On 15 April 2013, some important (and positive) changes came into force regarding the Australian Customs seizure provisions in the Trade Marks Act 1995 and Copyright Act 1968, as a result of the Raising the Bar reforms to Australian intellectual property legislation.

The three major changes to Customs seizure provisions

There are three major changes to customs seizure procedures which will affect trade mark and copyright owners who have Notices of Objection in place. These are:

  1. The initial onus will shift from the rights holder to the importer in relation to goods seized by Australian Customs pursuant to a Notice of Objection. The seized goods will now be forfeited to Customs unless the importer makes a claim for them.
  2. Rights holders may now be able to obtain additional information about the importer of the seized goods (and possibly also the exporter) from Customs.
  3. Rights holders may now be able to inspect samples of the seized goods in some circumstances, rather than just relying on photographs to determine whether the goods are genuine or counterfeit.

In practice, these changes mean that in the majority of cases, rights holders will not need to take steps, such as sending a letter of demand, to ensure counterfeit goods being imported into Australia are forfeited to, and destroyed by, Customs.

It appears that Australia may be one of the first jurisdictions in the world to adopt this new "reverse onus" procedure for forfeiture of goods. The other changes to the Customs provisions (regarding the provision of additional information about the importer and exporter and the right to inspect samples) bring Australia into line with practices that are already occurring in other jurisdictions, including the European Union.

The new Australian customs seizure procedure – in practice:

Here is how the new procedure works:

  1. The rights holder lodges a Notice of Objection with Australian Customs listing the registered Australian trade marks or copyright works that it would like to protect. The Notice remains in force for 4 years.
  2. Customs seizes the goods (which bear a trade mark or contain a copyright work that is listed on the Notice of Objection) if it suspects they are counterfeit and provides the importer and rights holder with a Seizure Notice. The Seizure Notice will set out the claim and action periods (explained below), and the name and address – of the rights holder (if the notice is given to the importer), or the importer (if the notice is given to the rights holder);
  3. The importer has 10 working days ("the claim period") after the Seizure Notice is given to lodge a Claim for Release with Customs. In the Claim for Release, the importer must provide their name, address and telephone number and the grounds for seeking the release of the seized goods;
  4. If no Claim for Release is lodged, the goods are automatically forfeited to Customs (and eventually destroyed). (There is some provision for late claims to be filed by the importer and therefore Customs must hold onto forfeited goods for 30 days in case a late claim is lodged);
  5. If a Claim for Release is lodged, then the rights holder has 10 working days ("the action period") to institute court proceedings against the importer, or persuade them to forfeit the goods, failing which the goods will be released to the importer.

It is likely that in many cases an importer of counterfeit goods will not lodge a Claim for Release at all and the goods will be automatically forfeited to Customs.

The only potential downside to the new procedure is that a rights holder's 10-day action period cannot be extended (unlike the previous system, which allowed for a 10-day extension). This provides a rights holder with a very tight timeframe to reach agreement with the importer to forfeit the goods or to institute legal proceedings against the importer to prevent the release of the goods, if the importer lodges a Claim for Release.

In most cases, under the new system, rights holders who have a Customs Notice in place need not do anything to ensure counterfeit goods detected by Australian Customs are forfeited and destroyed. Of course, rights holders can still choose to send a letter of demand or take other action against importers of counterfeit goods, but in the majority of cases, it will not be necessary to send a letter to persuade an importer to forfeit goods.

These are positive changes which should result in better cost-effective mechanisms for rights holders to prevent counterfeit goods from entering Australia.

Next steps for rights holders

If a rights holder already has a Customs Notice in place:

These changes automatically took effect from 15 April 2013. There is no need for current holders of an Australian Notice of Objection to do anything to avail themselves of the new procedure.

If a rights holder does not have a Customs Notice in place:

Rights holders who have not lodged a Notice of Objection with Customs should contemplate lodging such a notice as it now provides a simpler and more effective means of identifying potentially counterfeit goods entering Australia.