Ukrainian defence companies register patents in US and EU due to legal gaps in legislation – study
Ukraine is losing defence innovations due to ineffective protection of intellectual property rights in the defence technology sector, and Ukrainian companies are increasingly registering patents in the United States and the EU.
This undermines Ukraine’s position as a reliable partner in international defence projects, according to the analytical study "Technology and IP governance models in the EU/NATO for Ukraine" prepared by analysts of the Economic Security Council of Ukraine (ESCU).
Although our technologies are combat-proven, they will not attract billion-dollar investments or be scaled up until there is an effective system for protecting intellectual property. One third of defence industry manufacturers have already relocated their operations abroad. This is not only about economic losses but about a direct threat to the country in a technological war of attrition," said Oleksandra Azarkhina, Head of Defence Industries Development at ESCU.
At the same time, owing to the lack of a unified approach to intellectual property, some developers are already registering patents in the United States or EU countries. As a result, technologies created in Ukraine end up owned by other states, while tax revenues flow abroad.
"Ukraine has the potential to become one of the leaders on the global defence market, but exports are impossible without clearly defined rights to new developments. Our country pays an extremely high price for these innovations, and we cannot afford to lose them," stressed Serhii Honcharov, Executive Director of the National Association of Defence Industries of Ukraine (NAUDI).
In particular, the authors of the study note that intellectual property provisions in Ukraine’s Ministry of Defence contracts are inconsistent from one contract to another or missing altogether, leading to a systemic failure in which the state cannot rapidly scale successful military innovations. At the same time, businesses are wary of investing in new technologies because they risk losing the rights to their own innovations.
"For our Western partners, reliable protection is not a mere formality but a key precondition for technology transfer and joint production. Without it, we will not be able to gain access to critically important foreign developments that we need to win," added Ihor Fomenko, Chairman of the Board of FRU Defense.
The authors of the study note that the optimal governance model for Ukraine should ensure industrial competitiveness and safe integration into Euro-Atlantic structures. From the EU, the analysts propose borrowing a market-based approach to incentivising innovation, contractual discipline and clear definition of intellectual property rights. From NATO, they point to the protection of sensitive technologies, unrestricted government rights of use, and ensuring compatibility with export control regulations.
"Ukraine’s intellectual property rules do not meet the modern needs of the market, so companies are increasingly turning to predictable international protection mechanisms. We face a dual task: helping manufacturers protect their developments in Ukraine and preparing them to comply with international standards," explained Hanna Zarudna, Head of Government Relations at Tech Force in UA .
As reported earlier, in August, the Verkhovna Rada adopted a law on intellectual property rights to objects created in the course of military service. The document is intended to regulate both IP rights to objects created by service members and remuneration for military inventors. In September, President Volodymyr Zelenskyy signed the law, and as early as October, the government approved an experimental mechanism for transferring technologies developed within the Ministry of Defence system into serial production.
For more on why a separate law on intellectual property rights to military inventions was needed and how it is supposed to work, see our interview with one of its co-authors, Illia Kostin, a member of the Armed Forces of Ukraine and former partner at the law firm "Pravovyi Alians" (LA Law Firm).
