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What will be the consequences of Brexit?

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What will be the consequences of Brexit?

What will be the consequences of Brexit?

Brexit

Brexit will soon take place, that much seems certain, but what consequences will this have with regard to IP and all related contracts? IP Leads spoke to three insiders and put the following question to them – Would it be sensible at this stage to start thinking about/to start taking account of Brexit in (commercial) contracts (or when amending them)?

A tendency to select a more neutral location
Stamicarbon concludes contracts with a large number of companies around the world. Those contracts include a clause that sets out which court, or court of arbitration, will hear any disputes that may arise from those contracts. It also sets out the language of legal proceedings and the country whose laws will govern the contract. Up to now and for the majority of contracts, we were inclined to suggest that such contracts should stipulate the laws of England and Wales, with London as the location of legal proceedings and English as the language of those proceedings. The location, language and the applicable law are always subject to negotiation and these are not something that can be determined unilaterally. In the past few years, negotiations have however resulted in the selection of a more neutral location, such as Switzerland, being selected and our expectation is that once Brexit has taken place, more stringent visa requirements will make it more difficult and more costly to enter the United Kingdom and that this trend towards more neutral locations will therefore become more firmly established.

Jan-Willem Goedmakers
European Patent Attorney
Head of IP at Stamicarbon

Almost no effects at all
We do business with pharmaceutical companies all over the world, including a large number of American and Swiss companies. We don’t have connections with all that many companies in the United Kingdom, but where those companies come from actually doesn’t matter all that much. And that will continue to the case after Brexit. It will have almost no effect at all on the many hundreds of contracts we have concluded. In our contracts, we state that the contract will be subject to the laws of the Netherlands and we pay all of our invoices in euros. It is much more reassuring for us that way, as any legal proceedings can be conducted in the least costly way and all of our communications will be with a Dutch lawyer. I can well imagine that there will soon be certain changes with regard to the free movement of students and scientists, however. Or, and this would be an extremely unpleasant situation, Brexit could lead to some of our contractual parties becoming insolvent, in which case we ourselves would incur a loss.

Emmy van Oosterom
Senior Legal Adviser
Technology Transfer Office Erasmus MC

Automatic recognition will be a thing of the past
If we were involved in contractual negotiations right now, I would think very carefully before selecting the law of England and Wales. The benefit of specifying that legal proceedings will be conducted in an EU Member State is that judgments handed down by courts in an EU jurisdiction are automatically recognised and can be enforced in other EU Member States. Brexit will mean that the United Kingdom will soon no longer form part of the EU and could mean that it will also no longer be included in provisions governing the automatic recognition of court judgments. At the present time, it is impossible to predict what value a judgment issued by an English court will hold in the near future.

Have you already concluded contracts under English law? If so, I would advise you to draw up a list of those contracts and then to wait and see what course the negotiations actually take. That way, you will have done all the groundwork and once things become clearer, you will be able to act quickly.

Annelies de Bosch Kemper-de Hilster
Attorney-at-Law
V.O. Patents & Trademarks

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