Monday, 16 October 2017

UK's Future Relationship with the World Trade Organization

Author E Murray
Copyright ILO Historical Photo/Archives
Creative Commons Attribution-Share Alike 3.0 unported
Source Wikipedia


















Jane Lambert

The UK was one of the founder members of the World Trade Organization ("WTO") but its rights under the WTO Agreement and annexes are exercised, and its obligations are undertaken, on its behalf by the European Union. When the UK leaves the EU it must exercise its rights and discharge its responsibilities on its own account. Naturally, that will have repercussions for all the other member states of the WTO. By a joint letter dated 11 Oct 2017 to the Permanent Representatives to the WTO, Julian Braithwaite, UK Permanent Representative to the International Organizations in Geneva, and Marc Vanheukelen, EU Permanent Representative to the WTO, have set out their intentions with regard to the implications of the UK withdrawal from the EU within the WTO.

The letter states that the UK intends to replicate as far as possible its obligations under the current commitments of the EU. The EU and UK will follow a cooperative and transparent approach regarding any necessary adjustment in the WTO arising from the UK withdrawal from the EU and they will strive to minimize disruption to trade. Both the UK and EU UK intends to replicate as far as possible its obligations under the current commitments of the EU. The EU and the UK will follow a cooperative and transparent approach regarding any necessary adjustment in the WTO arising from the UK withdrawal from the EU.

Initially, the UK will continue the same policies as those of the EU with regard to market access, agricultural support, government procurement and trade and development.  It will continue to engage with the EU "in a spirit of cooperation, inclusiveness and openness on these matters over the course of the coming weeks and months."

This is an important document because the WTO Agreement and its annexes may be the only international agreement binding the UK to our neighbours when the EU treaties cease to apply to us in March 2019 pursuant to art 50 (3) of the Treaty of European Union. Interestingly, I found it not on the website of the Department for Exiting the EU, nor on any other British government website but on that of the Commission's task force on art 50.

Should anyone wish to discuss this letter or Brexit generally, call me on 020 7404 5252 during office hours or send me a message through my contact form.

Sunday, 8 October 2017

Some Proposals for Dispute Resolution from the Institute for Government





















Jane Lambert

Last week I reported that the German equivalent of the CBI had warned its members with business or investments in the United Kingdom to prepare for a very hard Brexit (see German Industry Federation advises its Members to prepare for a Hard Brexit 6 Oct 2017). As I have said before, the problem is how to guarantee British performance of the UK's obligations under any withdrawal treaty (see Dispute Resolution: A Potential Deal Breaker8 Aug 2017, Has Mrs May done enough to break the Logjam? 24 Sep 2017, Fourth Round of Brexit Talks: Still a Logjam 28 Sep 2017 and Brexit Briefing - September 2017 3 Oct 2017).

The performance of the other member states would be policed by the Court of Justice of the European Union. We are not prepared to accept that while the governments of the remaining member states cannot be expected to accept anything less. Until we have resolved that question there really is very little point in discussing anything else. Thus, a "good deal" or indeed any kind of deal with Europe other than those that exist under multilateral agreements just cannot happen. That is why the BDI is warning its members to prepare for a hard Brexit and indeed why my professional body is advising me to do the same (see German Industry Federation advises its Members to prepare for a Hard Brexit supra).

There does not need to be a breakdown of talks. I am sure that the present and any successor government would honour its obligations to its neighbours. It would be politically unthinkable to do otherwise. As I said in Fourth Round of Brexit Talks: Still a Logjam:
We may not have a written constitution but we do have rules that known as conventions that are at least as robust as those of other countries' constitutions. For instance, any Parliament could extend the 5-year limit to the duration of a Parliament originally contained in the Parliament Act 1911 and now re-stated in the Fixed Term Parliaments Act of 2011 but it would never do so. Would not an agreement between the main political parties not to repeal a withdrawal agreement statute be enough? The political reality for those who understand our constitution is that it probably would ....."
However, I added: "that may not be how they see things from across the Channel."

So are there any other solutions?  The Institute of Government, which describes itself as  "the leading think tank working to make government more effective" has considered a number of options in Dispute Resolution after Brexit  2 Oct 2017 which can be downloaded from that link plus this useful little video The UK position on dispute resolution after Brexit 2 Oct 2017. Re-joining EFTA and relying on the EFTA Court seems to tick more boxes than any of the others according to the Institute's infographic, but it would not be very popular with hardline Brexiteers.

Should anyone wish to discuss this article, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Further Reading


Date
Author
Title
Source
12.10.2017
Institute for Government

Thursday, 5 October 2017

German Industry Federation advises its Members to prepare for a Hard Brexit















Jane Lambert

In an article on its homepage entitled Deutsche Industrie schaut mit Sorge auf Fortgang der Brexit-Verhandlungen (German Industry views with Concern the Progress of the Brexit Negotiations) the Bundesverband der Deutschen Industrie e.V. ("BDI") the Confederation of German Industry (the equivalent of the CBI) warned its members with interests in the UK to prepare for a very hard Bexit ("einen sehr harten Austritt Großbritanniens aus der Europäischen Union"). "Anything else would be naive," said the BDI's Director-General Joachim Lang.

There is more gloom from the Bar Council which reports that the working assumption of the Commission's art 50 Task Force is that "there will be no formal EU-UK relationship in future. Therefore, following UK withdrawal, no CJEU, no single market, end of application of 4 freedoms and all economic rights; no cooperation in civil and criminal justice etc. UK nationals will no longer be EU citizens" (see Brussels News Issue 137 5 Oct 2017). It follows that "no protection will be given to secondary establishment and cross-border services. Thus, if a UK lawyer is appearing in a case pending before the CJEU at withdrawal date (WD), the client must change lawyer."

The Bar Council reports that the Task Force is aiming for an orderly winding down in judicial cooperation as in other areas. "The EU regime will cease to apply to the UK as at the date of withdrawal. The UK will be starting with a blank sheet, even with the Lugano Convention etc, since it is not a signatory in its own right."

I regret to say that I share the BDI and Bar Council's gloom because I do not think that the remaining 27 states can accept a withdrawal agreement that binds them as a matter of European Union law but not us.  German and other exporters will no doubt lose some sales if tariff barriers and customs formalities return at the border but they will not lose their market altogether. Where else are we Brits to get our cars, white goods, sparkling wine and luxury leather goods than the EU27? The Bar Council concludes that "the harsh reality is that the clock ticking is a far more serious problem for the UK than it is for the EU, whatever committed Brexiteers may wish to believe."

Anyone wishing to discuss this article should call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Tuesday, 3 October 2017

Brexit Briefing - September 2017

Helen Tse and Jane Lambert














Jane Lambert

Since my last Brexit Briefing, there has been a fourth round of negotiations on the terms of the UK's withdrawal from the EU, Mrs May made a speech at the church of Santa Maria Novella in Florence that has been generally warmly received, the British government and the Commission's art 50 task force published position papers on data protection and intellectual property and Helen Tse's book Doing Business After Brexit was launched in Manchester.

The Brexit Negotiations

Despite Mrs May's concessions in Florence. there is still a gap between the two sides which may prove to be unbridgeable.  It was summed up today by Michel Barnier in his speech to the European Parliament:
"We understand and share the worry of the 4.5 million British and European citizens who want to continue living and working like they did before Brexit.
This worry, which you refer to in your resolution, has been worsened by certain discriminatory measures taken by the British authorities. We are worried about this.
To effectively guarantee these rights, we need:
  1. The withdrawal agreement to have direct effect to allow British authorities and judges to rely directly on the withdrawal agreement. Without direct effect, these rights could be changed over time
  2. A coherent interpretation of the agreement on both sides of the Chanel, which only the European Court of Justice can assure."
Mrs. May went some way to allaying those fears by offering to incorporate the terms of any withdrawal agreement that guarantees the rights of the citizens of the remaining member states into English and Welsh, Scottish and Northern  Irish law, but, as I said in Has Mrs May done enough to break the Logjam? 24 Sept 2017, "it does not address the problem that a future British government could repeal any statute that incorporates a withdrawal agreement at any time." In Fourth Round of Brexit Talks: Still a Logjam 29 Sep 2017 I suggested a possible solution in the form of a constitutional convention but for countries used written constitutions that is unlikely to be enough.  I fear that the reluctance of our government to accept the interpretation of any withdrawal agreement by the Court of Justice will be the deal breaker.

Data Protection 

In its position paper on  data protection, the Commission's art 50 task force warned that "the United Kingdom's access to networks, information systems and databases established by Union law is, as a general rule, terminated on the date of withdrawal." That would be disastrous for a country with a services based economy.  As I said in Another Data Protection Act! "You're joking! Not another one!" - A Short History of Data Protection Legislation in the UK 23 Sept 2017 NIPC Law, we enacted data protection legislation because other countries passed laws that restricted the flow of personal data to us To enable the United Kingdom to safeguard personal data after the General Data Protection Regulation ceases to apply to us, the Government has introduced a new Data Protection Bill into the House of Lords (see Introduction to the Data Protection Bill 16 Oct 2017 NIPC Data Protection).

Intellectual Property

The Commission's position paper on intellectual property rights including geographical indications has been generally welcomed as far as it goes.  However, it is silent on the unitary patent which Tony Rollins regards as assent to the British position that the Unified Patent Court Agreement is an international agreement extraneous to the Treaties (see Commission Position Paper on Intellectual Property Rights including Geographical Indications 7 Sept 2017). I wish I could agree with him but I don't think I can for the reasons set out in my postscript. Fourteen countries including France have ratified the UPC Agreement which means that it could come into effect upon  British and German ratification. Unfortunately, German ratification has been delayed by mysterious proceedings in the German constitutional court. The following announcement appears on the UPC's website:
"A case is currently pending in the German Federal Constitutional Court (FCC) concerning the law passed by the German Parliament on the implementation of the Agreement on the Unified Patent Court (UPCA). This will cause delay to the German ratification of the UPCA and the Protocol on Provisional Application."
There is no indication as to how long those proceedings will last.

Asia

In response to a tweet by Lord Digby Jones that the 21st Century belongs to Asia, not the EU, I looked at Chin, India and Russia which are the three largest countries in that continent and found that they are coming together in the Shanghai Cooperation Organization, BRICS and the One Belt One Road project just as we are drawing away from our neighbours (see The Shanghai Cooperation Organization 9 Sep 2017). Our IP attaché to Beijing, Tom Duke, was in the UK last month and I had the honour of chairing his talks in Barnsley and Leeds.  His visit culminated in a symposium at the IPO's London office hosted by the IPO and SIPO entitled "Future Proofing the IP System" (see UK-China IP symposium highlights importance of innovation 22 Sep 2017 .Gov.UK website).

Book Launch

Finally, Helen Tse's book, Doing Business After Brexit, to which I have contributed the chapter on IP and data protection, was launched at a meeting of the Manchester SME Club at Deloitte's Manchester office on 20 Sept 2017. I reported it in Doing Business After Brexit  24 Sep 2017 in IP North West. The photograph of us both that appears at the top of the page was taken at that event.

Further Information

Should anyone wish to discuss this article or Brexit further, call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Friday, 29 September 2017

Fourth Round of Brexit Talks: Still a Logjam

Author Gene Daniels




















Jane Lambert

In Dispute Resolution: A Potential Deal Breaker? 8 Aug 2017 and Has Mrs May done enough to break the Logjam? 24 Sep 2017 I argued that the real stumbling block to a settlement in the withdrawal negotiations is not the size of the divorce bill but what guarantees, if any, can be given of our performance of our obligations under a withdrawal agreement. As I said in my latter article, Mrs May's offer to incorporate such a withdrawal agreement into national law and make sure our courts may refer directly to it is a step in the right direction but it does not address the problem that a future British government could repeal any statute that incorporates a withdrawal agreement at any time.

In their closing statements, Monsieur Barnier and Mr Davis seemed to agree. Monsieur Barnier said:
 "On citizens' rights, our priority, the UK has agreed to give direct effect to the Withdrawal Agreement.
This is very important.
It will give the assurance to our citizens that they will be able to invoke their rights, as defined by the Withdrawal Agreement, before UK courts.
We agreed to guarantee - for the citizens concerned - that the UK will apply EU law concepts in a manner that is consistent with EU law after Brexit.
But we failed to agree that the European Court of Justice must play an indispensable role in ensuring this consistency. This is a stumbling block for the EU" (see Press statement by Michel Barnier following the fourth round of Article 50 negotiations with the United Kingdom 28 Sept 2017 Commission website)
Mr Davis replied:
"But we must also acknowledge that a major question remains open between us – it relates to the enforcement of citizens’ rights after we leave the European Union.
The UK has been clear that, as a third country outside of the European Union, it would not be right for this role to be performed by the European Court of Justice.
But we have listened to the concerns that have been raised – and as a direct result of hearing those concerns the United Kingdom has committed to incorporating the final withdrawal agreement fully into UK law. Direct effect if you like.
We also recognise the need to ensure the consistent interpretation of EU law concepts.
We have not agreed the right mechanism for doing this yet but discussions this week have again been productive" (see David Davis' closing remarks at the end of the fourth round of EU exit negotiations in Brussels 28 Sept 2017 Department for exitng the European Union).
Monsieur Barnier acknowledged the progress that had been made in the talks but warned in his speech that the parties were not yet in a position to move on to discussing future trading relations. That was confirmed today by the President of the Commission who warned that such movement would require a miracle (see Brexit: Miracle needed to advance talks, says Juncker 29 Sept 2017 BBC website).

This will be a great disappointment for the British government, particularly those members of it who had campaigned for Brexit in last year's referendum. They had hoped that the remaining member states would back down on the ground that as they export far more manufactured goods to us than we export to them they had at least as much to gain from a trade deal as we would. That may be true but I doubt if it will happen for two reasons. The first is that the benefit of maintaining the union between themselves outweighs (or at any rate is perceived to outweigh) the value of their trade with us, significant though that may be. The second is that it is by no means certain that they would lose that trade as we are unlikely to lose our predilection for German cars and white goods, French wine and cheese, Spanish shoes and Italian handbags just because prices rise a little to take account of whatever tariff on those items that we may impose. They also know we want a trade deal and that Mrs May has already made concessions in her Florence speech to get one. They might be forgiven for believing that hanging tough delivers rewards.

So is there any way to break the logjam?  From a British lawyer's perspective, yes there is. We may not have a written constitution but we do have rules that known as conventions that are at least as robust as those of other countries' constitutions.  For instance, any Parliament could extend the 5-year limit to the duration of a Parliament originally contained in the Parliament Act 1911 and now re-stated in the Fixed Term Parliaments Act of 2011 but it would never do so. Would not an agreement between the main political parties not to repeal a withdrawal agreement statute be enough?  The political reality for those who understand our constitution is that it probably would, but that may not be how they see things from across the Channel.

Could we give in?  It would solve a lot of problems if we did.  It might enable us to continue to participate in a number of institutions that we like such as Euratom and the Unified Patent Court but it would probably re-open divisions in the Tory Party (and perhaps also the Labour Party) that the referendum was intended to heal. I remain pessimistic.

Sunday, 24 September 2017

Has Mrs May done enough to break the Logjam?

By Eric Gaba (Sting - fr:Sting) [CC BY-SA 3.0 (http://
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//www.gnu.org/copyleft/fdl.html) or
CC BY-SA 3.0 (
http://creativecommons.org/licenses/by-sa/3.0)],
via Wikimedia Commons


Jane Lambert

The Rt Hon Theresa May MP and Monsieur Michel Barnier visited Italy last week.  Both made speeches.  Monsieur Barnier delivered his to the Foreign and European Affairs Committees of the Italian Parliament in Rome on 21 Sept 2017 (see Speech by Michel Barnier in front of the Committees of Foreign Affairs and the Committees of European Affairs of the Italian Parliament 21 Sept 2017). Mrs May delivered hers the next day at the church of Santa Maria Novella (see PM's Florence speech: a new era of cooperation and partnership between the UK and the EU 22 Sept 2017).

Mrs May went to Florence with the object of persuading Monsieur Barnier or perhaps those instructing him that the parties had made sufficient progress on the negotiation of a withdrawal agreement to discuss the terms of a new relationship between the European Union and the United Kingdon after the 29 May 2019 or any transitional period that may follow our departure.  Has she done enough to achieve that objective?

If the differences between  Her Majesty's Government and those of the remaining member states were really about money as is so often said by politicians and the press in this country, then I would say that she probably had.  She said in terms:
"I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership."
But, as I said in  Dispute Resolution: A Potential Deal Breaker? 8 Aug 2017 I don't think money is the real problem.

The stumbling block is the constitutional principle that no Parliament may bind its successor.  Whatever Mrs May agrees to in a treaty, whatever treaty commitments she enshrines in statute, a future administration, whether of the right or of the left, could repeal it and the courts of England and Wales, Scotland and Northern Ireland would have no option but to give effect to the statute.

That's not possible right now because Union law prevails over national law. If Parliament passed an Act that was repugnant to EU law our courts would simply disregard it.  After Brexit, British nationals in the remaining states will still have the guarantee of EU law if a remaining state were to enact legislation that is repugnant to the withdrawal agreement but EU nationals living here would not because the EU treaties will have ceased to apply here by reason of art 50 (3).

That is why Monsieur Barnier said in Rome:
"On citizens' rights, our priority in this negotiation:
The issue of guaranteeing the rights of EU citizens in the United Kingdom has not been solved.
It is absolutely necessary that all these citizens, hundreds of thousands of whom are Italian citizens living and working in the United Kingdom, can continue to live as they did before, with the same rights and safeguards.
This is a human and social question, which the European Parliament and its president, Antonio Tajani, are vigilantly watching, and rightly so.
Citizens should be able to enforce their rights directly from the withdrawal agreement. This would prevent any possible dilution of these rights, if the rules implementing them in the UK were to change.
In the same way, we want these rights to be valid in national courts and that national courts have the possibility – or even the obligation – to refer questions related to the interpretation of rights deriving from European law to the Court of Justice of the European Union. The Court of Justice would remain the ultimate guarantor of the agreement.
This is for a simple reason: rights need to be effectively guaranteed.
Our citizens have real concerns today – which we share – when the Home Office sends deportation letters or appears to defy High Court orders, as we read in the press.
Our position on this point has been clear since the beginning. We want to provide the strongest safeguards for the rights of citizens on both sides of the Channel. We are waiting for the United Kingdom to express the same wish."
So what did Mrs May offer in response? Well, there was some movement.  The Prime Minister acknowledged the need for guarantees and made the following concession:
"We have also made significant progress on how we look after European nationals living in the UK and British nationals living in the 27 Member States of the EU.
I know this whole process has been a cause of great worry and anxiety for them and their loved ones.
But I want to repeat to the 600,000 Italians in the UK – and indeed to all EU citizens who have made their lives in our country – that we want you to stay; we value you; and we thank you for your contribution to our national life – and it has been, and remains, one of my first goals in this negotiation to ensure that you can carry on living your lives as before.
I am clear that the guarantee I am giving on your rights is real. And I doubt anyone with real experience of the UK would doubt the independence of our courts or of the rigour with which they will uphold people’s legal rights.
But I know there are concerns that over time the rights of EU citizens in the UK and UK citizens overseas will diverge. I want to incorporate our agreement fully into UK law and make sure the UK courts can refer directly to it.
Where there is uncertainty around underlying EU law, I want the UK courts to be able to take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation. On this basis, I hope our teams can reach firm agreement quickly."
The offer to incorporate a withdrawal agreement into national law and make sure our courts may refer directly to it is a step in the right direction - especially if our courts can take account of judgments of the Court of Justice of the European Union. But it does not address the problem that a future British government could repeal any statute that incorporates a withdrawal agreement at any time.  If I were advising Monsieur Barnier and his team (which, thankfully, I am not) I would have to tell them that Mrs May's concession is just not good enough.

Should anyone wish to discuss this article, he or she can call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Friday, 15 September 2017

Commission Position Paper on Data Protection and Protection of Information obtained or processed before the Withdrawal Date












Jane Lambert

On 6 Sept 2017, the Commission's Art 50 TaskForce published a position paper that had been transmitted to the 27 remaining states on the use of data and protection of information obtained or processed before the withdrawal date. That document contains the main principles of the EU position in that regard.

The Commission's starting point is that "the United Kingdom's access to networks, information systems and databases established by Union law is, as a general rule, terminated on the date of withdrawal." Such access may continue only if we fulfil the conditions set out in the position paper.

 The first of those conditions is that
"The provisions of Union law on personal data protection applicable on the withdrawal date should continue to apply to personal data in the United Kingdom processed before the withdrawal date and pertaining to
(i) data subjects in the EU27,
(ii) data subjects outside the Union,
to the extent that this data is covered by Union law on personal data protection before the withdrawal date." 
Those provisions will be contained in Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC ("the General Data Protection Regulation") and Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA ("the Data Protection Directive"). Since the Data Protection Bill will preserve the provisions of the GDPR and the Data Protection Directive in national law after our withdrawal from the EU, that condition should not be a stumbling block.

The Commission also requires the United Kingdom Government to protect European Union and national classified information after we leave the EU to the extent that it does so now. That includes obliging contractors and sub-contractors to comply with those requirements. Again, the Commission appears to be pushing at an open door for the Department for Exiting the European Union has already indicated in the UK position paper Confidentiality and access to documents that:
  1. The UK recognises the importance of continuing to respect obligations of confidentiality and to protect information exchanged while it was a Member State. 
  2. The UK considers that arrangements agreed with respect to confidentiality and the handling of information produced while it was a Member State should be reciprocal, affording an equivalent level of protection to the UK and the EU after the UK’s withdrawal. 
  3. These protections should be equivalent to those set out in the existing regimes.
In principle, the positions of the Task Force and British Government on data protection and the protection of classified and other restricted information do not seem too far apart. The Commission has combined data protection and protection of classified information in one document whereas the DExEU has addressed those topics in two separate position papers. However, problems may emerge when it comes to details such as whether the Commission will expect the UK to abide by decisions of the Court of Justice on the interpretation of the GDPR or other legislation after we leave the EU.

Anyone wishing to discuss this article or any other matter relating to Brexit should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Saturday, 9 September 2017

The Shanghai Cooperation Organization















Jane Lambert
I've been a bit of a fan of Lord Digby Jones ever since I heard him speak at PERA in 2011 (see "Growth Through Innovation" - Digby Jones at PERA 26 July 2011). I agree that the 21st century belongs to Asia though with the slight caveat that North Korea is in Asia but I don't understand how the 21st century's belonging to Asia is supposed to strengthen the case for Brexit. I won't comment further on that point as the purpose of this blog is to inform and not to debate our relationship with the EU.  The inference to be drawn from Lord Digby Jones's tweet, however, is that we should be doing more trade with Asia and he is right.

It is, however, ironic that the largest countries of Asia are creating new political and economic organizations just as we are leaving the EU. On 9 June 2017 India joined China and Russia and a number of other states as full members of the Shanghai Cooperation Organization ("the SCO"). Those three countries are also linked with the leading economies of Latin America and Sub-Saharan Africa through BRICS. Their economies will be linked much more closely through the One Belt One Road ("OBOR") infrastructure project that will construct new ports, roads and railways and improve existing ones to facilitate freight and passenger transport between the SCO countries (see the One Belt One Road research group website of Oxford University's Law Faculty).

According to art 1 of its Charter, the SCO was established with the following aims:
  • "to strengthen mutual trust, friendship and good neighborliness between the member States; 
  • to consolidate multidisciplinary cooperation in the maintenance and strengthening of peace, security and stability in the region and promotion of a new democratic, fair and rational political and economic international order; 
  • to jointly counteract terrorism, separatism and extremism in all their manifestations, 
  • to fight against illicit narcotics and arms trafficking and other types of criminal activity of a transnational character, and also illegal migration; 
  • to encourage the efficient regional cooperation in such spheres as politics, trade and economy, defense, law enforcement, environment protection, culture, science and technology, education, energy, transport, credit and finance, and also other spheres of common interest; 
  • to facilitate comprehensive and balanced economic growth, social and cultural development in the region through joint action on the basis of equal partnership for the purpose of a steady increase of living standards and improvement of living conditions of the peoples of the member States; 
  • to coordinate approaches to integration into the global economy; 
  • to promote human rights and fundamental freedoms in accordance with the international obligations of the member States and their national legislation; 
  • to maintain and develop relations with other States and international organisations; 
  • to cooperate in the prevention of international conflicts and in their peaceful settlement; 
  • to jointly search for solutions to the problems that would arise in the 21st century."
Art 3 of the Charter provides that the main areas of cooperation will be the following:
  • "maintenance of peace and enhancing security and confidence in the region; 
  • search of common positions on foreign policy issues of mutual interest, including issues arising within international organisations and international fora; 
  • development and implementation of measures aimed at jointly counteracting terrorism, separatism and extremism, illicit narcotics and arms trafficking and other types of criminal activity of a transnational character, and also illegal migration; 
  • coordination of efforts in the field of disarmament and arms control; 
  • support for, and promotion of regional economic cooperation in various forms, fostering favorable environment for trade and investments with a view to gradually achieving free flow of goods, capitals, services and technologies; 
  • effective use of available transportation and communication infrastructure, improvement of transit capabilities of member States and development of energy systems; 
  • sound environmental management, including water resources management in the region, and implementation of particular joint environmental programs and projects; 
  • mutual assistance in preventing natural and man-made disasters and elimination of their implications; 
  • exchange of legal information in the interests of development of cooperation within SCO; 
  • development of interaction in such spheres as science and technology, education, health care, culture, sports and tourism."
The article enables SCO member States to expand the spheres of cooperation by mutual agreement.  

Art 4 establishes a number of organs through which the member states collaborate. Their constitution and functions are explained in arts 5 to 10.  Art 4 (1) and 11 establish a Secretariat which is the SCO's standing administrative body. Headed by a Secretary-General, the Secretariat provides technical and organizational support for the SCO. It also makes budget proposals that are considered by the governments of the member states.  Art 16 provides that decisions are taken by consensus and are implemented by the member states.  There is no SCO court or provision for arbitration. Art 22 provides for disputes or controversies arising out of interpretation or application of the Charter to be settled by member states through consultations and negotiation. The official languages of the SCO are Russian and Mandarin.

Although not formally linked to the SCO, the OBOR project is likely to contribute its economic underpinning. As the University of Oxford website observes:
"The implementation of OBOR requires a legal and constitutional structure that is suited to the complex and un-precedented issues that arise in such a cross-border and international undertaking.
One set of questions concerns the constitutional and international structures and changes that may be necessary to facilitate the success of the New Silk Road initiative. Are the constitutional orders of the many nations involved suited to the level of international cooperation required by the initiative? Do those constitutional orders share the common aims and objectives necessary for the initiative? How do international standards affect the constitutional orders and traditions of participating states? These are examples of the many interesting and complex issues for research and discussion."
To an outsider, the SCO is the obvious legal and constitutional solution but that may not be how it is seen by the governments of China, India and Russia or indeed the other SCO member states or participants in the OBOR project. No doubt it will be one of the topics under discussion at the One Belt One Road Summit at Oxford on 13 Sept 2017.

Anyone who wishes to discuss this article should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Thursday, 7 September 2017

Commission Position Paper on Intellectual Property Rights including Geographical Indications











Jane Lambert

Even before the EU referendum, IP lawyers in the United Kingdom wrote articles and gave talks on what would happen to intellectual property rights if we voted to leave the EU. I penned my first thoughts in Were we to go - what would Brexit mean for IP? 26 Feb 2016 NIPC Law and returned to the subject immediately after the referendum in What Sort of IP Framework do we need after Brexit and what are we likely to get? 3 July 2016. I have written a lot of other articles on the subject since then many in the context of the unitary patent and the Unified Patent Court,  as have a lot of other people. However, until today we did not know much about the thinking of the Commission and the remaining 27 member states.

Now we have a position paper dated 6 Sept 2017 from the European Commission, Task Force for the Preparation and Conduct of the Negotiations with the United Kingdom under Article 50 TEU which has been transmitted to the remaining member states on Intellectual property rights (including geographical indications) for discussion today. It is not a particularly weighty document either in the word count or in its ideas. Above all, it does not address the issue upon which businesses upon both sides of the English channel (and indeed the rest of the world) want an answer namely, can a way be found to keep the United Kingdom in the Unified Patent Court and unitary patent system if we leave the European Union?

The document, which is 5 pages long including the cover page, begins with the following statement:
"The withdrawal of the United Kingdom from the European Union will create uncertainty for UK and EU27 stakeholders alike in relation to the scope of protection in the United Kingdom of certain intellectual property rights; to the treatment of applications for certain rights and to the exhaustion of rights conferred by intellectual property rights. This uncertainty will significantly affect the conditions under which goods that are placed on the market in the Union before the withdrawal date could continue to circulate between the EU27 and the UK."
Well, they can say that again.  I don't think even the most extreme Eurosceptic would disagree with that.

They suggest that any withdrawal agreement that we make with the remaining member states should ensure that:
"(a) the protection enjoyed in the United Kingdom on the basis of Union law by both UK and EU 27 holders of intellectual property rights having unitary character within the Union before the withdrawal date is not undermined by the withdrawal of the United Kingdom from the European Union;
(b) procedure-related rights (e.g. right of priority) in relation to an application for an intellectual property right having unitary character within the Union still pending on the withdrawal date are not lost when applying for an equivalent intellectual property right in the United Kingdom;
(c) applications for supplementary protection certificates or for the extension of their duration in the United Kingdom on-going before the withdrawal date are completed in accordance with the conditions set out in Union law;
(d) databases protected in the EU27 and the UK before the withdrawal date continue to enjoy protection after that date and
(e) exhaustion before the withdrawal date within the Union of the rights conferred by intellectual property rights is not affected by the withdrawal of the United Kingdom from the European Union."
I think the EU negotiators will find themselves pressing on an open door for most if not all of that.

My heart leapt a little when I saw the paragraphs headed "Intellectual property rights having unitary character within the Union" and  "Applications for Intellectual property rights having unitary character within the Union" because the words "unitary patent" are a shorthand for the expression "European patent having unitary effect". It sank, however, when I read the text of those paragraphs because the Commission seeks only the transposition of rights granted under EU regulations into national law and that is going to happen automatically under the European Union (Withdrawal) Bill.

As the Intellectual Property Bar Associaton ("IPBA"), of which I am a member, said at paragraph 10 of Paper 16 of the Brexit Papers on Intellectual Property:
"Intellectual property services are currently a flourishing area in the UK and the UK has significant influence in this area. Rights are well protected but subject to sensible defences. The intellectual property bar is very active and the excellence of the courts is widely appreciated, making a significant positive contribution."
The IPBA suggested that the UK Government should do the following to ensure that that remains the case:
 Securing rights to provide professional services
1. Rights of representation/practice - The IPBA joins and endorses the recommendations and requests set out in the Bar Council Position on Access to the EU Legal Services Market Post-Brexit.
1.1.1 UK as forum of choice - HMG should explore ways to ensure that the UK retains its position as a forum of choice for intellectual property matters in Europe. This should include steps to ensure that the UK remains more efficient and quicker as a litigation forum than other EU countries and EU courts. It should also include attempts to ensure that the UK is able fully to participate in the UPC post-Brexit and that, if the UK is not able to do so, the UK is nonetheless well-placed to remain a first-choice forum for resolution of patent disputes in Europe.
1.1.2 Prioritisation - HMG should ensure that the area of specialist legal services, including rights of representation in intellectual property cases, is given no less priority than that given to any other area of services provision in Brexit negotiations in which rights of access to the EU may be important.
1.1.3 Avoidance of approaches to Brexit which would be most likely to damage this sector - The UK should avoid any general approach to Brexit which would make such arrangements harder to secure. 
2. Ensuring that post-Brexit there is equivalent protection for intellectual property in the UK as currently exists under harmonised EU law, that there is no gap in protection with regard to existing rights and that defences which currently exist to infringement of intellectual property rights continue to apply unless and until specifically altered.
2.1. Ensuring continuing influence on substantive and procedural EU law which may affect industry in the UK. 2.1.1. HMG should take steps to ensure that the UK perspective continues to be heard by EU legislative and judicial authorities, where decisions are made that may have an impact on UK law and practice.
2.1.2. This may involve ensuring that HMG makes timely responses to EU consultations on legislative change and that it intervenes (and ensures generous rights of intervention for others) in CJEU cases which may have a direct impact on UK undertakings and an indirect impact on UK law after Brexit."
The IPBA has said that we would be happy to assist HMG in formulating appropriate strategies to that end. The government would be wise to take up that offer. If there is one thing that barristers know a lot about, it is negotiation.

Should amplification or clarification of any part of this article be required, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Post Script

The Chartered Institute of Patent Attorneys are much more kind to the Commission's position paper than I have been (see CIPA welcomes EC Position on IP Rights - Post Brexit 7 Sep 2017). The Institute's President, Tony Rollins, says:
“The paper only deals with EU unitary rights, that is, trade marks, registered and unregistered designs, plant variety rights and protected geographical indications, and does not deal with patents.
“This is because the European patent system is not a European Union institution and so will be entirely unaffected by Brexit. For UK-based patent attorneys carrying out European patent work it will continue to be business as usual."
I do wish I could agree with him but I can't.  Regulations 1257/2012 and 1260/2012 are EU instruments, art 84 (1) of the UPC Agreement makes clear that it is open to signature only for EU member states and art 20 spells out:
"The Court shall apply Union law in its entirety and shall respect its primacy."
If it were otherwise, the optional Litigation Protocol to the European Patent Convention would have been up and running by now.  

Sunday, 3 September 2017

Brexit Briefing - August 2017: Some Progress but probably not enough

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Jane Lambert

It is worth reminding ourselves what the art 50 negotiations in Brussels are intended to achieve. Much of our economic, industrial, international trade and social policies of the post war period have been founded on agreements and legislation made under the Treaty on European Union and the Treaty on the Functioning of the European Union ("the Treaties"). Art 50 (3) of the Treaty on European provides that those Treaties and everything that has been built up on top of them will cease to apply to the United Kingdom on the 29 March 2019 or sooner if we negotiate a withdrawal agreement "unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period."

The purpose of the negotiations in Brussels between the Rt Hon David Davis MP and Monsieur Michel Barnier and their respective negotiating teams is to hammer out a withdrawal agreement that will allow British pensioners on the Costa to keep their homes, doctors and nurses from Ireland and the Continent to continue working for the NHS, commuters in Dundalk to go to work in Newry without showing a passport and for the United Kingdom to honour funding commitments it made before last June's referendum. What those talks are not about (and indeed cannot be about unless and until Monsieur Barnier receives a mandate from the Council under art 218 (2) of the Treaty on the Functioning of the European Union) is trade.

At the start of the negotiations, it seemed that the British government recognized that reality but the spate of position and future partnership papers on such matters as data protection and future customers arrangements suggest that it does not.  Those papers are all very worthy and I have reviewed some of them in New Position Papers from DxEU 26 Aug 2017 and HMG's Exchange and Protection of Personal Data Position Paper 26 Aug 2017 NIPC Data Protection). They may be useful for future negotiations but they are completely irrelevant to any of the negotiations that are in hand right now or indeed for the foreseeable future.

So where do those negotiations stand?  In his speech at the press conference of 31 Aug 2017 following the third round of Article 50 negotiations with the United Kingdom, Monsieur Barnier was careful to avoid saying that nothing had been achieved:
"This week, we made some useful clarifications on a lot of points, for example, the status of frontier workers, the aggregation of social security rights, and pending legal proceedings before the Court of Justice, to name but three.
But we made no decisive progress on the main subjects, even though – and I want to say so – the discussion on Ireland was fruitful.
On this subject – which I continue to follow personally, as all other areas – we made real progress on the question of the Common Travel Area, on the basis of guarantees by the United Kingdom, and we clarified, in a constructive manner, what remains to be done, particularly with regards to North-South cooperation in the Good Friday Agreement.
But, I repeat again, time is passing quickly for us to reach a global agreement.
At the current speed, we are far from being able to recommend to the European Council that there has been sufficient progress in order to start discussions on the future relationship, while we are finalising the withdrawal agreement throughout 2018."
In his speech at the same press conference, Mr Davis  seemed to agree:
"This week we have had long and detailed discussions across multiple areas and I think it is fair to say, that we have seen some concrete progress. I mean, Michel referred to one, but I think there’s been more than that.
However, as I said at the very start of this week, it is only through flexibility and imagination that we’ll achieve a deal that truly works for both sides.
In some areas we have found this from the Commission’s side, which I welcome, but there remains some way to go.
Talks this week have once again focussed on citizens’ rights, on financial matters, on Northern Ireland and Ireland, and on issues relating to our separation. I’m pleased to say we have engaged in detail on all of those areas."
Looking on the bright side, there is slightly more green ink on the Scott schedule on citizens' rights as of 31 Aug 2017 than there was on 19 July 2017 mainly in relation to frontier workers and healthcare but there still remains an awful lot of red. My view is that the sticking point will not be over financial contributions but over enforcement of any withdrawal agreement by individuals and companies once the rule in Francovich goes (see Dispute Resolution - A Potential Deal Breaker 4 Aug 2017 and HMG's Enforcement and Dispute Resolution Position Paper 23 Aug 2017). If we can't get agreement on that we won't get any kind of withdrawal agreement let alone a favourable trade agreement.

Regrettably, I have no progress to report on the unitary patent and Unified Patent Court. German ratification appears to have stalled over a constitutional objection that has prevented the President from signing into law legislation that has already cleared both houses of the German federal legislature, I asked Markus Grampp what the objection was all about at the Cambridge IP Law Summer School which we both addressed, but neither he nor any of the other German lawyers at the event seemed to know.

One reasonably certain consequence of Brexit is that we lose not only the European institutions in London which I mentioned in my last Brexit briefing of 5 Aug 2017 but also jobs in the financial serviced industry to Frankfurt and other financial centres. They, on the other hand, will do very well out of Brexit (see How Frankfurt could benefit from Brexit: WHU-Otto Beisheim School of Management Study 29 Aug 2017).

A lot will be happening in September. Parliament will begin discussion on the European Union (Withdrawal) Bill when it returns for a few days before the party conferences. There could be all sorts of upsets at those conferences except perhaps for the LibDems, especially as Labour appears to have changed its tack on the single market and customs union. There will also be another round of negotiations between Mr Davis and Monsieur Barnier which will be particularly important for it will be the last chance for the Council to decide whether there has been sufficient progress on the Brexit terms to justify talks on the future relations.

On a more positive note, Helen Tse's Doing Business After Brexit for which I wrote the chapter on intellectual property and data protection is now on sale. It will be launched at a meeting of the Pro-Manchester SME Club on 20 Sept 2017.

Should anybody wish to discuss this article or Brexit generally, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Tuesday, 29 August 2017

How Frankfurt could benefit from Brexit: WHU-Otto Beisheim School of Management Study









Jane Lambert

Frankfurt Main Finance, an organization consisting of the Hesse state government, the local authorities of Frankfurt and Eschborn, Germany's leading banks, major financial institutions from other countries, international law firms and other businesses, has commissioned WHU-Otto Beisheim School of Management, one of the world's leading business schools to assess the economic benefits of Brexit for Frankfurt am Main and its surrounding region. In Brexit brings up to 88 thousand new jobs in the Rhine-Main region 28 Aug 2017 Sabine Knöß interviews Professor Lutz Johanning and Moritz C. Noll of the Business School's Capital Market Research department who carried out that work.

Those academics concluded, on the most optimistic case, that if 10,000 new banking jobs are created in the banking sector over the next 4 years they will lead to the creation of 88,000 new jobs in the Frankfurt Main conurbation as a whole. Most of those jobs will be in the support sectors needed to accommodate an extra 10,000 bankers. Even on a conservative estimate, they calculate that there are likely to be nearly 36,000 new jobs in the conurbation.

Noll explained their methodology as  follows:
"We extrapolated the existing statistical data on the employment market in Frankfurt and the region into the future with the help of an empirical model, taking the effects of the Brexit into account. To ascertain and arrive at meaningful figures for the purposes of further planning, we placed a high priority on two factors. Firstly, a valid data basis has been very important for us. Our study is therefore based on employment market data from the German Federal Employment Agency (BA) covering the past nine years. Secondly, we looked for statistical models that have already been effectively applied in the scientific community."
The interview does not state how the total of 10,000 banking jobs has been computed though there will undoubtedly be some as a number of banks have already announced an intention to transfer some of their operations from London to Frankfurt.

Frankfurt is not the only financial centre in Europe that hopes to benefit from Brexit. Amsterdam, Dublin, Madrid and Paris are also competing for the business that London could lose and all have their own unique attractions. Dubin is capital of the largest English speaking common law country remaining in the EU with close links to the United States and Commonwealth and Amsterdam, Madrid and Paris have similar cultural attractions to London.  From an IP perspective, Frankfurt has many advantages. It is thought to be easier to obtain patents for software implemented inventions than the UK and its courts are considered to be claimant friendly (see the IPO's report Building the Evidence Base on the Performance of the UK Patent System which I mentioned in my article of 26 Aug 2017). That should benefit fintech companies in the region.

Should anyone wish to discuss this article or the legal consequences of Brexit generally, call me on +44 (0)20 7404 5252 during normal office hours or send me a message on my contact form.

UK's Future Relationship with the World Trade Organization

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