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Cross-border intellectual property: a snapshot of Practical Law’s survey results

I wrote last month about the market practice research Practical Law is conducting into cross-border intellectual property (IP), which includes asking legal practitioners to participate in this survey.

Very many thanks to all who have participated so far. We have received a range of inputs from private practice and in-house lawyers across the globe, including the Americas, Australia, China, Indonesia and the UK, providing an insight into international IP practices and, in particular, the challenges faced by practitioners in this specialised area of law.

Focus on brands

The majority of respondents show a focus on international brand protection, with trade marks and rights to use domain names being the IP rights they most frequently advise on in a cross-border context.  In addition to IP licences and assignments, their expertise is often sought in the context of international franchise agreements, and settlement agreements relating to trade mark disputes.

Challenges for cross-border IP lawyers

As for challenges, the different rules and assumptions across jurisdictions on the validity, enforceability and first ownership of IP rights appear to present the greatest difficulty for cross-border IP lawyers, and require the most referrals to local counsel for country-specific advice.

Local competition law expertise is often sought to ensure cross-border IP transactions comply with regulations governing fair competition in the relevant marketplace. Variations on the tax treatment of IP agreements across jurisdictions also creates a reliance on local tax experts for clarity on transfer pricing, withholding tax and other applicable taxes, particularly for clients engaged in the cross-border sale and purchase of IP assets.

In-house respondents from the engineering and life-sciences sectors report finding country-specific rules and practices relating to employee inventor rights and compensation particularly problematic. Cultural and communication difficulties are also cited as obstacles to advising on cross-border IP transactions generally, with some respondents noting that the expectations and approaches of clients from different jurisdictions can give rise to particular challenges.

Likely impact of Brexit

Unsurprisingly, respondents express a divergence of opinion as to the likely impact of Brexit on this area of law.

Almost one third consider Brexit will have little or no repercussions for their practice, save in relation to transactions involving existing EU trade marks and design rights; whilst half believe it has the potential for great impact, some suggesting in relation to database right and copyright in particular. The rest of our respondents are understandably unsure, reflective of the uncertainty surrounding the future of IP rights post-Brexit generally, which I posted about here.

Across the board, an average of just 3% of our respondents’ working time is being spent advising clients and preparing their IP portfolios for Brexit, perhaps in part due to the little impact some believe it likely to have, but also symbolic of the lack of clarity around Brexit terms, making it difficult for detailed plans to be made. This aligns with the results of Practical Law’s in-house survey, in which two thirds of respondents from in-house legal teams reported spending 5% or less of their time planning for Brexit (for more see Alice Southall’s post here).

Other changes on the horizon

Aside from Brexit, upcoming changes on the horizon for 2018 which our respondents believe will affect cross-border IP include local developments, such as Australia’s reform of its parallel importation rules and Brazil’s hotly anticipated accession to the Madrid Protocol – both of which will significantly impact brand owners doing and wishing to do business in these countries.

IP as a new cross-border topic

Next year, IP will be added to the topics already covered by our cross-border resource centre, which aims to highlight the main legal, commercial and negotiating issues that arise when working across jurisdictions.

Within the IP topic will be a wealth of resources and integrated jurisdiction-specific guidance from up to 22 jurisdictions. To learn more about Practical Law’s cross-border resource centre, you can watch this cross-border overview video.

Participate in survey

We are still welcoming responses and so if you have not already participated in our survey but would like to do so, you can access it by following the link at the top of this post.

Jennifer Phillips

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