Counterfeiting is a widespread issue that involves the manufacture and distribution of goods using another person’s name or trade mark without their permission. The implication of such practices has the potential to affect brand owners across many industries – from manufacturers of traditional branded luxury goods items, to those across the automotive, pharmaceuticals, software, entertainment, toys, food and wine industries.
Counterfeit products are often manufactured overseas using lower quality components or workmanship, leading to cheap imitations which can affect a brand owner’s reputation, goodwill and bottom line. Even worse, poor quality or defective counterfeit products can result in health or safety risks to consumers.
Indeed, over the last few years, there have been recurring reports via the Federal Chamber of Automotive Industries and local media of large shipments of counterfeit automotive parts bearing the trade marks of popular car brands being intercepted en route to Australia (such as via Dubai, Asia and Europe), as well as seizures at the Australian border. In an entirely different sector, counterfeit wines and spirits are now an increasing problem for those trading in the alcoholic beverage industries, although more so for local producers exporting their products to countries such as China.
So how do we combat counterfeiting in Australia and Overseas?
Firstly, a comprehensive and up-to-date trade mark portfolio and registration strategy is critical to combating pirating and counterfeiting. If necessary, brand owners should review their registered trade mark portfolios and protection strategy with the assistance of a trade mark professional and obtain advice on what to protect and where. Trade mark protection should be continually reviewed and updated as new product lines are introduced and brands are updated, refreshed or phased out.
Secondly, in addition to securing relevant trade marks in appropriate countries, brand owners should be proactive in considering and utilising the various options and tools available to them to leverage the value of having secured registered trade mark protection.
Although registered trade marks do serve an important deterrent purpose, there is less value in simply holding a trade mark if you don’t take steps to preserve and enforce it. Whilst litigation through the Courts can often be a costly exercise if unable to be resolved early, there are also other effective tools available for assisting trade mark owners in the protection of their brand and marketplace reputation.
One such tool is the filing of a Customs Notice, which can provide a relatively low cost and effective tool for stopping infringing imports of imitation goods at the border, with the assistance of border police and customs officials.
What is a Customs Notice?
The Australian Customs and Border Protection Service operates a customs seizure scheme to prevent the importation of counterfeit goods into Australia. The legislative framework was further improved in favour of brand owners in 2013 when border reforms arising from the Intellectual Property Laws Amendment (Raising the Bar) Act 2102 were introduced, and there is continuing domestic and international dialogue on improving IP processes to better protect IP rights holders and prevent counterfeiting.
As the holder of a registered trade mark (or, in some cases, a notifiable copyright), brand owners can file a Notice of Objection with Australian Customs (Customs Notice), putting Australian Customs on notice of the details of your registered trade mark(s) (ie, trade mark registration number, mark, goods covered, expiry date) or other IP rights. Once filed, a Customs Notice will remain valid for 4 years and can be renewed and updated for so long as a trade mark remains registered. All current Customs Notices are publically available from the Australian Customs website.
Brand owners can also notify Australian Customs of the names and details of any particular known importers likely to be importing infringing counterfeit goods into Australia, including the dates and details of particular shipments due to arrive.
What happens after filing a Customs Notice?
Once a Customs Notice has been filed, Australian Customs can seize incoming goods that bear an infringing trade mark, such as counterfeit goods. According to the last Australian Customs and Border Protection Service Annual Report (published for 2014-2015), Australian Customs made 1,789 seizures of counterfeit goods, involving 561,045 items, estimated to have a retail value of more than $23 million, over this period.
If goods are seized pursuant to a Customs Notice, the importer and brand owner will be notified in writing. If the importer does not make a claim for the release of the goods within 10 working days of the notification, then the goods will be forfeited and destroyed. If a claim for release is made by the importer, then the brand owner will have a further 10 working days to commence legal action against the importer. If legal action is not commenced, for example because the brand owner determines that the particular shipment is not worth pursuing through the Courts, the goods will be released to the importer. However, the opportunity to obtain details of the importer, information about the quality and quantity of goods being imported in a particular shipment, and an insight into trading channels, may still provide a brand owner with useful information for targeting priority monitoring and enforcement areas in the event that proceedings are not commenced for a particular shipment.
The Final Word
Lodging a Customs Notice can act as a deterrent and hindrance to would-be importers of infringing products, as well as provide a useful mechanism for identifying and monitoring the activity of importers of infringing goods, and taking action against them before goods enter the Australian marketplace.
Equivalent notification and border seizure schemes are also available for brand owners with registered trade marks in overseas countries.