Concept Note by pengxiang


                     The State of Ukrainian National Legislation: Opportunities to use TRIPS Flexibilities


Ukraine has one of the most severe and rapidly growing HIV epidemics in Europe2. Currently more than 440,000 people
in the country are living with HIV, among them 190,000 women.3 The Ukrainian government indicates that in 2009
19,840 new HIV infections were registered, which was more than UNAIDS’ estimate. In 2009, 2, 591 persons have died
from HIV-related causes. The number of children born to HIV-positive mothers was 3,686.4 These are only official
statistics of registered cases. In reality, considerably more persons are affected.5 Currently the country holds the 21st
place in number of people living with HIV (between Cote d’Ivoire and Sudan) and 23rd place in number of deaths related
to HIV/AIDS (between Ghana and Lesotho).6 According to a World Bank prognosis, 820, 400 people may be infected
with HIV in Ukraine by 2014, reaching a prevalence of 3.5% among the adult population. The Report indicates that,
despite the pessimistic prognosis, the epidemic is still at the early stage, and timely, effective interventions, including the
availability of antiretroviral treatment, could halt and reverse it and reduce the epidemic’s impact on socioeconomic
development. 7

The Treatment Gap in Ukraine

Ukraine has achieved significant progress in its national response to the epidemic, particularly in the fields of prevention
services and substitution therapy for injecting drug users. A National Strategy for Overcoming HIV/AIDS was adopted,
implementing the government’s Program for Prevention, Treatment, Care and Support for HIV-Infected People and AIDS
Patients (2009-2013). New testing facilities have opened.8 The Ukrainian HIV/AIDS Alliance and the All-Ukrainian
Network of People Living with HIV/AIDS signed a five-year grant agreement with the Global Fund in 2007 that focused
on access to antiretroviral therapy (ART).9 However, according to the National Report on Monitoring Progress towards
the UNGASS Declaration of Commitment on HIV/AIDS, despite recent improvements in access to ART in Ukraine, the
expansion rates are still low; in 2010 at least 52 percent of the persons in need of ART are not receiving it.10 In addition,
the World Health Organization revised its international treatment guidelines in 2009. The 2006 guidelines recommended
that treatment starts at a CD4 count of 200 cells/mm3. The current ones recommend that treatment begins at - 350

  Background document prepared by Boyan Konstantinov for the seminar “Intellectual Property Rights and Access to Essential Medicines in
Ukraine: Challenges and Opportunities in Free Trade Agreement Negotiations, Multilateral Instruments and National Laws”, 21-22 June, Kiev,
Ukraine. Ukrainian Legislation in English and Russian used for the research was accessed from the websites of the Ukrainian State Department of
Intellectual Property, State Pharmacological Center, Customs Office, Ministry of Health, Ministry of Interior, as well as WIPO. The analytical report
“Influence of Legal Protection of Intellectual Property on Access to Medicinal Products” prepared by Anastasia Mindrul of the Intellectual Property
Institute with the Ukrainian Academy of Legal Sciences was extensively used in this research.
  USAID, HIV/AIDS Profile Ukraine, 2008
  UNAIDS country data on Ukraine
  S.O. Cherenyko, Current Problems with ARV Preparations and Potential Risks for the National Programs, Arising from the New Regulations in
Intellectual Property Legislation (presentation, delivered at the presentation at the Government Roundtable “Intellectual property rights and
Access to Essential Medicines in Ukraine”, Kiev, April, 2010).
 It is universally recognized that official data do not reflect the real scale of the epidemics in Ukraine and considerably larger numbers of Ukrainians
are affected.
  National Report on Monitoring Progress towards the UNGASS Declaration of Commitment on HIV/AIDS, Kiev 2010, p. 9
  University of California San Francisco HIV web resource InSite, quoting the U.S. Central Intelligence Agency Fact Book
  The World Bank, ‘Socioeconomic Impact of HIV/AIDS in Ukraine’, 2006, Executive Summary
  See UNGASS report, at 12.
  UNAIDS Country Situation, Ukraine, July 2008.
   See UNGASS report, at 14.
cells/mm3 or less. This means that persons who, under the previous guidelines, were not considered to be in need of ART
now require it and the number of persons in need of treatment has increased significantly.11

Antiretroviral therapy is increasingly recognized also as an HIV prevention method that reduces the chances of
transmission (treatment as prevention). ARV treatment cannot and does not eliminate the risk of transmission
completely. However, it is established that ARV treatment significantly reduces the risk of transmitting HIV from a
positive pregnant woman to her unborn baby. It is also used as a post-exposure prophylaxis, to prevent HIV infection
from being established in someone who has recently been exposed to the virus - for example a healthcare worker who
has received a cut, or a needle injury.12 A very recent study, carried out with sero-discordant couples from Africa showed
a 92% difference in preventing new infections when people are treated with ARVs as opposed to no treatment.13

The UNAIDS chart for Ukraine shows that antiretroviral therapy remains the component where the achievements are
considerably behind the set targets (See Figure 1).

                          Figure 1 (Source: UNAIDS)

In Ukraine, since 2008, despite the increase in funding from international and national sources, there has been a
funding shortage for national treatment program activities. The shortage was 47 % for 2008-2009, with projected
shortfall of 48 % for 2010.14 The treatment gap is further enhanced by the global economic downturn which has
impacted Ukraine. While most countries have not shown declines in their pharmaceutical consumption, Ukraine has
experienced substantial declines in volume and significant growth in expenditures for pharmaceuticals for the last
three quarters of 2009, and this includes ARVs.15

Patents, Cost of Medicines and Incorporation of the TRIPS Public Health Flexibilities

The cost of treatment, particularly for medicines still under patent, remains a major barrier to access globally. In
conditions of an economic downturn, the already insufficient existing ARV coverage rates are even more difficult to
sustain. Lower prices are essential if governments and donors are to meet the lifelong commitment to keeping patients
on antiretroviral therapy, and ensure the sustainability of treatment programmes as the number of people in need of

   WHO, ‘Priority interventions: HIV/AIDS Prevention, Treatment and Care in the Health Sector’, 2009
   See AVERT, HIV Treatment as Prevention,
    See Francois Dabis, Marie-Louise Newell, Bernard Hirschel, ‘HIV Drugs for Treatment, and for Prevention, The Lancet, Early Online Publication,
27 May 2010,
   Ibid, at 45
   IMS Health Q4 2009 Update, ‘Tracking the Effect of the Economic Crisis on Pharmaceutical Consumption, Expenditures and Unit Prices’, World
Health Organization, 2010
treatment grows.16 Reducing the cost of ART and providing access to affordable ARVs is crucial for adequately addressing
the treatment gap in Ukraine.

In most cases, the generic versions of medicines are cheaper, or even considerably cheaper compared to the patented
versions of the originator companies (“brand” medicines). This is especially valid for ARVs, where also the costs per
patient per year are substantial.17 Sveltlana Cherenyko, Head of the Committee on National Committee on AIDS,
Tuberculosis and Other Socially Dangerous Diseases with the Ukrainian Ministry of Health has reported on the price
comparison of generic and brand antiretrovirals which are summarized in the table below (see Figure 2):18

                                2009 Comparative Prices of Antiretroviral Pharmaceuticals
                               Name of ARV        Brand            Generic      Difference
                                                  Price            Price        (times)
                               AZT+3TC            56.2             1.3          43.2
                               EFV 600 mg         128.5            2.3          55.8
                               EFV 600 mg*        6.95             2.3          3
                               3TC                29.8             0.37         80.5
                               NVP                6.9              0.44         15.6
                               LPV/rtv*           5.09             2.6          2
                               TDF+FTC            12.87            2.6          5
                               TDF*               8.02             2.2          3.6
                               TDF+FTC+FV         128.3            5.2          25
                               Note:* signifies special prices for Ukraine
                             Figure 2 (Source: Sveltana Cherenyko, Ministry of Health, Ukraine)

All member states of the World Trade Organization, except for least-developed countries, have to provide opportunities
for patent protection of medicines in their national laws, as this is required by the Agreement on Trade-related Aspects
of Intellectual Property rights (TRIPS) which is part of the WTO law.19 However, TRIPS allows countries to retain
flexibilities and safeguards, which enable them to apply stricter regulations regarding patentability, issue compulsory
licenses and government use orders, use parallel importation, apply general exceptions, including regulatory or
experimental use exceptions, make use of transitional arrangements, etc. These important flexibilities are TRIPS-
consistent and do not violate the WTO law. In fact, they have been reaffirmed by the Doha Declaration on TRIPS and
Public Health.20 If effectively utilized, they should enable countries with economies in transition to achieve a balance
between intellectual property protection and specific developmental priorities, including the attainment of national
public health objectives.

As the TRIPS Agreement sets minimum standards, countries are free to, and sometimes choose to provide intellectual
property protection that exceeds the minimum standards of the TRIPS Agreement and provide for stricter protection of
intellectual property rights, including stricter patent protection of medicines. They are known as “TRIPS-plus standards”.
They can include patenting of new uses of known substances, patent extensions, supplementary protection certificates
and clinical data exclusivity provisions, waiving or limiting the right to issue compulsory licenses, restricting parallel
import, imposing stricter enforcement measures and measures at the border than the ones foreseen in the TRIPS
Agreement, imposing TRIPS-plus criminal sanctions etc. These standards are not required by WTO law.

   The number of people who need HIV treatment globally is projected to increase from approximately 11 million in 2007 to over 12 million in 2012
derived using Spectrum package using data in the 2008 Report on the Global AIDS Epidemic UNAIDS, Geneva)
   See the comparison made by the international HIV and AIDS Charity AVERT at See also WHO Treatment
White Paper (draft of 16 December 2009) at , 6.
   See Cherenyko, at slide 11.
   WTO Agreement on Trade-related Aspects of Intellectual Property Rights
   Doha Declaration on the TRIPS Agreement and Public Health
Ukraine has introduced some TRIPS-plus standards. Before the country joined the World Trade Organization on 16 May,
2008 some national laws, most notably the Law on Protection of the Rights on Inventions and Utility Models and the
Law on Pharmaceutical (Medical) Products were revised.21 Revised were also the Ukrainian Criminal Code and Customs
Code and other laws and by-laws (“polozhenia”). The country adopted numerous “TRIPS-plus” provisions. The table
below summarizes some of the most important of them. (See Figure 2):

Figure                                  Yes (Article 6, Section 2 Law on Protection of the Rights on Inventions and Utility Models) of new        2
            Patenting of New Uses
                                        use of both known products and processes.
                                        Article 6, Section 4 creates an opportunity for circumventing the “inventive step” requirement
            Patentability Criteria
                                        and getting, faster and easier, a ten-year utility model patent for medicines.
                                        20 years for inventions, 10 for utility models. Patents of medicines (no matter which) can be
            Duration of Patents
                                        extended up to 5 years.
                                        Allowed only after patent is granted, only before courts (Article 19 and following). No power of
            Patent Opposition
                                        State Department on IPR to declare a patent invalid.
                                        Unclear regulations. Article 28 provides for exclusive rights of patent holder to use the patent and
            Exhaustion Regime           defines that import is consider “use”. Article 31, Section 3 provides that if the product is
            (Parallel Imports)          manufactured by the patent holder elsewhere and imported by license this does not infringe the
                                        Yes, Article 30, Section 3, but TRIPS plus. (Prerequisite for an unjustified denial of a license by the
            Compulsory Licensing        patent holder; predominantly for the domestic market; CL ceases when the circumstances stop
                                        Yes, in conditions of force majeure (Article 31, Section 2) including import of unregistered
            Government Use
                                        medicines (Article 17 Law on Medical Products) by the Health Ministry.
                                        Non-Commercial Purposes (incl. Individual Use), Research and Science Experiments, Prior Use.
                                        Unclear whether Bolar Provision is considered.
                                        Yes, five years, regardless of whether patent-protected. Administrative and criminal sanctions
            Clinical Data Exclusivity
                                        (Article 9, Law on Medical Products).
            Measures at the Border      Yes, Chapter 45 of Ukraine’s Customs Code.
                                        Yes, Article 177, “Violation of Industrial Property Rights” of Ukraine’s Criminal Code. The text is
                                        separate from criminal sanctions for copyright and trademark violation. It only mentions “illegal
            Criminal Sanctions
                                        use”. Article 177 has an incriminating minimum – the monetary value of the object of the crime
                                        has to be at least 100 minimal wages (about USD 11,500).
            Registration                Article 9, Law on Medical Products: Authorities can deny registration if it would result in
            Restrictions                violation of a patent.
(Source: Ukrainian Law, Anastasia Mindrul, Ukrainian Intellectual Property Institute)

Regardless of the adoption of TRIPS plus standards for IP protection, Ukraine has retained some of these flexibilities,
such as compulsory licensing, licenses for government use and exceptions for non-commercial purposes. However,
until this moment Ukraine has not used any of these flexibilities to reduce medicine prices.

The access of more affordable generics to the market may be further hampered by the intellectual property protection
requirements from Ukraine in connection with the negotiations of the free trade agreement with the European Union
for which the EU and Ukraine started the negotiations in February 2008. In November 2009, Ukraine and the EU
negotiated some of the provisions of the chapter on intellectual property rights, which the Joint Progress Report
indicates as “close to provisional completion”.22 The draft text of the chapter is not available to the general public but
the Joint Progress Report and the EU-Ukraine Association Agenda, adopted in November 2009, provide information on
the IP priorities in the negotiation process. They are summarized in the table below (Figure 3):

Directive                  Introduces 11-year DE, as per the formula “8+2+1”. TRIPS plus market protection for brand medicines

   In fact, countries do not have to revise their national IP laws before, or even during WTO accession - but most countries do so because of
pressure during the pre-accession negotiations. See Frederick M. Abbott, Carlos M. Correa, ‘World Trade Organization Accession Agreements:
Intellectual Property Issues’, April 2007
   Third Joint Progress Report on the EU-Ukraine Association Agreement
2004/27/EC             by preventing authorities from assessing applications for generics during exclusivity period. More than
(Data Exclusivity-     doubles currently existing DE period in Ukraine. Already evidence that DE is actively used in Ukraine to
DE)                                                          23
                       prevent the registration of generics.
Directive              TRIPS plus enforcement standards incl. seizures, injunctions, damages, costs, censoring by the ECJ for
2004/48/EC             provisions in national laws that make IP protection “unnecessarily complicated or costly”.
Council Regulation      Application of TRIPS plus standard has already resulted, in 2008 and 2009, in seizures by customs
1383/2003                                                                                  24
                        officials of legitimate generics destined to developing countries.
(Customs Actions)
Council Regulation      “TRIPS-plus plus” standard to “compensates” for the time needed to obtain regulatory approval of
EEC No 1768/92          medicines. Comes into force after the general patent expires. Can last 5-5.5 years. May lead to
(Suppl. Protection      marketing exclusivity of medical products of 15 - 15.5 years in Ukraine. Adoption without revising the
                    25  current patent law could enable issuing of SPCs even with still pending patent applications.
Certificates - SPC)
Figure 3 (Source: EU Association Agenda for Ukraine, Inna Shatova Intellectual Property Department of Ukraine)

The utilization of the public health TRIPS flexibilities is extremely important. The cost of first line ARV therapy has been
reduced globally, thanks to the competition of generic manufacturers. For example, in 2001, an Indian generic
manufacturer announced that it would sell a generic version of a triple therapy antiretroviral for £350 per patient/year,
which resulted in a dramatic decrease in the price of ARV medicines. The cost of the triple therapy antiretroviral 4T
(stavudine) + 3TC (lamivudine) + nevirapine went from USD 10, 439 patient/year to USD 295 patient/year over the
period of less than eight months.26 However, the cost of second line ART still remains high and the price difference
between patented second line ARV medicines and their generic analogs is significant. Due to developed drug resistance,
more and more patients globally would require the switch to a new, third line regimen. WHO already recommends that
countries should develop policies that consider funding, sustainability and the provision of equitable access to third-line

Even affordability of first line ARVs is at stake because the revised international treatment guidelines now recommend
that treatment begins at higher CD4 counts. This means that all patients who were previously considered not yet in
need of ART would have to start treatment. This significant increase could lead to serious financial constraints if prices of
first-line therapy do not remain low. This development, coupled with the need for second and potentially third line ARV
regimens makes it all the more urgent for countries to utilize TRIPS flexibilities as a way of reducing prices and
promoting access to treatment.

Domestic and International Legal Obligations of Ukraine in HIV Treatment and Public Health

There are several national and international legal documents that enshrine the right to health in Ukraine According to
the Constitution of Ukraine, Article 49, “[e]veryone has the right to health protection, medical care and medical
insurance” and “*h+ealth protection is ensured through state funding of the relevant socio-economic, medical and
sanitary, health improvement and prophylactic programs“. According to this article the state “…and communal health
protection institutions provide medical care free of charge”. The Constitutional Court of Ukraine has upheld the right to
free of charge basic health care.28 The Ukrainian Law on Prevention of Acquired Immunodeficiency Syndrome (AIDS) and
Social Protection in its Article 17 stipulates that Ukrainian citizens who are infected with HIV enjoy all the rights and
freedoms under the Ukrainian Constitution and the laws, as well as other normative legal acts of Ukraine. The law

  An originator company has registered the one pill, once a day patented ARV medicine Atripla and through the clinical data exclusivity has
prevented the registration of its generic analogs. See Lezhentsev, at 5-11.
   ICTSD ‘European Generic Drug Seizures Take Centre Stage at TRIPS Council Meeting’, 10 June 2009 (available at, last visited 17 February 2010).
   The provisions of this Regulation are now contained in Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May
2009 (codified version).
   As reported by AVERT. See
   WHO ‘Rapid Advice: Antiretroviral Therapy for HIV Infections in Adults and Adolescents’, November 2009
   Valeria Lekhan et al. ’Health Care Systems in Transition. Ukraine’, p. 37.
stipulates that citizens living with HIV have the right to unpaid medicines needed for the treatment of any existing
disease they might have, prophylactics, and psychosocial support. They are also entitled to free travel to and from the
treatment facilities that have issued the referral for treatment.

In 1976 Ukraine (then part of the USSR) ratified the International Covenant on Economic Social and Cultural Rights,
which is a binding international treaty. Article 12 of the Covenant recognises the right of everyone to enjoy the highest
attainable standards of physical and mental health. According to the interpretative Comments to Article 12 provided by
the UN Committee on Economic Cultural and Social Rights governments must protect this right by ensuring that
everyone has access to a comprehensive system of healthcare, which is available to everyone without discrimination,
and is “economically accessible”, i.e. affordable.29 On 24 September 2009 Ukraine also signed the Optional Protocol to
the Covenant, which recognizes the competence of the UN Committee on Economic Social and Cultural Rights to
consider complaints from individuals. Ukraine has also signed the 2001 UNGASS Declaration of Commitment on
HIV/AIDS.30 By signing the UNGASS Declaration Ukraine acknowledges that “the lack of affordable pharmaceuticals and
of feasible supply structures and health systems continues to hinder an effective response to HIV/AIDS”, especially for
the poorest people, and recalls “efforts to make drugs available at low prices for those in need”.31 The country has also
committed, by 2005, to develop and make significant progress in implementing comprehensive care strategies, including
in providing access to affordable medicines, including anti-retroviral drugs.32 As mentioned above, in its most recent
progress report Ukraine openly acknowledges that there is a substantial gap in meeting the commitment to secure
affordable ARVs.

TRIPS-plus Provisions and Opportunities to Use TRIPS Flexibilities in Ukrainian National Law

Patentability Criteria:

Article 27, Section 1 of the TRIPS Agreement (Patentable Subject Matter), states that “… patents shall be available for
any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an
inventive step and are capable of industrial application.” The Ukrainian Law on Protection of the Rights on Inventions
and Utility Models states in Article 6 (Conditions of Granting the Legal Protection) that “*t+he legal protection shall be
granted to an invention (utility model) that does not contradict the public order, humanity and morality and complies
with the requirements of patentability.” The conditions of patentability are listed in Article 7 (Patentability Requirements
to an Invention, Utility Model). According to it “[a]n invention meets the patentability requirements provided that it is
new, involves an inventive step and is industrially applicable. A utility model meets the patentability requirements
provided that it is new and industrially applicable.” Article 7 further describes the criteria for novelty, inventive step and
industrial applicability which are in conformity with the TRIPS Agreement.

Not all legislations allow the existence of utility models, which are sometimes called “petty patents”. The World
Intellectual Property Organization (WIPO) mentions that the number of countries and regions that provide such
protection is small – only 57.33 Not all of these countries are WTO members. The TRIPS Agreement does not contain any
provisions on utility models and does not require countries to protect utility models. Ukraine not only allows utility
models but provides one of the longest periods for their protection – 10 years. The requirements for utility models are
usually less stringent than the ones for inventions. However, some countries do include an inventive step requirement
for protection of utility models, albeit less strict than the ones for inventions.34 Ukrainian law does not require an

   Committee on Economic Cultural and Social Rights, General Comment 14, paragraphs 11-12.
   This “soft law” document is a voluntary commitment of the states-signatories to develop policies, allocate resources and implement actions to
respond to the HIV/AIDS epidemic.
   2001 Declaration of Commitment on HIV/AIDS, section 25
   See UNGASS Declaration, section 56
   “Currently, a small but significant number of countries and regions provide utility model protection”. See WIPO, ‘Where Can Utility Models be
Acquired?’ See
   One such example is Germany. See official page of the German Patent and Trademark Office (in German)
inventive step for utility models at all. According to Ukrainian law medicines are not excluded from protection with
patents of utility models. Conversion from a patent application for invention to a utility model application is allowed, as
are parallel applications for both types of patents for the same product. This effectively means that medicines can be
protected with utility model patents for 10 years if a patent application is not successful. As Anastasia Mindrul points
out, the examination of a utility model application is a much faster three-step process, compared to the longer and more
rigorous application examination for patent protection of inventions35.

Another problematic aspect of patentability is the opportunity, according to Article 6 of the Ukrainian Law on Protection
of the Rights on Inventions and Utility Models, to patent new uses of already known substances and new uses of already
known processes. These provisions are clearly TRIPS-plus and will be examined below in the section on patenting of new

The limited opportunities to oppose patents under Ukrainian Law will be examined in the section on patent opposition.

Patenting of New Uses:

Article 6 of the Ukrainian Law on Protection of the Rights on Inventions and Utility Models “Conditions of Granting the
Legal Protection” stipulates that “*t+he legal protection shall be granted to an invention … that … complies with the
requirements of patentability… The object of an invention … may be… a product …., a process (method) as well as the
novel use of a known product or process…”
This is a TRIPS-plus provision of the Ukrainian national law. Article 27 of the TRIPS Agreement stipulates that “… patents
shall be available for any inventions, whether products or processes, in all fields of technology…” The TRIPS Agreement
does not require that countries recognize the patentability of new uses of either known products, or processes. The
TRIPS Agreement, in Article 27.3 (a), even explicitly allows the exclusion of “diagnostic, therapeutic and surgical
methods” from patentability. According to Ukraine’s national law the new use of a known surgical method, diagnosis, or
therapy can be protected with a patent. As Mindrul points out, neither developed, nor developing countries have the
practice to allow such patentability. Some developed countries such as Germany consider this “monopolizing the
medical practice”.36

Patentability of new uses of known substances is also not required by the TRIPS Agreement. The opportunity to protect
new uses in practice leads to the possibility of an even further extension of medicine patents, as many pharmaceuticals
have more than one application. Patenting of new uses is very similar to another process called “evergreening”, where
new patent is provided after making merely simple changes in the formulation of a medicine. Patenting such
“evergreen” medicines often leads to the exclusion of the generic competition and reduces affordability. As WHO
experts have pointed out, such TRIPS-plus protection is more likely to inhibit innovation in development of new and
more efficient pharmaceuticals rather than catalyze it.37

Duration of Patents:

According to Article 6, Section 4 of the Ukrainian Law on Protection of the Rights on Inventions and Utility Models “*t+he
term of the patent for an invention shall be 20 years as from the date of filing of the application with the Office… The
term of the patent for an invention, the object of which is a drug… and for the use of which a permission of the relevant
authorized body is required, may be extended at the request of the owner of this patent for a period that is equal to the
   Anastasia Mindrul, “Legislation in the Field of Intellectual Property Protection After Accession to the WTO”, (presentation at the Government
Roundtable “Intellectual property rights and Access to Essential Medicines in Ukraine”, Kiev, April, 2010), slide 5.
   Anastasia Mindrul, “Influence of Legal Protection of Intellectual Property on Access to Medicinal Products” (analytical report), 20-21.
   UNDP WHO Workshop on the Examination of Pharmaceutical Patents: Developing a Public Health Perspective Cape Town, 30 – 31 October 2008:
Meeting Report’
period between the date of filing of the application and the date of the receipt of such a permission, but for no more
than 5 years…”
The TRIPS Agreement has no provisions on extension of patents and the provision in Ukrainian national law is clearly
TRIPS-plus. The Ukrainian patent law does not clarify what permissions of the relevant authorized body are meant.
According to the State Pharmacological Center of Ukraine, currently there are seven secondary law documents (decrees
of the Government and orders of the Ministry of Health) that regulate the registration and re-registration of
pharmaceuticals.38 Patent holders have the opportunity to apply for re-registrations until the five-year limit is reached,
thereby extending the life of their patent to 25 years.

Patent Opposition:

The TRIPS Agreement does not prohibit patent opposition and does not regulate it. It only has a provision on patent
revocation and forfeiture, which stipulates that “*a+n opportunity for judicial review of any decision to revoke or forfeit a
patent shall be available” (Article 32). The Ukrainian Law on Protection of the Rights on Inventions and Utility Models
distinguishes between “declarative” patents (provisional protection after formal examination of the application and
while the substantial patent examination is pending) and patent for inventions and utility models.39 According to Article
33 of the Law, “*w+ith the purpose to invalidate a declarative patent, any person may file with the [Patent] Office a
request for examination of the patentability of the invention (utility model)... If a patent is considered to be fully or
partially invalid, the Office shall publish the relevant data in its official bulletin... A patent or a part of a patent shall be
considered to be invalid from the date of publishing the data on granting a patent.”

However, once a patent is granted it can be invalidated only by the court (Article 33, Section 1). This provision is TRIPS-
plus, as TRIPS only requires “the opportunity for a judicial review” and not the exclusive conferral of this right to the
courts. The text does not clarify who can file the claims in court. Ukraine’s Civil Procedure Code stipulates that any
person can address the court for protection of its infringed, disputed or not recognized rights and legal interests (Article
3). The Economic Procedure Code of Ukraine in Article 1 stipulates that any “subject of economic activity” can address
the Economic Courts for protection of its infringed or disputed rights and legal interests. Mindrul brings up an interesting
interpretation of the Constitutional Court of Ukraine which allows us to conclude that anyone – including civil society
groups – can contest patents in court.40

There is no opportunity to contest patents in an administrative procedure. The State Intellectual Property Department is
not authorized to declare patents invalid. Objections of the decisions of the Patent Office are allowed, according to
Article 24 of the Law, only to the applicant, and not to third persons. The applicant appeals before a collegial body of
the Patent Office. There is a clear imbalance in the opportunities to contest patents at administrative level in Ukrainian
law and the slow and expensive court procedures are further disincentives to oppose patents.

Exhaustion Regime (Parallel Imports):

Pharmaceutical manufacturers and distributors set different prices for pharmaceutical in different markets. Under the
conditions of parallel import patented pharmaceuticals can be purchased in one country at a certain price which is lower
than the price set for the second country. Then they are imported into this second country and sold there at a price
which is usually between the prices in the two countries (i.e. cheaper than the price set for the second country – the one
which imports the medicines). Parallel importation is carried out without the consent of the IP rights holders. Its legality
varies depending on the principle of exhaustion of rights that it is adopted by the jurisdiction. Under this doctrine the
first sale of a patented item exhausts the patent holder’s control over that particular item. Depending on the legislation
this could be valid only for the country (national exhaustion), a region (regional exhaustion), or for the whole world

   Olga Baula, Main Problems in the Registration of Pharmaceuticals in the Context of Intellectual Property Protection (presentation at the
Government Roundtable “Intellectual property rights and Access to Essential Medicines in Ukraine”, Kiev, April, 2010), 3.
   Ukrainian Law on Protection of the Rights on Inventions and Utility Models, Chapter I, Article 1, Definitions.
   See Mindrul, at 31-32.
(international exhaustion). From public health perspective the best principle to adopt is the one of international
exhaustion of rights, as this allows parallel importation of medicines from any country where they are cheaper. This is
not prohibited by the TRIPS Agreement, or by the Paris and Berne Conventions. Adopting a more restrictive regime
(regional or national) is TRIPS-plus.

In Ukraine, the regulations are unclear. Article 28 of the Law on Protection of the Rights on Inventions and Utility Models
says that a patent shall “give the exclusive right to the owner of a patent to use an invention (utility model) at his own
discretion” and defines, in Section 2, first sub-item, that import is considered “use”. Article 31, Section 3 provides that if
the product is manufactured by the patent holder elsewhere and imported under license this does not infringe the
patent. However, it also allows “the introduction of the product into the commercial circuit” by any person provided
that “the product is obtained without violation of the patent owner rights”. From the next sentence it appears that the
product is considered to be obtained without violation if it is manufactured by the patent holder. Despite this
interpretation the provision remains unclear and has to be made more precise.

Compulsory Licensing (CL):

Compulsory licensing is a TRIPS flexibility according to which the government, or authorized agencies, allow someone
else to produce a generic version of a patented product (or process) without the consent of the patent owner. The Doha
Declaration reaffirms the right of countries to determine the grounds for issuing compulsory licenses. There does not
have to be an emergency situation. CL are meant “predominantly” for the domestic market, but this is not a
requirement. In fact, importation as well as production and export under CL is allowed under the August 30 Mechanism
of the WTO. Article 31 of the TRIPS Agreement regulates CL.41

Ukrainian law has maintained this important TRIPS flexibility. Even though the national provisions contain some TRIPS-
plus elements, it is possible to use CL under Ukrainian law. The regime is regulated by Article 30 of the Law on Protection
of the Rights on Inventions and Utility Models, which says that “*w+ith the purpose to protect the health of population,
ecological safety and other public interests, the Cabinet of Ministers… may permit the use of the patented invention
(utility model) by a defined person without the consent of the patent… owner provided that this owner has groundlessly
rejected granting a license...” Further, the law stipulates that in case of the CL “... permission for such a use shall be
granted with consideration of specific circumstances…; the volume and the duration … shall be determined by purpose of
the granted permission…; the permission … shall not deprive the patent owner of the right to grant permissions …; the
right … shall not be transferred... ; the use shall be permitted mainly for providing the internal market needs…;
notification … shall be sent to the patent owner at the first opportune moment;… the permission …shall be revoked in
case of discontinuance of circumstances … *and] an adequate compensation in accordance with an economic value ...
shall be paid.”

The TRIPS Agreement does not limit the reasons for granting a CL like Ukrainian law, but the catch-all definition of the
law (“other public interests”) allows CL to be granted for many reasons. TRIPS does not require a “groundless rejection”

     Article 31 has the following requirements
        -     The merits for each CL are considered;
        -     Efforts to obtain voluntary license from the right holder on reasonable commercial terms before the CL, which have not been successful
              within a reasonable period of time. In cases of national emergency or other circumstances of extreme urgency this requirement can be
              waived but the right holder must be notified “as soon as reasonably practicable”. This requirement can also be waived in cases of “public
              non-commercial use”. In these cases, the government (or a contractor) knows that a patent will be used by (or for) the government and
              the right holder shall be informed “promptly”;
        -     Scope and duration of the CL shall be limited to the purpose for which it was issued and CL should not be exclusive (the patent holder still
              has the right to produce).
        -     Shall be non-assignable, except with the part of the enterprise that uses it.
        -      CL shall be issued predominantly for the domestic market – but not exclusively (import/export under CL is allowed).
        -     CL are to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. Competent authorities have
              the authority to review, upon motivated request, the continued existence of these circumstances;
        -     The right holder shall be paid adequate remuneration for each case of CL, taking into account its economic value.
of a voluntary license by the patent owner - just efforts to obtain it in reasonable terms and failure to do so within a
reasonable period of time. Notification to the patent must be made “as soon as reasonably practicable” according to
TRIPS, not “at the first opportune moment”. More importantly, TRIPS requires the payment of adequate remuneration,
NOT compensation to the rights owner. Remuneration means the payment for the economic value, whereas
compensation entails a “compensatory” element and seems to suggest that the rights owner is entitled to damages, or
lost profits because of the CL. Nothing of the sort is required by the TRIPS Agreement, and the country is free to
determine how to calculate the economic value of the CL.

According to Article 30, CL in Ukraine are provided with a resolution of the Cabinet of Ministers of Ukraine which grants
the permission and determines the validity period and conditions of the grant. This is not a requirement of the TRIPS
Agreement but of Ukrainian national law only. Similarly, the Cabinet of Ministers can revoke the CL; it determines the
amount and procedure for paying the “remuneration” to the patent owner. The government’s resolution may be
appealed in court procedures. It is interesting that the law uses the word “remuneration” in the second part of Article
30. Obviously, the legislator meant “remuneration” consistent with the TRIPS text, without any compensatory element.

Government Use:

Government use or “public non-commercial use” is very similar to compulsory licensing, in the sense that consent of the
patent holder is not required. However there are important differences. First, efforts to negotiate a voluntary license are
not required. The patent holder must be just informed. There are three hypotheses when this flexibility can be applied:
national emergency, “other circumstance of extreme urgency”, and “public non-commercial use”. The interpretations of
these hypotheses will not be discussed in details here; since Article 17 of the Ukrainian Law on Prevention of Acquired
Immunodeficiency Syndrome (AIDS) and Social Protection stipulates that ARV medication is to be provided free of
charge this fits in the definition of “public non-commercial use”.
Article 31, Section 2 of the Law on Protection of the Rights on Inventions and Utility Models specifies that “*t+he use of
the patented invention (utility model) shall not be considered to be the infringement of rights deriving from a patent
provided that it is used… in emergency conditions (natural disaster, accident, epidemic etc.) with the notification of the
patent owner as soon as possible and with the paying a relevant compensation to him.”
There is no definition what “a relevant compensation” means and the legislator once again reverts from “remuneration”
to “compensation”. However, the opportunity to allow license for government use still remains, under this Article, as
well as under Article 30.
In addition, in circumstances of force majeure and epidemics Article 17 of the Law on Medical Products of Ukraine allows
the import even of unregistered medicines by the Health Ministry.


Article 30 of TRIPS provides that WTO members “may provide limited exceptions to the exclusive rights conferred by a
patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not
unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third

Prior use is allowed under Ukrainian Law. As per Article 31, Section 1 of the Law on Protection of the Rights on
Inventions and Utility Models “any person, who has honestly used a technology… identical to the claimed invention …. or
has made considerable and serious preparations for such a use …. before the date of filing the application ...shall have
the right to extend this use free of charge…”

The exception for experimental use is also allowed, under Article 31, Section 2: “The use of the patented invention …
shall not be considered to be the infringement of rights deriving from a patent provided that it is used… for scientific or
experimental purposes.”

Individual use is also allowed under the same Article 31, as “use for non-commercial purposes”.

Bolar (regulatory) exception: Some national laws allow manufacturers of generic medicines to use the patented
medicine to obtain approval from the drug regulation authorities to market their version of the medicines. This is carried
out without permission by the patent owner, and before the patent expires. However, the generic producers can market
their medicine only after the patent expires. It is unclear whether Ukrainian Law allows the Bolar exception.42

Data Exclusivity:

Providing exclusivity to clinical data is a way to guarantee additional market protection for brand pharmaceuticals.
Through data exclusivity, national drug regulating authorities are prevented from accepting applications from producers
of generic medicines for registration of the generic versions during the period of exclusivity. As pointed out by the
European Generic Medicines Association generic medicines applications do not actually include data from the originator
registration file.43 They just refer to the data which are already filed with the drug registration agency. Banning this
opportunity means that the generic manufacturers have to repeat the clinical trials of the medicine (the results of which
are already known). This is a slow, costly and redundant process. It is also of questionable ethical justification, since
unnecessary experiments have to be carried out on patients.

Contrary to some opinions, the TRIPS Agreement does not provide for data exclusivity. As pointed out by WHO, Article
39 Section 3 of TRIPS requires countries to protect undisclosed registration data about new chemical entities against
disclosure and “unfair commercial use”. Authorities may not publish or share registration data - but this is not what
generic manufacturers want.44 They would like to use bio-equivalence instead of carrying out full clinical trials. The
thesis that this represents “unfair commercial use” is doubtful because of the arguments mentioned above. Data
exclusivity is clearly a TRIPS-plus provision and has a high social cost, since it delays and hinders the introduction of more
affordable generic medicines to the market.

Ukraine has a data exclusivity regime. It is regulated by Article 9 of the Law on Pharmaceutical (Medical) Products.
According to this Law “If the pharmaceutical product is registered in Ukraine, it is prohibited, for five years after the date
of such registration (regardless of the validity of any patent which concerns the medical product), to use the
registration information for filing an application for state registration of another pharmaceutical product, except for
cases when the right to refer or use such information is received in a due manner.”

There is evidence that data exclusivity has already been used by brand pharmaceutical manufacturers to prevent the
access of generic ARV equivalents to the Ukrainian market.45 In the same time, in the process of negotiating the FTA
agreement with the EU, Ukraine has been requested to introduce the “8+2+1” data exclusivity regime adopted in the
European Union. If adopted, this standard would more than double the existing data exclusivity period in Ukraine.

Generic medicines and their registration in Ukraine are regulated by Order of the Ministry of Health of Ukraine # 426 of
26.08.2005. According to Section 2.1, a generic pharmaceutical product is the one that has the same quantitative and
qualitative active ingredients as the product of reference, and which is interchangeable with this product. Various salts,
simple and complex ethers, isomers, mixtures thereof, complexes or derivatives are considered as the same active
ingredients provided that they essentially do not differ in terms of safety and efficiency. As per Section 6.3, the applicant
for registration of a pharmaceutical product is not required to provide results of the toxicological, pharmacological, or
clinical tests, if he can prove (1) that the product is an analog to another, already registered pharmaceutical product of
   See Mindrul, at 43-48.
   European Generic Medicines Association , ‘Data Exclusivity’,
   WHO,’ Briefing Note: Access to Medicines: Data Exclusivity and other TRIPS-plus Measures’, March 2006
   Konstantin Lezhentsev, Entering the WTO and Limiting the Access to Essential Medicines, Presentation from the Regional Meeting on Access to
Essential medicines and Intellectual Property Rights, Kiev 2009 , 5-11. Olga Baula
reports that in April 2010 there were five court cases related to data exclusivity of pharmaceuticals. See Baula, at 26.
reference, and the person or entity who has already registered this product allows the use of the data, or (2) the
efficiency and security of the ingredients of the medical product are known and well-studied (the applicant must provide
detailed bibliographic links on the published scientific data), or (3) the pharmaceutical product is, as a matter of fact,
similar to a referential medical product which has been duly registered in Ukraine no earlier than five years before the
application .46 In other words, according to current Ukrainian secondary legislation the applicant is not required to
provide pharmacological or clinical data if she/he can prove that the medicine the registration of which is sought, is a
generic medicine.

Enforcement: Border Measures:

In its Section 4 on “special requirements related to border measures” the TRIPS Agreement regulates only cases of
counterfeit trademark or pirated copyright goods (Article 51). The Agreement stipulates that members may enable
such an application to be made in respect of goods which involve other infringements of intellectual property rights -
but there is no such obligation. However, Ukraine has introduced such TRIPS-plus provisions in its Customs Code.
According to Article 255 on procedures for customs control and customs clearance of goods that contain objects of
intellectual property rights, “ *a+ right holder, who has grounds to believe that in the process of movement of goods
across the customs border of Ukraine, his rights to an object of intellectual property rights are violated, or may be
violated, has a right to file an application with the specially authorized central body of executive power on customs
practice to register goods containing objects of intellectual property rights”. Article 257 on suspension of customs
clearance of goods containing objects of intellectual property rights specifies that “*i+f the customs authority, based on
the data contained in the register … detects that the goods submitted for customs control and customs clearance have
characteristics of infringing goods, then their customs clearance is to be suspended. Such goods should be stored at the
temporary storage warehouses or customs authority warehouses.”
Ukraine has also not included some of the safeguards of Section 4 TRIPS, such the obligation for the claimant to provide
adequate evidence to satisfy the competent authorities (Article 52), and a security or equivalent assurance (Article 53).
The duration of suspension is also extended beyond the 10 working days specified by the TRIPS Agreement.

The provisions quoted above are likely to have an extremely negative impact on the access to generic medicines, as they
establish a presumption in favor of an alleged intellectual property right holder without providing any meaningful
safeguards to the importer. In the European Union there have already been numerous seizures of legitimate generics
destined to developing countries.47 In the process of negations of an FTA with the EU Ukraine was requested to
implement the EU customs regulation, according to which these seizures have taken place.48

Enforcement: Criminal Sanctions:

The TRIPS Agreement specifies that WTO members shall provide for criminal procedures and penalties “at least” in cases
of willful trademark counterfeiting or copyright piracy on a commercial scale. (Section 5, Article 61). This is the only
criminal sanctions requirement of TRIPS. Ukraine, in Article 177 of its Criminal Code, has introduced a TRIPS-plus regime.

According to this article, “*the+ illegal use of an invention, utility model … where such actions caused a significant
pecuniary loss shall be punishable by a fine of 100 to 400 tax-free minimum incomes, or correctional labor for a term up
to two years, with the forfeiture of illegally made products and the equipment and material designated for their
production… The same actions, if repeated or where they caused a specially significant pecuniary loss, shall be punishable

   Order of the Ministry of Health of Ukraine # 426 of 26 August 2005, with numerous amendments and additions, available at: . See also Olga Baula, Main Problems in the Registration of Pharmaceuticals in the Context
of Intellectual Property Protection (presentation at the Government Roundtable “Intellectual property rights and Access to Essential Medicines in
Ukraine”, Kiev, April, 2010), 5.
   ICTSD ‘European Generic Drug Seizures Take Centre Stage at TRIPS Council Meeting’, 10 June 2009,
     See Third Joint Progress Report
by a fine of 200 to 800 tax-free minimum incomes, or correctional labor for a term up to two years, or imprisonment for a
term up to two years, with the forfeiture of illegally made products and the equipment and material designated for their
production.” 49

The criminal provisions in Ukrainian law regarding illegal use of patents are not only TRIPS-plus but also exceptionally
strict. To compare, the unlawful request to pay for free medical assistance is punished by 100 tax-free minimum
incomes, or arrest for a term up to six months.50 The Association Agenda for Ukraine in preparation of the association
agreement with the European Union foresees further efforts to “take effective measures against counterfeiting and
piracy and ensure effective implementation of the enforcement legislation and of sanctions for infringements of
intellectual property rights.” 51

Conclusions and Recommendations

The overview of Ukrainian national law indicates that strict TRIPS-plus provisions have been recently adopted that are
likely to hinder, or, in the case of data exclusivity, are already hindering the access to more affordable generic medicines.
There is also a paradox: on one hand Ukraine’s national legislation provides for free antiretroviral therapy for all citizens
who need it, and on the other hand it lacks enabling norms that would make universal access possible. The country has
mobilized substantial - and growing - resources to address the HIV/AIDS epidemic, is experiencing a funding shortage in
its HIV/AIDS programs, and yet has adopted legislative provisions that are increasing the cost of ARV treatment, rather
than decreasing it. The regulations of the Ministry of Health recognize generics and limit reliance on data exclusivity,
while the Law on Pharmaceutical Products provides for data exclusivity and foresees administrative, civil and criminal
sanctions for its infringement. Ukraine has retained some important TRIPS flexibilities, most notably the opportunity to
issue compulsory licenses and licenses for government use but so far has not utilized them.

There is a clear need to achieve a balance between intellectual property rights protection and the opportunity for
Ukrainians to access affordable essential medicines, and especially ARVs. With this regard, the following TRIPS-
consistent recommendations can be made:

           Exclude diagnostic, therapeutic and surgical methods from patentability.
           Exclude new uses of known substances from patentability, or provide exclusion for pharmaceuticals (Article 6
            of the Ukrainian Law on Protection of the Rights on Inventions and Utility Models).
           Exclude pharmaceuticals, any technical solutions related to biological, chemical or pharmaceutical substances,
            as well as diagnostic, therapeutic and surgical methods from protection as utility models.
           Develop and apply stricter patentability requirements for pharmaceuticals to limit frivolous and questionable
            patent applications as well as applications that are not in the interest of public health concerns.
           Revise the provisions of Article 6, Section 4 and exclude the possibility for extension of patents for
           Revise Article 33, Section 1 to allow patent opposition before an administrative body (Patent Office). Allow the
            Patent Office to invalidate patents on its own initiative, without having to recourse to the court.
           Revise Article 24 in order to allow third persons to object decisions of the Patent Office on patents.
           Revise unclear provisions of Article 31, Section 3 regarding exhaustion of rights; introduce an international
            exhaustion of rights regime.
           Consider utilizing in practice the flexibility to issue compulsory licenses for the production/import of essential
            medicines under Article 30.

   According to statistical data, the minimal monthly income for 2010 for Ukraine is about UAH 922, or approximately USD 114. According to the
explanatory note of the Criminal Code, a “significant pecuniary loss” would then be around USD 11,400 and an “especially significant loss” would
amount to about USD 114,000. The fines imposed would be around USD 11,400- 45,600 and USD 22,800- 91,200.
   Article 184 of the Ukrainian Criminal Code
    EU Association Agenda for Ukraine, 2009, 19
         Provide an interpretation on “remuneration” and “compensation” in Article 30 in order to establish that there
          is no compensatory element in CL and only remuneration is provided Consider utilizing the tiered royalty
          method for calculating royalties to patent holders in cases of compulsory licensing, as done recently by
         Consider joining the countries who have officially agreed to utilize the WTO August 30, 2003 Mechanism.
         Consider revising Article 31, Section 2 in order to introduce the Bolar (regulatory) exception.
         Consider revising Article 9 of the Law on Pharmaceutical Products in order to abolish data exclusivity
          provisions. In the alternative, apply a broad interpretation of Section 6.3 of the Ministry of Health Order # 426
          of 26.08.2005 (revised), in order to allow registration of generic medicines without reference to exclusive
         Refrain from providing supplementary protection certificates. Do not adopt the provisions of Regulation (EC)
          No 469/2009.
         Refrain from adopting the provisions of Directive 2004/27/EC.
         Consider revising Article 255 of the Ukrainian Customs code in order to explicitly exclude pharmaceuticals
          from the measures provided for therein.
         Refrain from adopting the provisions of Directive 2004/48/EC and Council Regulation 1383/2003.

  UNDP and WHO, ‘ Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies’, 2005

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