LAW FIRM DIRECTORY

Intellectual Property

IP Address

The year 2017 did not mark a turning point for the intellectual property sphere. IP reform is on the back burner, and though the commencement of the Ukraine’s Association Agreement with the EU promoted IP protection, it also revealed new problems of law- enforcement. The absolute good news is the establishment of the IP court. The first steps towards "intellectual justice" have been made.

KHRYSTYNA POSHELIUZHNA

Reforms need drivers. If there are no drivers (or they are no more challenging), then reform is halted. It has been carried out by inertia, but the halt is inevitable. Reforms need a vision of the future, this is what we (or reformers) eventually want to get. A step-by-step instruction or, if you will, a roadmap for reaching the final destination is needed. Otherwise, the reform will simply get lost in a labyrinth.

Intellectual property reform was certainly no exception. Moreover, IP reform was a vivid example of how reforms should not be carried out. Following its results, the market was to have had the National Intellectual Property Authority, the only centralized authority for executing the functions of granting titles of protection according to the "single window" principle. In practice, however, the market received a " nailed down window". The creation of the National Intellectual Property Authority was provided for by the draft law On the National System of Intellectual Property Protection in Ukraine. It was developed more than a year ago by the Scientific Research Institute of Intellectual Property of the National Academy of Legal Sciences of Ukraine and since that time it has undergone significant changes. According to the latest information, the draft law was under the consideration of the sectoral Ministry. Its future is not known.

The state fed the IP market with declarations for the whole of last year: we have liquidated the State Intellectual Property Service of Ukraine (23 September, 2016), but it continues to work; we have provided for the Supreme Intellectual Property Court (IP court) in legislation, but it has not been established yet. In 2017, the declarations began to be translated into practice. In early May of last year, the Ukrainian Cabinet of Ministers transferred the functions of the State Intellectual Property Service of Ukraine on the implementation of IP state policy to the Ministry of Economic Development and Trade (MEDT) of Ukraine. The Department of Intellectual Property of the MEDT was headed by Valeriy Zhaldak.

It's a funny thing, but the transfer of functions to the Ministry of Economic Development and Trade did not help the market. In fact, quite the opposite Even the Ministry's rhetoric has changed somewhat. There were complaints that the functions of the State Intellectual Property Service of Ukraine are not characteristic for the MEDT and rumors appeared about the completion of only the first stage of the reform.

 

LEGAL LANDSCAPE

Things are not so good with the area of legislative regulation either. In May 2017, Parliament adopted the Law On State Support for Cinematography in Ukraine at the second attempt. This document expands the list of terms of the law on copyright and related rights, and also supplements the "magnum opus" on copyright with provisions for halting copyright violations through the Internet, contains the obligations of hosting services providers to ensure the protection of copyright on the Internet.

At the beginning of the year, the Verkhovna Rada of Ukraine registered a draft law on improving the legal protection of intellectual (industrial) property (No. 5699). The document was quite promising, as it was introduced by the Government and was aimed at implementing the provisions of the Association Agreement between Ukraine and the EU with regard to "intellectual property" (the draft’s main feature is the procedure for administrative appeal of issued documents of title for industrial samples – post-grant opposition). It will be a year soon since the draft law was adopted, and belief in its prospects is dying. It is the same story with draft law No. 6023 regarding improving the protection of geographical indications.

In August and September, four draft laws directed at the activities of collective management organizations were registered in Parliament. It is the activities of the national collective management organizations that are an eyesore to our "American friend" – the Office of the United States Trade Representative (USTR). Ukraine is still not able to harmonize the chaos in the market of dispute and distribution of royalties. In the meantime, collective management organizations have become regulars at domestic courts: there are still many disputes on copyright protection and recovery of compensation for its violation.

Sergey Konnov, senior partner at Konnov & Sozanovsky Attorneys at Law, also draws attention to the draft bill with regard to improving the legal protection of inventions and utility models. The document proposes an improved model for the protection of utility models: it can only be a device, an administrative procedure for invalidating the ownership of a utility model is established, the patent office is required to provide an official search report for the application filed by any person within six months. This document is still under the consideration of the relevant ministry.

Now to the most interesting things. On 1 September, 2017, the EU Association Agreement came into full effect. The document significantly enhances the protection of IP items. Think, for example, of an industrial design. The agreement extends the term of protection of an industrial design from 15 to 25 years, and changes the content of the concept of novelty. It also provides protection of an unregistered industrial design.

As we can see, the national legislator was not ready to implement "European gold standards". The state had a "plan B" in this respect. Under the Law of Ukraine On International Treaties of Ukraine, if an international treaty to which Ukraine is a party defines rules that differ from those provided for in the relevant act of Ukrainian legislation, then the rules of the international treaty shall be applied.

 

THE FUTURE IS HERE

If we asked lawyers to highlight the most significant IP event of 2017, they would definitely and unanimously name the foundation of the IP court. Yes, in 2016, lawyers said the same thing. However, if in 2016 this court looked more like a mirage in the desert, then in 2017 it became an oasis.

In terms of creating the IP court, legislators limited the decision of the President to 12 months. The head of state waited too long. The Specialized Court was established by decree dated 29 September last year. A day later, the High Judicial Council agreed that the number of judges of the IP court should be 21 staffing positions. On the same day, the High Qualification Commission of Judges of Ukraine announced a competition for 21 vacant posts. The receipt of documents from judges, lawyers and patent attorneys wishing to become pioneers of "intellectual justice" started on 1 December.

In addition, Parliament changed the procedural rules of the game and adopted new procedural codes. The special court will work in accordance with the rules of the business process. It will act as a court of first instance, and its structure shall include an appeals chamber. The last instance for "intellectual affairs" will be the Supreme Court; unlike the IP court, it will begin to work very soon.

What does the market expect from the activities of the new court? Illarion Tomarov, advisor, head of IP/IT practice of Taylor Wessing Ukraine expects only thing from the IP court: to give grounded decisions with an analysis of arguments and evidence, interpretation of provisions and filling in of gaps. "First of all, this means that the court refuses to quote fragments of the forensic report, representing them as motivation", he explains. He hopes that the court will make the move from standard phrases ("the court critically evaluated the evidence") to a detailed assessment of the arguments submitted by the parties.

"Creation of such a court is an important step in strengthening the mechanisms for protecting intellectual property rights. The specialization of judges, the absence of separate appellate institutions (the decisions of this court as a court of first instance will be reviewed by the board of appeal of the same court) can shorten the time for examining cases and improve the quality of decisions", Sergey Konnov says. This year will show whether it will be possible to implement the plan.

Mr. Tomarov believes that the EU Association Agreement will affect the protection of intellectual property rights only through a court that will shape the practice of application of new provisions. "I hope that the provisions of the Agreement will prompt the courts to actively apply the basic concepts of 'conscientiousness' and 'reasonableness' for assessing the actions of the parties and qualifying disputable legal relations", he says.     

 

INTELLECTUAL JUSTICE

All these are prospects for the future. There are also a lot of interesting things in judicial practice now, although a special boom is not being observed.

"IP items are actively created when the economy ­begins to develop", comments Bogdan Lvov, judge of the Cassational Economic Court of the Supreme Court, who until recently was head of the Supreme Economic Court of Ukraine and is perhaps the most famous IP judge. – In such periods, the number of litigations in this category increases correspondingly. Now, unfortunately, we have to admit that we did not observe an 'explosion' in disputes over inventions. The issue of protecting copyrights and trademarks is still burning". In his opinion, an increase in the number of disputes relating to inventions will show a revival in the economy and the renewal of its material component.

Sergey Konnov confirms this trend: "Clients often turn to us regarding registration of rights to product and service marks and protection in case of violation of rights to these items." He says that intellectual property is one of the most dynamically developing institutions of law today. Modern technologies provide new opportunities for capitalizing on intellectual property and opening new markets. "Accordingly, there is a need for correct and timely protection of new items, as well as for high-quality and professional protection of the results of creative activity", Mr. Konnov emphasizes.

Among trends over the last three years, Illarion Tomarov identifies the expansion of the scope of copyright protection of two items: "word" (the name of the work or character) as a designation for products and "technical conditions" as a subject of borrowing by competitors. "Such an extension can lead to abuse of the law: for example, copyright cannot prohibit the manufacture of products according to someone else's technical specifications, although courts will sometimes satisfy such requirements", the commentator says. More and more cases related to the fight against counterfeit products (if customs officers managed to halt registration of a lot of products at the Customs Service) are being brought to trial. On the other hand, the sale of counterfeit products via the Internet allows transgressors to remain anonymous for a long time or to change the site and continue trading. As our interlocutor notes, "until an effective means of blocking sites containing counterfeit products appears, it is necessary to combine different options regarding protection methods."

Illarion Tomarov names two of the most high-profile cases. The first one is Oshchadbank's dispute over the cancellation of "SBERBANK" TM, which, successfully for the plaintiff, passed the first instance, but has been stuck for six months in an appeal court, which will keep us in suspense in 2018 as well. "The following issues will probably be resolved in the case: whether such a method of protection as the change of name of a legal entity is permissible and whether a potentially well-known trademark has sufficient distinctiveness", Mr. Tomarov predicts.

The second one is case No. 910/22952/16 which deals with two important aspects of the use of phonograms in audiovisual works: whether the list of ways of using the phonogram established in the law is complete, and how to correlate the right to use the phonogram without consent, but with the payment of a fee established by law, with the right of the licensee to claim compensation for alleged illegal use? "The Supreme Economic Court of Ukraine returned the case for further consideration, and the plaintiff refused the claim, so the questions received no answer, despite the decisions of other courts, where these questions are interpreted differently", Illarion Tomarov clarifies.

He also recalls other sensational IP disputes: the case of infringement of a patent for eye antiseptic, which the defendant produced under the name "Miramistin"; a dispute about similarity in the names of medicines, "Mildronate" and "Mildrocard", in which the court took into account the peculiarities of buying consumer prescription drugs; a longstanding dispute over a dishwashing sponge, the form of which is registered as a three-dimensional trademark.

Let's sum up. The opinions of market representatives regarding the IP system are quite polarized. "They've ruined the system!" – some say with disappointment. Others will be more restrained in their statements and say that some steps towards the "bright future" have been taken, and effective protection of IP rights is not only a question for the regulator, but also the legislator, the judiciary, and market representatives. After all, it is said that one should start with oneself.

Comprehensive care

Bohdan LVOV,

judge of the Cassational Economic Court of the Supreme Court

 

The proper regulation of economic activities acquires special relevance today in connection with the signing of the Ukraine-European Union Association Agreement.

Intellectual property protection belongs to the category of the most complex economic and civil cases. Moreover, it is incredibly difficult for the owners of IP rights to get proper protection without having special knowledge.

There are cases in practice when people were looking for a certain court where judges are familiar with these matters, even registered as entrepreneurs, only to have the dispute considered in the economic court with the corresponding specialization of judges. A whole category, measured in hundreds of cases, "died" after they were transferred to district courts. Unfortunately, the judges of district courts turned out to be unprepared, since even economic courts, with their more than 15 years worth of specialization in this area, have spotty quality of consideration of this category of cases.

Consequently, the concentration of consideration of all cases regarding the protection of intellectual property rights in one court, namely the Supreme Intellectual Property Court, will improve the quality of justice, the effectiveness of protection of the property rights of subjects of IP legal relations. Therefore, the fact that disputes from general, administrative and economic jurisdictions will be transferred to "a single pair of hands", and the same cases will not be considered in different jurisdictions, is an undisputed advantage.

In addition, all changes in procedural legislation are aimed at improving the effectiveness of protection, the quality of cases, the harmonization of Ukrainian legislation with EU legislation. In other words, the pride of place goes to the protection of rights, while the rest is subject to the main goal, that is, effectiveness, for which reason, sometimes witnesses in the business process are needed in certain cases, toughening of responsibility for obstructing the resolution of cases, effective tools for preventing abuses of legislation, etc.

All this should work as a whole: on the one hand, the process itself will increase the effectiveness of judicial protection, and, on the other hand, the coming into force of the economic part of the Agreement, preferably with the simultaneous updating of Ukrainian legislation, modernization of the regulatory framework, and creation of the IP court, will give Ukrainian society professional judges.

Practice Leaders. Intellectual Property

Authorities

 

Michael Doubinsky(Doubinsky & Osharova)

Antonina Pakharenko-Anderson (Pakharenko & Partners)

Leading Individuals

 

1

Yaroslav Ognevyuk (Doubinsky & Osharova)

2

Oleksandr Mamunya (AEQUO)

3

Alexander Pakharenko (Pakharenko & Partners)

4

Ruslan Drobyazko (Baker McKenzie)

5

Julia Semeniy (Asters)

Other Notable Practitioners

Listed in alphabetical order

 

Petro Borovyk (Borovyk & Partners)

Zhanna Brazhnyk (PwC Legal)

Irina Kirichenko (Ilyashev & Partners)

Yuliya Kolchenko (Baker McKenzie)

Evgeniy Kompanets (Pakharenko & Partners)

Anton Koval (Doubinsky & Osharova)

Anna Kravchuk (IP Law Agency Synergy)

Taras Kyslyy (Egorov Puginsky Afanasiev & Partners Ukraine)

Vadim Mikhailyuk (Mikhailyuk Sorokolat & Partners)

Kateryna Oliinyk (Arzinger)

Mariya Ortynska (IPStyle)

Oleksandr Padalka (Sayenko Kharenko)

Natalia Pakhomovska (DLA Piper Ukraine)

Vladyslav Podolyak (Vasil Kisil & Partners)

Elena Shamrina (Pakharenko & Partners)

Victoria Sopilnyak (Doubinsky & Osharova)

Ilarion Tomarov (Taylor Wessing Ukraine)

Leading Firms

 

1

Pakharenko & Partners

2

Doubinsky & Osharova

3

AEQUO

4

Baker McKenzie

5

Sayenko Kharenko

Other Established Practices

Listed in alphabetical order

 

Arzinger

Asters

DLA Piper Ukraine

Egorov Puginsky Afanasiev & Partners Ukraine

Gorodissky & Partners

Ilyashev & Partners

IPStyle

IP Law Agency Synergy

Konnov & Sozanovsky

Mikhailyuk Sorokolat & Partners

Vasil Kisil & Partners