Ukraine Adopts New Laws on Judicial Reform; IP Court to be Established in 2017

On June 2, 2016, the Ukrainian parliament adopted three laws aimed at reforming Ukraine’s judicial system:

• Law on Amendments to the Constitution of Ukraine;
• Law on the Judicial System and the Status of Judges; and
• Law on the Bodies and Persons Involved in the Enforcement of Judgements and Decisions of Other Bodies.

The laws, expected to enter into force by the end of the year, aim to transform the outdated judicial system, ensure efficiency and transparency, and raise professional and ethical standards for judges.

The new law on the judicial system replaces the current four-instance system of courts of general jurisdiction, commercial and administrative, dealing with criminal and civil cases, consisting of:

• courts of first instance;
• courts of appeal;
• cassation courts (the Supreme Specialised Court on Civil and Criminal Cases, the Supreme Commercial Court and the Supreme Administrative Court);
• the Supreme Court of Ukraine, where cases can be referred under a limited number of circumstances, such as: 1) inconsistent application of the provisions of the substantive and/or procedural laws by the cassation courts; 2) violation of Ukraine’s obligations under international treaties, established by an international judicial institution recognised by Ukraine; 3) inconsistency between the rulings of the cassation courts and the rulings of the Supreme Court of Ukraine in application of the substantive law,

with the three-instance system of general, commercial and administrative courts, consisting of:

• district courts of first instance;
• district courts of appeal;
• the Supreme Court of Ukraine, which will act as a cassation court, but in certain cases also as a court of first instance or a court of appeal.

The Supreme Court of Ukraine will consist of:

• Major Chamber of the Supreme Court of Ukraine;
• Cassation Administrative Court;
• Cassation Commercial Court;
• Cassation Criminal Court; and
• Cassation Civil Court.

Like other cassation courts under the Supreme Court of Ukraine, the Cassation Commercial Court will have specialised chambers to consider different categories of disputes. Particularly, it will, inter alia, include the chamber for cases related to the protection of intellectual property rights and competition.

Therefore, under the new law on the judicial system, the currently operating specialised cassation courts of third instance will be abolished and transformed into autonomous chambers under the auspices of the new Supreme Court of Ukraine.

It is expected that these changes will contribute to the increased efficiency and transparency of the judicial system, as well as to its independence, that is depoliticization. In 2004, the Supreme Court of Ukraine was practically deprived of its power after being accused of a lack of loyalty to the old political regime, following the presidential elections of November 2004. The functions of the court of cassation were transferred to the three specialised supreme courts, so instead of one cassation instance, three different cassation courts were formed, which often resulted in contradictory decisions as well as political influence on judicial decision-making. It was difficult to resolve such inconsistent practice and decisions before the Supreme Court of Ukraine. Also, not many cases reached the fourth instance because of strict limits imposed in terms of grounds of appeal.

The new law on the judicial system also provides for the creation of specialised courts that will hear cases related to intellectual property rights and corruption:

• the High Intellectual Property Court and
• the High Anti-Corruption Court.

The High Intellectual Property Court will act as the court of first instance having jurisdiction over IP-related disputes. Its decisions will be reviewed by the Supreme Court of Ukraine.
In addition to meeting general requirements for judges, potential High Intellectual Property Court judges will also have to meet at least one of the following criteria:

• at least three years of experience as a judge;
• at least five years of experience as a patent attorney;
• at least five years of experience as an attorney-at-law;
• overall professional experience may not be less than five years.

The High Intellectual Property Court is to be established within 12 months after the law on the judicial system enters into force, but it cannot predate the date of entry into force of the law on constitutional amendments — September 30, 2016. Therefore, the IP court is expected to start operating by the end of 2017. The Supreme Court of Ukraine will be reorganized within six months after the law on the judicial system enters into force.

The system of legal representation before courts will also change after the implementation of the reform, as under the Law on Amendments to the Constitution only attorneys-at-law are eligible to represent clients before courts. The transitional provisions of this law provide for step-by-step implementation of these changes, starting with the obligatory representation by attorneys-at-law before the Supreme Court from January 1, 2017, and before courts of all three instances from January 1, 2019.

Other important changes expected to have positive impact on the enforcement of IPRs in Ukraine, relate to the reform of the system of court judgement enforcement, namely the new enforcement law introduces private enforcement officials (“private bailiffs”) and other mechanisms allowing rights holders to have better control over the enforcement procedures.

Until the new court system is up and running, the current courts of first instance (general, commercial and administrative), the courts of appeal, the Supreme Specialised Court on Civil and Criminal Cases, the Supreme Commercial Court of Ukraine, the Supreme Administrative Court of Ukraine and the Supreme Court of Ukraine as the fourth instance will continue to act within their competence provided by the current laws.

The establishment of specialised courts is one of the most essential changes brought about by the judicial reform. Although already criticised by judges as inexpedient due to a rather low number of IP-related cases (mostly handled by commercial courts), there is no doubt that the involvement of professional judges with relevant experience will make the system more efficient and IP-related litigation more predictable. So far, rights holders have been trying to avoid litigation by all means, not only to save costs and time, but also because of the high level of corruption and inconsistency in the application of substantive and procedural law provisions. It is not without a reason that hopes to improve the investment climate in Ukraine are pinned on the efficient implementation of the judicial reform.

Prepared by: PETOSEVIC Ukraine

For more information, please contact ukraine@petosevic.com.