UK Prime Minister David Cameron is visiting Scotland today, for discussions about the details of a referendum on independence that is likely to take place in the autumn of 2014.
The Scottish National Party (SNP), led by Alex Salmond, which is in power in the devolved Parliament in Edinburgh, will campaign for independence in the referendum. The vote may also include a third option, for greater devolution.
If it is successful, Scotland will become an independent country for the first time in nearly 300 years as soon as 2015. It would become a country with just over 5 million people, and a per capita GDP of roughly $27,000. English would remain the official language.
Precedents for such a split are few and far between. In Europe, the most recent example was the so-called velvet divorce when Czechoslovakia became the Czech Republic and Slovakia. More recently, in Africa, South Sudan became independent from Sudan.
But Scottish independence could have much wider economic and political ramifications. Although many government functions are already devolved, and Scotland has its own legal system, many changes would have to be made if it became an independent country. These would include addressing IP protection and enforcement.
"Working back from 2015, you have to look at what regulations you have on day one and where you can use existing procedures," said Alastair Ross, public policy director at law firm McGrigors (which on May 1 will merge with Pinsent Masons).
"Our sense is that the government is now starting to look at what kinds of business regulation will be in place immediately," he added. "It is likely the approach will be outcome-based rather than process-based: for example, what does a successful IP regime look like?"
Some signs are already clear: the SNP has signalled that it wants to create a low-tax, pro-innovation economy modelled on other small EU nations such as Ireland and Denmark.
A new IP system?
The government has set out some policies clearly already. For example, it will retain the Queen as head of state and Edinburgh will be the capital of the new country. It also wants to become an EU member state in its own right, which will mean that Community trade marks and designs would be valid in the country and it would have to implement EU directives and regulations and follow the rulings of the Court of Justice of the EU.
But what will happen on matters of detail is less clear at this stage. For example, would Scotland create its own patent and trade mark office to register rights? What would happen to existing UK rights – would they be valid in Scotland? Would the country join international systems such as the European Patent Convention?
Gill Grassie of Maclay Murray Spens said it would be unlikely that Scotland would set up a new IP office in the short term. "I think the most likely scenario is that existing UK registered rights would be recognised and the system would continue as is. But Scotland would then have to contribute public funding to the running of the UK IPO. It would be complex to start unravelling the system."
This approach would be in line with the SNP's stated plan to retain the British pound as its currency, at least in the short term.
Grassie's colleague Robert Buchan added that setting up a new Scottish IP office would go against the trend in Europe towards harmonisation and centralisation: "To make things more national would seem to be a backward step." Seona Burnett of McGrigors agreed: "Creating another IP office could create new hurdles for rights owners, as they have to navigate two jurisdictions."
An opportunity for rights owners
So it is likely that there will be no change regarding filing patents, trade marks and designs. But the consensus among lawyers who spoke to Managing IP was that independence could lead to more subtle reforms. "Independence may be an opportunity to do things that are beneficial and advantageous," said Burnett.
For example, the UK lacks an unfair competition law, which means brand owners can find it harder to deal with issues such as lookalikes as they rely on passing off. An independent Scotland could adopt a continental-style unfair competition law.
"UK passing off can be limited in scope. The laws of unfair competition in continental Europe can provide greater protection against parasitic lookalikes," said Grassie. Historically and philosophically, Scotland might even look towards continental legal systems more favourably than those in the UK.
At the very least, an independent Scotland would probably be responsive to significant local industries, such as oil and gas producers and whisky distillers, who might lobby for stronger IP protection.
The whisky industry, for example, successfully campaigned for the introduction of the Scotch Whisky Regulations 2009 in Scotland.
If the country votes for independence in 2014, therefore, there could be a rare opportunity for IP owners to set out exactly what they would like to see in an IP system.
The government's approach |
Managing IP asked the Scottish government about its policy for IP post-independence. A spokesperson responded: Independence offers an opportunity for Scotland to decide how it wishes to structure its own approach to IP regulation. In the coming weeks and months, we will be considering a variety of potential options, which might include, for example, partnership arrangements with the rest of the UK or the establishment of a new regulatory regime for Scotland, as well as the issue of the European Patent Office. Scottish ministers are mindful of the obligations that Scotland would have as a member in its own right of the European Union in adhering to regulations and directives across a whole range of policy areas. In terms of IP regulation, we will consider the responsibilities that a robust system would have in terms of ensuring the mitigation of systemic risk; fairness and efficiency of markets and the protection of companies, customers and investors. These are all issues that will form part of the ongoing programme of work that is currently being undertaken. Such considerations are at a relatively early stage and the Scottish government will look to engage with relevant stakeholders to help shape thinking and to develop clear and robust models. |
