Intellectual property rights

1. Copyrights and neighboring rights in Ukraine. Legal and practical aspects of exercising thereof.

The basis for legal regulation consists of internal regulatory legal acts and a number of international agreements, ratified by Ukraine (the Universal Copyright Convention, the Berne Convention for the Protection of Literary and Artistic Works of 1952, the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms of 1971).

According to the legislation of Ukraine, the copyright originates as a result of creating works, and neighboring rights - as a result of performing works, production of phonograms and videograms, communication to the public of programs by broadcasting organization. It is envisage that the emergence and implementation of copyright and related rights is not required to register, particularly in formalizing it. Nevertheless, in practice, in case of a dispute, the advantage is occasionally had by person who registered its copyright.

An author of a work, as well as a performer, phonogram producer, and videogram producer, in order to acknowledge one’s copyrights and neighboring rights, is entitled to apply a special sign of the copyright (neighboring rights) protection. Unless and until evidenced otherwise, the person indicated on the original or a copy of a work (phonogram, videogram), shall be the author of a work.

Copyright protection, as a general rule, lasts for the life of the author plus and additional 70 years. Intellectual property rights of performers shall be protected for 50 years from the date of inception. Moral rights of performers are protected in perpetuity. The rights of producers of phonograms and/or videograms shall be protected for 50 years from the date of first publication or inception of a phonogram (videogram) provided the phonogram (videogram) was not made public during indicated period.

2. Copyright registration.

A copyright holder, in order to certify its authorship of published or not published work, the fact and date of publishing or agreements related to the right of an author of a work, shall be entitled to register its copyright in the corresponding state registers at any time during the term of the copyright protection.

The registration authority is the State Agency of Ukraine on Copyright and Neighboring Rights.

The following persons shall be entitled to submit documents and materials for registration:

• an author of a work;
• a person which possess copyright;
• employer, under whose instructions and at whose expense a work was created;
• a person authorized by an author or a person who possess copyright;
• an organization which was authorized by an author to manage his intellectual property rights.

It is required to submit the following documents for state registration:

• an application filled in Ukrainian;
• one copy of a work in typewritten form (published or unpublished), a phonogram and other documents and materials for a deposit;
• a document certifying payment of the registration fee;
• documents and materials required for specific objects of copyright and related rights.

Documents and materials shall be submitted as a package. In the absence of any document or material, the application with attachments shall be returned to the applicant without review. The decision of registration or refusal thereof shall be made within one month from the date of receipt of all necessary documents and materials. After state registration, the persons who hold the copyright or any other exclusive right in relation to a work shall be issued a copyright state registration certificate.

3. Intellectual property rights for a trademark and commercial name.

A trademark is a sign or a combination of signs, which are suitable to distinguish goods (services), produced (supplied) by one person, from goods (services), produced (supplied) by other persons. The subjects of intellectual property rights for a trademark are natural and legal persons.

Acquisition of intellectual property right for a trademark shall be verified by a certificate. Terms and conditions for issuance of the certificate are provided by the Law of Ukraine “On Protection of Rights to Marks for Goods and Services”. Acquisition of intellectual property right for a trademark which is internationally registered or recognized by law as well known, does not require verification by certificate.

According to the Law of Ukraine “On Protection of Rights to Marks for Goods and Services”, a person interested in obtainment the certificate, shall submit an application to the State Service for Intellectual Property, completed in Ukrainian and include the following:

• an application for registration of a trademark;
• an image of a trademark applied for;
• the list of goods and services, for which the applicant is asking to register a trademark, grouped according to the International Classification of Goods and Services for the Purposes of the Registration of Marks.

A due shall be paid for the submission of an application, where the document certifying the payment must be either submitted together with an application or sent within two months from the day of the submission of an application. Issuance of the certificate shall be conducted within one month after state registration of a trademark.

A commercial name shall be granted legal protection provided it distinguishes one person from others and does not mislead consumers regarding its activity. The commercial name must contain a reference to the legal form of the legal entity and the name of the company written in words.

The intellectual property right for a commercial name shall be effective from its first use and shall be protected without obligatory submission of an application for its registration and regardless of whether or not a commercial name is a part of the trademark.

4. Protection of rights for inventions, utility models, industrial designs.

An invention shall be considered eligible for acquisition of intellectual property rights provided it is new, involves an inventive step, and is suitable for industrial use.

A utility model shall be considered eligible for acquisition of intellectual property rights provided it is new and suitable for industrial use.

An industrial design shall be considered eligible for acquisition of intellectual property rights provided it is new, according to the legislation.

In order inventions, utility models, and industrial designs, which comply with the aforementioned criteria, to acquire intellectual property rights, a patent must be obtained.

In order to obtain a patent regarding the aforementioned objects, it is required to submit an application in Ukrainian, which must contain information provided by legislation (a description, drawings, a model etc).

The term of patent of Ukraine for inventions is 20 years from the date of application to the State Service for Intellectual Property. The declaration patent term of validity is 6 years. The term of patent of an invention regarding medicines, animal and plant protection agents shall not exceed 5 years. The term of patent of a utility model declaration is 10 years. The term of patent of an industrial design is 10 years and shall be prolonged on the basis of a patent owner petition, but not more than 5 years.



5. Intellectual property on the Internet.

The legislation of Ukraine hardly regulates the issue of intellectual property rights protection on the Internet, therefore regulation of these relations is often conducted using related legal provisions.

Thus, since, pursuant to the Law of Ukraine On Protection of Rights to Marks for Goods and Services, the use of trademarks for goods and services as domain name shall be considered as an infringement of the rights of a holder of a goods and services’ registration certificate, therefore, the trademark for goods and services shall firstly be registered, identical to the trademark which would then be applied as a domain name, and later the domain name itself shall be registered. If a registered domain name matches a trademark for goods and services, the latter shall have prevalence. Similarly, protection of the domain name can be rendered by the commercial name or registered trademark. The following is noteworthy:

• a website shall be the object of the copyright provided it constitutes a work, that is, a result of creative activity of a person;
• display of a work on the Internet available for public use shall constitute its reproduction and requires authorization of persons which hold the copyright;
• offering a sale of an invention, a utility model, or an industrial design on the Internet, shall be regarded as usage of the aforementioned.

6. Conclusion of license agreements and implementation of said practice

According to article 1109 of the Civil Code of Ukraine for licensing agreement, a licensor grants to a licensee the usage of intellectual property rights (a license) under conditions determined by the mutual agreement of the parties. Unless otherwise provided by a license contract, it is considered that the license contract provides a non-exclusive license.

A license contract shall be considered entered into, if the following is specified:

• type of a license;
• the scope of intellectual property right (specific rights granted under a contract, how to use this facility, area and term of granted rights etc);
• an amount, method of and terms of pay for use of intellectual property rights, and other conditions which the parties consider appropriate to include in the contract.

The expiration date of the license agreement shall not exceed the termination date of the property right for the object that is stated in the intellectual property rights agreement.

Apart from license agreements, intellectual property rights shall be conducted on the basis of custom agreements and use of intellectual property rights’ objects etc.

7. Taxation of operations regarding the objects of intellectual property rights

The Tax Code of Ukraine sets certain legal provisions regarding taxation of operations with the objects of intellectual property rights, specifically payment of royalties. Thus, the charges of royalty, paid to a non-resident, that exceed 4 per cent of the previous annual income is not included in the expenses of a VAT tax payer.

It shall be prohibited to include as expenditure to a VAT tax payer payments of royalties:

• in favor of a non-resident with offshore status;
• in favor of a person, which is not a beneficiary (actual) recipient (an owner) of such a payment for services, except for cases, when a beneficiary (an actual owner) authorized other persons to receive such a payment;
• regarding the object, whose intellectual property rights originate with a resident of Ukraine;
• in favor of a person, who is not subject of taxation in respect to royalties, in the state in which one resides.

However, income from the sale of material and non-material rights, specifically intellectual (industrial) property shall be considered income and taxed at either 23 per cent of profit (for legal persons), or 15 per cent or 17 per cent of income (for natural persons’). Meanwhile incomes, received by the non-resident from the sources of their origin in Ukraine, shall include royalty as well.

Dispossession of objects of intellectual property rights, and, moreover, operations of acquiring intellectual property rights, according to license agreements amongst others, are subject to a value added tax in the amount of 20 per cent.

8. Protection of intellectual property rights. Litigation practice over copyright. Moral damage.

According to article 432 of the Civil Code of Ukraine, every person is entitled to take legal action in order to protect its intellectual property rights.

In general, practice of intellectual property rights protection, including the copyright, is quite diverse. Legal grounds for reparation of moral damage as a result of infringement of intellectual property rights are the following:

• article 52 of the Law of Ukraine on Copyright and Related Rights;
• article 23 of the Civil Code of Ukraine;
• the Code of Ukraine on Administrative Offences (article 52-1 etc);
• the Criminal Code of Ukraine (articles 176, 177).

Considering the cases on reparation of moral damages, the courts as a rule require the documents, certifying the facts of disparagement, abasement of honor, business reputation or moral anxiety, to be served. In the absence of such documents, the courts as a rule refuse to repair moral (non-material) damage.