It is hard to predict with any certainty what effect the referendum decision and the UK’s ultimate exit from the EU will have on existing agreements. While some agreements may be entirely unaffected, there could be unintended consequences for others. Either way, it would be advisable to review your IP licences and other agreements (as well as those currently being negotiated) as soon as possible to identify any potential Brexit-related issues. Whilst the Brexit deal is still being negotiated timetables for action may well change. However, at present we would prioritise agreements that will last beyond December 2020 (which is the proposed end to the Transition Period).
The issues to focus on when reviewing agreements for potential Brexit-related issues will of course depend on the underlying transaction and the commercial objectives of the parties. However, examples of general issues to consider include:
Territory – if the “Territory” covered by an IP licence refers to the “European Union”, does the agreement now need amending so that it continues to include the UK?
EU laws – does the agreement refer to compliance with EU law? If so, could the UK’s exit affect the day-to-day operation of the agreement in any way? Do any references to specific EU laws need to be changed (i.e. to include the national law equivalent)? It is expected that the UK will continue to comply with certain EU laws for some time after Brexit but this may not be universally true.
Brexit clauses – if there is a specific Brexit related implication for the transaction (such as a fluctuation in the currency rate or increased cost or delay at customs), it may be appropriate to include provisions to trigger a renegotiation or even a termination of the agreement.
Other potential issues include data protection, registered IP rights or enforcement issues.
Ultimately, the answer is likely to be a matter of construction for each agreement. Where there is any uncertainty, the best way to resolve it is likely to be by written agreement between the parties. Our transactions team would be happy to assist with any such review or negotiation process.