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The UKs uncertain position in the DSM following Brexit

Following the UKs vote to leave the European Union on 24 June 2016, the UKs ongoing role as part of the European Digital Single Market (DSM) following Brexit is far from clear and despite the eventual shape of the negotiations to come, the UKs changing relationship with the EU will no doubt have a significant impact on UK businesses operating online, especially relating to intellectual property rights. Even if some type of single market deal is done between Britain and the EU, the UK will inevitably lose its leading role in influencing the final shape of the DSM, which could have a negative impact for digital and e-commerce businesses based in the UK, explains Nick Fenner, Partner at TLT LLP.

Regarding cross-border sales of goods and services, the purpose of the DSM is to move from 28 national markets to a single market fit for the digital age, which according to the Commission could contribute 415 billion a year to the European economy. If the UK is outside the DSM, it could encounter barriers to enter the EU wide market that would not be there for countries remaining within the EU, said Fenner. In addition businesses and individuals in the UK would not have the equal right of access to digital products put on the market within the DSM.

Cross-border portability of digital content is one of the goals of the DSM and could lead to UK consumers being unable to access content considered a right for EU members. However, being outside the DSM could solve a problem for some UK rights owners, such as the BBC, who have historically restricted access to certain digital content from within the UK, adds Fenner.

A single pan EU injunction to protect intellectual property rights is amongst proposed reforms, to help copyright owners enforce their rights and control unauthorised use within the EU. Fenner remarks that if the UK is outside that regime, the cost of enforcement represents an additional cost of doing business in the UK, which may be reflected in the terms offered to UK licensees and purchasers.

With harmonisation a fundamental building block of the DSM, the UK may have to face the prospect of copyright laws that are not equivalent to the rest of the EU. UK businesses should consider that compromises are worthwhile in order to receive the benefits and cost savings represented by harmonised laws, within a market to which the UK is a significant exporter, concludes Fenner.

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