Pan Baltic Conference on Intellectual Property Protection and Enforcement
25-26 October 2000
Riga, Latvia.
Enforcing IP Rights: the Role of Customs in Anti-Counterfeit
Given their position at the external borders, customs are in the frontline as regards the protection of intellectual property rights.
In 1999, the customs administrations of the Member States of the European Union detained over 25 million articles with an estimated value of € 790 million. These included items as diverse as parts of cars, medical kits, pharmaceuticals, microprocessors, software, textiles, shoes, CDs, toys and a wide range of household products.
In the European Community, the customs fight against counterfeiting and pirated goods rests on two legal instruments:
Council Regulation (EC) No 3295/94 of 22 December 1994 laying down measures concerning the entry into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights;
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Commission Regulation (EC) No 1367/95 of 16 June 1995 laying down provisions for the implementation of the Council Regulation.
The regulations apply to goods:
entered for free circulation, export or re-export
found in the course of checks on goods under customs supervision, for instance in transit or in a warehouse.
The regulations apply to "goods infringing an intellectual property right", i.e.:
"counterfeit goods", namely goods bearing without authorisation a trade mark which is identical to the trade mark validly registered in respect of the same type of goods, trade mark symbols (logos, labels, stickers, …) and packaging materials;
"pirated goods", namely goods which are copies made without the consent of the owner of the copyright;
goods infringing a patent or a supplementary protection certificate.
The regulations forbid placing these goods in a customs situation described above.
The regulation does not apply to goods of non-commercial nature contained in personal luggage of travellers within the limits laid down in respect of relief from customs duties.
Working of the system
Application for action
The first step is that the right holder may lodge an application for action by the customs authorities. A competent authority has been designated for this purpose in each Member State. This application shall be made in each Member State, except where the applicant holds a Community trademark.
The application shall include:
The applicant may be charged a fee to cover the administrative costs incurred in dealing with the application.
A security may also be required to cover any liability of the holder vis-à-vis the persons involved in the customs operation.
The customs authority shall take the decision and inform the applicant accordingly.
Action by the customs authorities
Where a customs office considers that the goods presented may be infringing an intellectual property right, it shall suspend release of the goods or detain them.
The customs authority informs the declarant as well as the person who applied for action to be taken.
At this stage, the situation may differ among the Member States. In most of them, the right holder has to refer the case to the authority competent to take a substantive decision (i.e. a judicial authority). If, within ten working days of notification of suspension of release or of detention, the customs office has not been informed of the referral, the goods shall be released.
Goods found to be infringing an intellectual property right are destroyed or disposed outside the channels of commerce in such a way as to preclude injury to the right holder, without compensation of any kind.
Intervention at customs own initiative
Before an application has been lodged or approved, the customs authority may notify the right holder of a possible infringement when it appears evident to the customs office that goods are goods infringing an intellectual property right. The customs authority could then suspend release of the goods or detain them for a period of three working days to enable the right holder to lodge an application for action.
Recent developments
Amendment to the regulation
The scope of the regulation, as described above, results from an amendment which was made last year:
the scope was extended to goods infringing patents or supplementary protection certificates for medicinal products;
the customs authorities are nowadays permitted to take action whatever the customs status of the goods.
Given the recent adoption of these measures, it is too early to assess their consequences. Nevertheless, it shows that customs are better equipped to fight against piracy and counterfeiting.
In 1999, there were in total for the European Community almost 5.000 cases recorded for more than 25.000.000 articles with a value of more than 790 millions € (euros) on the legitimate European market.
Although the number of registered cases is almost the same as for the previous year, the number of articles involved has increased considerably.
The trend that began in the ninety’s is confirmed very clearly as figures for the luxury trademark sector which now corresponds to only 1% in terms of the number of articles. At the same time, the sector "Other" exceeds three quarters of the number of articles. In this sector cigarettes and alcohol were the preferred target of the counterfeiters. Jewellery, watches, etc., only represent about 2% of the number of articles intercepted by customs.
Other examples of counterfeiting may be quoted: medical equipment and vehicle parts, vodka and cigarettes, toothbrushes and toothpaste, energy drinks, rice, washing powder, etc.
Need for cooperation
Cooperation between right holders and customs authorities is of paramount importance in the area of counterfeiting. For instance:
when lodging an application, the right holder shall give all possible details to allow customs to carry out their tasks; similarly, he should inform customs of any modification made to his product;
when customs suspend release of the goods or detain them, the right holder should take the necessary steps to refer the case to the competent authority and inform customs accordingly.
Only a close cooperation would enable customs to fight against counterfeiting and piracy
