Reform of the intellectual property system in the defense sector of Ukraine is a prerequisite for attracting international financing and development of the sector - Oleksandr Kubrakov

Ukraine has launched a reform of the intellectual property system in the defense sector, which is to be submitted to the Parliament next week in the form of a draft law. 

Currently, in the area of technology development and innovation in the defense sector, the issue of intellectual property rights is not only not regulated, but sometimes not formulated at all. This blocks the boom of Ukrainian defense technologies, hinders investment attraction, and is an obstacle to the entry of Ukrainian innovative defense products into international markets. 

These and other issues were discussed on February 13 at the conference “Reform of the Intellectual Property System in the Defense Sector: First Results and Vision for the Future” organized by the Ministry of Defense of Ukraine in cooperation with the independent think tank We Build Ukraine. 

During the event, the first results of the intellectual property reform were presented - the developments that will be submitted to the Verkhovna Rada in the form of a draft law in the coming days, as well as a roadmap for future reform. In addition, the participants discussed the state of the intellectual property system in the defense sector, the conditions for inventive and innovative work in the Armed Forces, and the need to create a single window for inventors and remuneration for them. The participants were also presented with the results of a study of the state of intellectual property in the Armed Forces of Ukraine and intellectual property practices in Ukraine, the United States and other countries.

According to Ivan Havryliuk, First Deputy Minister of Defense of Ukraine, despite the fact that the war in Ukraine began in 2014, the development of technologies and innovations in the defense sector was at a standstill at the time of the full-scale invasion. At the same time, it became clear from the first weeks of the war that it would be difficult to create parity on the battlefield without Ukraine's own innovative solutions in the defense sector. 

“This is what always happens during war - you look for new opportunities to win. The lack of a regulated system of intellectual property management in the Ministry of Defense has become an obstacle to development. The reform is needed to speed up and deepen defense cooperation with partners, as well as to prevent situations where some of our inventions are used by other people for personal purposes rather than defense. So this needs to be corrected,” he said.

At the same time, Ivan Havryliuk emphasized that the need to introduce an effective intellectual property system in the defense sector is important both in the context of countering the enemy and entering the global market. He noted that Ukraine is currently developing very rapidly in the defense sector. Although the capacities of some areas still do not meet the needs of the front line, the capacities of others, including unmanned systems, are in surplus. Other issues that need to be regulated in order to enter foreign markets include intellectual property and integrated management of the Defense Ministry's innovation portfolio.

According to Oleksandr Kubrakov, Advisor to the Minister of Defense and Chairman of the Supervisory Board of the We Build Ukraine think tank, at the end of the third year of the great war, Ukraine is finally reaching the point where we are creating joint ventures-when foreign companies' production facilities appear in Ukraine, and ours are making joint ventures with foreign companies, etc. Therefore, the issue of the availability and protection of intellectual property rights is being raised more and more often. Moreover, the enforcement of intellectual property rights is a key issue for many governments, as it affects the financing of development. 

“Due to the lack of IP protection, businesses suffer, as they are limited in production, innovation, and international cooperation. This leads to a significant number of patents for domestic military developments being registered abroad. Instead of contributing to the development of our economy and strengthening national security, Ukrainian technologies are used by other countries that offer more favorable conditions for intellectual property protection. And then we buy them in the form of foreign developments at 40-70% more expensive,” he emphasized. 

Ilya Kostin, Head of the Intellectual Property Department of the Main Department of Military Justice, Senior Lieutenant of Justice, said that until now there was no regulatory framework covering all aspects of intellectual property practice in Ukraine, so they had to work from scratch. But as of today, the draft law that will launch the reform in this area is ready. 

“We worked in a very tight timeframe, as these changes were needed yesterday. Therefore, we plan to reach the first results of the reform in two months. We are moving in several directions in parallel. And we plan that our directions will start working synchronously. There are four directions in total.  The first area is the registration of the relevant draft law. We are preparing to submit it to the Parliament next week. Therefore, the Ministry of Defense has fulfilled its task and now the ball is in the Parliament's court. The second direction,” he emphasized.

Olena Shulyak, head of the Verkhovna Rada Committee on the Organization of State Power, Local Self-Government, Regional Development and Urban Planning, announced her intention to support the draft law and emphasized the importance of parliamentarians' support. According to the MP, the situation that has arisen due to the lack of intellectual property rights in the Armed Forces is in some respects similar to the course of Ukraine's recovery. In particular, in terms of observance of property rights to project documentation necessary for the reconstruction or restoration of a facility destroyed during the armed aggression of the Russian Federation. 

“There are also problems and obstacles in the field of restoration at the legislative level related to intellectual property management. Every facility that is being restored either with public funds or with funds from international partners goes through a design phase, and the project documentation has an owner - of property and non-property rights. It's clear that the author retains the right to non-property rights. But the main problems we have are with property rights to project documentation if the owner is the state or local authorities,” Shulyak said. 

She explained that if the contract does not clearly state what happens to the property rights to the project documentation, then these property rights are disposed of by the author. Therefore, if the state or municipality wants to make any changes to these documents, it is necessary to go through the procedures with the owner of the property rights - to find him, obtain consent, pay additional funds, etc. And this process can be quite complicated.

“The author may be at the front, may change his or her position on whether he or she will continue his or her work or not. Thus, the state loses, the local government loses, and as a result, we all lose. Therefore, I consider the initiative to regulate property rights, as well as a similar approach proposed today by my colleagues from the Ministry of Defense, to be the most appropriate and effective,” she summarized.