Deep Dive: Ukraine’s new MoD IP unit to guard innovations

The Ukrainian Ministry of Defense is circling the wagons around its wartime inventions.

The drone detector, ‘Vityrak M’ or Windmill M, received its patent early in November — the first patent that the MoD itself has laid claim to.

It’s the first tangible result of a larger initiative to centralize more of Ukraine’s wartime developments. 

“The war has shown that… the desire to fight against the enemy is so high that the number of innovations made by ordinary people, ordinary soldiers, is simply astronomical compared to what the state has done,” said Illya Kostin, head of the new Intellectual Property Unit within the Ministry of Defense. 

Officially launched in September, the division counts its first patent as a major win, a proof-of-concept for what’s to come.

The latest initiative is key if Ukraine is ever to make a profit off of its bevvy of new inventions. IP is first and foremost a way of making the R&D that powers new inventions profitable. 

It’s one that runs contrary to the traditional business of war.

“Military technology, in the minds of many, is viewed as a tool to use, rather than a tool that might be commercially attractive to someone,” explained Kostin. 

But, he added with a touch of pride, “when we talk about what’s being developed in the armed forces, these are technologies that our partner nations don’t even have.”

Across business sectors, IP is essential to recouping investments in research and development. Ukraine is currently pouring money into military technologies out of a need to survive. But IP ownership will, Kostin believes, be vital to keeping Ukraine competitive among international arms exporters in a period of peace. 

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Innovation drives the question: Who does it belong to? 

Ukrainian soldiers have spent the war figuring out how to do everything from reconfiguring shells for mismatched mortars to synchronizing the frequency hopping of their drones with their radio frequency jammers.

Those progressive, decentralized developments, so archetypal of the Ukrainian response to the war, are a major reason the ministry is trying to patent its new ideas. It’s a unique process to patent military products, which are often defined by secrecy, while a patent more typically lays claim to its own novelty in a public way. 

The Vitryak M’s patent, for example, includes limited information as to the core product and which part of it is unique. Many drone detectors use algorithms to put up radio frequency signals automatically; the secret sauce of this one remains undisclosed in its documentation.

What is clear is that the Vitryak M’s advance in the field of detectors is primarily in its algorithm and software. The distinction makes its development especially vulnerable to intellectual rather than physical theft. 

While the public patent is not specific, the claim of ownership if administered properly can punish copy-cat developers from taking inventions developed at the Ukrainian front and selling them – most concerningly abroad. 

One issue that perpetually dogs Ukrainian business is offshoring — the registration of a corporation abroad, which then holds assets like the IP outside of the Ukrainian legal system. It’s a common practice among military start-ups, and often a subject of governmental fretting over taxes and licensing fees escaping Ukraine. 

But for the Ministry of Defense, the question is more of securing the IP from Russia, or even allied export controls.

“The question of control is one of whether the enemy will be able to get access to these technologies, if the tech is taken completely out of Ukraine,” said Denys Berehovy, a representative of the IP unit. “Then a Polish company owns it, and takes it to defense conferences all over Europe, saying ‘we’re a Polish company, all rights reserved in Poland,’ then it turns out that the government is Poland, in whose boundaries the export control will be governed along with the possibility of any sales.”

In addition to the desire to bring in a profit after the war, Kostin said the expansion of IP authorities have been due to the need to expand production non-traditionally — at times, in a fashion you could call guerilla.

Since the war started, a significant proportion of production has migrated away from massive factories like Ukroboronprom’s to decentralized, often-informal workshops throughout the country but especially near the frontlines. This is due to both more small-scale developments happening along the line, and Russia’s targeting of weapons plants, like the strike on Pivdenmash last month.

However, with the increasing reliance on smaller producers, there are more vectors for inventions to leak out into the world. There is no question that observers — some spies, more profiteers — are siphoning off new technologies developed in Ukraine. But the IP unit aims to answer the question of what the Ministry of Defense is prepared to defend in court. 

Soldier and IP Lawyer 

Originally from Crimea, Kostin was an IP and (occasionally) criminal lawyer, primarily working with pharmaceutical companies. He was initially mobilized in 2014 following the annexation of Crimea, eventually serving as an intelligence officer. He ended up in the brass of the Ministry of Defense following the 2022 full-scale invasion.

Today, head shaved, dressed in camo, packing a pistol, the short stocky Kostin barely resembles his headshot from his former law firm, Pravovoy Alliance, except for his intense gaze.

For most of that time Kostin’s primary duties have been in military justice. In September, he announced the results of a study from his division earlier that year appraising the whole of the Ministry of Defense’s work on intellectual property. 

“Total [crap/trash],” he wrote at the time, noting that the ministry owned the rights to nothing

The IP unit is his newest project, launched in recent months to help the ministry win back from private and foreign hands its wartime investments in novel weapons, its new electronic armory.

The new unit is a conspicuous outcropping of Ukraine’s general new interest in intellectual property as it has caught on to the need to defend its local defense invention abroad (see our previous reporting on the issue here).

The IP office is currently writing a new bill to establish overarching rules for the ministry’s IP authorities. It’s a draft bill the office owes to the Cabinet of Ministers by the new year. It is also trying to condense the patent application for military or military-funded applications into a single-window online portal, streamlining the process for inventors but also siloing these patents from the civilian IP office, which has also seen a wartime revamp.

Even when pushed, Kostin did not venture to give an estimate for the amount of money the Ministry of Defense stands to earn by control of the IP that has been driving the war.

“We’re taking inventory of what has been made,” Kostin said, but he puts the figure that the ministry has invested into these inventions as billions of hryvnias.

Kostin notes a problem throughout the process — that there aren’t enough experts with backgrounds that, like his, bridge IP law and military tech, to identify the core distinction between a nifty idea and a patentable invention.

Still, Kostin said his team is working on a new bill that they are preparing to send to the Rada soon, though declined to share a draft. 

Its goals include establishing time frames in which the military will be able to patent soldiers’ inventions. They are, he explained, still sorting out the exact frameworks, but want to ensure that anything that they invest in gets their money back.

Do soldier-inventors benefit? 

Any bill that, like the one under development within the office, hands legal rights to a project over from a soldier-developer to the ministry is likely to be controversial, particularly for those soldiers who were hoping to make their own money selling developments. 

In the United States, defense innovation patents still belong to the private inventors, even those funded directly by military programs.

"For DIU, we contracted on commercial terms, meaning that the U.S. government did not contract for or own the IP even if DIU funded a project.  We would also contract FOR the data used in government applications to ensure that the U.S. government can access that beyond the project," Michael Brown, former head of the US Defense Innovation Unit and currently a partner at VC firm Shield AI, wrote in an email to Counteroffensive.Pro.

Kostin’s office said they are hardly planning to lead some grand crackdown on private developments. For one, they will guarantee inventors receive a percentage of profits, though the specific percentage remains a topic of debate. Aside from which, there are limits to the number of patents their growing but still small team can hope to file. 

“Unfortunately, or maybe fortunately, we can’t control everything,” said Berehovy. “Even so, our focus, our first order of business is the intellectual property that the MoD is financing.”

Their current thought is to give the Ministry of Defense 12 months to lay claim to a patent. If the ministry doesn’t want it badly enough to register before then, such a patent would be up for grabs by the inventors — or anyone else.

But Kostin affirms that the ministry needs to centralize the developments it’s funded. 

“The MoD has put billions of hryvnias into deep-tech research. Logic of course dictates that if we gave the money, we should hold the rights.”

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The development of intellectual property law in Ukraine

The legal basis for IP in Ukraine is building out, but slowly, Kostin laments. IP law in Ukraine faced chronic staffing shortages dating back years before Russia’s full-scale invasion. But where it touches on weapons today, many of the experienced patent examiners and experts to review weapons patents are actively fighting. Some soldiers at the front moonlight for Kostin’s new division, but it remains a small operation.

On November 20, the U.S. embassy closed out of fear of a massive missile strike. The same day, the new team made the trek up seven flights of stairs to show the Counteroffensive.Pro their office in an inconspicuous institute in the western reaches of Kyiv.

Progress is ongoing. Ukraine’s law, “On Public Procurements” saw a mass overhaul in the year before and after Russia’s full-scale invasion. The changes to the longstanding law for military acquisitions include the pronouncement “there exists a need to defend intellectual property rights.” It also establishes core legal requirements around the transfer of intellectual property in the course of a contract between the ministry and a private contractor. But it’s not much. 

Kostin noted that Russia had undermined Ukraine’s weapons industry security and aggressively defended its own, pointing to an analogous division of Russia’s Ministry of Defense dating back six years, as well as regulations from that ministry addressing patents for classified inventions dating back to before the annexation of Crimea and insurrections in the Donbas. 

The US Defense Department has also in recent years established an Intellectual Property Cadre that, like Kostin’s office, is coping with the complications of having so much weapons technology being software. The U.S. Departments of Justice and Commerce last year set up the Disruptive Technology Strike Force to prosecute people exfiltrating sensitive software and technologies. 

Ukraine has been party to most of the major international IP agreements for decades — from Paris, Berne, Madrid and the Hague. But the country’s reputation for abiding by these accords is patchy, and enforcement remains lax.

Ukraine touts its engagement with the World Intellectual Property Office, but publishes an insignificant number of local court cases on IP on WIPO, in any other international forums, or in any languages other than Ukrainian. Even serious violations are punished with trivial fines. One piracy case that made its way all the way to the Supreme Court saw a final punishment of 41,730 UAH — roughly $1,000 USD. Meanwhile, IP cases generally take two to three years to make it through a Ukrainian court.

The IP division’s work features international outreach in an effort to rehabilitate Ukraine’s legal reputation abroad. In November, the office presented before the U.S. Chamber of Commerce on their need for a new system of patenting for military developments.

One critical pitch is that a high court focused on intellectual property has been on the blocks since the Poroshenko administration. “It’s coming still,” Kostin assures, confidently. 

“[The High Court of Intellectual Property] will integrate the functions of both a court of first and a court of appellate instance, specifically handling disputes related to intellectual property rights,” read the IP unit’s presentation given to the Chamber of Commerce.

In keeping with the expansion of the IP legal system, Kostin’s team are working to turn their little unit into a full-blown directorate by this time next year, reporting  to the minister directly. 

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