Ukraine advances patent reform with two new laws

On 16 August 2020, two laws introducing patent reform came into force – the Law of Ukraine “On amending certain legislative acts of Ukraine on strengthening protection of rights to trademarks and industrial designs and combating patent abuse” (Patent Abuse Law) and the Law of Ukraine “On amending certain legislative acts of Ukraine in relation to patent legislation reform” (Patent Reform Law).

The changes introduced under the laws relate to IP objects such as trademarks, industrial designs, inventions and useful models, and are primarily aimed at harmonising Ukrainian legislation on IP rights protection with the EU IP regulation following the Ukraine – EU Association Agreement. The new regulations are also meant to combat 'patent trolling' (i.e. patent abuse) through the introduction of a post-grant opposition procedure.

Industrial designs

The newly introduced amendments generally relate to:

• formal minor changes (e.g. industrial design that meets the patentability conditions is no longer granted a patent, but rather a certificate);
• protection under these certificates and patentability conditions;
• industrial design registration procedures;
• procedures for challenging an existing registration (i.e. post-grant opposition procedure).

Following Patent Reform brought on by the passage of these two laws, an industrial design, besides needing to meet the 'novelty' requirement, must now satisfy a newly introduced condition of individuality.

This individuality requirement means that a design’s impression on an informed user must be different from the impact of a different design previously introduced to the general public.

The Patent Abuse Law also limits the scope of articles that can be registered as industrial designs, and among other things excludes from patentable articles those features of an article exclusively related to technical functions.

Following the EU's example, the Patent Abuse Law extends protection to designs that are not registered if such designs have been introduced to the general public. The criteria for introduction to the general public include designs that are published, exhibited, used in trade or are made public by any other means. Information about events where such designs are being made public must be objectively known and accessible in circles that specialise in a given and regular commercial activity in Ukraine.

The proprietary rights of an owner of an industrial design that is not registered include the exclusive right to use the design and to forbid the use of the design if such use results from copying the design. Unlike owners of registered designs, owners of designs that are not registered cannot transfer their proprietary rights to a third person, license the design or forbid the use of the design by third persons that was not the result of copying.

Moreover, the use by a third person of a design similar to an unregistered industrial design that was created by the third person separately and the person objectively was not familiar with the initial design, cannot be forbidden by the owner of the initial unregistered design since this use cannot be considered copying.

The Patent Abuse Law also extends the protection under a registered design to other similar designs (that are also not registered) provided that differences in these designs when compared to the registered design are not visible to an informed user.

Another change introduced by the Patent Reform extends the total registration period of industrial designs from 15 years to 25 years. Under the amendments, however, the initial registration period will be five years, and an owner of an industrial design will need to file for a registration extension for another five, ten, 15 or 20 years, which means that the total registration period can be up to 25 years. This, however, does not apply to industrial designs protected as not registered designs. The protection period for these designs is three years starting from the date the design was first introduced to the public.

Along with substantive amendments, the Patent Abuse Law also introduces procedural changes. Certain industrial designs can now be covered by one joint application, which means that if an applicant wishes to register more than one design at a time, multiple applications need not be submitted. Prior to the amendments, a separate application was necessary for the registration of each design. The application, however, can only contain designs of the same class under the international classification for industrial designs and cannot cover more than 100 designs.

In the event the application violates the stated limitation, the applicant is given three months to divide the application according to design quantity or design classification requirements. If the applicant does not act upon this proposal, the institution executing the expertise will conduct expertise of the first design in the application only along with other designs (but not more than 100) of the same class contained in the application. An applicant on his own initiative can also divide an application following the procedural requirement laid out in the Law.

As already mentioned, the Patent Abuse Law introduces a procedure of “post-grant opposition”. This means that any person may challenge a registration of an industrial design with the Appellate Chamber after the registration has been granted during administrative proceedings. The respective claim can be filed both during the period the registration is in place and after its expiration. The decision of the Appellate Chamber can be appealed in court. An industrial design’s registration can still be challenged directly in court as well.

The post-grant opposition is also provided for in the Patent Reform Law in relation to inventions and useful models.

Trademarks

Patent Reform remains consistent with other prior changes and steps when reforming trademark regulation. For example, the Patent Abuse Law continues to substitute the term “mark for goods and services” with the term “trademark”, which represents the use of more consistent terminology across various legislative acts.

Besides terminology, the Patent Abuse Law introduces several amendments that relate to substantive matters in trademark regulation. The law defines some new items that cannot be protected as trademarks, which among others include:

• geographic names if they mislead from the actual origin, quality characteristics of a product or using the reputation of the geographic name;
• names of plants varieties.

This exception only applies if the stated names are either registered, or if their registration is still pending or if they are protected in Ukraine on grounds other than registration.

The Patent Abuse Law also specifically defines the notion of a collective trademark, while providing additional registration requirements related specifically to such trademarks. Even though the collective right ownership pf a trademark is not new and is already present in Ukrainian law, this was not directly defined prior to Patent Reform and its regulation was considered weak.

The introduced amendments further broaden the scope of a trademark’s use by a third person that cannot be forbidden by a trademark’s owner. Such excluded actions, besides the use of a trademark in comparative advertising (previously introduced in a different amendment and now only being expanded), include use of a trademark when selling a product (i.e. providing a service) when the mark indicates certain characteristics of a product (and its service) that is related to its sale and further use.

Inventions and useful models

In addition to minor changes (e.g. useful models are no longer certified by a patent but by a certificate), Patent Reform introduces the following significant changes.

The new laws significantly limit the scope of objects that can be patented or protected as useful models. Following Patent Reform protection under a patent or under a useful model, certificates cannot be granted to the following:

• surgical or therapeutic methods of treating a human or animal, methods of diagnosing a human or animal (exceptions include products – substances or compositions – used in diagnosis or treatment);
• human cloning;
• processes concerning human genetic identity;
• use of human embryos for industrial or commercial purposes;
• changing the genetic identity of animals causing suffering without any significant medical benefit to humans or animals, and animals bred in this process;
• a human body at different stages of its formation and development, and simple detection of one of its elements, particularly sequences or parts of gene sequences (exceptions include inventions involving elements of a human body outside the body or otherwise obtained using a technical process, such as sequences or partial sequences of a gene, even if the structure of that element is identical to a natural element);
• a product or process involving a plant or animal, the use of which is restricted to a particular plant variety or breed;
• a product or process which relates to natural biological material, which is not separated from its natural environment or not a product of a technical process.

Moreover, the Patent Reform Law further clarifies and limits the patentability of certain objects if they are patented or registered as separate objects by excluding from patentable objects (if they are not a compound of a broader invention or useful model) the following:

• discovery, scientific theory, mathematical method;
• scheme, rules and method of games, competitions, auctions, physical exercises, intellectual or organisational, particularly economic, activities (e.g. planning, financing, supply, accounting, lending, forecasting, rationing, etc.);
• computer programmes;
• forms of presenting information;
• appearance of goods (including products, buildings, areas), exclusively satisfying aesthetic needs.

While some of the stipulated objects have always been subject to protection as IP objects, their specific exclusion from patentable objects within the Patent Reform further clarifies the regulation that is already in place.

In addition to the post-grant opposition procedure described above, the Patent Reform Law provides for the right of any person to lodge an objection to the registration of an invention or a useful model before a patent or certificate is granted while an application for registration is still pending by filing an objection, according to the procedural and formal requirements laid out in the Patent Reform Law.

Another procedural change, even though it has already been partially implemented in practice due to COVID-19 related restrictions, concerns all of the stipulated IP objects: trademarks, industrial designs, inventions and useful models. The application for registration of these IP objects can now be submitted electronically. These applications are processed under legislation that is already in place for other documents subject to submission and signing in electronic form.

Implications for the pharmaceutical industry

Patent Reform Law introduces the following important changes that have impact on patent holders in the pharmaceutical industry:

Combating “evergreen” patents

Evergreen patents are used by drug producers as a strategy to extend the lifetime of patent protection by presenting minor changes (e.g. by patent registration of salts, ethers, combinations, polymorphs, metabolites, etc.). Starting 16 August 2020, patent applicants are obliged to prove that these drugs meet patentability requirements as 'non-obviousness'.

Enabling Bolar provision

The Bolar provision is a safe harbour exemption that allows a generic producer to register its product immediately after the expiry of the patent protection of the original drug, thus reducing the time for bringing a product to market and giving consumers the opportunity to get faster access to treatment.

Patent Law Reform determines that production of pharmaceuticals with usage of the patent-protected inventions will not constitute violation of IP rights only during the additional patent protection and in two cases:

• the production is aimed at exporting to other countries with an “UA export” label;

• production is started no earlier than six months before the expiration of the term for additional protection for storage purposes. Generic producers will be allowed to sell drugs only after the expiry of the additional patent protection of the original drug.

Overall, the stipulated reform introduces a significant amount of substantive amendments that further provide better and more efficient protection of IP rights in Ukraine by harmonising Ukrainian legislation with the EU regulation, while remaining consistent with previously adopted changes.

For more information on patent laws in Ukraine, contact your regular CMS advisor or local CMS expert: Anna Pogrebna, Olga Belyakova, Diana Valyeyeva and Naida Shykhkerimova.