IP transactions in Ukraine

An IP transaction is one of the instruments for IP rights enforcement. An effective IP transaction can lead to a major market expansion and generate new sources of revenue. It may also enhance a company’s business reputation. All the benefits of IP transactions are available in Ukraine.

Ukrainian law provides for the following IP-related activities:

• Licence to use an IP asset

• Licence agreement

• Agreement on customised creation and use of an IP asset

• Agreement on assignment of exclusive economic IP rights

• Other agreements.

A licence is a written authorisation to use an IP asset, and may constitute a part of a more general licensing agreement or be executed as a separate unilateral document. A licence may be exclusive, non-exclusive, single or of another type not prohibited by the effective law. A licence agreement is a bilateral IP transaction containing the licence and some other terms and conditions set forth by the parties.

Licence agreements in Ukraine must contain at least the following terms: the licence type, the scope of IP rights transferred (i.e. TM certificates/patents, list of goods and services, certain rights being transferred, means of use of the IP asset, territory and term of agreement, etc.), and the amount and means of payment.

“If the geographical scope of the agreement is not determined, the licence agreement will be effective within the territory of Ukraine.”

The licence is considered non-exclusive, unless otherwise explicitly stipulated in the licence agreement.

IP rights that are not effective as of the date of the IP licence agreement (e.g. the rights to assets that are not created as of the date of signing the agreement) may not be subject to licensing. Certain authorisations to use an IP asset and certain uses not determined in the licence agreement will be considered not transferred to the licensee.

A licence agreement should envisage that the quality of goods and services produced or provided will not be lower than the quality of goods and services of the trademark/patent holder, who will ensure compliance with that requirement. If the geographical scope of the agreement is not determined, the licence agreement will be effective within the territory of Ukraine.

Provisions of the licence agreement that contradict the Civil Code of Ukraine are deemed unenforceable. Sublicensing is available if under the licence agreement, the licensee is entitled to sublicense.

The term of validity of the licence agreement may not exceed the term of validity of the respective IP object being licensed. In case the term of licence is not explicitly set forth in the licence agreement, the latter shall be effective until protection of the licensed IP asset has expired, but not for more than a five-year period.

According to the agreement on customised creation and use of an IP asset, an author will create an IP asset in compliance with the requirements of the customer and within the agreed term. This agreement will determine the means and conditions of use of IP assets by the customer. Provisions of the agreement limiting the author’s right to create other IP assets shall be considered unenforceable.

Under the agreement on assignment of exclusive economic IP rights, the owner will assign the rights to the other party in full or in part. The IP assignment agreement must contain at least the following terms: the scope of the IP rights assigned (i.e. trademark certificates/patents, list of goods and services being assigned, etc.), the amount and means of payment.

Assignment of exclusive economic IP rights will not affect licence agreements entered into before the assignment. Trademark assignment will not be allowed, in case it confuses consumers.

Trademark and patent assignments will be enforceable in Ukraine only upon state registration. Licence agreements are not required to be registered; however, they may be registered by either party at the respective state registry.

Information on transactions registered by the Ukrainian patent and trademark office (PTO) is published in the official bulletin. Normally, the option to register and publish a licence agreement is used by those parties wishing to inform the public of some terms and conditions of the licence agreement to avoid any abuses by the counterparty.

The licence/assignment agreement may be filed for state registration by the company or by a patent attorney acting on its behalf.

State registration is normally processed by the Ukrainian PTO within two to three months. The agreement is only effective and enforceable on registration.

Franchising and other complex commercial agreements containing IP are also available in Ukraine.