New rules on customs enforcement of intellectual property rights will come into play in January 2014 after the European Parliament voted in favour of a new Regulation this month.
Customs authorities in the European Union play an important role in assisting brand owners in the battle against the flow of counterfeit goods into the EU by identifying and detecting at the border shipments of goods which are suspected of infringing intellectual property rights.
In 2011, 115 million suspect articles were detained at the EU’s borders; the total value of the equivalent genuine products was nearly €1.3 billion. The dramatic upsurge in detentions over the last few years is largely attributable to the increased numbers of online purchases made by EU consumers from the Far East.
Existing customs laws already enable authorities to detain certain counterfeit goods, however a new customs Regulation will strengthen the position by widening the list of IPR infringements to be controlled by customs at the border and extending the existing procedure for the early destruction of infringing goods.
The New Position
Existing customs laws do not cover certain IPR infringements. The new position widens the list of IPR infringements to include goods bearing confusingly similar marks to a trade mark (i.e. the goods do not necessarily need to be counterfeit to be detained). The list of protected rights is also extended to trade names, semiconductor topographies (i.e. electronic equipment which contains counterfeit semi-conductors), utility models (also known as "petty patents", an exclusive right granted for inventions similar to a patent) and devices which are designed to circumvent technological measures (i.e. devices designed to decrypt encrypted work).
The new Regulation also makes mandatory across the EU the procedure (currently used in the UK) which allows the destruction of certain goods where the importer has confirmed his agreement to their destruction or if he does not specifically oppose the destruction within a certain period of time. The Regulation introduces a far more workable way of dealing with small consignments, i.e. postal or express courier consignments which either contain three units or less or have a gross weight of less than two kilograms. If the brand owner ticks a box when completing its annual customs form, the authorities will have the power to destroy small consignments without involving the rights-holder (or its lawyers) at all. This should greatly reduce the administrative burden on the rights-holder and keep costs to a minimum. The importer will be given 10 working days to consent to the destruction of the goods. The rights-holder would have to pay for the storage and destruction of the goods although, in theory, they can seek compensation from the importer provided they can be traced. This should help combat the huge rise in counterfeits coming through the postal system due to the rise in internet sales in recent years (a 300% increase since 2009).
The Regulation specifically excludes goods of a non-commercial nature contained in travellers' personal luggage and does not extend to parallel imports (i.e. goods which, although genuine, were only intended by the brand owner for sale outside the EU), overruns (goods made by the brand owner's factory but which the brand owner had not authorised the factory to sell) or goods in transit within the EU.
Rights-holders may be disappointed that parallel imports and goods in transit are excluded from the new powers afforded to customs, however, the mandatory introduction of the procedure allowing the destruction of goods without proceedings and the proposals for small consignments will undoubtedly greatly improve the current position for brand owners.