UKRAINE: WORKSHOP ENCOURAGES JUDGES, PROSECUTORS,

UNCLAS SECTION 01 OF 03 KYIV 001452

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E.O. 12958: DECL: N/A
TAGS: ETRD KIPR ECON UP
SUBJECT: UKRAINE: WORKSHOP ENCOURAGES JUDGES, PROSECUTORS,
POLICE TO STEP UP IPR ENFORCEMENT

REFS: A) KYIV 1450
B) KYIV 1417
C) KYIV 449


1. Summary: Post, in coordination with U.S., UK, and
Ukrainian institutions, held an IPR enforcement workshop in
Kyiv June 5-7. Ukrainian judges, prosecutors, police, and
IP inspectors participated in the workshop, which focused
on court proceedings for IPR-related cases. Discussions
revealed several problem areas for Ukraine's enforcement
bodies, and U.S. and British experts passed on best
practices. The workshop bolstered our IPR dialogue with
the GOU, although Post also has some "lessons learned" for
any similar events in the future. Post sincerely thanks
USPTO and all participants for their participation. End
Summary.


2. In coordination with the U.S. Patent and Trademark
Office (USPTO),the United Kingdom Intellectual Property
Office (UKIPO),and Ukraine's State Department of
Intellectual Property (SDIP),Post conducted an IPR
enforcement workshop in Kyiv June 5-7. The approximately
40 Ukrainian participants included judges, prosecutors, law
enforcement officials, and regional IPR inspectors. The
following U.S. and British experts participated in the
event:

Todd Reves - Office of Enforcement, USPTO
Marina Lamm - Office of Enforcement, USPTO
Steve Mellin - Assistant U.S. Attorney, Eastern
District of Virginia
Gerald Reichard - Special Agent, FBI
Timothy Tymkovich - Judge, U.S. Court of Appeals for the
Tenth Circuit
Phil Lewis - Senior Policy Advisor, United Kingdom
Intellectual Property Office (UKIPO)
Pete Astley - Principal Trading Standards Officer,
Warrington Borough Council (UK)
Michael Buchan - Motion Picture Association (UK Office)


3. Post thanks USPTO for its speedy response to our request
(ref C) for training in Ukraine on IPR-related court
proceedings. While investigations and prosecutions of IPR
crimes are growing significantly, convictions have lagged
behind. Sentencing is often light, failing to produce an
adequate deterrent to IPR crimes. This workshop helped to
focus Ukraine's leading IPR authorities on necessary steps
to improve IPR enforcement through the courts.

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MAJOR THEMES
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4. The workshop covered a variety of themes: Working with
industry, calculating damages, determining jurisdiction,
sentencing, links to other crimes, property forfeiture, and
handling of seized goods and equipment. As discussed
below, in each area the experts offered good suggestions
for Ukraine. Some of these suggestions could be adopted
easily, but others may require legal or regulatory reforms.

Working with Industry
--------------


5. U.S. and UK experts repeatedly emphasized the importance
of working closely with industry, from the initial days of
an investigation through the trial phase. GOU officials
recognized the need to cooperate with industry, but on
several occasions complained that industry reps in Ukraine
are not proactive enough in defending their own IP rights.
On the margins of the workshop, Post conducted the fifth
meeting of our IPR Enforcement Group (ref A),which brings
GOU and industry reps together in the hopes of furthering
their cooperation.

Calculating Damages - Strict Requirements for GOU
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6. Ukrainian prosecutors and police complained of strict
legal requirements demanding them to provide an expert
determination of precise damages caused by an IPR crime,

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and to do so within a short period of time prior to
prosecution. U.S. and UK experts responded that in their
systems, estimates of damages are used as guidelines for
sentencing, but are not required prior to prosecution, and
are recognized as being inherently imprecise. They
encouraged the Ukrainians to find a way of prosecuting such
cases without quantifying exact damages, which sometimes
can be nearly impossible. They also shared practical
advice on how best to arrive at damage estimates when
required for sentencing.

Unclear Jurisdiction
--------------


7. IPR-related crimes are currently heard in a wide range
of Ukrainian courts. Viktor Moskalenko, Deputy Chairman of
the High Commercial Court, argued that the Commercial
Courts should be given primary jurisdiction. Other courts,
he said, too often lack the specialized knowledge necessary
to properly evaluate IPR crimes. Serhiy Lebid, head of the
Ministry of Interior's IPR Division, called on the Supreme
Court to hold a coordination meeting for all court bodies
in order to establish consistent procedures for IPR crimes.

Weak Sentencing
--------------


8. Lebid also complained that, while the criminal code
permits appropriate penalties, the sentences courts
actually hand down in IPR crimes are not stiff enough. Law
enforcement is investigating and bringing to court an
increasing number of IPR cases, said Lebid, but judges
continue to hand down relatively small fines and suspended
sentences. U.S. Judge Tymkovich noted that formal
sentencing guidelines have proven successful in the United
States in maintaining sentencing consistency and in
enforcing stricter sentences.

Links to Other Crimes
--------------


9. U.S. and British officials outlined several useful
tactics in pursuing IPR criminals. In particular, they
noted that criminals engaged in piracy/counterfeiting are
often involved in other crimes, such as drug trafficking.
Making this connection can often help persuade a court that
may otherwise not view IPR crimes as particularly serious.

Property Forfeiture
--------------


10. U.S. and UK officials described how forfeiture laws can
allow law enforcement to seize equipment used by IPR
criminals for official purposes. Reichard noted that the
FBI often uses such provisions to provide equipment to
under-funded, local agencies active in IPR enforcement.
Ukrainian officials expressed interest but noted that in
Ukraine this program might raise public concerns of
corruption.

Storage/Destruction of Infringing Goods
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11. UK officials cautioned that storage of IPR infringing
goods can present a serious challenge. SDIP officials said
that storage of pirated optical disks is not a problem, but
admitted, after prodding by industry reps present, that
Ukraine lacks the capacity to store the counterfeit goods
being found in increasing numbers. Reves from USPTO argued
that lack of storage should never be an impediment to
seizing infringing goods, and noted that rights holders
might be able to assist. (Note: Ref A covers this issue in
greater detail. End Note.)

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LESSONS LEARNED
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12. The workshop significantly bolstered our IPR dialogue
with the GOU by allowing for expert-level discussions of
the "nuts and bolts" of enforcement. Still, Post has

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learned a few lessons in conducting such IPR training
events:

Judges are Special
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13. Post worked hard to recruit Ukrainian judges to
participate in this workshop, as numerous industry reps and
even some GOU officials have described the courts as the
weakest link in IPR enforcement. While we succeeded in
getting fair participation during sessions focused entirely
on the judge's perspective, our judiciary colleagues failed
to attend most of the other sessions. Although it is
beneficial for judges to discuss IPR enforcement together
with prosecutors and police, future events targeting judges
should probably treat them separately in order to assure
better attendance.

Need to Reach Regions
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14. Due to funding constraints, we were not able to cover
travel costs for officials from outside of Kyiv for this
workshop. As a result, it drew participation mostly from
national-level institutions. While dialogue with national-
level experts remains useful, reaching local judges,
prosecutors, and police is critical in bringing IPR
enforcement in Ukraine to the next level. Ref B outlined a
proposed assistance program to address this need.

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FOLLOW UP
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15. The inherent risk in an individual training seminar
that is not part of a longer-term program is that it will
have no lasting impact on participants or on the policy
environment in which they operate. To counter that risk,
post will compile the chief conclusions and recommendations
of the seminar for distribution to the participants,
including SDIP. Post will request USPTO input and
clearance on that document.

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THANKS TO USPTO
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16. Post wishes to sincerely thank USPTO and all USG
participants for their funding of and involvement in the
workshop. Your efforts were very much appreciated, both by
us and our Ukrainian colleagues!

TAYLOR