The national legal framework and government activities
Nowadays the system of intellectual property protection is entering its pre-final stage of development in Ukraine, towards compliance with the internationally accepted approaches to such protection. The crucial role of intellectual assets in the global economy growth determined the choice of innovative strategy by Ukraine in the 21st century. The important part of that strategy is the development of the national legal framework that includes adoption of the national
laws and accession to international agreements that become part of the national legislation. The laws of Ukraine that regulate intellectual property protection are as follows (non-exhaustive list):
• Code on Administrative Infractions of Ukraine (7 December 1984);
• Law of Ukraine "On Protection of Plant Variety Rights" (21 April 1993);
• Law of Ukraine "On Protection of Rights to Trademarks and Service Marks" (15 December 1993);
• Law of Ukraine "On Protection of Rights to Inventions and Utility Models" (15 December 1993);
• Law of Ukraine "On Protection of Rights to Industrial Designs" (15 December 1993);
• Law of Ukraine "On Copyright and Allied Rights" (23 December 1993);
• Law of Ukraine "On Protection against Unfair Competition" (7 June 1996);
• Law of Ukraine "On Advertising" (3 July 1996);
• Law of Ukraine "On Protection of Rights to Integrated Circuit Designs" (5 November 1997);
• Law of Ukraine "On Cinematography" (13 January 1998);
• Law of Ukraine "On Protection of Rights to Goods Origin Designations" (16 June 1999);
• Law of Ukraine "On Distribution of Copies of Audiovisual Works, Phonograms, Videograms, Computer Software, Databases" (23 March 2000);
• Criminal Code of Ukraine (5 April 2001);
• Customs Code of Ukraine (11 July 2002);
• Civil Code of Ukraine (16 January 2003);
• Commercial Code of Ukraine (16 January 2003);
• Law of Ukraine "On State Regulation of Activities in the Sphere of Technology Transfer" (14 September 2006).
The normative framework on intellectual property protection is constantly evolving. Apparently, the most important recent legislative effort in Ukraine was the December 2008 restatement of Article 4 "Illegitimate use of designations" of the Law of Ukraine "On Protection against Unfair Competition" allowing for more efficient counteraction to parallel import. As restated, Article 4 stipulates that the use of a commercial name, a trademark or service mark, advertising materials, and other designations by a business entity without permission of another business entity that has already been using those or similar designations in its business activities, which resulted or may result in a confusion of interested parties with regard to business activities of those entities, is illegal. The earlier wording of the law less clearly defined the business entity competent to issue permissions whose activities could be confused with those of an infringer.
Thus, using more precise definitions trademark owners may hinder parallel import of goods, if the parallel importers use the trademarks of the manufacturers in an active way (advertising, etc.). There are also other legal means against parallel import that, however, go beyond the scope of this report. Another legislative development in the sphere of intellectual property was the adoption of the Procedure of Appraisal of Intellectual Property Rights on 25 June 2008 that establishes the procedure for determination of the appraised value of proprietary rights to certain objects of intellectual property. Currently, the responsible authorities plan to draft the Procedure of Damages Calculation for Copyright and Allied Rights Violation and adopt a program of counteraction to camcording in the first half of 2010.
The legislative activity of the Ukrainian government was appreciated by the USA government, and resulted in moving Ukraine from the Priority Watch List to the Watch List in the "Special 301" Report 2008 due to improvements in intellectual property rights protection. As noted in the report "the "Special 301" Report is an annual review of the
global state of intellectual property rights protection and enforcement, conducted by the Office of the United States Trade Representative (USTR) pursuant to Special 301 provisions of the Trade Act of 1974. The 2008 Special 301 review process examined intellectual property rights protection and enforcement in 78 countries. Following extensive research and analysis, USTR designates 46 countries in this year's Special 301 Report in the categories of Priority Watch List, Watch List, and/or Section 306 Monitoring status".
Ukraine is a party to the following international agreements in the sphere of intellectual property:
• Paris Convention for the Protection of Industrial Property (1883);
• Berne Convention for the Protection of Literary and Artistic Works (1886);
• Madrid Agreement Concerning the International Registration of Marks (1891);
• The Hague Agreement Concerning the International Deposit of Industrial Designs (1925) (the Hague Act of 1960 and Geneva Act of 1999);
• Universal Convention on Copyright (1952);
• Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (1957);
• International Convention for the Protection of New Varieties of Plants (1961); March 2010
• International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961);
• Convention Establishing the World Intellectual Property Organization ("WIPO") (1967);
• Locarno Agreement Establishing an International Classification for Industrial Designs (1968);
• Patent Cooperation Treaty (1970);
• Strasbourg Agreement Concerning the International Patent Classification (1971);
• Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of Their Phonograms (1971);
• Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (1973);
• Budapest Treaty on the International Recognition of Deposits of Microorganisms for the Purposes of Patent Protection (1977);
• Nairobi Treaty on the Protection of the Olympic Symbol (1981);
• Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989);
• Trademark Law Treaty (1994);
• WIPO Copyright Treaty (1996);
• WIPO Performances and Phonograms Treaty (1996);
• Patent Law Treaty (2000);
• Singapore Treaty on the Law of Trademarks (2006).
In addition to the international obligations arising from the membership in international treaties the country also has to
fulfil certain objectives in view of 2012 UEFA European Football Championship, which is to be held in Ukraine. Among those goals is the protection of UEFA and its commercial partners' intellectual property rights. Thus, in 2008 the Cabinet of Ministers of Ukraine created the Coordination Board on Issues of UEFA's Intellectual Property Rights Protection. The Board's objective is to cooperate with the relevant structures of UEFA in order to promptly react to violations of UEFA's intellectual property rights.
Table 1. Applications for industrial property objects in 1992 – 2009
Organizational structure of the system of intellectual property protection Ukraine has a multiple system of state authorities that secure the necessary level of intellectual property protection. This statement is equally true with respect to the three branches of the state power: legislative, executive, and judicial.
The only authority of the legislative power is the Supreme Council (Verkhovna Rada) of Ukraine. Therefore, the legislative direction of intellectual property protection is represented by the Sub-committee on Intellectual Property in the structure of the Supreme Council Committee on Science and Education.
Judicial branch is characterized by the specialization of courts in the sphere of intellectual property. In 2000 a Chamber of the High Economic Court of Ukraine was established to adjudicate cases related to the protection of intellectual property. The relevant panels were also created in the structures of local and appellate economic courts.
The authorities of the executive branch that are entrusted with the function of intellectual property protection are the most numerous. In 2000 in the structure of the Ministry of Education and Science of Ukraine the State Department of Intellectual Property was established. Its main task is implementation of the state policy in the intellectual property sphere and drafting legislative instruments with regard to intellectual property protection. It also includes the Appeal Chamber that reviews the complaints on the decisions regarding applications for inventions, utility models, industrial designs, trademarks, integrated circuit designs, and goods origin designations (see Tables 1 and 2).
The other executive authorities are as follows:
• Ministry of Justice (takes part in drafting legislative instruments on intellectual property issues and is responsible for adaptation of the national legislation to the legislation of the European Union);
• Ministry of Internal Affairs (is engaged into preventive and investigative activities related to intellectual property infringements as well as takes part in drafting legislative instruments and amendments);
• Security Service (takes part in activities directed to protection of state secrets of Ukraine, assists to business entities in protection of their commercial secrets that are vital to the security of Ukraine);
The information is taken from the official website of the State Department of Intellectual Property: http://www.sdip.gov.ua/
Table 2. Protection documents included to the state registers in 1992 – 2008
The information is taken from the official website of the State Department of Intellectual Property: http://www.sdip.gov.ua/
• State Customs Service (controls the movement of goods containing intellectual property objects across the customs
border, registers such goods, etc.);
• State Tax Administration (controls tax charges and payments of taxes in cases of import of goods and audio- and video production into the territory of Ukraine);
• Antimonopoly Committee of Ukraine (protects undertakings against unfair competition related to unlawful uses of intellectual property objects);
• State Committee of Ukraine for Technical Regulation and Consumer Policy (controls compliance with the consumer
protection and advertising legislation).
Integration into WTO and EU
Being a part of the globalized world and situated at the crossroads of Europe and Asia, Ukraine consistently moves on its way of accession to global communities. Recently, Ukraine has achieved its goal of accession to the World Trade Organization (WTO), and became its 152nd member on 16 May 2008. To comply with the accession-related obligations of Ukraine the Supreme Council of Ukraine adopted relevant amendments to the Laws of Ukraine "On Protection of Rights to Trademarks and Service Marks" and "On Protection of Rights to Goods Origin Designations" in
April 2008. The amendments were aimed at harmonizing the national laws with the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"); in particular, they balanced the co-existence of trademarks and geographical designations. Also in compliance with the obligation of TRIPS Article 63.2 Ukraine provides notifications
of the laws, regulations, final judicial decisions and administrative rulings of general application, made effective and pertaining to the subject matter of TRIPS. The notifications are available at the WTO site. The integration to the European Union is a more protracted way for Ukraine. However, the work on harmonization of the intellectual property legislation with the European legislation keeps its pace. The most recently introduced bill (2009) "On Certain Amendments to the Laws of Ukraine on Intellectual Property" includes numerous proposals on harmonization.
The proposals are aimed at the implementation of various European legislative instruments into the national legal framework. The European acts to be implemented are the Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs, Directive 89/104/EEC of the Council of 21 December 1988 to approximate the laws of the member states relating to trade marks, Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark, Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for agricultural products and
Also aiming at the improvement and clarification of the national legal provisions the bill provides for implementation of certain rules of the international treaties: Paris Convention for the Protection of Industrial Property (1883), Madrid Agreement Concerning the International Registration of Marks (1891) and the Protocol thereto (1989), The Hague Agreement Concerning the International Deposit of Industrial Designs (1925), the Patent Cooperation Treaty (1970), and the Patent Law Treaty (2000).
Technology transfer in Ukraine - the level playing field for foreign investors
Until recently technology transfer activities were not included in a proper legislative framework. However, in 2006 the Law of Ukraine "On State Regulation of Activities in the Sphere of Technology Transfer" (the "Technology Transfer Law") was adopted. Subsequently, it was followed by the relevant government acts: Resolution of the Cabinet of Ministers of Ukraine "On Certain Issues of Technology Transfer" (2007) and Order of the Ministry of Education and Science of Ukraine "On Procedure of State Registration of Technology Transfer Agreements and Administration of the State Register of Technology Transfer Agreements" (2008).
The Technology Transfer Law clarifies the main issues of technology transfer activities in Ukraine: subjects of technology transfer, framework of international cooperation of Ukraine, responsibilities of the state authorities, activities of technological brokers, etc. But the most important issues for foreign investors willing to engage in technology transfer into Ukraine are the mandatory requirements to the essential provisions of technology transfer agreements and prohibition of certain hardcore restrictions.
The provisions that are required to be included in technology transfer agreements are as follows:
• list of the technological components to be transferred;
• price of the technology;
• terms, place and means of technology transfer;
• conditions of technical knowledge and know-how transfer;
• licensing and sublicensing process;
• territorial and field-of-use restrictions;
• insurance of technologies and their components;
• liabilities of the parties and certain other mandatory requirements.
The Technology Transfer Law also provides that the execution of technology transfer agreements with certain hardcore restrictions is not allowed. The prohibited restrictions are as follows:
• payments that considerably exceed the price of the technology and its components;
• obligations on the part of the transferee to buy raw materials, intermediate products, equipment and its components from the transferor when they are not applied during the manufacturing
• obligations on the part of the transferee to sell the products manufactured upon the technology so transferred preferably to the buyers determined by the transferor, or the use of the personnel pre-determined by the transferor;
• the right of the transferor to set the sales or re-export price of the products manufactured upon the technology so transferred;
• unjustified limitations on the volume of production and certain other practices.
Finally, it should be noted that due to the recent start of development of technology transfer legislation the technology transfer activities in the context of foreign investment are not overregulated, allowing for a broad discretion of foreign transferors with regard to the technologies they plan to import into Ukraine.