Cover Story (#05 May 2017)

IP Acceleration

The evidence suggests that the protection of intellectual property rights is that very unique practice area that is less sensitive to crisis and is a benchmark of a countrys economic culture.

Reform of Ukrainian intellectual property rights may bring lots of changes for business community and IP professionals. Mariya Ortynska, director of IPStyle Patent Law Company is certain that IP lawyers will definitely have more professional challenges and new work with the coming legislative novelties. We met with her so as to take a wider look at the Ukrainian IP market and ongoing regulatory changes, their impact on IP rights protection and enforcement, as well as the international perception of Ukraine. After an intense conversation with her we came away persuaded that efforts on IP right protection are being sped up.

How did you find the past year from the perspective of your IP practice? What kind of queries from clients could you single out most recently?

Mariya Ortynska: Despite the overall economic situation in Ukraine, IPStyle Patent Law Company and the IP law market in general are experiencing stable growth in client numbers. According to our estimates, the market grew 10%-15% in 2016. Of course, this is a tentative rating, its almost impossible to count the real volume of the IP protection market.

Besides, there is a constant overflow of clients between law firms, so the evaluation of the market situation of different players can vary.

Like other legal markets, the IP services market is also segmented there is a fairly limited number of Top tier law companies, with which tend to work leading companies in their sectors, especially foreign companies, and a large number of small law firms.

If we emphasize the IP market trends that we saw, I would talk about the rise in the number of companies whose management has begun to think strategically and decrease their enthusiasm about EU integration.

So, firstly, clients are changing their approach to IP protection. Earlier, they just carried out trademark registration and thought this would be enough. Now they are starting to understand the necessity for a complex IP policy. Companies are more and more often ordering the development of a contract with employees, contractors, and partners. Unfortunately, this understanding comes only after facing a problem. Some have lost their IP rights and dont want it to happen again.

Secondly, after huge interest in the EU market and the desire to register TM in the whole EU, entrepreneurs now understand how difficult it is to break into the EU market. While in 2015 many Ukrainian manufacturers had started directly with EU trade mark registration, last year the majority chose only a few European countries for TM registration.

At the same time, domestic producers are not turning their backs on the markets of CIS countries, and demand for TM registration there is not lower than on the EU market.

The year 2017 is already being anticipated as a crucial one for the IP market, as we may see the implementation of regulatory reform. What do you expect from the coming changes?

M. O.: The time of judicial reform in Ukraine has finally come. We can only wonder why the reform process didnt start from this. So, 2017 will be in many respects the defining year for domestic judicial system and the IP market in particular.

I expect a rise in the consciousness of the Ukrainian legal community in the sphere of intellectual property rights protection.

Under any circumstances the new specialized court will lead to development of IP regulations, a more effective system of justice and administrative services.

In addition, improvements are expected with the prevention of IP infringements by patent trolls and a reduction in the volume of counterfeit products sold by Ukrainian and foreign manufacturers on the territory of Ukraine.

The Takedown Notice procedure should start to operate in Ukraine. A new stage of development of protection of copyright and related rights on the Internet is expected: fast and effective removal of disputed content.

I can say confidently that 2017 wont let IP lawyers relax.

What legislative changes would you evaluate as milestone ones, and why? What should we expect to be adopted in the near future?

M. O.: The most important is the start of IP disputes by High IP Court. This should result in quick regulation of practical cases in the said sphere and improvement in IP rights protection.

Moreover, after the Draft Law On the State Support of Cinematography of Ukraine has been passed, copyright protection on the Internet may be successfully realized through the Takedown Notice application. I hope it can cut the volume of copyright infringement by Ukrainian web-users.

It should improve Ukraines position in The Special 301 Report by the Office of the United States Trade Representative and it will help us to leave the so-called Priority Watch List.

The professional community has widely discussed the concept of a takedown notice and its implementation in other countries. What does this mean? How would you comment on its prospects for Ukraine?

M. O.: On March 2017 the Verkhovna Rada of Ukraine passed the Draft Law On State Support of Cinematography in Ukraine. Among other new regulations in this law it is possible to find a description of the Takedown Notice procedure there.

The described procedure is very close to mechanisms implemented in the EU and USA. So, we can expect the same results.

For instance, the IP rights holder will have a clear mechanism on how to fight against pirated content on web-sites.

On the other hand, its not forbidden to place a web-site on foreign hosting. And dont forget about Internet trolls they also become a new mechanism in how to make life harder for others.

The new edition of the Law On Copyright and Related Rights provides the following:

if the right holder discovers an infringement of his exclusive rights on the Internet, he has the right to contact the owner of the website, where the relevant information with the application for termination of the infringement is posted;

in some cases, the right holder can directly contact the hosting provider with a similar application;

these statements are submitted solely through the intermediary of an attorney;

the applicant is liable for providing knowingly unreliable information regarding the presence of tangible rights to intellectual property objects, the infringement of which is specified in the application.

These applications may be filed only with respect to the following copyright objects: audiovisual works, musical works, computer programs, videograms, phonograms, broadcasts (programs) of broadcasting organizations.

Under certain conditions, the hosting provider independently makes it impossible to access the electronic information specified in the application for termination of the infringement committed by the website owner.

If the applicant requests the hosting provider to block access to the electronic information and then does not provide him with a confirmation of the lawsuit regarding the protection of his rights to copyright/related rights object in respect of which an application for termination of the infringement was made, then on the tenth working day the hosting provider will restore access to electronic information that was blocked earlier.

The law also obliges hosting providers to stipulate in contracts on hosting services the conditions and rules that prohibit customers from placing of electronic information with infringement of copyright or related rights of third parties. Moreover, it obliges customers to provide reliable and correct information about themselves, including their contact details, and in case of their change, provide immediate notification about this.

Ultimately, it will be very interesting to watch for the first cases of use of a Takedown Notice in Ukraine and IP lawyers will definitely have more work.

According to ongoing reform of the judiciary, the Higher Court for Intellectual Property Matters should be established by October. How can it change IP rights protection in Ukraine?

M. O.: Reform of the IP sphere is a long and painstaking process that has been performed in Ukraine over the last few years. Specialized courts for IP Matters is a wide spread practice in many foreign countries (UK, Germany, Switzerland, Japan, etc.).

In particular the creation of an IP Court will stimulate the establishing of a unified approach for dispute consideration, increasing the professionalism of judges, accelerating IP litigations.

At the same time, there are some discussion rules in the current version of the bill. For instance, the Higher Court for IP Matters will work as a trial court. But, in the case of appeal, the court case according to the territorial jurisdiction will be sent to general courts of appeal. And in the case of cassation it will again be sent to the Kyiv Supreme Court. Such mechanism will only drag out litigation, which is contrary to the concept of the IP Court.

So, after the beginning of the work of the new IP Court its very possible that the relevant laws will be amended.

What are the top trends on the global IP arena? What about their relevance in the local context?

M. O.: Foreign experts say that IP law and litigation is one of the fastest growing segments of the legal marketplace.

In developed countries the market of IP law can be divided into two parts: IP attorney specialists, like patent lawyers, and IP litigators. The educational and aptitude requirements for both are very different.

In Ukraine, with just a few hundred disputes per annum, IP lawyers are universal soldiers. A small number of IP law companies even have experts with a science or engineering background in staff, so what can be said about specialized lawyers.

Unfortunately, the level of higher education in Ukraine is at a low level, and IP-courses do not receive enough attention. IP law comes as an optional discipline and doesnt have a separate course in the law faculties of the majority of domestic universities.

The situation is similar in the judicial system. If a district court has at least one judge who possesses good expertise in IP this is already a very good result. That is why the formation of the Higher Court for Intellectual Property Matters will have such a big impact from the point of view of the formation of a highly professional market of IP dispute resolution.

Fortunately, we have managed to develop some very good experts in this field, there are specialized agencies (such as Ukrpatent, Scientific and Research Center of Forensic Expertise on Intellectual Property of the Ministry of Justice of Ukraine) and I look to the future with optimism.

How does the level of IP rights protection in Ukraine differ from that in developed countries? Could you compare European and Ukrainian views on IP?

M. O.: Ukraine has signed a number of international agreements that brought us closer to generally accepted standards. But the approach to the review of applications is a little different.

For example, there is the so-called opposition period in Europe after the filing of application form for the trademark. The application is published and all interested persons can submit objections. After that the fate of an application is decided by an expert.

In Ukraine the approach is different. Since the middle of 2015 applications are also published only after formal examination conducted, but there isnt the usual period of opposition as there is in Europe. However, any person has the right to file his/her opposition against the application 5 days before issuance of the decision on the substantive examination that was conducted.

Earlier, it was necessary to conduct a preliminary search within 3-10 business days, which showed pending applications, applications which have passed the formal, substantive examinations and also registered marks. Such a search could be conducted only by the branch office of the Ukrainian Institute of Industrial Property (Ukrpatent). Now it is no longer necessary to make it and pay money, as the above-mentioned applications are available on the Ukrpatent website on a free basis.

Ukraine is a pretty young country in terms of IP protection. Our judicial system is not so thorough, we dont even have enough number of cases to talk about established practice, like for instance they have in the UK or USA.

Nevertheless, we expect the introduction judicial reform soon, after which we will finally have specialized IP courts. This will facilitate work not only for lawyers and our clients but for our judges and experts too.

What are the main challenges for the Ukrainian IP market? Please, reveal your personal secret on business development.

M. O.: The overall literacy of the population and business in legal matters. As I mentioned, we can note growing demand for IP strategy only recently. The majority of entrepreneurs still dont understand the necessity for this. Unlike in developed countries where everybody knows about the importance of IP protection.

In those countries the primary accumulation of capital ended a long time ago, real estate and land have been divided up, raiders dont come and physically take control of a business. Therefore, there is competition of ideas, new inventions and brands. Everyone knows the different between the price of a product with a well-known expensive brand and the same quality product signed by a so-called no name brand.

The most valuable global brands are worth tens of billions of dollars that is the value of brands and not of their premises. And, therefore, the protection of IP is given so much attention.

Still, in Ukraine there are positive trends in this area.

My personal secret is the ability to think outside the box, a desire to find the best solution for the customer and nto have erves of steel.

We in IPStyle pay attention to educational activities seminars, round tables, business lunches, participating in the organizing committees of forums and conferences. We try to involve foreign experts in our activities, to initiate ongoing dialogue with the authorities for faster and effective development of the market.

The more mature the market the better it will be for all parties. And this is something we must all work together for.

IPStyle key facts:

  • Year of establishment
  • 2007

  • Lawyers/technical team/partners
  • 8/3/2

  • Core practice areas
  • IP right protection

    IP consulting

    IP litigation

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