Ukraine keeps on fulfilling its obligations to carry out Intellectual Property reform in accordance with the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their member states, on the other hand (hereinafter - the Association Agreement).

Thus, three extremely important bills have been adopted by the Verkhovna Rada of Ukraine on 05.02.2020 in the first reading, including changes being a part of the reform in the sphere of intellectual property, which has been lasting for more than five years, namely:

- № 2255 “On Amending to Certain Legislative Acts of Ukraine regarding the National Intellectual Property Authority Creation”.

- №  2258 “On Amending to Certain Legislative Acts of Ukraine regarding Security Strengthening and Rights' Protection of Trademarks/Industrial Designs and Patent Trolling Сontrol”

- № 2259 “On Amending to Certain Legislative Acts of Ukraine (Concerning the Patent Legislation reform)”.

According to authors, the Bill № 2255 aims to create an optimal, high-quality and effective state system of intellectual property legal protection, capable of creating, implementing a transparent public model to overcome existing challenges and risks, suggesting effective tools of the intellectual property sphere as incentives for both related economic and social factors development.

Indisputably, Ukraine has long been expected to create an effective state system of intellectual property legal protection, and this project maintains important standards. Thus, it is finally offered to establish a two-tier structure of the state system of the intellectual property legal protection in Ukraine, where all the main functions belong to the Ministry of Economic Development and the National Intellectual Property Authority (hereinafter - NIPA). The Ministry of Economic Development will ensure both state policy formation and implementation in the intellectual property sphere, and the NIPA will perform separate public functions (authority) to implement the state policy (issuing protection documents (patents, certificates) for intellectual property).

Such a state system model of the intellectual property legal protection stands a good chance of becoming effective, which is corroborated, inter alia, by international practice. Thus, a system of this kind has been used for many years in the majority of world-leading economies, in particular Germany, Japan, Singapore, South Korea, France and others.

However, it should be noted the given project needs to be supplemented with rules minimizing further stagnation in the effective system formation, according to a lot of experts in the intellectual property sphere. Thus, it is indicated in the explanatory report to this project that the NIPA functions will be performed by a state organization, being created on the basis of the state enterprise "Ukrainian Institute of Intellectual Property" (expert institute), and will be assigned to the sphere of the Ministry of Economic Development Administration. Nevertheless, the bill does not refer to this information, which can lead to a “struggle” for the NIPA status between existing enterprises being a part of the Economic Development Ministry in the intellectual property sphere.

It would be pertinent to amend the draft law to the second reading, according to which both law final and transitional provisions should be supplemented with a norm obliging the Cabinet of Ministers of Ukraine to quickly determine the organization performing the NIPA functions, the state organization formed by the state-owned enterprise Ukrainian Institute of Intellectual Property (Ukrpatent) reorganization, as advised by the central executive authority, ensuring both formation and implementation of state intellectual property policy.

Such a position is quite reasonable and tenable since namely Ukrpatent has both International Searching Authority and the International Preliminary Examining Authority statuses for many years. Deprivation of this status by Ukrpatent and transferring it to another person, created not by the reorganization of the mentioned body, may lead to the reform delay sine die.

Moreover, the NIPA legal status requires more particularization in accordance with № 2255, provided that all the power powers inherent in state bodies are granted to it, in particular the protection documents' issuance. It is more expedient to define the NIPA legal status as the central executive authority implementing the state policy in the intellectual property sphere.

The Bill № 2258 will ensure the achievement of a European level of intellectual property rights' protection for both trademarks and industrial designs, ensuring transparency in the procedures for the intellectual property rights' acquisition and disposal, improving the protection documents' quality, ensuring the effective implementation mechanism for protecting intellectual property rights, including the struggle against “patent trolling ” according to the authors' statements.

Below the most important changes having made in the given bill can be reviewed:

- Establishing the procedure for filing registration applications of goods'/services' marks and industrial designs in electronic form;

- A single term for trademarks is granted, since the “sign for goods and services” concept is replaced by “trademark”, which is noted in the Civil Code of Ukraine

- A one-time penalty is provided for the trademark unfair usage, the amount of which is determined by the court in the amount of 10 to 50,000 minimum wages;

- The grounds for registering both refusal and invalidate trademarks are expanding;

- Extra eligibility criterion — an individual character is granted to industrial designs;

- The maximum duration of property rights up to 25 years is established for industrial designs;

- Another title will be issued for industrial design: a certificate will be issued instead of a patent;

- The possibility of recognizing a certificate for an industrial design out of courts has been established, by filing an appropriate application with the Appeals Chamber;

- Compensation for losses or a one-time monetary penalty is provided, the amount of which is determined by the court in the amount of from 10 to 50,000 minimum wages for dishonest registration of an industrial design;

The given innovative legislations, offered by Bill № 2258, are able to provide telling rejoinders in the struggle against the so-called “patent trolling”. Thus, the possibility of recognizing industrial design certificates in an administrative post-grant opposition by contacting the Appeals Chamber can significantly shorten the procedure for invalidating these objects.

It is also important that the Appeals' Chamber decision comes into force from the date of approval by order of the Institution being subjected to full disclosure on the official website of the Institution, based on the consideration results of such an application, according to the proposed draft rules. Thus, even challenging such a decision in court, the unscrupulous owner will no longer have rights to the corresponding object, which greatly improves the chances of minimizing unscrupulous registrations.

It should be pointed out that the monetary penalties' application by the court with respect to such infringers significantly reduces the economic effect compared to what they are receiving now, except for the simplified procedure for recognizing unfairly registered patents and certificates.

At the same time, according to the explanatory report to the draft, its purpose is to implement the Directive 2008/95 / EU of October 22, 2008 provisions of the European Parliament and the Council on trademarks' member states legislation approximation and the Council Regulation in Ukrainian legislation on the trademark rights (EU) № 207/2009 of February 26, 2009 protection on the Community trademark in national law.

However, as justly noted by the Main Scientific and Expert Directorate, the proposed law provisions do not take into account the provisions of the new EU Directive № 2015/2436 and Regulation (EU) 2015/2424, on amendments to Council Regulation (EU) № 207/2009 on:

1) provisions in accordance with the signs of which the trademark may consist and in what form it may be represented (Article 3 of Directive 2015/2436 and Article 4 of Regulation 2015/2424)

2) some grounds for refusing to register a trademark, such as the impossibility of registering trademarks being excluded from registration in accordance with Union law or international agreements providing for the traditional guaranteed products' protection (clause 1 (k) of Article 4 of Directive 2015/2436 and clause 1 (l) of Article 7 of Regulation 2015/2424)

3) trademarks including essential elements of the plant varieties' earlier name or reproducing them, being registered in accordance with the laws of the Union or national legislation providing for the plant varieties rights' protection, being close to plant varieties or being closely related species (Article 4, paragraph 1 (l) of Directive 2015/2436 and Article 7, paragraph 1 (m) of Regulation 2015/2424)

4) some grounds for refusal to register a trademark, such as the presence of a previous trademark having a reputation in a Member State in respect of which the registration is applied or in which the trademark is registered, and the usage of a later trademark without good excuse may receive an unfair advantage, or damage the distinctive character/reputation of the previous trademark (paragraph 3 of Article 4 of Directive 2015/2436 and paragraph 5 of Article 8 of Regulation 2015/2424), etc.

Taking into account the above, generally, Bill № 2258 is forward-looking, meeting all the requirements assumed by Ukraine in accordance with the Association Agreement, despite these shortcomings.

Draft Law № 2259 will ensure the achievement of a European level of intellectual property rights protection of both inventions and utility models, obligations' fulfillment undertaken by Ukraine in accordance with the Association Agreement, European Union law provisions' implementation in the sphere of intellectual property in national legislation, ensuring transparency in the acquisition and disposal of intellectual property rights, improving the quality of protection documents, providing the implementation of an effective protection mechanism intellectual property rights. It will also create the prerequisites for enhancing inventive activity, leading to an improvement in the Ukraine investment climate, according to claims of its authors.

The important changes containing in this Bill are the following:

- the list of technology objects being not covered by legal protection for inventions and/or utility models is expanding;

- establishing the procedure for filing registration applications of both inventions and utility models in electronic form;

- the right is granted to any person to submit a motivated objection to the invention registration within six months after the information published about the relevant application;

- the procedure for providing extra rights' protection to inventions is being specified;

- the possibility of recognizing patents for utility models and inventions out of court, by filing an appropriate application with the Appeals Chamber;

- the declarative patent concept with the law is completely removed;

- the requirement of granting permission before the release on the market of products intended to protect health and plants is stipulated and protected by patents;

- setting an additional period for the medicinal product protection, a plant protection product and medicinal products for which pediatric studies have been carried out.

Taking into account all the forward-looking norms, unfortunately, the project № 2259 does not contain a norm according to which a one-time penalty is collected for dishonest registration of a utility model, as provided for in the industrial designs' project. The presence of this rule in the project is needed to combat patent trolling because such a type of dishonest registration is in a great request not only in relation to industrial designs, but also for utility models.

Moreover, regretfully, none of the projects mentioned above, although aimed at intellectual property development in Ukraine and being a part of the reform, do not contain any norms to stimulate innovation in Ukraine. And this is at a time when even in the Association Agreement in Article 157, with which the “Intellectual Property” chapter begins, it is noted that the objectives of this chapter are:

a) simplification of both creation and commercial use of innovative products and creative activity products on the territory of the Parties; and

b) achieving an appropriate and effective level of protection and enforcement of intellectual property rights.

Having Draft Laws №№ 2258, 2259 and 2255, and turning them into Laws, Ukraine is approaching the reform completion in terms of the goals defined in paragraph B) of Article 157 of the Association Agreement, on an appropriate and effective level of protection and enforcement of intellectual property rights.

However, this is only half of the reform in the sphere of intellectual property. We expect that projects ahead will be presented as soon as possible, by which Ukraine will begin to implement paragraph A) of Article 157 Association Agreements to facilitate both creation and commercial use of innovative and creative products.