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Legal Digest

Legal Digest

In July the Cabinet of Ministers of Ukraine adopted Resolution No. 496 on raising fee rates, which was considered unlawful by the State Regulatory Service. What does this Resolution actually state?

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On 19 July 2019, Resolution of the Cabinet of Ministers of Ukraine that changed the fee rates related to actions associated with intellectual property (IP) rights came into force. In accordance with the Resolution, fees related to preparations for state registration of copyright and relevant contracts on an inventor’s copyright to a product are increased by 3-9 times. Moreover, the Resolution increased fee rates  related to actions associated with IP rights to inventions, utility models, industrial designs, and integrated circuits from 5-10% to 10-40% of the established fee rate. The Resolution was not perceived positively by IP and copyright holders as well as the State Regulatory Service. At present, signing of a petition calling to revoke the Resolution posted on the Cabinet of Ministers’ website is in progress. The petition states that such increase in fees destroys innovation activity in Ukraine. Furthermore, it significantly impairs the competitiveness of Ukrainian businesses on the global market, as the average relative burden on Ukrainian entities is much heavier in comparison with other countries. However, the probability of getting the required number of signatures to the petition is extremely low. Moreover, the State Regulatory Service of Ukraine, which agrees with the petition in its conclusions, also stated that the procedure for the Resolution’s adoption did not comply with relevant regulations. Thus, the current version of the draft Resolution was not provided to the State Regulatory Service for review and approval, which means it was adopted in breach of the Law of Ukraine On Principles of State Regulatory Policy in Business Activities. Therefore, the provisions of the Resolution are rather disputable and unfavorable for both the authors of IP objects and entities, who will seek protection of their IP rights to such IP objects. However, it is difficult to predict whether the Resolution will be revoked, as no official response of the Cabinet of Ministers of Ukraine with regard to the Resolution’s disputability has appeared in public.

Veronika Kurilko, Consultant, KPMG Law Ukraine

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