Ukrainians dressed like fantasy, mystical and video game heroes attend a festival in Kyiv on Sept. 21, 2019. As gaming is becoming increasingly mainstream, the video game industry is booming in Ukraine. However, the weak intellectual property rights policy harms its meteoric rise.

People love video games — after all, they are ready to pay billions of dollars annually for this entertainment.

In 2018 alone, the global gaming industry generated $43 billion in revenues. Around 14 million Ukrainians chipped in, spending $160 million on games and gaming hardware.

Ukrainians, however, are not only playing games — they are creating them, too.

Over the last several years, more than 30 new game development companies have appeared in Ukraine, and some 20,000 people here actually work on developing video games for computers and gaming consoles like Sony PlayStation and Microsoft Xbox.

Some of the games made in Ukraine, in fact, have earned huge popularity in the West. This includes a shooter set in Chernobyl, “S.T.A.L.K.E.R.,” and the strategy game “Cossacks,” both created by Ukrainian GSC Game World. Ukrainians have also been developing the video game series “Metro 2033.”

International developers like French Ubisoft, German Crytek and Belarusian Wargaming are tapping into Ukraine’s talent, too. They have opened offices here.

Taking all of this into account, research companies estimate that the gaming market will only continue to grow in terms of revenue and the number of players, especially in the popular mobile sector, where games are developed for smartphones and tablets.

But there is a problem that holds Ukraine’s gaming industry back from faster growth: poor protection of intellectual property, the lifeblood of this industry.

High-tech work of art

Like all the tech companies, game design firms struggle against piracy and infringements of intellectual property rights by competitors.

But the challenge of protecting intellectual property rights in game development lies in the complexity of video games — there is more to them than meets the eye.

Julia Semeniy, a lawyer at the Asters law firm, points out that a typical game is a combination of raw programming code and visual art. So game developers must protect not only the code, but also images, sounds, texts and scripts.

“Any game involves various intellectual properties, software first of all, but also characters, game environments and other graphics,” Semeniy told the Kyiv Post. Copying any of them may potentially be copyright infringement.

Concept artist and game designer Jane Lysa agrees. She told the Kyiv Post that teaming up with a lawyer is a necessity when it comes to creating characters and dealing with potential employers in this industry.

For Lysa, intellectual property theft has been “a common practice” in the Ukrainian gaming industry.

“Our judicial system doesn’t care that much about intellectual property rights,” she said.

The best way artists can protect themselves so far is to use their celebrity status to warn others about dishonest companies, she thinks. But for that to work, the artists should be famous, which is not the case for the majority of people in this profession.

Copyright respect

To protect intellectual property, Lysa urges Ukraine’s government to involve specialized lawyers in creating proper laws, as the biggest challenge is to ensure efficient protection of copyrights in court.

The difficult part is that visual art is something that can be accidentally copied — for example, when two separate game designers are inspired by the same science fiction novel. The laws will have to foresee such cases. If they are not addressed properly, this could severely restrict competition.

“Different people from different parts of the planet can come up with a similar idea,” Lysa said. “Everybody has the same visual library.”

Asters’ Semeniy thinks that improving intellectual property rights protection in Ukraine will require complex and systematic efforts. It’s not just about asking lawyers to prepare laws. It starts with proper education, an evaluation of people working in the sector and even judicial reform.

A complex issue

Although the community of lawyers is working to protect business and create favorable case law, the experience of judges needs to improve, too.

There have been considerable efforts to launch a specialized intellectual property court and it is crucial for this process to be completed, Semeniy said. And in July 2019, the Ukraine Alliance Against Counterfeiting and Piracy (UAACP) started doing just that. It released a report advocating for the creation of the Intellectual Property Court as a top priority. It is demanding that the selection of judges be completed by the end of 2019.

But protecting intellectual property isn’t just a local cause. It’s an international matter: the EU Ukraine Association Agreement contains intellectual property rights norms, and Ukraine has to align its legislation with them in order to develop trade with the EU.

During a meeting with the UAACP in July 2019, EU representatives complained about the slow implementation of Ukraine’s commitments and said the country needs to speed up.

The EU representatives also emphasized “that intellectual property rights infringements result in severe losses to the Ukrainian economy, decreasing investment and government revenues, and killing jobs in the creative and innovative industries.”

Semeniy, in turn, said that intellectual property protection is specifically important for startups, as they form the country’s most crucial asset. One cannot expect serious investments without proof of efforts to protect intellectual property, she added.

At the recent Kyiv Post Tiger Conference, held in Kyiv on Dec. 10, Economy Minister Timofiy Mylovanov concurred.
Mylovanov said that Ukrainians must start respecting intellectual property rights.

“We watch pirated movies, we listen to pirated music and we think it’s the norm,” Mylovanov said. “Even the government has pirated software, downloaded from Russian websites.”

The minister said he thinks Ukrainians should change their mentality.

“Culturally, we need to get serious in enforcing (respect of the work of others),” he said. “An idea has the same right to be defended as a house or a piece of land.”

In the video game industry, Lysa insists that ethics are critical for growth: “As soon as our ethics level goes up, everything will go up, and we will thrive even more.”