Tech firms face higher costs in event of no deal Brexit

Brexit Tech

In another ‘no deal Brexit’ contingency planning notice, the UK government has said businesses could face additional costs to access EU and UK markets.

While the government will continue to enforce existing intellectual property rights, this will come as worrying news to many tech enterprises across the country.


What the latest planning notice means for UK tech firms

The latest notice on intellectual property (IP) rights in the event of a no deal is of particular concern to the UK’s tech industry.

The government says that it will continue to recognise the European Economic Areas (EEA) exhaustion scheme, which the UK is currently a part of. Essentially, IP rights are “considered exhausted once they have been put on the market in the EEA with the rights holder’s permission.”

As a result, there won’t be any changes to the rules for imported goods into the UK. However, there could be significant changes for exported goods as well as parallel imports.

As the planning notice explains: “Goods placed on the UK market by or with the consent of the right holder after the UK has exited the EU will not, however, be considered exhausted in the EEA. This means businesses exporting these goods from the UK to the EEA might need the right holder’s consent.”


The potential for additional costs and heavier burdens

In response to the planning notice, industry body techUK’s CEO Julian David was pleased that protection for existing intellectual property rights would remain, but expressed concern over access to key markets.

“These notices demonstrate the additional costs and burdens businesses will face when seeking access to both the UK and EU markets, duplicating systems and regulators across a number of areas,” he said.

“For example, the requirement to register chemicals both in the UK and in Europe will lead to significant duplication. UK tech manufacturers, including SMEs, rely on a steady supply of safe and high quality chemicals to make the products we use every day, so avoiding additional complexity should be a priority,”


Changes to copyright law and veterinary IT

Copyright law, notably the portability of online content, and veterinary IT could also be adversely affected by a no deal Brexit.

Changes to copyright law could mean online content providers won’t be able to offer cross-border access to UK consumers when they travel to the EU, resulting in restricted access.

What’s more, because animal medicine IT systems are EU-wide and fall under veterinary medicine regulatory networks, the exchange and recognition of data submitted for regulatory activities between the UK and member states would also cease.


Growing uncertainty for the UK tech industry

Each planning document that the government has published regarding a no deal Brexit continues to highlight the dangers the UK economy faces. Several IT and technology experts have expressed concern over the implications of leaving the EU without an agreement in place, including Julian David.

“The best way to avoid the consequences of a No Deal, as set out in these notices, is by renewing efforts to seek agreement on the outstanding issues in the negotiations,” he added.


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