Now that the UK Parliament has rejected the withdrawal agreement which was prepared by the UK Government and the EU institutions, questions are mounting about what to expect now and which preparations may be in order.
On 29 March 2017, the United Kingdom has officially declared to leave the European Union, in accordance with article 50 of the EU Treaty. This marked the start of a two-year period during which a withdrawal agreement is to be reached. Unless an extension of this term would be agreed, or the UK would revoke its decision to leave, the UK will automatically no longer be part of the EU from 29 March 2019. As Brexit D-day draws closer without a deal having been reached, it seems more and more important to be prepared for the worst.
In a ‘no-deal’ Brexit scenario, the UK would become a ‘third country’ in the parlance of the GDPR, as soon as the UK would no longer be part of the EU. This would mean that organisations established in the EU would have to take additional measures (‘appropriate safeguards’) if they wish to use, or continue using, any IT services delivered from the UK involving the processing of personal data. As it is fair to say that nowadays almost all IT services involve the processing of personal data in some way or another, this would have a substantial impact on the IT sector.
A no-deal Brexit could also have significant effects on intellectual property (IP) and therefore the IT sector as a whole, which is heavily reliant on IP. A general consequence of Brexit is that IP infringements spanning across the EU and UK would have to be litigated separately in both the UK and the EU, and any injunctions covering the entire EU, would no longer apply in the UK. If your organisation has an EU-wide trademark, your mark will only remain valid in the UK if you request this explicitly from the UK IP Office (UKIPO). Copyright, which is the most important intellectual property right for software, and copyright licenses would also be affected.
If you haven’t made any preparations for Brexit yet, there is no immediate need to panic. There is still some time left to take action. Although it appears that an extension of the article 50 period would be the far more rational option at this point, for all parties involved, rather than letting Brexit happen without a withdrawal agreement, it would be risky to bet everything on that outcome and do nothing. Instead, it is advisable to do the following as soon as possible:
To help with Brexit-related issues, some EU countries (e.g. Ireland and the Netherlands) are offering vouchers to small and medium sized enterprises (SMEs). These vouchers can be used to (partially) recover costs (usually up to €2000 – €2500) of professional advice relating to Brexit.
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