Unfair competition in public procurement related to intellectual property rights

Abstract

The article examines the advantages and risks of using the negotiation procedure forpublic procurement of goods, works, and services that include objects of intellectual propertyrights. An analysis of Ukrainian and EU legislation regarding public procurementthat includes objects of intellectual property law was carried out. The practice of conductingpublic procurement in Ukraine under the negotiated procedure in cases where there isa need to protect intellectual property rights is considered. It was concluded that there aredifficulties in understanding and, accordingly, in the practice of applying the provisions ofthe legislation regarding the application of the negotiation procedure for public procurementof goods, works, and services that include objects of intellectual property rights. Imperfectlegislation on public procurement with regard to objects of intellectual propertyrights leads to unfair competition in the form of rights abuse. It is proposed to specify inthe legislation of Ukraine the cases in which the negotiation procedure can be applied tothe public procurement regarding objects of intellectual property rights and to identifyspecific objects of intellectual property rights in relation to which such a procedure can potentiallybe applied. Proposed proposals for supplementing the Law of Ukraine «On PublicProcurement» with the provision of Directive 2014/24/EU that the negotiation procedurefor public procurement related to objects of intellectual property rights is used in exceptionalcases when there is no reasonable alternative or replacement, and the lack of competitionis not the result of artificially narrowing procurement parameters. It was alsoproposed to clarify the provisions of Paragraph 5, Clause 2, Part 2 of Article 40 of the Lawof Ukraine «On Public Procurement» regarding the application of the negotiation procedurefor public procurement that include to objects of intellectual property rights as follows:«if the subject of public procurement is goods, works, or services containing objects ofintellectual property rights» in order to better understand it.