Brexit draft deal: a welcome step but more certainty needed, say lawyers

While the pharmaceutical industry has welcomed the draft Withdrawal Agreement for the UK’s departure from the EU, more clarity is still needed, lawyers have told LSIPR.

UK Prime Minister Theresa May announced that a Brexit deal had been agreed between the European Commission and the UK’s negotiators on Wednesday, November 14.

News of the draft deal, which builds on previous announcements, came shortly after two associations representing the pharmaceutical and biotechnology fields in the UK, the Association of the British Pharmaceutical Industry (ABPI) and the BioIndustry Association (BIA), submitted concerns over a ‘ no deal’ Brexit.

The 585-page draft Withdrawal Agreement on Brexit contains information on the future of existing IP rights in the UK.

“There remains a long way to go for certainty on Brexit for life sciences businesses but this is a key step on that journey,” said BIA in response to the draft.

Similarly, ABPI welcomed the agreement, but added that there was still much more work to be done.

Sally Shorthose, partner at Bird & Bird, London, said that from a life sciences point of view, the agreement is “light in detail and rich on goodwill”. As such, the implications for the UK pharmaceutical industry remain “uncertain”, she said.

Gregory Bacon, partner at Bristows in London, added that “it’s obvious that Brexit poses a number of serious challenges for the life sciences sector”.

He said these challenges mostly stem from future limitations on the free movement of medicines and medical devices, and “against this backdrop, there are potential benefits to the government’s proposed Withdrawal Agreement, and some possible deficiencies”.

The draft deal confirmed that a transition period would come into play after the UK leaves the EU on March 29, 2019, during which the UK will be treated as if it were a member state. The transition period will apply until the end of December 2020.

Bacon said that this extended period of free moment, which includes the potential for an extension, gives pharmaceutical businesses a longer period of time to ensure that they are prepared to sell products on both the UK and EU markets.

He added: “For devices, a transition period would provide more time for the new EU medical devices regulations to come into full effect, allowing greater scope for harmonisation, and hopefully an opportunity for agreements to be reached on information sharing post-exit.”

However, the draft agreement does nothing to pre-empt a situation where there are separate regulatory requirements in respect of medicines and medical devices in the UK and in the EU, Bacon noted.

Isobel Finnie, partner at Haseltine Lake in London, pointed out that patents are not mentioned at all in the draft deal. European patents are examined and granted by the European Patent Office, which is a non-EU institution, and the UK’s departure from the EU will not change this.

“National patents and European patents will be unaffected,” Finnie said.

On SPCs, the provisional deal specifies that any applications which are filed before the end of the transition period will continue to be dealt with under the existing regime (article 60 of the draft).

“And granted SPCs are a national right, so they will continue to exist,” Finnie said, before adding that the draft agreement is “completely silent” on the topic of future SPC applications.

She believes that the existing EU regulatory framework (and case law) will be adopted by the UK, at least initially, after the transition period. Overall, the draft agreement has taken a “sensible and pragmatic approach” to Brexit, Finnie said.

Hiroshi Sheraton, partner at Baker McKenzie, London, noted that the deal also helpfully addresses judicial certainty.

Cases pending before the Court of Justice of the European Union will continue post-Brexit, which Sheraton said is “particularly significant in the field of SPCs, where the English courts have been especially active in making referrals”.

Shorthose said that the pharmaceutical industry’s reaction to the draft agreement is one of “huge relief and optimism”, but the Withdrawal Agreement is not a done deal yet.

“There is still a political mountain to climb in terms of getting the agreement through UK parliament, the EU parliament,” she explained.

The draft agreement also contains information on trademarks, designs, and geographical indications post-Brexit. An analysis of these provisions can be found on sister site  WIPR.

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