Ukraine To Amend Customs Code, Ratify Amendments To TRIPS

The Ukrainian Parliament is currently drafting an amended Customs Code to introduce a number of changes to the country’s intellectual property legislation. Moreover, in mid-March, local lawmakers authorised Ukraine’s President Petro Poroshenko to ratify the protocol amending the TRIPS agreement which enables increased exports of pharmaceuticals produced under compulsory licences to countries which are not capable of manufacturing them locally.

TRIPS refers to the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights.

The draft Customs Code, in its version from 21 December 2015, which is currently debated by the Ukrainian parliament [available here, in Ukrainian], states that the amendments aim to “protect intellectual property rights in the movement of goods through the customs border of Ukraine.”

Among the planned changes to the country’s Customs Code, Ukraine is to expand the list of protected intellectual property rights, develop a new procedure of preventing IP rights abuse, expand the list of entities allowed to seek IP rights protection by the state, as well as introduce a procedure of destroyng products which are suspected of infringing IP rights.

EU Law Harmonisation

With its latest efforts, the country’s parliament aims to harmonise the Ukrainian legislation with European Union and WTO standards.

According to an analysis [available here, in English] by PETOŠEVIĆ, a network of firms specialising in IP services throughout Eastern Europe and the former Soviet Union region, should it be “adopted by the parliament and signed by the president, the draft law will enter into force on January 1, 2019, three years after the entry into force of the Ukraine–EU Association Agreement on January 1, 2016.”

In particular, the draft law would enable to harmonise Ukraine’s customs regulations, above all “the provisions of Part XIV (IPR protection during the movement of goods across the customs border of Ukraine)” with the EU legislation, PETOŠEVIĆ said in its analysis.

Introducing a destruction procedure for small batches of goods suspected of IP rights infringement would allow Ukraine to harmonise its law in line with the EU’s regulation 608/2013 concerning customs enforcement of intellectual property rights [available here, in English].

The regulation’s Art. 17 states that “to reduce the administrative burden and costs to a minimum, a specific procedure should be introduced for small consignments of counterfeit and pirated goods, which should allow for such goods to be destroyed without the explicit agreement of the applicant in each case.” In addition, “customs authorities should have the possibility to require that the applicant covers the costs incurred by the application of that procedure.”

The draft law also would expand Art. 46 of the existing Customs Code [available here, in English] which states that “Intellectual property means copyrights and allied rights, inventions, useful models, industrial models, trademarks, geographical marks (indication of the origin of goods) and species of plants.” In its modified form which is included in the draft, this article adds several new categories to the list, such as layouts and integrated circuits.

Ukraine to Ratify TRIPS Protocol

On a related note, earlier this year, the Ukrainian parliament passed a law which authorised Ukraine to ratify amendments to the TRIPS agreement. The law was recently signed by the country’s president, however, this does not mean that its implementation process was completed, as pointed out by local experts.

“The Ukrainian law to ratify the protocol amending the TRIPS Agreement entered into force on March 12, 2016. Nevertheless, the protocol will take effect upon its acceptance by two thirds of the WTO members, for the WTO members that have accepted the protocol,” Yuriy Karlash, an associate at PETOŠEVIĆ’s Ukraine office in Kiev, told Intellectual Property Watch [in English]. “As far as we know, currently the number of member states that have accepted the protocol is less than two thirds. According to a decision of the WTO General Council of November 30, 2015, the period for acceptance was extended to December 31, 2017.”

International law firm Dentons has released an analysis [available here, in English] in which it states that the agreement’s new protocol “supplements the valid TRIPS Agreement with Article 31 bis; its provisions enable pharmaceuticals to be exported on the terms of compulsory licensing [to] countries which either do not have their own capacities to manufacture such products or their existing capacities are not sufficient to satisfy their own health care needs.”

“Accession to the WTO compelled acceptance by Ukraine of the TRIPS and TRIPS plus requirements, thus strengthening patent protection of pharmaceutical inventions. This allows big pharmaceutical companies to effectively maintain the price monopoly and restricts availability of patent-protected medicines,” Oksana Horban, an associate at Dentons’ Ukraine office in Kiev, told Intellectual Property Watch [in English].

To remedy the situation, Art. 31 bis and Annex thereto were added to the TRIPS Agreement to enable export, in limited cases, of pharmaceuticals on the terms of compulsory licensing, according to Horban.

“Provided that the protocol takes effect, and as specified by the protocol, Ukraine will be able to issue compulsory licences both to export drugs to other countries as well as to import the drugs it needs. Most likely, Ukraine will act both as an exporter and an importer,” Karlash said. “The adoption of domestic regulations implementing the details related to compulsory licensing, as provided in the protocol, will follow later, closer to the date when the protocol is expected to take effect.”

Ukraine has intensified efforts to harmonise its national law with the EU legislation since the country’s government signed an Association Agreement, which comprised a Deep and Comprehensive Free Trade Area (DCFTA), with Brussels on 21 March and 27 June, 2014. The European Commission said in a statement [available here, in English] that its agreement with Kiev is “the main tool for bringing Ukraine and the EU closer together.”

Provisions which established a DCFTA between the EU and Ukraine entered into force on 1 January 2016, but Brussels has autonomously provided Ukrainian exporters with preferential access to the EU market since 23 April 2014, according to data from the European Commission.

 

Image Credits: Cabinet of Ministers