell

Jeremy Mandell

Treasury and the OCC Make Significant Fintech Announcements

Two key federal government announcements were made on July 31, 2018 related to fintech issues. First, the U.S. Department of the Treasury issued a press release

Treasury and the OCC Make Significant Fintech Announcements

Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREXIT fast approaching, the European Union (“EU”) and the United Kingdom (“UK”) have been pushing things forward at the negotiator level, but also independently. The latest of these developments is the White Paper, released by the UK Government on July 12, 2018 (“White Paper”), that laid down a proposal for the future relationship between the UK and the EU. It highlighted the importance of further cooperation in matters of IP protection and touched on issues like the participation in the Unified Patent Court (“UPC”) System and the establishment of an own protection scheme for Geographical Indications (“GIs”). Moreover, on July 19, 2018, Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, reassured businesses of the UK Government's intention to grant equal protection to IP rights holders in the UK following BREXIT, which has been reaffirmed on July 23, 2018, by a news story titled “IP and BREXIT: The facts,” which was posted by the UK Government on <a href="http://www.gov.uk/">www.gov.uk</a> (“UKGov News”).This is the second part of our article on IP protection post BREXIT, which is dedicated to giving a comprehensive overview of what IP right owners can expect when the UK leaves the EU on March 29, 2019 (“Exit Date”), by summarizing the state of affairs for each IP right category separately. The first part of the article dealt with post BREXIT issues relating to European Union trade mark Registrations (“EUTM”), Registered Community Designs (“RCDs”), Unregistered Community Design Rights (“UCDs”) and granted Community Plant Variety Rights (“CPVRs”) (together, “EU-IP”). In case you missed it, you can read it <a href="https://mofotech.mofo.com/topics/ip-protection-post-brexit-part-1.html">here</a>. This second part will be directed at issues relating to Geographical Indications (“GIs”), eu. country code TopLevel Domains (“ccTLD”), data base rights, European Patents (“EPs”) and Supplementary Certificates (“SPCs”). Both parts of the article will be supplemented by a set of actions that we suggest can be taken to address the risks indicated by the probable future IP right regimes that we are facing and the risks associated with the uncertainties of a “deal or no-deal” scenario.Agreed and not agreed (until everything is agreed) – Part 21.     Geographical Indications and Protected Designations of OriginAccording to the proposal made by the EU under Article 50 Sec. 2 of the Draft Agreement on the withdrawal of the United Kingdom and Northern Ireland from the European Union and the European Atomic Energy Community (“Draft Agreement”), the UK should provide holders of Geographical Indications and Protected Designations of Origin with continued protection of their rights in the UK after expiry of the Transition Period. The parties have not yet been able to agree upon this provision at the negotiator level. However, the White Paper states that the UK will establish its own GI scheme consistent with, and possibly going beyond, the provisions of the World Trade Organizations Agreement on Trade-Related Aspects of Intellectual Property (“TRIPS”). According to the statement, the new scheme will provide a clear and simple set of rules on GIs and continuous protection in the UK for UK GIs, notwithstanding exit from the EU. It will be open to new applications from both UK and non-UK applicants.2.     “.eu” Country Code Top Level Domains (“ccTLD”)In addition to the Draft Agreement, the European Commission released another statement on March 28, 2018 (“ccTLD Statement”), announcing that the regulatory framework pertaining to .eu ccTLDs will cease to apply to the UK from March 30, 2019. Thus, undertakings and organizations that are established in the UK but not in the EU and natural persons who reside in the UK will:<ul><li>no longer be eligible to register or renew .eu ccTLDs;</li><li>be subject to revocation actions by EURid without the right to submit the dispute to any extrajudicial settlement of conflicts (as provided for in Article 20(b) of the Commission Regulation (EC) No. 874/2004);</li><li>no longer be eligible to rely on IP rights recognized or established under UK law but not in the EU Member States (e.g., common law rights) in .eu domain name dispute proceedings, which, until such date, has been the case in accordance with Article 21 of the Commission Regulation (EC) No. 874/2004; and</li><li>not be eligible to rely on a choice-of-law clause in agreements concluded between the Registrar and the .eu domain registrant if such clause designates UK law.</li></ul>The ccTLD Statement stresses that a transitional arrangement may be contained in the final Withdrawal Agreement. The Draft Agreement in its current form, however, provides no information in this regard.3.     Database RightsDatabase rights were introduced in the UK with the implementation of the EU Database Directive (Directive 96/9/EC). This protects databases where, at the time the database was made, its maker is (1) an individual who is a national of or habitually resident in the EEA; or (2) a company incorporated, or an unincorporated body formed, under the law of an EEA state that has its central administration, principal place of business or registered office within the EEA. In the Draft Agreement, the UK now agrees that the holder of a right in relation to a database that arose before the end of the Transition Period shall be granted an IP right in respect of the UK with the same level of protection as afforded under the EU Database Directive if such person or entity is: (i) a UK national, (ii) a person with a habitual residence in the UK or (iii) an undertaking established in the UK. In relation to (iii), where an undertaking has only its registered office in the UK, its operations must be genuinely linked on an ongoing basis with the economy of the UK or of a Member State.4.     PatentsIn general, there will be no impact on European patent protection in its current form, which is granted as a bundle of national rights in selected countries of the European Patent Convention (“EPC”). This is because, in contrast to what its name suggests, the EPC is not solely an EU institution, but has several non-EU Member States (e.g., Morocco) being a party to it. However, it remains an interesting question whether the UK will be party to the Unified Patent Court (“UPC”) System, under which a new type of patent will be issued by the European Patent Office conferring protection across the entire territory of the participating European nations as one single right. As indicated in the beginning of this article, the UK ratified the UPC Agreement (“UPCA”) and thereby paved the way for negotiations to ensure the UK’s continued participation in the UPC following BREXIT. In the White Paper, the UK again affirmed its intention to further explore staying in the Unified Patent Court and Unitary Patent system post BREXIT and to “work with other contracting states to make sure the Unified Patent Court Agreement can continue on a firm legal basis.”However, as with almost everything concerning BREXIT, the UK’s participation in the UPC System is still far from certain. On the one hand, it is yet to be seen whether the UK is willing to accept the role of the ECJ in the UPC System despite its intentions to end the ECJ’s jurisdiction in the UK overall. On the other hand, as reported earlier <a href="https://mofotech.mofo.com/topics/turn-on-tune-in.html">here</a>, the UPCA must enter into force before the UK leaves the EU – i.e., before March 29, 2019 – but there are still outstanding ratifications, inter alia, from Germany, where a constitutional claim filed with the German Federal Constitutional Court (Bundesverfassungsgericht) is currently pending, barring the German Federal President (Bundespräsident) from signing the UPCA and the UPC’s Protocol Privileges and Immunities.5.     Supplementary Certificates (“SPC”)SPCs can provide up to five (5) additional years of protection for a marketed medicine or plant protection products. As confirmed in the UKGov News during the Transition Period, businesses can continue to apply for and be granted SPCs using the current SPC system and existing UK SPCs granted under that system continue to be valid. Since these SPCs are based on EU Regulations No. 1610/96 and No. 469/2009, the UK will need to replace the existing legal framework for rights of patent term extension with a new framework to be available at the end of the Transition Period. As suggested in a <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/717697/Joint_Statement_-_19_June_2018.pdf">jointly released a statement </a>on June 19, 2018 (“Joint Agreement”), the UK and the EU came to the agreement that Article 56 of the Draft Agreement shall apply. This states that SPC applications filed before the end of the Transition Period and still pending at its end will be granted even after the end of that Period and provide for the same level of protection under UK law as under the EU Regulations.WHAT'S LEFT TO DECIDEAlthough the Draft Agreement and the Joint Statement suggest that, at least with regard to IP protection post-BREXIT, consent has so far been reached for the majority of issues and the negotiators of the EU and UK Government in the Joint Statement committed themselves “[ . . . ] to making progress as quickly as possible on all aspects necessary to reach such an agreement [ . . . ],” there are still open issues that need to be addressed in the final Withdrawal Agreement, which is targeted for signing by October 2018.One such open issue is the actual registration procedure for equivalent rights to EU-IP (“UK Equivalents”), including the question of whether any payments from IP rights holders will be required for the creation of UK Equivalents or whether such registration will be provided free-of-charge, which the parties have not yet announced as agreed upon at the negotiator level. However, at least on a unilateral basis the UK Government in the statement of Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, has indicated that the UK will grant UK Equivalents free of charge: “We have agreed to protect all existing EU trade marks, community registered designs and unregistered designs in the UK as we leave the EU. In place of those EU-level rights, 1.5 million new UK trade marks and registered designs will be granted automatically and for free.”ACTIONS THAT CAN BE TAKEN NOWDespite the fact that the EU and the UK constantly reassure that they want a deal in place by October 2018, the possibility remains that topics other than IP prevent the UK from signing the final draft of the Withdrawal Agreement. IP owners are advised to bear this in mind when planning their future IP strategy.In our first part of this article, we pointed out actions that can help address risks associated with the uncertainties contemplating to the protection of EUTMs, RCDs and CPVRs. Here we want to supplement these suggestions with the following:<ul><li>.eu ccTLDs: Holders of eu. ccTLDs located in the UK with no establishment in the EU may want to consider registering other ccTLDs.</li></ul><ul><li>License agreements: Existing license agreements where (i) the UK is part of the license territory and/or (ii) EU-IP or International Registrations designating the EU are licensed will need to be carefully examined, and, with regard to new license agreements, emphasis should be given to the contractual language to not only provide for a license to the EU-IP or the International Registration itself but to also encompass its future UK Equivalent. Furthermore, territory definitions should make express reference to the UK, rather than to the EU as a whole.</li></ul>***

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Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in the digital, high-tech, life sciences, and pharmaceutical industries.

Wolfgang Schönig

Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

One of UK’s largest public EV charging networks

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Associate

Sana Ashcroft is an associate based in the London office of Morrison & Foerster and is a member of the Technology Transactions Group.
Sana advises on a wide range of domestic and cross-border commerci

Sana Ashcroft

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Counsel

Robert advises companies from the technology and life sciences sectors on a wide range of commercial, intellectual property (IP) and regulatory matters. His clients range from multinational corporations to startups and scaleups.

Robert Grohmann

Robert Grohmann is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising domestic and foreign companies and startups in all areas of technology and IP law, including patent and software licensing, employee inventions law, as well as know-how protection. Moreover, Mr. Grohmann’s expertise encompasses the judicial and extra-judicial representation in matters of trademark law, design law, and competition law.

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IP Protection Post BREXIT Part 2: A Right-by-Right Analysis

Supreme Court Restricts the Extraterritorial Reach of U.S. Patent Law for Exported Goods

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Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREX

IP Protection Post BREXIT Part 2: A Right-by-Right Analysis

Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREXIT fast approaching, the European Union (“EU”) and the United Kingdom (“UK”) have been pushing things forward at the negotiators level, but also independently. The European Commission got the ball rolling by releasing the third version of the Draft Agreement on the withdrawal of the United Kingdom and Northern Ireland from the European Union and the European Atomic Energy Community (“Draft Agreement”) on March 19, 2018, which reflected the state of affairs with regard to post–BREXIT protection of pan-European IP rights. Shortly thereafter, on March 28, 2018, another statement was released pertaining to <a href="https://ec.europa.eu/info/publications/eu-domain-names_en">.eu country code Top Level Domains </a>(“ccTLD Statement”). The UK, on the other hand, ratified the<a href="https://www.gov.uk/government/news/uk-ratifies-the-unified-patent-court-agreement"> Unified Patent Court Agreement </a>(“UPCA”) on April 26, 2018, and, before that, the<a href="https://www.gov.uk/government/news/uk-ratifies-hague-agreement-for-industrial-designs"> Hague Agreement for industrial designs</a> that took effect on June 13, 2018. Additionally, the parties <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/717697/Joint_Statement_-_19_June_2018.pdf">jointly released a statement </a>on June 19, 2018 (“Joint Agreement”), stating that they had reached an agreement at the negotiators level with regard to the Draft Agreement relating, inter alia, to the protection of pending Supplementary Certificates (“SPC”).On July 12, 2018, the UK Government released a White Paper, a proposal for the future relationship between the UK and the EU (“White Paper”). On Thursday, July 19, 2018, the Parliamentary, Robin Walker MP, confirmed the UK Government’s intention to grant protection to IP rights holders following BREXIT equal to that under the current IP regime of the EU, which was then reaffirmed on July 23, 2018, by the post of a news story titled “IP and BREXIT: The facts” on www.gov.uk (“UKGov News”).This article is the first of two parts dedicated to providing a comprehensive overview of what IP right owners can expect when the UK leaves the EU on March 29, 2019 (“Exit Date”), by summarizing the state of affairs for each IP right category separately. Herein we will give you some background information and deal with post-BREXIT issues related to European Union trade mark Registrations (“EUTM”), Registered Community Designs (“RCDs”), Unregistered Community Design Rights (“UCDs”) and granted Community Plant Variety Rights (“CPVRs”) (together, “EU-IP”). The second part will be directed at issues relating to Geographical Indications (“GIs”), eu. country code TopLevel Domains (“ccTLD”), data base rights, European Patents (“EPs”) and Supplementary Certificates (“SPCs”). Both parts of the article will be supplemented by a set of actions that we suggest can be taken to address the risks indicated by the probable future IP right regimes that we are facing and the risks associated with the uncertainties of a “deal or no-deal” scenario.SOME BACKGROUNDWith the UK’s public vote to leave the EU on June 26, 2016, one of the countless topics to be addressed in the BREXIT negotiations is: “What will become of this EU-IP post BREXIT”? Without any form of agreement between the EU and the UK in place after the Exit Date, EU law will no longer apply to the UK, and the European Court of Justice (“ECJ”) will not have jurisdiction over the UK as of this date. In this worst case scenario, EU-IP will simply cease to extend to the UK from one day to the next. IP right holders that had mainly or exclusively relied upon such EU-IP and made significant investments in this regard could now end up without any form of protection in the UK. Given the thriving activities of UK businesses in filing, for example, EUTMs (being the second highest number of filings in the EU), this is not only a concern for EU-IP holders in the mainland Member States, but also of particular interest for EU-IP holders in the UK.Agreed and not agreed (until everything is agreed) – Part 11.      Transition Period and Certain Common PrinciplesThe Draft Agreement was the first sign of significant progress in the negotiations between the EU and the UK. Certain sections of it provide for certain common principles that apply to most EU-IP. Other arrangements only apply to certain types of IP rights.First and foremost, as stipulated in Article 121 of the Draft Agreement, the negotiators have preliminarily agreed on a transition and implementation period that runs from March 30, 2019, to December 31, 2020 (“Transition Period”). According to Article 122 of the Draft Agreement, EU rights – including EU-IP – will extend to the UK during the Transition Period and shall:<ul><li>produce in respect of and in the UK the same legal effects as those that it produces within the Union and its Member States;</li><li>be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union; and</li><li>be deemed to include the UK when making any reference to Member States in EU.</li></ul>The Draft Agreement also states that EU-IP granted by December 31, 2020, will also automatically be registered as a separate right in the UK (“UK Equivalent”). This applies to all registered rights – i.e., EUTM, RCDs and CPVRs. The UK Equivalent will have the same filing, renewal and priority dates as the original EU-IP.If an EU-IP is subject to an invalidation/revocation or nullity or cancellation proceeding that has been ongoing prior to the end of the Transition Period and such EU-IP is declared invalid/revoked or cancelled in such a proceeding (even after the end of the Transition Period), the UK Equivalent too will be held invalid/revoked at the same date. However, in accordance with Article 50 Sec. 3 of the Draft Agreement, the UK will have no obligation to issue such declaration where the grounds for invalidity/revocation or nullity or cancellation of the EU-IP do not apply in the UK.Another agreement that could be reached pertains to the exhaustion of IP rights, which is a principle common to most IP rights, but has found its specific expression in the EU in what is called the “Fortress Europe.” In principle, exhaustion in the EU applies, and an IP right is not infringed by its use, if the IP right, or a product applying the IP right, was put on the market in the European Economic Area (“EEA”) by the proprietor or with his consent. The Draft Agreement contemplates that IP rights so exhausted within the EU (including the UK, for the term of the Transition Period) will remain exhausted in the UK and the EU thereafter. Naturally, the Draft Agreement does not address exhaustion after the Transition Period. It is yet to be discussed which approach on exhaustion the UK will take after the Transition Period. If the UK decides on using a national exhaustion regime, it may be possible for UK IP rights to be used to prevent parallel imports from the EU into the UK. This topic is further discussed <a href="https://www.citma.org.uk/membership/brexit/exhaustion_rights">here</a>. In the UKGov News, it has been suggested, however, that the UK looks forward to “exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders”, and in this sense to discuss issues like exhaustion of IP rights. 2.     Trademark RightsIn addition to the above-stated principles that will apply to the registration of UK Equivalents, holders of EUTMs that are converted into UK Equivalent trademarks will further benefit, if applicable, from the seniority of a UK trademark that was claimed in the EUTM registration.A crucial point to highlight is that EUTM applications that were filed within the Transition Period and received a date of filing, but are still pending at its end, will not automatically be converted into UK Equivalents. Instead, the applicant will have a so-called “right of priority,” meaning the right to file for an identical copy of such EUTM application (i.e., identical mark and identical list of goods and services) in the UK within nine (9) months of the end of the Transition Period, and will then be granted the same filing date and priority as its corresponding EUTM application.Other issues to be aware of relate to: a.      genuine useUK Equivalent trademarks will not be liable to revocation on the ground that the corresponding EUTM was not used in the territory of the UK before expiry of the Transition Period. It remains unclear, however, when the non-use period will start to run after the end of the Transition Period. This effectively extends the so-called “grace period” of the UK Equivalent trademarks, meaning the period in which to commence use of the mark in the UK before the UK Equivalent trademark becomes vulnerable to cancellation for non-use. However, there is no such provision for the reciprocal grant of EUTMs used solely in the UK. Even though the EUIPO’s Q&A document published in January 2018 suggests that use of an EUTM in the UK qualifies as use in the EU at least as it relates to the period before the Exit Date, it has not found its way into the Draft Agreement. For businesses that have been operated in the UK exclusively before the Exit Date, there remains a risk that their EUTMs may be vulnerable to cancellation for non-use in the EU.  b.      reputationUntil expiry of the Transition Period, UK Equivalent trademarks will benefit from the reputation that the corresponding EUTM enjoys in the EU. Thereafter, reputation will be based on the use in the UK. c.       International Registrations with EU designationsThe UK also agreed to take measures to ensure that trademarks protected in the UK through an International Registration designating the EU via the Madrid System will continue to enjoy protection following the end of the Transition Period.  3.     Designs a.      Registered Community Designs (“RCDs”)The protection mechanisms provided under the Draft Agreement for RCDs are essentially the same as those for UK Equivalents in general (as described in Section 1) and UK Equivalent trademarks (as described in Section 2) above. Here, too, UK Equivalents will have the same filing and priority dates as their RCD counterparts, and RCD applications still pending at the end of the Transition Period must be filed again with the UK IPO within nine (9) months in order to enjoy such privilege.In addition, with its ratification of the Hague System on March 13, 2018, which took effect on June 13, 2018, the UK opened up another possibility for foreign companies and individuals to obtain design protection in the UK. Comparable to the Madrid System for international trademark registrations, the Hague Agreement allows applicants to register a design in any one of the 67 contracting countries through a single application via the World Intellectual Property Organization (“WIPO”). Previously, design protection in the UK via the Hague Agreement could be obtained by means of designating the EU only (which included the UK), but it will now be possible to designate the UK directly through the system. On the other hand, in the Draft Agreement, the UK agreed to take measures to ensure the protection of EU designations via the Hague System that were registered before the end of the Transition Period. b.     Unregistered Community Designs (“UCDs”)UCDs are designs that, from the date on which they were first made available to the public within the EU, are protected under the Council Regulation (EC) No. 6/2002. The UCD protection lasts for a period of three (3) years. The Draft Agreement provides that the holders of UCDs that were made available before the end of the Transition Period will benefit from a UK Equivalent for the remaining period of protection. However, the UK still has to provide for the respective mechanism, as the UK’s current unregistered design right legislation does not offer the same scope of protection as that provided under the EU regime. In the UKGov News the UK stated it will establish new schemes, which “will preserve the full scope of the UCDs in the UK”.4.      Community Plant Varity Rights (“CPVR”)UK Equivalents relating to CPVRs benefit from the same principals common to all registered EU-IP, as discussed in Section 1 above. Additionally, the term of the UK Equivalent shall be at least equal to the remaining period of protection under EU law. Comparable to the provisions on pending EUTM and RCD applications at the end of the Transition Period, CPVR applications will not automatically be converted into corresponding UK applications. The applicant will instead have an ad hoc right of priority, meaning the right to file an identical UK application that secures the priority of the CPVR application for the UK application for the purpose of determining distinctness, novelty and entitlement to the right of such a UK application. However, the period to file a priority saving application in the UK is reduced to six (6) months only.ACTIONS THAT CAN BE TAKEN NOWAlthough the UK’s Prime Minister, Theresa May, recently announced that the EU and the UK still want a deal in place by October 2018, the UK, at several points in negotiations, has threatened to leave the EU without a deal. And, indeed, the possibility remains that topics other than IP prevent the UK from signing the final draft of the Withdrawal Agreement. IP owners may seek comfort in the July 19, 2018, announcement of the Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, that stated: “We have agreed to protect all existing EU trade marks, community registered designs and unregistered designs in the UK as we leave the EU. In place of those EU-level rights, 1.5 million new UK trade marks and registered designs will be granted automatically and for free.”However, IP owners are also advised to bear in mind when planning their future IP strategy that none of this is certain as of yet. Even though each portfolio provides for unique challenges and measures should be assessed on a case-by-case basis. There are a number of general actions that could be considered at this stage:   <ul><li>EUTM and RCD holders: </li><li>Review of Portfolio. Owners should review their portfolios for marks or designs that are protected solely by European or International Registrations with EU designation. With regard to important assets, thought could be given to filing a national UK application or an International Registration with UK designation for additional reassurance.</li><li>Dissimilar Protection. Likewise, if you hold protection under both the UK and the EU trademark regimes, you may want to make sure that the goods and services that your business offers, or will offer in the near future, are protected by both registrations equally – if this is not the case, you could consider filing a separate EUTM or UK trademark, as the case may be.</li><li>Existing UK trademarks. Owners of existing UK registrations are advised to consider a renewal of protection where necessary.  </li><li>New Filings. With regard to new filings for EUTMs or RCDs, important applications could be accompanied by a national UK application for additional reassurance.  </li><li>Pending EUTM Applications Subject to Oppositions. On the subject of pending EUTM applications that are subject to an opposition based on the earlier national right of countries remaining in the EU (i.e., trademark, company name, etc.), it may be advisable to push things forward, because, in order to profit from a UK Equivalent, the trademark must be registered at the end of the Transition Period. On the other hand, in relation to pending EUTM applications that are subject to an opposition based on an earlier UK right (e.g., by way of extending the cooling-off period), or pending UK trademark applications that are subject to an opposition based on an earlier EUTM, thought could be given to slowing down the opposition proceeding (e.g., by way of extending the cooling-off period). This is because, after the Exit Date or, respectively, the Transition Period at the latest, these earlier rights will likely not be a legal basis for an opposition against your application anymore.  </li><li>Sole Use of EUTMs in the UK. Owners of EUTMs that have been put to use exclusively, or almost exclusively, in the UK and are (or will soon be) subject to the use requirement may want to consider starting to use their rights more extensively in other EU countries or to register new national trademarks in important countries of the EU in order to benefit from a new grace period.</li></ul><ul><li>Breeders: With regard to applications not yet filed or likely not to be granted until December 31, 2020, breeders can expect to file applications in the EU and in the UK. Since the latter application will be required immediately following the Transition Period and will likely go hand in hand with double the paperwork and two lots of Distinctness, Uniformity, Stability (“DUS”) examinations, timely preparation will be an advantage.</li></ul>