We met last week with Dan Reavill and Richard Brown from Travers Smith, who gave us an update on Brexit. Here are the highlights from these two esteemed London lawyers:
- Overview. It has been 12 weeks since the historic Brexit vote. And no one has negotiated this kind of departure before. Hence, leaving the EU is and will be messy.
- Timing. A notice of withdrawal has not yet been sent to the EU, which sets the two-year time period for negotiating (an orderly) withdrawal under Article 50 of the Lisbon Treaty. However, over the weekend, UK Prime Minister Theresa May announced that her government intends to serve notice by the end of March 2017. That would mean that the UK-EU withdrawal would be likely in early 2019.
- Objectives. The UK government wants a unique relationship with the EU that has yet to be negotiated. Indeed, there is not much recent experience in the UK of negotiating trade deals at all. The UK government knows that access to the EU single market is important for the UK's economic vitality. But the UK voters were clear about immigration (no open borders) and sovereignty issues. Norway has a unique relationship with the EU—it allows participation in the single market of the EU. But the arrangement with Norway does not adequately address the immigration and sovereignty issues raised by the UK voters. The Swiss-EU arrangement also does not adequately address the UK voters' concerns. It remains to be seen if the UK can strike the right balance with the EU.
- Opportunities for Gain/Possible Loss. It remains to be seen if London/the UK can remain a (let alone "the") favored European headquarters for multinational companies. Some multinational companies are looking favorably at Dublin (Ireland is still part of the EU). On the continent, Frankfurt, Paris, Brussels may attract new headquarter offices at the expense of London. And Scotland, disappointed with the Brexit vote, may be emboldened to mount its own exit vote from the UK and join the EU separately which could provide a boom for Edinburgh or Glasgow. However, large worldwide headquarters are being or continue to be built in London (perhaps because the plans and work were well underway before the June 24 Brexit vote, such as the major expansion by Goldman Sachs in downtown London). Uncertainty abounds, but there likely will be mini or full-fledged real estate booms in major European cities while these issues get sorted out. Which city or region that becomes the grand winner (or not the loser) is still to be determined.
- IP Not Driving Brexit Negotiations. As discussed in our earlier post on the topic, the UK will continue to be part of the European Patent Office that is not under the management of the EU. While the unitary EU patent that was so close to being implemented until the Brexit vote (and now the unitary EU patent is put on hold), the bigger IP issue will be whether EU trademarks will allow some form of priority to trademark owners wanting protection in the UK. We should presume that this will be adequately addressed, but behind the scenes. Because there are so many more pressing issues surrounding Brexit (see item no. 3 above), IP will get low coverage in the media for a while and indeed will likely be low on the list of points to be negotiated in the UK withdrawal.
Continue to stay tuned for further Brexit updates.