Despite the fact that antitrust and intellectual property laws were recently perceived as aimed at different tasks, their mutual integration occurred over time. After all, they have one goal – stimulating economic development and innovation, encouraging competition.

If antitrust legislation is aimed at preventing the emergence of monopolies and abuse of a dominant position in the market, then intellectual property legislation, on the contrary, is designed to protect the achievements of some entrepreneurs and limit others in this – that is, to help limit competition.

However, the legal protection of intellectual property is designed to stimulate innovation and economic development. Here the intersection of goals takes place, which is reflected in the antitrust laws. And the legislation in the field of intellectual property reflects rules designed to limit the monopolization of the market – patents and copyrights are limited in time, and they must meet certain criteria for being registered.

The legislation of Ukraine on the protection of economic competition is based on the norms established by the Constitution, the laws On the Protection of Economic Competition, On Protection against Unfair Competition, On the Antimonopoly Committee of Ukraine, their by-laws, the Paris Convention for the Protection of Industrial Property.

In Ukrainian legislation, economic competition is defined as “competition between business entities in order to obtain, thanks to their own achievements, advantages over other business entities, as a result of which consumers, business entities have the opportunity to choose between several sellers“.

Accordingly, actions aimed at violating these principles will be considered unfair competition – the appropriation and use of the achievements of another person and depriving consumers of the opportunity to distinguish products from one manufacturer from another.

Namely, the unlawful use of the business reputation of a business entity is possible by:

1. Use of company designations – name, commercial (company) name, trademark, advertising materials, packaging of goods and periodicals, other designations without the permission of the business entity, which earlier began to use them or similar designations in their activities.

2. Use of goods of another manufacturer – sale under its designation of goods of another manufacturer under an amended or replaced brand name without permission.

3. Copying the appearance of the product in such a way that it becomes similar to the original that can confuse the customers.

4. The creation of comparative advertising, except if the data are actually confirmed, reliable, objective and useful for informing consumers.

5. Discredit of a business entity, dissemination of misleading information – incomplete, inaccurate or false data on the origin of the goods, manufacturer, seller, manufacturing method, source and method of acquisition, etc.

6. Illegal collection, disclosure and use of trade secrets – the introduction into production or accounting when planning or carrying out economic activities without permission of information that a trade secret is.

If the abovementioned violations were identified, this is a reason to appeal to the Antimonopoly Committee of Ukraine with a statement on the protection of intellectual property rights. In order to reach a fair conclusion, the Antimonopoly Committee of Ukraine may involve experts, police officers, customs and other law enforcement officials for consideration of the case, seize or impose seizure on objects, documents or storage devices that may be evidence or source of evidence in the case.

If the business entity is found guilty of violating fair competition, in addition to the obligation to terminate the violation:

1. A fine may be imposed – up to 5% of revenue from sales of products last year. If there was no revenue – up to 170 thousand UAH.

2. The injured party in court may demand compensation for the damage caused.

3. By a court decision, goods with brand names illegally used, copies of goods may be seized from both the manufacturer and the seller.

4. At own expense to refute false, inaccurate or incomplete information.

In 2018, the Antimonopoly Committee issued 168 decisions recognizing business entities as guilty of unfair competition. In 53 cases, fines were imposed and in 115, recommendations were made to stop the violation.

The total amount of fines amounted to 24.1 million UAH.

At the same time, every 7 ruling on unfair competition was appealed in court. The vast majority of violations, almost 79%, are the dissemination of misleading information.

In 25 cases last year, the Antimonopoly Committee of Ukraine determined that one of the parties illegally used someone else’s brand names, and in 5 it discredited another business entity.

The most malicious violators of fair competition were enterprises in the agricultural sector – 44% of violators.

Below are a few examples of cases with various types of violations, the decisions of which the Antimonopoly Committee of Ukraine issued in 2018:

Type of violation Description Antimonopoly Committee decision
Misleading information dissemination 85 pharmacy chains posted on the facades of their branches the information “Social pharmacy”, “Wholesale prices”, “Economy Pharmacy”, etc. Recommendations to stop violations within two months and bring the external design of all pharmacies in accordance with the law
Misappropriation of trade secrets Before the dismissal, employees of TPK Vector-VS copied information on the complete list of suppliers and customers and concluded agreements and used this information in planning the work of Ergon Electric, the company they founded. Fine 360 thousand UAH for Ergon Electric
Achieving unlawful competitive advantages Electromotor has registered a patent for the utility model Chopper. On the basis of this patent, an application was submitted to the customs authorities to prohibit the customs clearance of “copies” of such products by the competitor Ukrferrotrade. Despite the fact that the patent was invalidated due to non-compliance with the patentability conditions (lack of novelty), Electromotor took measures to extend the registration period of the utility model in the customs registry. Fine 1,052 million UAH for Electromotor
Misuse of brand names Kyiv Margarine Plant illegally used product packaging similar to Shchedro’s product packaging. Fine 162.5 thousand UAH for Kyiv Margarine Plant
Misuse of brand names Kyiv BKK illegally used the packaging of products (the cake “Fairy Key”), similar to the design of the packaging of products Confectionery Corporation Roshen (cake “Golden Key”). At the same time, Kyiv BKK actually continued the production and sale of the “Fairy Key” cake by concluding a concession agreement with Kyivhleb. Fine 326.1 thousand UAH for Kyiv BKK Fine 219 thousand UAH for Kyivhleb
Misleading information dissemination Misuse of brand names Simferopol Wine and Cognac Factory placed “Whiskye” (“Ukrainian Whiskye”) on the label of alcoholic drinks “Jack Talker Red Level”, “Jack Talker Black Level”, “Jack Talker Blue Level” while they are not whiskey. Using without the permission of Diageo Brands B.V. external design of alcoholic beverage labels similar to Johnnie Walker labeling. Fines 445.7 thousand and 1.4 million UAH for Simferopol Wine and Cognac Factory
Misuse of brand names Simferopol Wine and Cognac Factory and Strongdrink without permission of Jack Daniel`s Properties, Inc. corporation used the design of alcohol labels “Black Jack” and “Black Jack Silver Whiskey”, similar to the label design Jack Daniel`s. Fine 4.2 million UAH for Simferopol Wine and Brandy Factory Fine 5.4 million UAH for Strongrink
Misleading Information Dissemination Kotnar-M posted false information on its website that the O’DAILYS Original liqueur is an Irish liqueur. He placed the designations “Choсolate”, “Hazelnut” and “Coffee” on the labels in the names of liquors “O’DAILYS Choсolate”, “O’DAILYS Hazelnut” and “O’DAILYS Coffee”, while such components are absent in the liquor. Fine 3.35 million UAH for Kotnar-M

Elena Polosmak, Managing partner of Crane IP Law Firm