Summary and implications

The European Commission has published a proposed new Regulation on the power of Customs authorities in the EU to detain and destroy goods which infringe IP rights. The draft Regulation is the result of a public consultation and, if adopted, will replace Regulation 1383/2003/EC.

The proposals will be welcomed by rights holders, and include:  

  • Permitting EU Customs to detain parallel imports;  
  • Extending the IP rights covered by the current Regulation by including trade names, semiconductor topographies and utility models;  
  • Allowing EU Customs to destroy “small consignments” of counterfeit or pirated goods without any involvement from the rights holders;  
  • Making mandatory the current provision which allows individual Member States to provide that Customs authorities in that country can destroy counterfeit or pirated goods if destruction is not explicitly opposed by the declarant or owner of the goods.

Widening Customs’ powers to detain parallel imports

The current Regulation excludes certain types of infringements. Under the proposed Regulation, EU Customs would be able to detain “goods suspected of infringing an intellectual property right”. This would include parallel imports, which would represent a significant widening of EU Customs' authority. At present, it is very difficult in the UK for a rights holder to have Customs detain parallel imports. A rights holder needs to file a very detailed notice with UK Customs under section 89 of the Trade Marks Act 1994 and this procedure is not often used.

Small consignments

Rights holders sometimes take no action when they are notified of the detention of a small number of infringing items by EU Customs, as it is not cost-effective to do so. The draft Regulation proposes a specific procedure for “small consignments” of counterfeit and pirated goods. EU Customs would notify the owner of the goods of its intention to destroy the goods and would be able to destroy them if the owner does not object. The destruction would be carried out at Customs’ cost. The rights holder would only be notified of the product detention if the owner objects to destruction. Then, the rights holder would need to commence legal proceedings to prevent the goods being released. It is intended that the European Commission will consult regarding the thresholds for “small consignments”.

Simplified Procedure

The draft Regulation recognises how useful the “simplified procedure” for product destruction has been where it is available. The current Regulation allows Member States to provide for this “simplified procedure” to apply, in which case Customs authorities in that country can destroy infringing goods when the declarant or owner does not object. There is no need for the rights holder to commence legal proceedings in those circumstances. The draft Regulation makes the application of the “simplified procedure” compulsory in respect of counterfeit and pirated goods. It would not apply to parallel imports.  

The draft Regulation has been sent to the European Council and the European Parliament for their comments. This may result in the proposal being amended before the Regulation is adopted.