Let us begin with the truth. If you think that your brand is safe, your goods are not being counterfeited and these counterfeits are not being sold in Ukraine, you are completely wrong. If you do not think about this at all, you are wrong too. It does not even matter whether you do business in Ukraine or not. The chance that fake goods marked with your brand are sold here is probably even higher than 95%. The State Committee of Ukraine for Technical Regulation and Consumer Policy has conducted research on the matter and proved that as of 2011 90% of all goods on the Ukrainian market were fake. Ukraine has become a paradise for all counterfeiters and counterfeit sellers due to the lack of effective legislative protection of brand owners’ interests and rights, as well as due to the general poverty of average Ukrainian citizens (thus, an average Ukrainian woman finds it quite acceptable to buy a handbag marked by, let us say, the “Gucci” brand for $100, as she simply does not have $1500 to buy an authentic one).
In fact, the third reason I could outline is the brand owners’ reaction like “So what?” in response to counterfeit-related alerts. Yes, indeed, brand owners often do not pay proper attention to the safety of their brands in Ukraine, especially if they neither do, nor intend to do business here. However, such a negligent attitude may cost a pretty penny. Why? There are reasons for that. Actually, you have to pay attention that counterfeit selling even in “undiscovered points of this planet”:
- damages public confidence in your authentic products;
- damages the business reputation of your company;
- creates a financial loss of expected gain or profits for your company; for example, if a batch of 1000 fake goods branded with your trademark (“TM”) are sold for, let us say, $50 each (the counterfeiter’s gross profit makes $50,000) while their official price is $300 for each, you lose the expected profit of $300,000 because, but for the counterfeiters, consumers would buy your authentic products for the price you have set;
- causes a flood of complaints targeted against your company from consumers who happened to be improvident enough to buy a fake product. It happens that such complaints involve really huge amounts of money (you never know what the exact amount of the claim may be).
So, to cut a long story short: how could you help yourself and the situation? Or at least what could be your first steps to make the position of your brand safer in Ukraine?
As importing/exporting fake goods into/from Ukraine is ridiculously easy and causes a constant supply of counterfeit products to the market of Ukraine, we advise you to start with customs procedures. This will help you be sure that no fake product marked with your brand will be moved through the customs border of Ukraine. Even more, this will enable you to control the situation with grey imports/exports of your goods, as no unauthorized importer/exporter will have the possibility to move your products into or out of Ukraine without your consent.
To ensure this, you should start with registering your intellectual property objects in the Customs Intellectual Property Register of Ukraine (“Customs IP Register”). What does it give and how does it work?
Let us imagine a situation where your IP object is already registered in the Customs IP Register. The algorithm of moving products marked with your brand through the customs border of Ukraine will then be as follows:
Click here to view image.
Looks nice. But this algorithm will not work by itself without you first taking action. So, this is what you should do to make the algorithm work for you:
- If your brand is not legally protected in Ukraine, i.e. if Ukraine is not among the designated countries covered by your international trademark registration and you do not have a national Ukrainian trademark certificate, you have the following two options:
- either to extend the protection of your mark to Ukraine by renewing your international trademark registration and indicating Ukraine as a designated country (you could even do this online using the E-renewal service). The average fee for such renewal is €700;
- or seek protection directly in Ukraine by applying for the national registration of your TM. This option is less advantageous, as the registration of the TM in Ukraine may take much time (the shortest period in which you can have your TM registered is 4.5-5.5 months, the longest – 12-18 months). However, it may be cheaper, as the registration of a black-and-white word mark for one class of goods by one applicant not resident to Ukraine within 4.5-5.5 months without preliminary search will cost you approximately €380.
- If you are the holder of the international trademark registration wherein Ukraine is indicated as a designated country, you should obtain the notification from the State Intellectual Property Service of Ukraine that your TM is legally protected in Ukraine. The State Intellectual Property Service of Ukraine will issue such a notification at your request.
- You should then file an application with the Customs Control Organization Department of the State Fiscal Service of Ukraine for registration of your IP object in the Customs IP Register. In this application, you should indicate your IP object, authorized importers and exporters, etc.
After this formal procedure, your application will be considered during 30 days from the date of its filing, and if everything is okay with your papers, your IP object will be registered in the Customs IP Register.
Alright, now you have your TM registered in the Customs IP Register. So what, what does it give you, and what is next? That is a nice question indeed and I am sure you will like the answer to it.
As you have already seen in the algorithm above, now every single time someone tries to move goods branded with your TM through the customs border of Ukraine, the customs office will check the data regarding authorized importers/exporters indicated in the Customs IP Register and decide whether such importer/exporter is authorized to do so or not. In case if you did not specify a certain company as an authorized importer/exporter in your application for registration of your IP object in the Customs IP Register, you can always amend such information by sending the respective letter to the Customs Control Organization Department of the State Fiscal Service of Ukraine to provide information regarding the additional importer/exporter, details of an agreement between you and such importer/exporter, goods planned to be imported/exported and their manufacturer. If the customs office detects that a company trying to move goods branded with your TM through the customs border of Ukraine is authorized by the brand owner, no problem will arise then, but if not, the customs office will stop their customs clearance, notify you as the brand owner that a certain company is trying to import/export certain goods branded with your TM and ask you a question like “what should we do: let them go with it or stop them and wait until you file a statement of claim with a court regarding the violation of your IP rights?” (by the way, the customs office gives you 10 days for filing such a statement, and during these days the customs office will keep the wanna-be-moved goods in the customs area). So yes, now you are in charge, and now it is up to you to solve the “to be or not to be” dilemma for the counterfeits to your goods in Ukraine.