Maksym Koval, Esq.
Overall, the recent IP reforms underscore Ukraine’s commitment to implementing international standards and improving its IP protection legislation. While much of Ukrainian IP legislation has been adapted to EU legislation, a few problematic areas remain. Immediately below we review some of the issues that still require improvement, including the current IP court system that oversees litigation and enforcement, as well as customs enforcement and counterfeiting.
1.IP Courts in Ukraine
As intellectual property disputes become increasingly complex, many businesses operating in Ukraine are eagerly awaiting the establishment of a specialized patent court. The creation of a dedicated patent court will improve the efficiency of resolving IP disputes, offering more consistent and expert-driven decisions. While discussions and preparations for such a court are ongoing, a patent court has not yet been established.
Currently, all IP disputes, including patent, industrial designs, trademark and copyright infringement cases, are handled by Ukraine’s civil and commercial courts, which are responsible for adjudicating IP disputes, including both infringement claims and enforcement of rights. Unfortunately, these courts often lack the specialized knowledge required for dealing with highly technical IP cases, making the resolution process slower and less predictable.
2.IP Litigation and Enforcement
In case of unfavorable decisions, IP dispute parties are presented with the opportunity for appellate review, where a higher court can reassess the case. In certain situations, parties may also seek a review by the Supreme Court, Ukraine`s highest judicial authority. This multi-tiered system ensures that parties involved in IP disputes have several avenues to challenge or defend their positions, providing a balanced approach to justice.
Depending on court workload, the timeframe for resolving cases in the court of first instance can take up to 2 to 3 years, which poses challenges for businesses seeking swift enforcement of their rights. In many IP cases, Ukrainian courts appoint court examinations to provide technical opinions on disputed matters. The duration of these examinations varies depending on the institution conducting them, typically taking between 3 to 9 months. This additional step, while crucial for ensuring informed decisions, further extends the overall timeline for resolving IP disputes.
Importantly, Ukrainian courts continuously collect and summarize relevant case law, which often plays a significant role in the decision-making process of higher courts. This evolving body of case law helps ensure consistency in rulings and provides valuable precedents for future intellectual property disputes.
3.Customs Enforcement of Intellectual Property Rights
Considering Ukraine’s strategic geographical position as a transit country between Europe and Asia, effective customs enforcement and strong anti-counterfeiting measures are critical to safeguarding the interests of right holders and maintaining the integrity of the market.
In recent years, Ukraine has taken significant steps to strengthen border measures related to IP protection. This includes the introduction of advanced risk assessment techniques and the use of modern technologies, such as electronic databases and real-time information sharing, to identify and intercept counterfeit goods. Additionally, training programs for customs officers have been implemented to improve their ability to recognize and handle IP-infringing products.
In this context, the State Customs Service of Ukraine (SCSU) plays a vital role in preventing the import and export of counterfeit goods. Specifically, the SCSU is responsible for monitoring and controlling the movement of goods across national borders, ensuring that products infringing on IP rights do not enter the domestic market. Increased cooperation between customs authorities, IP rights holders, and international partners, has led to a more efficient identification and seizure of counterfeit goods.
One of the primary mechanisms for protecting IP rights at the border is the customs clearance system. IP owners can register and record their rights, including trademarks, patents, and copyrights, with the Ukrainian customs authorities. Once registered, customs officers are tasked with detaining suspect counterfeit goods and taking appropriate enforcement actions. This customs regime allows the SCSU to undertake the following actions:
• suspend customs clearance procedures for suspect goods;
• inspect and sample detained goods; and,
• initiate administrative proceedings or refer to law enforcement agencies if a violation is confirmed.
Applications included in the registry of the SCSU should be submitted in paper and/or electronic form. In case of electronic filing, an original legalized power of attorney must be submitted within 30 working days. Entry into the SCSU registry is valid for a period of one year with possible extension for an unlimited period (if the term of rights to the IP object remains valid).
Despite positive trends in the development of IP protection in Ukraine, some legislative challenges remain unresolved. For instance, the administrative procedure does not allow for the destruction of counterfeit goods detained at customs upon the request of right holders. This limitation makes it difficult to prevent counterfeit products from re-entering the market via “other” channels, creating ongoing challenges for IP rights enforcement. Addressing such legislative gaps is crucial for improving the effectiveness of IP protection in the country.
4.Police Enforcement and Anti-Counterfeiting Initiatives
In addition to the state customs authorities, the National Police of Ukraine plays a critical role in combating the distribution and sale of counterfeit goods within the country. The police are empowered to conduct investigations, raids, and prosecutions related to IP crimes, including the production, distribution, and sale of counterfeit and pirated goods.
Ukrainian legislation provides for both criminal and administrative liability for IP infringements. Penalties for counterfeiting can include fines, confiscation and forced destruction of counterfeit goods, as well as imprisonment for more serious offenses. Cooperation between law enforcement agencies, IP right holders, and international organizations has been essential in enhancing the effectiveness of protection measures.
On April 15, 2023, the Law of Ukraine No. 2974-IX “On Amendments to Certain Legislative Acts of Ukraine on Strengthening the Protection of Intellectual Property Rights” (the “IP Protection Law”) came into force. This Law implements several provisions of the EU Directive 2004/48/EC on the enforcement of IP rights and amends a range of Ukrainian regulations. A key aspect of the Law is the introduction of measures for protecting against IP rights violations. Specifically, infringers are now required to cover all costs associated with the removal of their counterfeit goods from public circulation and the destruction of materials and tools used in their production.
Additionally, the IP Protection Law introduces a new remedy: a one-time monetary payment, designed for cases when the infringement was unintentional and without negligence, making the application of other remedies overly disparate to actual harm caused. However, the minimum amount of the one-time payment may not be less than the cost of the license for using the relevant IP object. The Law also explicitly allows for the recovery of non-pecuniary (moral) damages for IP rights violations and grants courts the authority to order the publication or dissemination of information about IP rights violations and related court decisions at the infringer’s expense.
Changes have also been made to legislation regulating advertisements to facilitate the struggle against IP right violations and promote a safer online environment. According to the new version of Law No. 270/96 “On Advertisement,” (as lastly amended this year), the placing of advertisements on websites that raise concerns regarding IP rights compliance is prohibited. The list of these websites is to be included in the database of the World Intellectual Property Organization (WIPO).
Despite these efforts, challenges remain in fully eradicating counterfeit goods from the Ukrainian market. The ongoing war with Russia, resulting economic pressures and the growing sophistication of counterfeit networks continue to pose significant obstacles. However, Ukraine is improving its IP enforcement mechanisms, both at the border and within the domestic market. Ongoing efforts include the development of more robust IP enforcement policies, the enhancement of inter-agency cooperation and the promotion of best practices in IP protection.
In conclusion, on the whole, the Ukrainian IP legislative reform has been a tremendous success, quietly bringing its antiquated legislation into compliance with EU’s regulations. At the same time, as could be expected, there are several areas that still require attention and fine-tuning. We hope you found this overview useful.
