LAW FIRM DIRECTORY

Intellectual Property

Trait step

The first outlines of IP reform, the point change in sectoral legislation, landmark litigation and even its "own court" — 2016 was a fruitful year for the national sphere of intellectual property of Ukraine. But market participants are looking increasingly to the future — and along with implementation of all that is planned on paper the IP sphere in Ukraine has every chance of reaching a qualitatively new level

KHRYSTYNA POSHELIUZHNA

The year in retrospect

In early 2016 the attention of the State Intellectual Property Service (SIPS) of Ukraine was focused on getting the activities of collective management organizations (CMO) under control.

Late winter was marked by staff losses. On February 18 Alla Zharinova, the Head of SIPS of Ukraine, was dismissed from office by the Cabinet of Ministers of Ukraine. On the same day Antonina Malysh, who had previously headed the Administration of State Supervision over the Observance of Intellectual Property Legislation, was discharged of a post of Acting Head of the Service. But it turned out that the performance of obligations was not temporary — Mrs. Malysh has been "at the helm" of service for more than nine months. Competition for the appointment of the head of the service failed. However, the countdown of the existence of the service is taking place.

Meanwhile, the Supreme Court of Ukraine drew a line under the notorious case for protection of the TV format of Revizor vs. Inspector Freimut (the dispute between the New Channel and Studio 1+1): The court found no grounds to reverse a decision of the Supreme Commercial Court of Ukraine (SCCU), which actually took the side of the New Channel. But the defeated party had other plans on that point...

Spring was marked by calm: European partners (EU Twinning project) provided training sessions for customs officers and judges; market participants gathered at numerous events of different formats for discussion, which became eternal burning issues and even formed the Social Council under the service. But in early summer the IP sphere received a gift, which it could only dream of.

While last year the prospects of taking IP cases to commercial courts were only under discussion, this year the grandest expectations of market participants were implemented — the Supreme Intellectual Property Court (IP court) (in this context the SCCU and other special high courts are being dissolved) was created. The authors of judicial reform opened the doors of the IP court  not only to serving judges, but patent attorneys and lawyers with five-year experience — they all can apply for posts of IP court judges. But since the staffing of the judicial system will be carried out starting from the top (the Supreme Court), the hands of "smiths" of judicial staff will reach the staffing of this Court still awhile away from now.

IP reform

The Ministry of Economic Development and Trade (MEDT) of Ukraine announced the reform of legal protection of intellectual property rights a long time ago. But the first significant step to its implementation was only made in late August: On August 23 the CMU adopted a decision on the optimization of central executive bodies of the state system, which liquidated SIPS in Ukraine. But the service continues to operate till a certain government act regarding securing exercise of powers and functions of MEDT's service will come into force. The Ministry stated that this act would be adopted in a few months after a decision on  liquidation of SIPS has come into force. But so far the act has not been adopted yet, and the service is still operating.

MEDT is working on establishing the National Intellectual Property Body (NIPB), which is "a single window in the best traditions of European practices", implementing state policy in the IP sphere. They want to create the NIPB based on state intellectual property agency Ukrpatent. By the way, the influences of liquidation have not affected this body to date. But the reformatory machine is already on the move, and Ukrpatent will hardly resist for a long time.

Does the process of reforming the legal protection system of intellectual property have an effect on the legal market? This question was addressed to market representatives. "It is no secret that the need to reform the legal protection system of intellectual property was long overdue," answers Yaroslav Ogneviuk, the Partner of Doubinsky & Osharova PLA. "First of all, right holders await effective reforms. They want to see understandable results: maximum elimination of the possibility of abuse of IP rights by others, getting the fastest and most effective ways of ending violations of rights and bringing transgressors to justice".

Yaroslav Ogneviuk believes that in view of the specificity of the IP industry and its close relations with civil, criminal, customs and tax laws, effective reforms in the IP sphere are only possible if they are coordinated by the Cabinet of Ministers of Ukraine or a special inter-departmental agency. "The IP revolution, of course, is not going to happen without significant intellectual property reforms, but our officials of the highest rank should not constantly request external investments and wait idly for them", — he sums up.

Signs of attention

Legal practitioners consider in one voice the establishment of the Superior Specialized Intellectual Property Court as the most significant event on the market. In addition, Illarion Tomarov, the Head of the IP practice at Eterna Law ILF, calls adoption of the Law "On Protection of Cinematography", which introduces a procedure of pre-trial media content blocking on websites, as being among significant events. "However, while the first event was postponed for almost a year, the second would produce results in the near future", — Mr. Tomarov believes.

"I think that the application of blocking sites rules will show how far you can go in abusing law and all of 2017 will pass by under the banner of legal proceedings caused by illegal blocking, or, on the contrary, blocking denial. After summing up the main errors, the law will be amended, and in a few years time we will be able to get a more balanced mechanism", — Illarion Tomarov supposes.

By the way, the outgoing year brought another legislative novelty — amendments to the Law of Ukraine "On Copyright and Related Rights" regarding the use of copyrighted works in "parodies, potpourri and caricatures", allowing the free use of works of other authors without their consent to create parodies, caricatures and potpourri, but with an indication of the author and source of what was borrowed.

Yaroslav Ogneviuk says that the IP practice is less influenced by other factors by virtue of its nature and has its own specific nature. Nevertheless, in 2016 an insular interest remained on the part of Ukrainian clients in their protection of intellectual property rights. "A major national client follows the trend of cost minimization by enlisting domestic lawyers. Outside lawyers, having more practice and a broad specialization, continue to deal with tough and uncompromising cases. In turn, a foreign client began to trust the economic stabilization of the country, and external military and political threats ceased to be a significant reason for them to pause in actively protecting IP rights", — emphasizes the Partner of Doubinsky & Osharova.

According to Mr. Ogneviuk, some clients want to obtain the cheapest services, others — the most qualitative, while a third group are looking for a balance. A trend for extremes became stronger on the IP market in 2016. This primarily affected the interests of medium-sized firms or firms of general practice, which have recently begun to develop an IP practice. "Middle class firms have to do everything to keep their lawyers fully occupied or offer their services to high-profile clients at a lower cost to gain a competitive advantage over firms whose IP practice is very strong", — he says. Yaroslav Ogneviuk believes that this tendency will continue in future and, furthermore, IT technologies will also provide competition to standard and cheap services.

As to so-called landmark IP cases of 2016, Illarion Tomarov gave first place to the lawsuit filed by Oschadbank against Sberbank (the banks are suing over the trademark of Sberbank, which was registered by Oschadbank as early as in 2007). "The decision on this case, which is accompanied by a large number of related claims will be another (after resolution of the Revizor vs. Inspector Freimut  dispute) test for the judicial system: whether it is able to evaluate all the actual circumstances of appearance and use of signs, not being ­guided­ by the opinion of one expert, but from the point of view of the service consumer", —says Mr. Tomarov. By the way, with regard to Revizor... In the summer of 2016 Studio 1+1 tried to reopen a case, reasoning that there are newly-discovered circumstances, but the appeal has for the time being sided with the opponents of Studio 1+1.

"Another two important components of IP practice in 2016: the fight against counterfeiting and parallel imports. There are no serious upheavals regarding the first item: law-enforcement agencies as a result of reform have lost their staff and best practices, and the distribution of counterfeit goods through the Internet enable the preservation of anonymity and hide from the rights holders for a long time. The uniting of efforts of technical intermediaries (hosting providers and domain name registrars) and trade agents (large online sites like OLX) regarding effective handling of the complaints of rights holders is a more effective way of preventing counterfeiting, —Illarion Tomarov considers.— The fight against "grey" import with the help of searches demonstrated the one-sidedness, and that is why businesses that cares about their image and protection of its consumers, will apply European approaches (for example, the decision of The Court of Justice of the European Union L'Oreal vs. EBay of 2011, which partly related to the grounds of non-application of exhaustion of rights).

 

Business attitude

Given that the IP court has only been established on paper so far, commercial courts headed by the Supreme Commercial Court of Ukraine continue to review IP cases. "Commercial courts and, in particular, the SCCU have built up considerable experience in implementing justice in the field of intellectual property, protecting and restoring the violated rights of business entities", — says Bogdan Lvov, Chairman of the SCCU, in his comments, who, despite his administrative position, continues to review IP cases. According to Mr. Lvov, statistics show a rise in the filing and consideration of such cases by commercial courts.

Thus, in 2016 (statistics for nine months of 2016) 444 claims for disputes related to the protection of rights to IP items were brought before local commercial courts of Ukraine, 285 of which were considered with completion of proceedings (in the same period of 2015, 375 cases of this category were brought, 319 petitions were examined). "Traditionally, most of these cases were reviewed by the Commercial Court of Kyiv," — emphasizes Mr. Lvov. As regards the SCCU, in 2016 this court considered 87 cassation appeals related to the protection of intellectual property items, while in the corresponding period in 2015 there were 78 complaints.

Bogdan Lvov notes that before  the completion of the processes to form the Supreme Court, the SCCU will accept and consider appeals in cassation in the usual manner.

"As to judicial trends, the number of cases involving the use of trademarks has increased. Thus, in 2016 commercial courts considered cases of claims for declaring certificates of Ukraine of marks for goods and services invalid, prohibition to perform actions on customs clearance of goods, cessation of actions that violate rights to marks for goods and services, declaring agreements on transfer of exclusive rights to marks invalid, etc.", —the Chairman of the SCCU says in comments.

According to him, the greatest number of cases in this category were cases of recovery of compensation for violation of proprietary copyrights, and the CMO acted as plaintiffs.

"It is worth noting that new interesting items appear each year, for the protection of rights for which the parties apply, more pressing and complex issues for discussion arise", — emphasizes Bogdan Lvov. For example, in 2016 such items were computer programs, domain names, plant varieties and medicines, protected by patents for inventions. "If we talk about difficult moments faced by judges during the consideration of cases, then the issue of exhaustion of trademark rights is a vivid example. Determination of the stage at which the rights of the certificate owner (international registration) become exhausted in terms of Ukrainian legislation has become open to debate: after goods were introduced into civil circulation regardless of the territory or only after they were introduced into civil circulation within the territory of Ukraine", — underlines Mr. Lvov.

In addition, the problem issue remains regarding proving the use of musical work, particularly the possibility of recording such use through acts drawn up solely by the representative of the CMO. "For our part, we believe that relevant acts together with the remaining rest of the evidence base in a particular case may be deemed to be proof of illegal (unlawful) use of relevant works regardless of whether public performance or public notification is at issue here, — says Bogdan Lvov. — It should be noted that cases of granting permission for the use of works by legal organizations, which do not have the status of a CMO, and, therefore, the right to grant permission to any persons use of an unlimited (unspecified) list of works, are not isolated."

The IP market is finding it hard to exist at a time of change. But I want to believe that 2017 will be a generous one not only for good news, but for real benefits of reforms: creation of NIPB, adoption of a procedural IP code, the start of work of the IP court, and the updating of legislation in this sector.

 

 

Intellectual Property

Leading FIRMS

 

1

 

1.

PAKHARENKO & PARTNERS

 

2

 

2.

Doubinsky & Osharova

 

3

 

Baker & McKenzie

 

4

 

Sayenko Kharenko

 

5

 

AEQUO

 

Authorities

 

Michael DOUBINSKY

( Doubinsky & Osharova)

 

Antonina PAKHARENKO-ANDERSON

( PAKHARENKO & PARTNERS)

 

Leading INDIVIDUALS

 

1

 

Yaroslav OGNEVYUK

( Doubinsky & Osharova)

 

2

 

Ruslan DROBYAZKO

(Baker & McKenzie)

 

3

 

Alexander PAKHARENKO

( PAKHARENKO & PARTNERS)

 

4

 

Oleksandr MAMUNYA

(AEQUO)

 

5

 

Julia SEMENIY

(Asters)

 

OTHER NOTABLE PRACTITIONERS

 

Oleg ZHUKHEVYCH

( Gorodissky & Partners)

 

Irina KIRICHENKO

( Ilyashev & Partners)

 

Taras KYSLYY

( Egorov Puginsky Afanasiev & Partners Ukraine)

 

Anton KOVAL

( Doubinsky & Osharova)

 

Yuliya KOLCHENKO

(Baker & McKenzie)

 

Anna KRAVCHUK

(Synergy)

 

Yuriy KRAINIAK

( Jurimex Law Firm)

 

Vadim Mikhailyuk

( Mikhailyuk, Sorokolat & Partners)

 

Mariya Ortynska

(IPStyle)

 

Oleksandr PADALKA

(Sayenko Kharenko)

 

Natalia PAKHOMOVSKA

(DLA Piper)

 

Vladyslav PODOLYAK

( Vasil Kisil & Partners)

 

Victoria SOPILNYAK

( Doubinsky & Osharova)

 

Oleksiy STOLYARENKO

(Baker & McKenzie)

 

Ilarion TOMAROV

(ETERNA LAW)

 

Elena SHAMRINA

( PAKHARENKO & PARTNERS)