News & Insights

Changes to intellectual property laws could pose challenges to publishers and others

The publishing sector has raised concerns that changes to UK Intellectual Property (IP) rights could damage their business to the tune of £2.2bn per year.

A report published earlier this year by a government taskforce has suggested that parallel import laws should be liberalised to increase consumer price and help keep prices down – sparking concerns from that the UK publishing industry could suffer if cheap IP-protected goods legitimately produced for overseas markets are allowed to be sold in the UK.

Current position

As an interim step since Brexit, the UK has continued to apply a unilateral application of the previous EEA Regional Exhaustion Regime. This means that we accept that parallel goods can move from the EEA into the UK as we did when part of the single market. However, now that we are a ‘third party’ country we cannot automatically move goods in the other direction (parallel export).

What is at stake?

A change to the UK IP laws would impact all those trading in physical goods (rather than digital content), but particularly those who are ‘IP rights sensitive, i.e. those businesses selling goods where there is a high dependence on copyright, designs, patents and/or trademarks, so those affected could include fast-moving consumer goods, luxury goods, pharmaceuticals, and the automotive sector as well as publishing.

It is proposed that copyright should be considered exhausted in the UK once goods are put on sale anywhere in the world so, for example, books could be parallel imported into the UK from anywhere in the world without the copyright owner’s permission. This could erode profits from UK sales if goods are manufactured at lower cost in overseas territories and then freely imported into the UK.

The publishing sector believes that many small and medium sized businesses would not survive if this change. The exposure to predatory competition could stifle innovation and creativity because there would be less appetite for investment. In the long run, they believe readers could have fewer book choices and that the main beneficiaries would be online retailers like Amazon.

The government has acknowledged the need to strike a balance in a future regime.  They recognise that IP rights incentivise creativity and innovation but believe that protectionism brings a risk of monopoly and higher prices. Conversely an international regime could improve consumer choice, allow greater competition, and fair market pricing.  However, concerns remain that a proliferation of parallel goods could also lead to safety issues and an increase in counterfeiting.

The government has held a consultation on the report and the government response to the consultation is now anticipated. We will continue to monitor the progress of this proposed change.

For advice about how your business might be affected contact Cathrine Ripley at [email protected].