Luxury Law

1.1. Sources of law

In Ukraine, trademarks are primarily governed by a combination of national laws and international treaties.

Legislation. The primary domestic law governing trademarks in Ukraine is the Law of Ukraine on the Protection of Rights to Trademarks. The Civil Code of Ukraine also contains provisions relating to trademarks. In addition, there are several subordinate Rules and Instructions relating to the trademark registration process in Ukraine.

International Treaties. The Paris Convention for the Protection of Industrial Property provides international standards for the protection of trademarks. Ukraine is also a member of the Madrid System (Madrid Agreement and Protocol), which allows trademark owners to seek protection in multiple countries through a single application. In addition, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) includes provisions related to trademark protection.

The EU–Ukraine Association Agreement primarily covers broader aspects of political, economic, and trade cooperation between the European Union and Ukraine but it does also include provisions related to intellectual property rights, including trademarks.

There is no rule of binding court precedents in Ukraine. However, court decisions play a significant role in interpreting and applying trademark legislation in Ukraine, in particular by clarifying legal aspects related to trademark protection and enforcement.

Under Ukrainian law, trademark rights are exclusively acquired through formal registration, and the principle of use is not recognized as a source of trademark rights.

Non-registered trademarks are not recognized in Ukraine. However, well-known trademarks can receive protection under Article 6bis of the Paris Convention.

1.2. Substantive law

The law of Ukraine does not distinguish between famous trademarks or trademarks with a reputation. At the same time, the law protects well-known trademarks provided that such trademarks are officially recognized as such by the Ukrainian Patent and Trademark Office (UA PTO) Chamber of Appeals or the court.

Trademarks belonging to the “luxury industry” do not enjoy a broader range of protection from a legal standpoint.

1.3. Enforcement

In determining whether a trademark is well-known in Ukraine, the following factors may be considered:

• The degree of fame or recognition of the trademark in the relevant sector of society.

• The duration, scope and geographical area of any use and promotion of the trademark.

• The duration and geographical area of any registrations of the trademark.

• Evidence of successful enforcement of trademark rights.

• The value associated with the trademark.

The evidence must be submitted in written form along with an application for the recognition of the trademark as well-known. Affidavits and expert evidence are welcome and may be attached as annexes to the application. Oral testimony is required during hearings before the UA PTO Chamber of Appeals or the court.

A trademark can be enforced against domain names, trade names and other distinctive signs. The business activity of the entity with a conflicting trade name must be considered to determine if the trade name is used for goods or services that are identical or similar to those covered by the registered trademark being enforced.

Owners can enforce their rights against unauthorized trademark use in social media, provided that the use constitutes trademark infringement, in particular, when a third party uses a trademark without authorization in a way that creates a likelihood of confusion among consumers regarding the source or origin of goods or services. This includes using a similar or identical trademark in social media profiles, posts, advertisements, or promotions.

The use of a trademark in comparative advertising is permitted exclusively to distinguish goods and services and objectively emphasize their differences, provided that such use is carried out in accordance with fair business practice and in compliance with unfair competition provisions.

The trademark laws of Ukraine do not include a specific provision that allows for limitations on trademark rights specifically for the use of a trademark in parody. In practice, the conflict may arise when a trademark is used in parody primarily for commercial purposes or when the use of the trademark in parody unjustly benefits from the trademark’s reputation or creates a likelihood of consumer confusion regarding its origin.

Trademark infringement and unfair competition are distinct legal concepts, and they may overlap in cases where the unauthorized use of a trademark also involves unfair business practices that harm consumers. The choice of whether to pursue parallel or separate proceedings may depend on the specific circumstances of the case, the available legal remedies, and the strategic goals of the trademark owner.

The most common issues luxury brands face in expanding and protecting their trademark rights include counterfeiting, online infringement, and grey market sales.

2.1. Sources of law

In Ukraine, copyright is primarily governed by a combination of national laws and international treaties.

Legislation. The primary domestic law governing copyright in Ukraine is the Law of Ukraine on Copyright and Related Rights. Certain provisions of the Civil Code of Ukraine also relate to copyright and, in addition, there are several Rules and Instructions relating to the copyright registration procedure. 

Relevant International Treaties include the Berne Convention for the Protection of Literary and Artistic Works (which sets international standards for copyright protection), WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty.

Although the EU–Ukraine Association Agreement primarily covers broader aspects of political, economic, and trade cooperation between the European Union and Ukraine, it does include provisions related to copyright protection.

Court decisions have no precedent force in Ukraine, but play a significant role in interpreting and applying copyright legislation in Ukraine.

International agreements and treaties to which Ukraine is a party take precedence over domestic laws and regulations.

2.2. Substantive law

The types of works that are copyrightable under Ukraine’s copyright law include:

• literary works;

• speeches, lectures, sermons and other oral works;

• musical works with and without lyrics;

• dramatic, musical-dramatic works, pantomimes, music and light shows, circus performances, choreographic and other works created for stage performance, and their performances;

• theatrical performances, stage adaptations of works, and adaptations of intangible cultural heritage suitable for stage performance;

• audiovisual works;

• texts of translations for dubbing (including duplication), subtitling of audiovisual works in other languages;

• works of fine arts;

• photographic works;

• works of applied art;

• works of architecture, urban planning, gardening and landscape art;

• works of artistic design;

• derivative works;

• collections of works, collections of intangible cultural heritage treatments, encyclopaedias and anthologies, collections of ordinary data, and other composite works, provided that they are the result of creative activity in selecting or organizing the content;

• illustrations, maps, plans, drawings, sketches, and plastic works relating to geography, geology, topography, engineering, construction and other fields of activity;

• computer programs;

• databases (compilations of data), if they are the result of intellectual activity by selection or arrangement of their components; and

• other works.

As the law includes other works in the list, the law provides for an open list of copyrightable works.

Objects of industrial, fashion or accessory design are copyrightable if they meet the eligibility criteria. The design must be original, meaning it reflects the author’s creative effort and is not a mere copy of existing designs. Moreover, it should possess artistic or creative elements beyond purely functional aspects. The design must be fixed in a tangible medium, which could include sketches, drawings, plans, or other tangible representations of the design.

The copyright holder has the right to use the work in any way, as well as the exclusive right to authorize or prohibit the use of the work by other persons. The copyright legislation of Ukraine also covers moral rights, namely:

• the right to claim recognition of authorship;

• the right to prohibit the mention of the author’s name;

• the right to choose a pseudonym;

• the right to demand the preservation of the integrity of the work, to oppose any distortion or other alteration of the work without the author’s consent;

• the right to name the work or leave it untitled; and

• the right to dedicate a work to a person (persons), event or date.

Employers can secure rights to works from employees through employment contracts. Employers may also use work for hire agreements to clarify that works created by employees during employment are considered owned by the employer.

Rights to works by consultants can be obtained through consulting or service agreements. These contracts should outline IP ownership and clarify whether the entity or the consultant retains rights to the created works.

Rights in works by suppliers can be acquired by including relevant clauses in supply contracts. These clauses should specify ownership and any rights or licenses granted to the legal entity.

A copyright assignment agreement must be made in writing and must include the following terms to be valid in Ukraine: the subject of the contract, methods of using the work, the territory to which the rights apply, the amount and procedure for payment of the author’s remuneration, the duration of the contract, as well as other terms agreed upon by the parties.

Personal moral rights belong exclusively to the author and cannot be transferred (alienated) to others, nor do they pass through inheritance.

The term of validity of intellectual property rights to a work expires after 70 years following the author’s death. The author’s moral rights are protected in perpetuity.

2.3. Enforcement

There is no requirement for a copyright registration to enforce a copyright or to obtain damages or other relief. Similarly, there are no copyright deposit or copyright notice requirements in Ukraine.

Objects of industrial design, which primarily serve functional or utilitarian purposes, are generally not protected by copyright in Ukraine.

To establish copyright infringement, it is generally sufficient to demonstrate that there is substantial similarity between the allegedly infringing work and the original copyrighted work. This means that the infringing work is substantially similar to the protected work in terms of its expressive elements, such as its structure, characters, themes, or other creative elements.

In general, copyright can be enforced against any unauthorized use of the copyrighted work in other intellectual property objects or their components, including trademarks, designs, patents and other IP rights. 

Copyright can be enforced against its unauthorized use in social media, such as uploading, sharing, distributing, or otherwise using copyrighted content without permission of the copyright holder.

Copyright can also be enforced against its unauthorized use in comparative advertising. The conditions for such enforcement may include the use of copyrighted work without permission for commercial purposes.

The unauthorized use of copyrighted work in parody is considered fair use if the author’s name and the source of the borrowed material are mentioned. 

While not explicitly defined as “fair use” or “fair dealing”, the use of copyrighted works for the purposes of parody, potpourri, or caricature are permitted.

An otherwise valid copyright can be deemed unenforceable due to actions by the copyright holder aimed at harming another person or leading to the abuse of the law. The general limitation period for copyright infringement claims is three years from the date when the copyright holder became aware or should have become aware of the infringement.

In general, there are no significant or specific issues that luxury brands face in expanding and protecting their rights in copyright.

3.1. Sources of law

Legislation. The primary domestic law governing industrial designs in Ukraine is the Law of Ukraine on the Protection of Industrial Designs. Certain provisions of the Civil Code of Ukraine also relate to industrial designs. There are also specific Rules and Instructions related to the registration and protection of industrial designs in Ukraine.

Relevant International Treaties include the Hague Agreement Concerning the International Registration of Industrial Designs and the EU–Ukraine Association Agreement, which includes provisions related to design protection. 

While court decisions in Ukraine do not have precedent force, they play a significant role in interpreting and applying industrial design legislation in the country.

International agreements and treaties to which Ukraine is a party take precedence over domestic laws and regulations.

3.2. Substantive law

Under Ukraine’s law, both registered and unregistered designs are protectable. An industrial design may be the appearance of a product or its part, which is determined, in particular, by the lines, contours, color, shape, texture and/or material of the product and/or its decoration.

To obtain a valid registered design right, the design must be novel and must have individual character, meaning it creates a different overall impression on an informed user compared to any prior design. For unregistered design rights, the owner must create a design that meets the same novelty and individual character criteria but does not require formal registration.

A legal entity can acquire the rights in the design created by its employee when such design was created in connection with the performance of official duties of the employee or on behalf of the employer. In this case, the employer must enter into a written agreement with the employee on the amount and terms of remuneration payment in accordance with the economic value of the industrial design. The rights in the designs created by consultants or suppliers may be assigned based on a design assignment agreement.

To be valid, a design assignment agreement must be concluded in writing and signed by the parties.

In the assignment agreement, it is essential to explicitly state that the rights to the design are being assigned to the company. This eliminates any ambiguity about who owns the design and prevents disputes in the future.

Under Ukraine’s law, the author of a design (the designer) cannot transfer or waive their moral rights.

The registered design protection lasts five years from the application date and may be extended at the owner’s request for one or more five-year terms. The total term of protection may not exceed 25 years from the date of application.

The legal protection of an unregistered design is three years from the date when it was made available to the public in Ukraine.

3.3. New technologies

Non-fungible tokens (NFTs) have had no significant impact on the protection of the rights of luxury brands and goods in Ukraine so far.

The rise of sophisticated artificial intelligence (AI) has, to date, had little impact on the luxury market in Ukraine. However, AI has had an impact on the copyright legislation of Ukraine more generally. In particular, the new version of the copyright law introduced the concept of “non-original objects generated by a computer program”. Such objects are protected for 25 years under the so-called sui generis right.

Cryptocurrencies are utilized in diverse sectors in Ukraine for various purposes. In response, Ukrainian authorities have expressed intentions to embrace the EU’s Markets in Crypto-Assets regulation. This regulatory framework is designed to safeguard investors, prevent the improper use of crypto assets and maintain financial stability.

3.4. Enforcement

Design infringement is assessed based on the criteria of novelty and individual character, both for registered and unregistered designs. Design infringement does not necessarily require actual copying of the design. Instead, what matters is whether the design in question is substantially similar to a prior design. Substantial similarity implies that the designs share significant visual and aesthetic similarities to the extent that they would be perceived as the same or nearly the same by an informed user.

In general, design can be enforced against its unauthorized use in other intellectual property objects or their components, including trademarks, copyrights, patents and other IP rights. 

A design can be enforced against its unauthorized use in social media when such media are utilized for the sale of infringing products produced using the design.

While Ukrainian legislation does not specifically address comparative advertising for designs, it is generally permissible if the comparison does not contradict trade and other fair business practices and does not harm the normal use of the design.

The use of the design in parody is not regulated by Ukraine’s laws. Therefore, it is unlikely that a design can be enforced against its use in parody.

If an alleged infringer can demonstrate that they were using a design before the design owner’s registration or acquisition of rights, they may have a defence based on prior use. If the design owner’s registration is found to be invalid due to issues like lack of novelty or individual character, this could also be a defence against design infringement claims. Furthermore, it is not deemed an infringement when a design is used in the construction or operation of a vehicle of a foreign state that is temporarily or accidentally located in the waters, airspace or territory of Ukraine.

An otherwise valid registered/unregistered design can be deemed unenforceable due to actions by the design owner aimed at harming another person or leading to the abuse of the law. The general limitation period for design infringement claims is three years from the date when the design owner became aware or should have become aware of the infringement.

Design infringement and copyright infringement and/or unfair competition are distinct legal concepts, and they may overlap in cases where the unauthorized use of a design also involves copyright infringement and unfair business practices that harm consumers. The choice of whether to pursue parallel or separate proceedings may depend on the specific circumstances of the case, the available legal remedies, and the strategic goals of the design owner.

In general, there are no significant issues that luxury brands face in expanding and protecting their design rights.

4.1. Sources of law

Ukrainian legislation provides legal protection to the name of a person and to some extent also to the image of a person.

Article 296 of the Civil Code of Ukraine states that the use of the name of a natural person in literary and other works, except in works of a documentary nature, as a character is allowed only with their consent.

Article 8 of the Law of Ukraine “On Advertising” states that it is prohibited to use the name or image of a natural person in advertising (that is, for commercial purposes) without their written consent. Also, under Article 6 of the Trademark Law, it is prohibited to register a person’s name/image as a TM without that person’s consent.

Any Ukrainian company operating on the territories of states which have adopted the GDPR should abide by the latter’s provisions. Also, to fulfill the requirements for the harmonization of the legislation of Ukraine with the legislation of the EU, Ukraine is amending the Law “On the Protection of Personal Data” the main purpose of which is harmonization with the provisions of the Regulation of the European Parliament and of the Council (EU) 2016/679 of April 27, 2016. This strengthens the protection of personal data and places greater compliance burdens and financial risks regarding compliance on luxury brands.

4.2. Substantive law

As the right of publicity is not provided by Ukrainian legislation per se, the right to use a name will be considered. 

No other conditions are posed for a person to protect their rights.

An individual cannot assign their right of publicity in whole or in part and they cannot license their right of publicity.

In case a person dies, their name may be used only with the consent of their children, widow/widower, or — if there are none — parents, brothers and sisters.

In the event the heirs have an independent right over the deceased individual’s name, they can conclude an agreement which clearly states that the name can be used in a specified IP object.

The right of publicity does not have an expiration date; it is only limited by the circle of the living relatives specified in the law. This right does not pass to the heirs of the specified relatives.

4.3. Enforcement

The name and image of a person are enforced against commercial use (e.g. for publishing the literary work, using as a TM or as advertising). 

Ukrainian legislation does not specify conditions which are necessary to prove that an individual’s name, image, likeness, or other unequivocal aspects of one’s identity have a commercial value to obtain an injunction or other remedies for unauthorized use.

If a person’s name or image has been registered as a trademark, a person may file a trademark invalidation claim based on non-compliance with the conditions for providing legal protection. If a name/image has been used in advertising, a person may turn to the appropriate authorities with a complaint or to file a lawsuit. If a person’s name was used in a work, a person may turn to the court.

A clear and concrete agreement should be concluded before any use of a person’s name and/or image.

Due to the globalization of fakes, counterfeiters take advantage of global supply chains, making it difficult to trace the origins of counterfeit goods. Furthermore, advances in technology, such as 3D printing, have made it easier for counterfeiters to replicate products with high precision.

Product placement is permitted in Ukraine. There are some limits to be observed in relation to product placement. Product placement of gambling is prohibited. Product placement is also prohibited in:

• audiovisual media, on video-sharing platforms and on information-sharing platforms regarding tobacco products; 

• medicinal products (the sale (release) of which is carried out on the basis of a doctor’s prescription and/or prohibited for advertising); and 

• other goods where the advertising, production or distribution of which is prohibited by law.

When a party fails to perform an agreement, the brand owner may seek damages as a remedy. Damages could cover financial losses directly resulting from the breach, such as lost profits or additional costs incurred as a result of the other party’s failure to perform the agreement. The brand owner may also seek a preliminary injunction as a remedy, namely a court order to stop the communication.

In general, there are no unique concerns for product placement faced by luxury brands. 

The concept of publicity rights for legal entities or corporations is not well-established. However, legal entities have the right to the inviolability of their business reputation. Legal entities or corporations also enjoy the right to confidentiality.

There are no specific conditions that legal entities must satisfy to enjoy the right of publicity/privacy. The respective rights arise by default, provided that a legal entity or corporation is properly registered in Ukraine.

In general, there have been no significant legislative or litigation challenges related to environmental issues or issues of diversity and inclusion in Ukraine.

Ukraine adopted the National Strategy for Creating a Barrier-Free Space in Ukraine until 2030 and approved an action plan for its implementation. In addition, according to the Law of Ukraine “On the Fundamentals of Social Protection of Persons with Disabilities”, enterprises are obliged to create conditions for unimpeded access of persons with disabilities (including persons with disabilities who use mobility devices and guide dogs) to physical facilities.

Specific clauses aimed at protecting the corporate image or reputation of one of the parties may be included in the agreements. Such contractual provisions may prohibit parties from making negative statements or taking actions that could harm the reputation or image of the other party.

It is generally possible to include a clause prohibiting the sale of products to re-sellers whose image falls below a certain defined standard. Prohibiting sales to certain re-sellers should not be anti-competitive or overly restrictive.

Prohibitions on selling below a certain price or outside specific time periods should also be drafted in a manner that does not violate competition laws or unduly restrict trade. In particular, vertical agreements or price-fixing clauses may be the subject of investigations by the competition authorities.

Including a clause that prohibits the use of non-original, but otherwise legitimate, spare parts and components is typically enforceable in contracts.

Luxury brands often have specific concerns in the secondary market, such as resale and third-party providers like repair and reconditioning services. Moreover, luxury brands may be particularly concerned about the presence of counterfeit products in the secondary market.

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