Ramifications of Scottish Independence on Intellectual Property in the United Kingdom

1. Introduction

A referendum on Scottish independence is due to be held in Scotland on 18th September 2014. If the Scottish people vote ‘yes’ to independence, Scotland will leave the United Kingdom of Great Britain and Northern Ireland, and potentially the European Union, and form a new sovereign state. This article provides a summary of the current intellectual property laws in Scotland and investigates how a ‘yes’ vote will change the intellectual property laws of Scotland and the remaining countries of the United Kingdom.

2. Historical background leading to the referendum

The date at which Scotland became a sovereign nation is unknown, but many scholars believe that the various kingdoms and tribes within Scotland unified in the 9th century AD. With the death of Queen Elizabeth 1st of England, who had no heir, in 1603 AD, Scotland and England moved towards union when King James VI of Scotland became King James I of England. In 1707, Scotland entered into political union with England and Wales to form the Kingdom of Great Britain. Despite union, Scotland has always maintained a different legal system to England and Wales. Furthermore, in recent years, Scotland has gone through a process of ‘devolution’ where a number of political powers have been transferred from the United Kingdom government in London to the Scottish parliament in Edinburgh, the capital of Scotland. The Scottish political party, the Scottish National Party (SNP), had pledged to hold a referendum on Scottish independence if voted into power in the last election to the Scottish parliament, and in the last election the SNP became the dominant political party in Scotland. The SNP are now delivering on their promise to hold a referendum on the question of Scottish independence.

3. Demographics

Scotland today is one of the countries that form the United Kingdom, with the remaining countries being England, Wales and Northern Ireland. Scotland has a population of 5.3 million people (similar in size to Denmark and Singapore) and is consequently the second largest country in the United Kingdom after England (which has a population of 53 million people). The official language of Scotland is English. However, Scottish Gaelic and Scots are also spoken by some of the population. The economy of Scotland is varied and includes oil extraction from the North Sea and oil refining, food and drink (whisky for example), electronics, game software (Scotland is the home to the massively successful Grand Theft Auto games) and financial services.

4. Current intellectual property law in Scotland

As part of the United Kingdom, intellectual property in Scotland may be protected via domestic legislation. In particular, the UK Patents Act of 1977 provides protection for patents, the UK Registered Designs Act 1949 provides protection for designs, the UK Copyright, Designs and Patents Act of 1988 provides copyright and unregistered design right protection, and the UK Trade Marks Act of 1994 provides protection for trademarks. The United Kingdom intellectual property office is based in Newport, Wales, and serves each of the countries of the United Kingdom, including Scotland. Intellectual property in Scotland may also be protected via a number of international treaties, such as the Paris Convention for the protection of intellectual property, the European Patent Convention, the Patent Cooperation Treaty, the Madrid Protocol on trademarks, Council Regulation (EC) nº 6/2002 of 12 December 2001 on Community Designs, and Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark.

5. The effect of a ‘yes’ vote to independence

5.1. Domestic effects

The UK Intellectual Property Office has not yet published any guidance as to what would happen if Scotland became independent from the United Kingdom. Clearly, Scotland will require its own domestic intellectual property laws, separate from those of the remainder of the United Kingdom, to enable protection of patents, trademarks and designs. The domestic intellectual property laws of the United Kingdom are generally in harmony with other European Union countries. It is likely that if Scotland remains part of the European Union (or joins after independence), that domestic intellectual property laws in Scotland will be similar to those of the United Kingdom and other member states of the European Union. An independent Scotland could introduce forms of intellectual property rights that are currently unavailable to the rest of the United Kingdom. For example, Scotland could introduce additional protection for inventions via utility models (also known as petty patents), to provide a more straight forward route for businesses to obtain some form of intellectual property protection. Similarly, Scotland could introduce intellectual property legislation to protect certain industries within Scotland. One recent example of such legislation (generated by the United Kingdom parliament in London) is the Scottish Whisky Regulations 2009 which regulate the sales description and the use of distillery names as brands. The domestic intellectual property laws of the United Kingdom will not require substantive amendment to take Scottish independence into account. However, the UK Patents Act 1977 has been drafted to take into account different legal terminology used in Scotland, and amendment will be required if Scotland becomes independent to remove such terminology. As an example, in section 71 ‘Declaration or declarator of non-infringement’ of the UK Patents Act 1977, the term ‘declarator’ is a term from Scottish law. Furthermore, it is also likely that Scotland will have to establish a separate intellectual property office to handle applications for domestic intellectual property rights and to encourage innovation in Scotland. At this stage, one can only guess where a Scottish intellectual property office would be located. The Scottish parliament is based in the capital city Edinburgh and the intellectual property office may therefore also be based in Edinburgh with other government buildings. However, in the United Kingdom and Ireland, the intellectual property office is located outside of the capital (in Newport and Kilkenny respectively) to reduce costs and provide economic benefit to a region outside of the capital city. If Scotland also follows this principle, we may see the Scottish intellectual property office located in a city outside of Edinburgh such as Dundee or Aberdeen.

5.2. International effects

Given recent comments from the European Commission, it seems likely that Scotland will be considered a new state and will be required to apply for membership of the European Union and sign international treaties on intellectual property rights. For example, Scotland may have to sign the Patent Cooperation Treaty (PCT) and the European Patent Convention to enable Scotland to be designated in PCT and EP patent applications. Consequently, there may be a time period where it is not possible, for example, to designate Scotland in a European patent application or a PCT application. If Scotland is not a member of the European Union, it will not be possible to protect Scotland via a European Union designation using the forthcoming Unitary Patent legislation. Similarly, it will not be possible to conduct litigation before the forthcoming European Union unitary court system in respect of patent infringement in Scotland. It is likely that the remainder of the United Kingdom (namely, England, Wales and Northern Ireland) will be considered the continuation of the current United Kingdom and will not be required to apply for membership of the European Union or sign international treaties for intellectual property rights. Precedent that supports this situation includes the split of the Soviet Union (where the Russian Federation was considered to be the successor nation) and the breakup of India (where Pakistan was considered to be the new state). Factors that are considered when deciding whether a country is the successor nation include whether that country has kept the seat of central government along with most of its territory, population and armed forces. Considering these factors, it is likely that remainder of the United Kingdom will be considered the successor nation. Of course, this situation is not guaranteed and there has been some suggestion that a breakup of the Union would lead to the creation of two new states which would both have to negotiate their membership of international organisations.

5.3. Status of existing intellectual property rights

It is not clear what will happen to existing intellectual property rights registered in the United Kingdom. Will intellectual property rights currently registered in the United Kingdom be valid in Scotland after independence? Will there be a transitional period in which existing rights may be validated in Scotland? None of these questions have been answered yet by the UK Intellectual Property Office, and at the moment, we can only guess as to what their answer will be. Furthermore, it is not clear whether regional intellectual property rights will be valid and enforceable in Scotland after independence. For example, a community registered design provides design protection in respect of all of the countries within the European Union. If Scotland were to leave the European Union, would such a right cease to have effect in Scotland?

6. A lesson from history

The Republic of Ireland was once a member of the United Kingdom of Great Britain and Ireland. In the following paragraphs, we look at how the independence of Ireland was handled to see if there are any parallels with Scottish independence and whether any lessons may be learned. Under the Acts of Union 1800, Ireland united with the United Kingdom of Great Britain to form the United Kingdom of Great Britain and Ireland. In 1853, the Patent Law Amendment Act established a single patent office for England, Scotland, Ireland and Wales. Interestingly, this Act introduced the concept of renewal fees to keep a patent in force which is now a feature of the patent laws of most countries. When the Irish Free State was established in 1921, no mention was made of patents in the constitution. Consequently, the laws in force in 1921 remained in force in Ireland unless they were amended or repealed. Ireland established its own patent law in 1927 through the Industrial and Commercial Property (Protection) Act of 1927. The Act also established an independent Irish Patent Office. Given the importance of intellectual property to the Scottish economy, the author suspects that if the Scottish public do vote ‘yes’ to independence, that the Scottish government will prepare intellectual property legislation ready for the date of independence in order to remove potentially damaging uncertainty. Given that treaties such as the Patent Cooperation Treaty and the European Patent Convention were not in force at the date of Irish independence, we are not able to learn how a newly independent Ireland handled the ratification of these treaties.

7. Is Scottish independence likely?

The legitimacy of the referendum on Scottish independence is provided at least in part by the United Kingdom being a signatory to the United Nations Charter which gives a population the right to self-determination. Furthermore, the United Kingdom is a signatory to the Universal Declaration of Human Rights which guarantees people’s rights to change nationality. Politicians in both the United Kingdom parliament and in the Scottish parliament have endorsed the right of the Scottish people to self determination. Current poll results from Scotland suggest that a ‘no’ vote is most likely. A TNS poll conducted between 10th June and 23rd June indicated that 41% of the population support independence, with 59% preferring Scotland to remain in the United Kingdom. Reasons for the lack of support for independence include historical and cultural ties (with many Scottish people living in England, and vice versa), the belief that Scotland will be economically stronger by remaining within the United Kingdom, and concern that Scotland’s influence within the world will be diminished if it leaves the United Kingdom. If the Scottish public vote ‘yes’ to independence, the Scottish National Party have a planned date of independence of March 2016.

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