Ukraine's Copyright Landscape for Protection of IT Products

According to the extensive report released by the prominent IT community known as DOU, Ukraine boasted over 250,000 proficient IT professionals in 2021. Projections indicate a potential 23% surge in Ukrainian tech specialists by 2024. 

Even during full-scale war, the Ukrainian IT sector managed to register a growth in revenue. In 2022, the export of Ukrainian IT services yielded approximately $7.3 billion, marking a notable increase of 5.85% compared to the preceding year. 

As the Ukrainian IT market gains more attention and reliance on outsourced IT services grows, investors and clients are facing the distinct aspects of Ukrainian law. 

Here, we suggest taking a look at certain insights that will help protect IT Products. 

Imagine a successful IT product. It's complex and involves many people working together. It's like a puzzle with creative solutions. This is where legal experts come in to protect the product from competitors. 

In Ukraine, getting a patent for a computer program is not common, given the challenging criteria for patenting an invention. This leaves us with copyright. But the question remains, copyright for what? 

• (1) Graphic elements: Original parts of interfaces, designs, images, promotional materials, and even fonts can be subject to copyright protection. 

• (2) Computer code (both source and object code) is also covered by copyright and often holds significant value. However, certain aspects like the graphical user interface, functional set, and data file formats utilized in a computer program's operation are not considered as forms of its expression and therefore are excluded from copyright protection. 

• (3) Original texts and other components of the product that qualify for copyright protection. 

Ukrainian law distinctly outlines that ideas and principles underlying any component of a computer program, including its interface, logic diagrams, algorithms, and programming languages, are not protected by copyright. 

It is important part of successful IP strategy to identify all copyrightable elements and ensure that each contractor or employee assigns their rights to them. 

The most prevalent model in the global IT industry for transferring copyright to software is the "work for hire" doctrine. According to this doctrine, the initial copyright ownership of a created work belongs to a third party rather than the creator. However, the Ukrainian jurisdiction does not recognize the "work for hire" concept, which could raise concerns for foreign clients. 

A distinctive feature of Ukrainian law, as well as many European laws, is that the primary copyright holder is the individual who actually created the work. Another unique provision in Ukrainian copyright law is the prohibition on the transfer of so-called future copyrights, referring to objects that are yet to be created. 

Given the intricacies of Ukrainian legislation, it is advisable to opt for one of the contractual models that allow the transfer of copyright to the customer from the moment the work is created. These options include: 

• a contract for commissioned work creation; 

• an employment contract; 

• a gig-contract. 

The gig-contract deserves special attention, as it is a distinctive tool tailored for companies in the Diya.City ecosystem. Diya.City, launched in 2022, is a special legal framework aimed at providing a conducive environment for IT business development in Ukraine. It creates a unified economic and legal space for the IT sector. Companies that become part of this framework as residents of Diya.City enjoy several advantages, particularly concerning taxation regulations. 

According to the Law of Ukraine “On Copyright and Related Rights” it is required in a copyright transfer agreement to have information that makes it clear which object is being transferred (like its name and/or distinctive features). 

The challenge lies in how to precisely designate the segments of software created under the agreement, thereby protecting the company from potential disputes and ambiguities. Identifying software solely by name or description within the agreement is tricky. The recommended approach is to execute an additional legal document promptly upon the code's creation and provide a corresponding link to ensure unmistakable identification. This legal document can serve as a record confirming the acknowledgment of the transferred intellectual property rights. 

It is also really important to make sure that if there is a link to the code (leading to a specific SRM system), it should display the uploading date and the real name of the person who created it (rather than just the nickname). 

Providing legal support for the IT sector comes with various challenges. As the Ukrainian IT market continues to grow steadily and the legal landscape adjusts to better support increasing investor involvement, having skilled legal guidance to navigate the details of intellectual property becomes a crucial strategic need. Combining progressive legal strategies with the innovative IT sector guarantees that the promising trajectory of the Ukrainian tech industry stays firmly on track. 

The Global IP Matrix