Key takeaways

Among the novelties introduced by Law 2974-IX, the most significant are the following.

Right to information

A claimant or third party in IPR infringement proceedings now may request the court to order (i) a person who is believed to have violated IPRs based on sufficient grounds, and/or (ii) a person who offered, received, owned, and/or used goods or provided services infringing IPRs for commercial purposes; or (iii) third parties potentially involved in the infringement (producers, manufacturers, distributors, etc.) to disclose information about the origin and distribution network of goods or provision of services that violates IPRs or for which there are sufficient grounds to believe that the distribution of such goods or the provision of such services violates IPRs.

Such information shall comprise (i) the name and address of persons believed (based on sufficient grounds) to be manufacturers, distributors, or other previous owners of such goods or providers of such services, including persons who carry out wholesale or retail trade in such goods or provide such services and (ii) the quantity and value of manufactured, delivered, supplied, received or ordered goods or services.

It should be noted that, procedurally, the court may order that information be disclosed before filing a lawsuit as a measure of securing evidence in response to a justified request by the claimant.

The amendments implemented Articles 235 and 236 of the Association Agreement into Ukrainian legislation.

It is not clear from the wording of the respective provision whether a court shall confirm the existence of IPRs prior to ordering the disclosure of information on an alleged infringement, and it may be best to wait for the implementation of the provision by the Ukrainian courts. The decision of the Court of Justice in pending case No. C-628/21, which concerns the right to information about an alleged copyright infringement of images to which a copyright has not yet been established, may also be indicative of further development of court practice in Ukraine.

Means of protecting IPRs

Law 2974-IX also provides for the implementation of the provisions of Articles 239 "Alternative measures" and 240 "Damages" of the Association Agreement into Ukrainian legislation.

Now, instead of (i) removal from civil circulation of (a) goods manufactured or introduced into civil circulation in violation of IPRs or (b) materials and tools that were used mainly for the manufacture of such goods, and (ii) destruction of such goods, materials and tools at the expense of the infringer, the court, at the request of the infringer, may impose a one-time monetary payment provided that the IPRs were violated unintentionally and without negligence and that the application of the above methods of protection is disproportionate to the damage caused to the claimant.

The size of such payment is determined by the court as the amount of remuneration that would have been paid for obtaining permission to use the disputed IPRs and that reasonably satisfies the claimant.

Additionally, at the request and at the discretion of the owner of a registered or unregistered industrial design/a TM certificate/a patent for an invention or a utility model, the infringer — in addition to the compensation for non-material (moral) damages — is obliged to either indemnify the property damages or pay compensation.

The amount of damages is determined by the court, taking into account the lost profit or income received by the infringer as a result of the IPR violation.

The amount of compensation is determined by the court on the basis of the scope of the violation, the fault of the infringer, and other circumstances that are of significant importance, and it cannot be less than the amount of remuneration that would be paid for obtaining permission to use the disputed IPRs.

In the event that the IPR infringement occurred unintentionally and without negligence, the amount of compensation is equal to the amount of remuneration that would have been paid for granting such permission.

Securing claim for IPR infringement

In the event of a property claim for infringement of IPRs, the defendant may now — at their own initiative — secure the claim by depositing funds in the court deposit account in the amount the claimant requires or by providing a bank guarantee for such amount.

Recommendations 

The new amendments have been enacted to improve the protection of IPRs by providing rights holders with effective mechanisms to protect their rights in court and ensuring the fulfillment of the obligations undertaken by Ukraine in accordance with the Association Agreement. We recommend pro-actively monitor the enforcement of these legislative novelties.

For related content, please see here for English and here for Ukrainian.