Ukraine’s patent laws have a curious loophole that allow inventions to be easily and legally copied and turned into cash. This grey scheme, called “utility models,” is often used to the detriment of the real inventors and the consumers who end up buying a legal, but low quality – and often outright dangerous – product.
A utility model is a slight alteration to an existing invention. “Let’s imagine we have an invention, for example, a pen. Its technology is standard and typical. If you change the place where the button is located, you get a utility model,” explains Sergiy Grabar, marketing head of the science park of the National Technical University of Ukraine.
This style of patent registration is unique to Ukraine and can be used to copy inventions and profit from someone else’s work.
A drug producer, for example, can take 15 years to invent and test a new medicine. It costs the producer millions. To register a real patent in Ukraine, the producer spends Hr 4,000 ($500). When the patent is registered, the drug’s formula is published and becomes freely available – except certain nuances that remain a commercial secret.
A Ukrainian entrepreneur can simply add a harmless ingredient and register a utility model – a generic drug, supposedly for the same use, and with the same effects. The registration procedure costs him Hr 1,000.
Aleksandr Mamunya, a lawyer specializing in intellectual property and patent law, says there are plenty of examples on the market.
“[Ukrainian entrepreneurs] start production and the medicine will cost 10 times less, because they didn’t invest anything,” he said. Consequently, Ukrainians will buy the drug that costs less if it lists the same active ingredients. But potentially, the drug can be dangerous because proportions and technology might not be observed, and ingredients might be missing.
Mamunya says that agrichemicals are also copied frequently in the same style.
In one such case, U.S. company I.E. du Pont de Nemours sued Dnipropetrovsk-based Avrora-2 and Agrosfera for using a herbicide formula for which du Pont has a patent.
The Dnipropetrovsk formula, called Bolid, is used on corn, just like du Pont’s herbicide. The commercial court of Dnipropetrovsk on May 20 banned Bolid from sale, but the case went on to the Court of Appeals and the chemical is still widely available in Ukraine.
“It’s a huge problem,” Mamunya says. “Farmers end up poisoning the earth. Ukrainian products can’t be exported to the European countries because the pesticide concentration is too high. These products stay in Ukraine. We and our children eat them.”
Farmers don’t like discussing the issue. Vasyl Revenko, a farmer from Kirovograd Oblast, said that he had heard about such problems. “Sometimes farmers have troubles because of substances, that are either fake or low-quality,” he said.
There is a vast procedural difference between registering a utility model and getting a proper patent. A true inventor has to wait for two years for his model to be tested by specialists before they get a patent.
Also, the invention has to be new, which is not a requirement for utility models. Those who apply to register utility models only go through a formal procedure, which only takes two to three months.
“Utility models don’t go through all these circles of hell. It’s an unfair situation, isn’t it?” said Mamunya.
Lev Gluhivsky, vice president of the Ukrainian Industry Property University, the organization that issues patents in Ukraine, says utility models are easy to challenge in court.
“If someone sees his idea was copied, he can go to the court. The judge will order an examination of the utility model in question, and if the object was invented earlier by someone else, the utility model patent will be canceled,” he said.
But Mamunya says it’s easier said than done. He says it’s difficult to fight the holders of rights for utility models because judges and lawyers are dealing with the new, unknown and very intricate inventions in sectors they know little about.
“It’s difficult for judges to know the particulars of every situation. Sometimes I need to give them a lecture in court, beginning with the most basic things,” says Mamunya.
“As a result, there is a crowd of happy owners of patents for utility models. They use these papers to shield them against all authorities,” he added. “The procedure should be made more difficult. If it is longer and more expensive, most of the dishonest entrepreneurs will think twice before using this scheme.”
Kyiv Post staff writer Elena Zagrebina can be reached at [email protected]
