February 28, 2006

Dear CIPR members and friends,

Criminal Consequences for Violations of Intellectual Property Rights Strengthened in Ukraine

February 27 — Ukrainian President Viktor Yuschenko signed the Law on the Introduction of Amendments to the Criminal Code of Ukraine in Regard to Protection of Intellectual Property Rights, which was adopted by the Verkhovna Rada February 9, 2006.

The law stipulates a strengthening of criminal consequences for aggravated violation of copyright, neighboring rights, patent rights, utility models, industrial designs, topographies of integrated circuits, plant varieties, technical innovations, unlawful use of trademarks for goods and/or services, trade names and qualified appellations of origin.

For such crimes the law stipulates fines of up to 3000 times the minimum monthly income — 51,000 grivnas or $10,200 (before the amendments the fine was limited to 1000 times the monthly minimum income) or three to six years of imprisonment.

Furthermore, the law defines in which situations the size of the material damage resulting by the criminal act can be considered significant, large or very large.

Sergei Movchan, Representative of the Coalition for Intellectual Property Rights (CIPR) in Ukraine:

"The signing of the Law on the Introduction of Amendments to the Criminal Code of Ukraine in Regard to Protection of Intellectual Property Rights provides legal producers additional instruments for protecting their rights to intellectual property. In addition, the adoption of these amendments will make it possible to establish effective barriers to the entry of contraband products onto the Ukrainian market, which in the end is better for the consumer."

Mikhail Dubinsky, Lawyer, Vice President, Ukraine Trademark Association

"It should be noted that the given law changes Articles 176, 177 and 229 of Ukraine's Criminal Code with the goal of improving the criminal protection of intellectual property rights. Thus, specifically, any person can face criminal liability in cases of copyright or neighboring rights violations (Part 1, Article 176), violations of rights to patents, utility models, industrial designs (Part 1, Article 177), unlawful use of trademarks for goods and services, brand names (Part 1, Article 229), which have material damage in not only a large amount, but of a significant amount. This significant amount is 20 times the untaxed minimum monthly income (which currently is 3500 grivnas and also takes into account the social compensation provided for by the Ukrainian Law "On Income Taxes for Individual Persons"). In this way, the threshold for material damage is decreased, on the basis of which an individual can be held criminally responsible."

Sergei Movchan

Coalition for Intellectual Property Rights (CIPR) — Ukraine
Vul. Mykhailivska 8A
01001, Kyiv, Ukraine
Tel: +(380-44)270-7240
Fax: +(380-44)270-7241
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