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Publications - Trade mark protection in Ukraine


Trade mark protection in Ukraine


Journal "The In-House Lawyer", #164, Oktober 2008

THE IMPORTANCE OF TRADE MARKS to different businesses is constantly growing in Ukraine. Trade marks protect the rights of the owners of a company, and keep others from using their names for similar or competing products or services. At the same time, consumers are protected: by preventing companies from using the names or marks of others, trade marks assure customers of who they are buying from.

The growing intensity of competition in the Ukrainian and global markets has made the positioning and identification of products and services essential for the successful running of a business. In most cases this relies on a company's trade marks. In western countries the trade mark is one of a company's most valuable assets. With an established trade mark a company may benefit from greater customer loyalty, increased resistance to the marketing actions of competitors and a greater willingness among consumers to accept price rises. However, the majority of Ukrainian businesses fail to take this issue seriously.

Trade marks are critically important assets and should be protected as such. In this article we will provide an overview of certain aspects of trade mark protection in Ukraine.

PRE-EMPTIVE TRADE MARK PROTECTION: REGISTRATION
Registration of trade marks can be considered a pre-emptive method of trade mark rights protection. The legislation covering trade marks and their protection is the Law of Ukraine on Protection of Rights of Marks for Goods and Services (the Trade Mark Law). It provides the fundamentals of trade mark regulation in Ukraine: a definition of the terms, the possibility of registration, the registration procedure for trade marks, the rights and obligations of a certificate owner, protection of the certificate owner's rights, etc.

Registration of a trade mark offers a higher degree of security to the owner of the mark. The registration of a trade mark is therefore the first step towards protecting it.

The basic rule established by the Trade Mark Law is that any sign, or combination of signs, capable of distinguishing the goods and services of one entity from those of other entities is eligible for registration as a trade mark, provided it is visually perceptible. Such signs -in particular words, including names, letters, numerals, figurative elements and combinations of colours - as well as any combination of such signs, are eligible for registration as trade marks in Ukraine. The Trade Mark Law does not provide separate regulation of service marks, and they are protected in the same way as marks distinguishing goods.

Legal entities and individuals can apply to register their trade marks. If an applicant is a non-resident, they can file an application only through the patent lawyers of Ukraine.

Foreign and Ukrainian applicants generally enjoy the same spectrum of rights. Moreover, since 16 May 2008 (the date Ukraine joined the World Trade Organization (WTO)) the official fees for trade mark registration actions with the Ukrainian Institute of Industrial Property are charged at the same rates for both Ukrainian and foreign applicants (regardless of the location of residence of the individual or registration of a legal entity). The costs were equalised because the WTO rules forbid discrimination between a member's own nationals and those of other member states.

Patent lawyers always recommend that, before filing an application (or after filing but before payment of the official fee for application), prospective trade mark owners carry out research on other trade marks already registered or in the registration process. This allows applicants to prepare their file more accurately and avoid any possible disputes and delays in relation to the Ukrainian patent authorities and third parties.

The trade mark registration procedure is clearly detailed by Ukrainian legislation. However, we would like to draw your attention to certain aspects of the registration process.

The procedure for trade mark registration is rather time-consuming but there exist official ways of accelerating the process by means of paying extra charges.

Trade mark applications are examined by the Ukrainian patent authorities for any conflict with previously registered trade marks or trade marks with an earlier priority or filing date that claim similar goods and/or services.

Claiming priority for a trade mark is possible in Ukraine and it may be established from the filing date of the trade mark application or from the date when a trade mark was shown at official or officially recognised exhibitions conducted on the territory of a member state to the 1883 Paris Convention for the Protection of Industrial Property.

A trade mark certificate issued by the Ukrainian patent authorities provides its owner with a right to use the trade mark and enjoy other rights provided by the legislation. The rights conferred by the trade mark certificate are valid from the date of the filing of the application. The Trade Mark Law includes a comprehensive description of actions that may be considered use of a trade mark. Without the consent of the trade mark owner, third parties may not, in the course of commercial activity, use identical or similar signs for goods or services that are identical or similar to those for which the trade mark is registered, where such use would result in the likelihood of confusion. In particular, the trade mark owner has
the exclusive right to forbid use of the trade mark by others without its consent. The Trade Mark Law establishes certain exceptions to the exclusivity of this right. The trade mark owner can choose to allow use of the trade mark by others. This is usually done by means of a licence agreement (patent lawyers de recommend that such agreements are registered with the Ukrainian patent authorities, but this is not compulsory).

The registration of a trade mark is renewable on an indefinite basis. The initial trade mark certificate is valid for ten years from the date on which the application was filed. However, the Trade Mark Law allows certificates to be renewed for each subsequent ten-year term on the condition that the official charge for the renewal is paid. This may be considered a great advantage of trade mark registration because other intellectual property objects (industrial designs, utility models, etc) are limited in their exclusive use by time, and the validity term of the certificates/patents may not be renewed.

Cancellation of a trade mark on the grounds of non-use can take place after three years of uninterrupted non-use, unless valid reasons, based on the existence of obstacles to such use, are shown by the trade mark owner. Circumstances arising independently of the will of the owner of the trade mark, such as import restrictions or other government controls, are recognised as valid reasons for non-use. Use of a trade mark by another person, while subject to the control of its owner, is recognised as use of the trade mark for the purpose of maintaining the validity of registration.

PROTECTION BY ADMINISTRATION
Ukrainian legislation provides various methods of trade mark protection. The decision as to which is the most effective and efficient method should be based on an analysis of business needs.

The administrative method of trade mark protection involves the filing of an application with the respective body of the Anti-Monopoly Committee of Ukraine (AMCU). Usually, it is the duty of the respective territorial department or the state commissioner of the AMCU to consider allegations of unfair competition. The Law of Ukraine on Protection from Unfair Competition, inter alia, establishes as an offence any use of a trade mark, without the consent of its owner, which may cause confusion with the activity of other businesses.

An application to the AMCU can only be filed within six months of discovering the infringement of trade mark rights. The applicant should provide sufficient evidence that the violator is a competitor (evidence that they work in the same field, whether regional or national). Within 30 days of the application being filed the AMCU must make a decision on whether to commence proceedings. This term can be extended to 60 days if any additional information is required and the applicant is not able to provide it.

In the course of proceedings the AMCU examines the circumstances of the case and decides whether there has been unfair competition. As a result, the AMCU may recognise the actions of the violator as unfair competition, order that these actions cease, and impose a fine upon the transgressor.

Fines are the main sanction imposed by the AMCU, and theoretically they may amount to up to 3% of the guilty party's revenue in the preceding year. However, practice shows that applying to the AMCU is used as an additional and pre-emptive tool in the course of protection of trade mark rights. It is usual practice for officials of the AMCU to suspend proceedings until a court delivers an award in the case connected with the same trade mark.

Another administrative method of protection of trade mark rights is applying to the State Customs Service of Ukraine (SCS). This allows the trade mark owner to prevent unauthorised import or export of goods that use the trade mark. The trade mark owner should file a request for inclusion of the trade mark in the register held by the customs service. The applicant is obliged to guarantee the covering of all expenses in connection with storage of the goods, and to cover losses incurred by the customs bodies, owners of the respective warehouses, declarants, recipients or senders of the cargo, and the owner of the detained goods. In the event of an attempt to illegally import or export goods that infringe the rights of such a trade mark, the respective regional office of the SCS has the right to stop processing those goods and notify the trade mark owner of the alleged infringement.

PROTECTION BY LITIGATION
Despite the availability of the above methods, the most widespread method of trade mark protection in Ukraine is litigation. The main categories of trade mark disputes considered by Ukrainian courts are those concerning the infringement of trade mark rights, the invalidation of trade mark certificates and the premature termination of the validity of trade mark certificates. Depending on the category of dispute, the demands of the claimants and the parties involved, a case can be considered by courts of general jurisdiction, a business court or an administrative court.

The claimant should very thoroughly define the damages incurred as a result of the infringement of the trade mark owner's rights. The procedural codes of Ukraine state that in the course of a case each party should provide enough evidence to prove the circumstances to which it refers.

Most cases on infringement of trade mark rights anticipate the participation of persons with special intellectual property knowledge, so the subsequent involvement of judicial experts is inevitable. In this respect, the wording of questions posed to the expert is of great importance. It is the task of an expert, not of a judge, to determine the correlation of legal protection of different IP objects (e.g. trade marks and industrial designs). The opinions or conclusions of experts hired by the claimants with the aim of identifying the prospects of a case before a claim is filed, are usually taken into account by judges on a level equal to other pieces of evidence.

At the same time, pursuant to the Criminal Code of Ukraine, illegal use of a trade mark or other type of wilful infringement of a trade mark owner's rights shall be considered a crime, provided that such use causes a considerable amount of financial damage. However, criminal proceedings resulting from infringement of trade mark rights are extremely rare in Ukraine.

One of the problems that the owner of a trade mark may face in the course of protecting its trade mark rights is the simultaneous existence and validity of a patent for an industrial design for an identical sign. Taking into account the fact that Ukrainian legislation has a number of deficiencies {eg it does not provide for qualification expertise for industrial designs), it often comes to light that identical signs are registered as both trade marks and industrial designs. In such cases, the trade mark owner may file a claim with a court for invalidation of the respective patent. Grounds for this may be the absence of novelty in the industrial design or a violation of third-party rights in the course of applying for the patent for industrial design.

FORTHCOMING CHALLENGES
Another forthcoming challenge for Ukraine is the protection of intellectual property rights in the course of the final part of the UEFA European Football Championship 2012. The newly adopted Law of Ukraine on Organising and Hosting Final Part of the European Football Championship 2012 in Ukraine also provides specific protection of UEFA's trade mark rights. Most notably, the State Department on Intellectual Property (SDIP) shall establish a group of experts to deal with UEFA's intellectual property rights. This group shall exercise the accelerated six-month examination of the applications for registration of the intellectual property of UEFA. In addition, SDIP shall promptly disclose applications that contradict any of UEFA's trade mark applications or registrations.

Ukrainian legislation has been amended'; to provide UEFA with effective remedies:: for the protection of its trade mark rights. In particular, during the preparation for and holding of the final part of Euro 2012, Ukrainian courts shall resolve disputes concerning the violation of UEFA's trade mark rights within a seven-day term and without the preliminary court session. These amendments to the law do contain a number of discrepancies, but Ukraine still has enough time to bring the new rules in line with the rest of its legislation.

On the whole, Ukrainian legislation on trade mark protection complies with international standards established by the Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1С of the Marrakesh Agreement Establishing the World Trade Organization of 15 April 1994. However, Ukraine is still missing a few provisions that would decrease the possibility of trade mark abuse.

As we have seen, although Ukrainian legislation provides a number of legal tools and methods to protect trade mark rights, any party to a particular case should choose the tool or method that best suits the circumstances, and which is the most efficient for them.

By Oleksandr Aleksyeyenko, partner,
Volkov Koziakov & Partners
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