LAW FIRM DIRECTORY

Intellectual Property

The Year’s Movements

Social, economic, political stresses this year did not have a critical impact on the intellectual property market. Lawyers complain about the short-sightedness of the State Service of Intellectual Property in the definition of its objectives and goals and ask for a more dynamic approach towards “intellectual issues” for the IT business

KHRYSTYNA POSHELIUZHNA

The outgoing year passed neither worse nor better for the intellectual property sphere as compared to other branches of law. The impact of military operations in the East and occupation of Crimea and more, namely ratification of the Association Agreement with the EU, was less noticeable for it (compared to others). In all other respects everything is stable: specialized legislation that has not been updated for years, problems (which have become perennial) with so-called patent trolling, counterfeiting, parallel imports. However, there were positive developments: the deepening of cooperation between national authorities and international institutions and the adoption of guidelines for the examination of applications for industrial property rights (Guidelines).

With regard to legislative work, it is worth mentioning the development of a number of draft bills: on the collective management of property rights of copyright and related rights proprietors, on the settlement of rendering administrative services in the field of intellectual property. An attempt was made (a futile one to date) to revive the draft law on amendments to some legislative acts of Ukraine regarding the protection of intellectual property rights on the Internet. The mechanism of protection against piracy on the web does not “come to life” on the pages of the law due to a conflict between providers and rights holders. The former do not want to bear responsibility for the posted content of their clients, while the latter naively believe that after blocking of pirated content the copyright problems will be resolved.

INTELLECTUAL IMMUNITY

Intellectual property, even though it is a very isolated area of relations, does not exist in a complete vacuum and, therefore, undergoes social, political and economic stresses, as is the case with other areas of life. It is obvious that no market tolerates any instability, uncertainty and any other risk factors. Oleksandr Mamunya, Partner at Aequo Law Firm, notes that the intellectual property market in Ukraine has not been developed and was always at such a level when all it is possible to talk about is the fact that the country has a certain set of intellectual property objects, and that is all. “There is no system of technology transfer, global licensing programs, large-scale commercialization, active defense and finally, a market in the full sense of the word, has never existed in Ukraine. This is a situation where the largest global players willing to see the Ukrainian market (as a budding one) in its development strategy, contain the minimum required arsenal of local intellectual property instruments in Ukraine, as without such a minimal arsenal the presence of any civilized company in any market is simply not possible. At the same time, very few holders of such instruments (portfolios of intellectual property rights) actually used/use them to increase the efficiency of their activities in Ukraine”, Mr. Mamunya says in his comments.

He believes that in the described situation military operations in the East of the country and occupation of Crimea surely had a negative, but not dramatic, impact on the activities of intellectual property market players. Occupation of Crimea has caused certain confusion: it is due to the fact that de facto the peninsula’s territory falls under two jurisdictions – Ukraine and Russia. “So far, these events are not factors that completely cross Ukraine out of global business development strategies, which mean that nothing has really changed – the intellectual property market will continue to exist in a slow mode, as before. Unfortunately, national businesses have never really been game changers in the Ukrainian intellectual property market”, the Partner of Aequo Law Firm says.

METHODOLOGICAL ASSISTANCE

The State Intellectual Property Service of Ukraine rarely indulges the professional community with any explanations and methodological literature, and so the proposal this year of Rules and regulations on industrial designs, marks, inventions as well as utility models is definitely a landmark event. This was, in particular, noted by Natalia Meshcheriakova, Partner at AstapovLawyers International Law Group.

There is one “but” though, as it seems that these rules and regulations either lag behind or were published in a hurry. Ms. Meshcheriakova believes that when preparing the said rules and regulations the agency had no desire to take into account that today, in an environment where the law on industrial design has not changed for many years, it is Rules and Regulations that can partly remedy the common practice of shameful registration of anything as industrial designs. “However, ‘the central executive body of power that implements state policy in the sphere of intellectual property’, as we can see, is not too forward-looking in defining its tasks and objectives”, Natalia Meshcheriakova emphasizes.

At a time when the market and the professional community already discuss the concept of the individual nature of an industrial sample, talk about the features of the product caused by its technical function, expect that implementation of the provisions of the Association Agreement between Ukraine and the EU will help to solve a number of related problems. For example, to unfair registration of industrial designs, the central body of executive power comprehends in a very strange way state policy in the field of intellectual property in general.

Surely, as recognized by Ms Meshcheriakova, the professional community did not expect that the guidelines, approved by the agency’s panel back in spring of this year (prior to the signing of the economic part of the Agreement with the EU), will explain the concepts which are not yet envisaged in national legislation (and judging by the content of the promulgated draft National Strategy for development of the sphere of intellectual property for the period up to 2020, we will not see them soon – the agency is not setting itself the task to develop a mechanism in the near future for implementing the provisions of the Agreement), but the agency could well take into account the realities and propose to partially remedy the situation through the Rules and regulations.

FIGURES FROM THE COURTROOM

The first half of 2014 was, compared to the same period last year, characterized by an unchanged number of cases in disputes relating to the protection of rights to intellectual property objects for local economic courts, and a 16% rise in the number of cases brought before commercial courts of appeal. At the same time, the location of commercial courts of Donetsk and Lugansk Regions, in particular the Donetsk Commercial Court of Appeal in the ATO zone, as reported by Igor Benedysyuk, the secretary of the 4th Trial Chamber of the Higher Commercial Court of Ukraine, did not have an effect on the general trend for the number of cases in disputes related to the protection of rights to intellectual property objects to increase, since most cases of this category are considered by the Kyiv Commercial Court, commercial courts of the Kyiv, Dnipropetrovsk, Odessa and Kharkiv Regions, and the least amount of such cases were considered by the commercial courts located in the Ivano-Frankivsk, Ternopil and Khmelnytsky Regions.

In the first half of this year the percentage of cassation appeals in this category increased by 35% compared to the corresponding period of 2013, while the number of considered cases rose by 30%. The vast majority of cases in this category considered by the commercial courts of Ukraine are connected with the protection of copyright and related rights (49%), protection of rights to industrial property objects (34%), invalidation of law-enforcement documents (17%). Igor Benedysyuk clarifies that in January-September 2014 in the category of cases related to the protection of rights to intellectual property objects, the largest number of petitions belonged to cases on the protection of copyright and related rights – 34 petitions, of which the following subcategories can be defined: recovery of compensation for infringement of property copyright, recovery of royalties, recovery of allocations provided by Article 42 of the Law of Ukraine “On Copyright and Related Right”, compulsion to conclude an agreement on payment of remuneration (royalty), cessation of acts that infringe copyright, invalidation of the agreement on assignment of rights to use works and others.

In turn, Ms. Meshcheriakova believes that registration of intellectual property objects and disputes in the courts are indicators of the condition of the economy: all processes in production and trade are clearly visible. “The trends in society are obvious at large, so we only have prospects if we adopt civilized European rules of business”, the commentator predicts.

DEVELOPMENT PROSPECTS

Dmytro Gadomskiy, IT and media law practice Partner at Yuskutum Law Union, points to the “intellectual side” of the information technologies market. In his opinion, it is worth expecting good prospects. Ukraine has been one of the leaders of offshore programming for many years and thousands of foreign IT companies place their R&D centers in our country. Dmytro Gadomskiy says that up to a point this industry did not need a developed intellectual property system. However, this year Ukraine hit the top 20 countries with the most innovative companies. That is, companies began to appear in Ukraine whose main asset is high-tech products. When this business came across the national peculiarities of regulating intellectual property rights it remained dissatisfied.

“Our sphere of intellectual property is very well described by the opinion of foreign investors: ‘If your intellectual property rights are registered in Ukraine, then you have no rights’”,  Mr. Gadomskiy says citing a quote, adding that this can be argued, but it is expedient to understand the reasons for this point of view and try to change it.

The lawyer believes that that different groups of specialists are now working on a dozen draft laws in the intellectual property field, and the trend is not only in the direction of increasing legislative pressure and granting the inventors and authors more rights. “On the contrary, the IT business needs to create a more dynamic model, putting to the fore a company’s ability to implement its idea better and to a higher quality than that of a competitor, rather than just hold the patent and sue anyone who develops something similar”, says Dmytro Gadomskiy.

However, that is not all. A similar situation can be observed with copyright, whose excessive formalism did not allow the use during development of the code distributed by open licenses. In addition, Dmytro Gadomskiy observes further that we found ourselves in a state of permanent expectation of legislative changes in the field of copyright protection on the Internet. Indeed, these changes are lobbied by companies whose business flourished at the end of the last century, while the opponents of such changes are companies developing right now: online cinema and music sharing services.

The second major catalyst of changes in the IP area was the spread of 3D printing. “While the right holders of intangible assets, such as games, are still trying to fight against violations of their rights on the Internet, enthusiasts are crazily producing game characters or, even worse, disseminating such models via the Internet. Formally, copyright infringement or violation of patent rights does not happen”, the expert notes. Hence, the field of intellectual property will deal with the solution of these problems next year.

As for the sector’s prospects, it should be mentioned that in October of this year Mykola Kovinya, the Chairman of the State Intellectual Property Service, was dismissed from his post at his own request (he was subject to dismissal under the Law of Ukraine “On Purging Power”). Apparently, new management at the central body of executive power is expected in the new year. Therefore, it is quite obvious that 2015 will be a year of change for the intellectual property field. 

Practice Leaders. Intellectual Property

Authorities*
Michael DOUBINSKY
(Doubinsky & Osharova)
Antonina PAKHARENKO-ANDERSON
(Pakharenko & Partners)
Leading FIRMS
1 1. Pakharenko & Partners
2 Doubinsky & Osharova
3 Vasil Kisil & Partners
4 Baker & McKenzie
5 Konnov & Sozanovsky
Leading INDIVIDUALS
1 1. Yaroslav OGNEVYUK
(Doubinsky & Osharova)
2 Alexander PAKHARENKO
(Pakharenko & Partners)
3 Oleksandr MAMUNYA
(Aequo)
4 Ruslan DROBYAZKO
(Baker & McKenzie)
5 Julia SEMENIY
(Asters)
OTHER NOTABLE PRACTITIONERS*
Oleksiy FILATOV
(Vasil Kisil & Partners)
Irina KIRICHENKO
(Ilyashev & Partners)
Anton KOVAL
(Doubinsky & Osharova)
Yuriy KRAINIAK
(Jurimex Law Firm)
Taras KYSLYY
(Egorov Puginsky Afanasiev & Partners)
Maya LGOVA
(Grischenko & Partners)
Natalia MESHCHERIAKOVA
(AstapovLawyers International Law Group)
Mariya ORTYNSKA
(IPStyle)
Oleksandr PADALKA
(Sayenko Kharenko)
Oleg ZHUKHEVYCH
(Gorodissky & Partners)

* — Listed in alphabetical order.

Practice Leaders (by Ukrainian Law Firms 2014)