Business position on the Draft Law # 1230

16/ 09/ 2019

Last week, the European Business Associations business community joined Verkhovna Rada Committee meeting on Finance, Tax and Customs Policy to discuss the draft law #1230 regarding amendments to the Customs Code of Ukraine on protection of intellectual property rights while moving goods across the customs border. Thus, the project proposes to approximate the norms of the Ukrainian legislation to the norms of the EU Regulation on customs control over the observance of intellectual property rights, which certainly welcomes by the business community. During the discussion business focused attention on 4 key things because proposed version of the draft law needs correction, for example, regarding the obligatory existence of a proven infringement of the trademark owners rights in the country of production for defining the goods as counterfeit, which, basically, neglect the effectiveness of the customs register. Firstly, it is important to define the term of counterfeit as this information is the first indicator for customs officers in order to check the batch. However, information provided in the Draft Law can lead to negative consequences, in particular, the need to prove the infringement of the rights of the trademark owner. Secondly, the use of the Customs Register of Intellectual Property Rights as a tool to combat counterfeit goods and prevent them from entering the customs territory of Ukraine. In case of any distrust from the customs authorities, the customs clearance of such goods have to be subjected to additional control, and, in general, this Register should be a preventive tool to prevent the importation of counterfeit products. Thirdly, the need to address so-called patent trolling. Meaning, making it impossible to suspend goods and pay royalties for them if they are not new to international practice. These are cases of patent rights registration for consumer goods, such as headphones, hangers, wheels, plugs, etc. Fourthly, the reimbursement of costs related to storage, destruction of goods suspected in infringing intellectual property rights. Currently, there is a practice where the right holder receives notification from the revenue and fees body that a counterfeit goods may be hit with significant delay, which makes it impossible for the right holder to protect his intellectual property rights in a timely manner. Thus, the participants of the meeting suggested fixing the term - the payment of expenses by the right holder starts from the day when he initiated the extension of the suspension of customs clearance of goods. In addition, there was an idea to set a specific time limit for sending the information to the owner of the trademark. At the same time, it have to be reiterated that despite the particular difficulties that arise while importing goods using Customs Register of Intellectual Property Rights, the registry itself is an important tool to prevent the importation of counterfeit products into Ukraine. Therefore, European Business Association hopes that business proposals will be taken into account in order to improve the draft law, which will help to simplify the legal import of original goods and minimize the importation of counterfeit goods into the territory of Ukraine.

Last week, the European Business Association’s business community joined Verkhovna Rada Committee meeting on Finance, Tax and Customs Policy to discuss the draft law #1230 regarding amendments to the Customs Code of Ukraine on protection of intellectual property rights while moving goods across the customs border.

Thus, the project proposes to approximate the norms of the Ukrainian legislation to the norms of the EU Regulation on customs control over the observance of intellectual property rights, which certainly welcomes by the business community.

During the discussion business focused attention on 4 key things because proposed version of the draft law needs correction, for example, regarding the obligatory existence of a proven infringement of the trademark owner’s rights in the country of production for defining the goods as counterfeit, which, basically, neglect the effectiveness of the customs register.

Firstly, it is important to define the term of counterfeit as this information is the first indicator for customs officers in order to check the batch. However, information provided in the Draft Law can lead to negative consequences, in particular, the need to prove the infringement of the rights of the trademark owner.

Secondly, the use of the Customs Register of Intellectual Property Rights as a tool to combat counterfeit goods and prevent them from entering the customs territory of Ukraine. In case of any distrust from the customs authorities, the customs clearance of such goods have to be subjected to additional control, and, in general, this Register should be a preventive tool to prevent the importation of counterfeit products.

Thirdly, the need to address so-called “patent trolling.” Meaning, making it impossible to suspend goods and pay royalties for them if they are not new to international practice. These are cases of patent rights registration for consumer goods, such as headphones, hangers, wheels, plugs, etc.

Fourthly, the reimbursement of costs related to storage, destruction of goods suspected in infringing intellectual property rights. Currently, there is a practice where the right holder receives notification from the revenue and fees body that a counterfeit goods may be hit with significant delay, which makes it impossible for the right holder to protect his intellectual property rights in a timely manner. Thus, the participants of the meeting suggested fixing the term – the payment of expenses by the right holder starts from the day when he initiated the extension of the suspension of customs clearance of goods. In addition, there was an idea to set a specific time limit for sending the information to the owner of the trademark.

At the same time, it have to be reiterated that despite the particular difficulties that arise while importing goods using Customs Register of Intellectual Property Rights, the registry itself is an important tool to prevent the importation of counterfeit products into Ukraine.

Therefore, European Business Association hopes that business proposals will be taken into account in order to improve the draft law, which will help to simplify the legal import of original goods and minimize the importation of counterfeit goods into the territory of Ukraine.