Brexit and intangible capital

Britain’s decision to leave the EU, scheduled to happen in March 2019, has created the opportunity for a comprehensive review of key elements of the UK’s patent, copyright and trademark laws and rules.

Until last year’s referendum, Britain was committed to aligning itself with the EU in all three areas, but the break with Brussels means there’s scope for the UK pursue a different approach.

The unitary patent and Unified Patent Court were due to come into operation in mid-2017, though the UK’s involvement is likely to be delayed.

Leaving the EU provides the opportunity for parliament to review British copyright legislation which has been unchanged since 1988.

Companies are also being advised to take early action to protect their trademarks in EU countries; the UK will leave the harmonised European Trademark Regime when Brexit is completed. The British government is considering the possibility of a transitional system in which EU trademarks will be converted into UK trademarks.

“The UK government should treat intellectual property as a priority issue and work to shield brand owners from the potentially negative impacts of Brexit,” International Trademark Association chief executive Etienne de Acedo said in an article in The Times on 26 April.

Conventional economists view intangible capital including patents, copyright and trademarks as playing the role of all other forms of capital.

Those with an interest in maintaining the status quo which has led to more than 90 per cent of the assets of Britain’s largest companies being accounted for by intangible capital are arguing for all EU intellectual property legislation to be converted into UK law. Others are pressing for the laws to be made even more favourable to the owners of intellectual property and those that advise them.

Economics2030, in contrast, argues that intangible capital couldn’t be more different to capital with physical properties and that its creation and circulation has a profound and largely negative impact upon sustainable economic growth prospects.

That’s because intangible capital can be manufactured using legislation and accounting rules, does nothing to stimulate tangible good production and investment and can be transferred across borders in ways that can frustrate sound economic and corporate management.

Alternative perspectives are needed to ensure that changes to intellectual property rules after Brexit work for everyone and not just intangible capital owners.

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