We are now well into the new year and the festive season seems a distant memory, but with an influx of infringing goods arriving into the country in December there are still a number of ongoing issues for many manufacturers.
Importation of infringing goods is not a new concept but as illegal importers get savvier we are being called upon more frequently to assist in the protection of our clients' intellectual property rights. What a number of companies are not aware of is that in relation to goods which are not in free circulation in the EU already, there are a number of steps that can be taken in advance of the arrival of infringing shipments to strengthen their position when an attempted importation is suspected. This article gives an overview of the protective provisions available and the advance steps that can be taken to protect intellectual property. These provisions do not apply to grey/parallel imports.
Once goods are in the possession of HM Revenue and Customs/Border Force it is possible for companies to apply for information (under EU Regulation No 608/2013 (“the Regulation”)). The Regulation allows HMRC to use a gateway to disclose to third parties, for example manufacturers, any information that would otherwise be confidential. In order for HMRC to agree to the disclosing of information they must decide that the requirement for the information falls within one of six categories. Commonly the categories are (1) seeking to initiate proceedings to determine whether an intellectual property right has been infringed and seeking compensation; and (2) activities relating to criminal investigations and proceedings. The information may only be used for the purpose for which it has been disclosed.
However, before a company can seek to use this gateway they must complete a National IP Rights Application for Action (AFA) or an EU AFA if you want customs action in two or more Member States.
The Application Process and Arrival of Goods
The AFA confirms a company's ownership of intellectual property rights along with other basic information and also special technical data on the authenticity of any goods, for example, bar codes and images proving that the goods are counterfeit, details of any pattern of fraud, the port or country from which the goods were consigned, the port into which they are expected to arrive and the date of arrival, the identity of the importer or exporter and the technical differences between authentic goods and the infringing goods. The AFA also requires undertakings to be given by the company which include an agreement to reimburse, where requested, the costs incurred from the moment of detention of the goods which may include storage and destruction costs.
The AFA should be submitted to HMRC 30 working days before the goods are expected to be imported or exported or before the date on which the monitoring period is to commence. If the company is short of time and it requires Border Force to take immediate action, it is necessary to send them the information as soon as possible and accompany it with a Red Alert Form if it is suspected an impending shipment is due.
Once suspected infringing goods have been detained by Border Force, it is obliged to notify the holder of the goods of their detention within one day of making the decision to detain and to seek its consent to the abandonment or destruction of the goods. It must also notify the company seeking to enforce its IP rights of the detention. At this point it is important to act promptly as time limits are imposed and these are strictly observed. Within 10 working days (3 working days for perishable goods) from notification of the detention of goods the following information must be provided to Border Force:
- Whether it is believed the goods infringe any IP rights.
- Whether the goods can be destroyed. Of course, if the goods are infringing they will need to be retained for evidential purposes should the rights holder want to take further action.
- If the goods infringe IP rights and the rights holder has not consented to their destruction it is imperative that court proceedings are initiated, failing which the goods will be released.
- If the declarant/holder of the goods has objected to the destruction of the goods the rights holder must initiate court proceedings, failing which the goods must be released.
It is possible to seek further information from Border Force and both the declarant/holder of the goods and the rights holder have the right to inspect the goods. The rights holder may also request a sample for testing. If court proceedings are initiated before the expiry of the 10 day detention period, Border Force must be provided with an issued Claim Form and proof of ownership of the IP rights.
An AFA is valid for one year, although an extension may be sought providing it is requested more than 30 working days before the expiry of the AFA.