Customs enforcement of intellectual property rights

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A new Customs Regulation came into effect on 1 January 2014, which strengthens the powers of Customs officials to detain suspected counterfeit and pirated goods at EU borders. It also introduces a new procedure for the treatment of “small consignments”. There are important differences from the previous regime, which rights holders need to be aware of.

How the regime works
As previously, the new Customs Regulation [1] (the Regulation) applies to infringing goods being imported or exported across the external borders of the European Economic Association (EEA). Customs check for potential infringements by comparing the information provided by the rights holder with that provided by the importer. Where they suspect an infringement, Customs will detain the goods. Customs will invite the rights holder to inspect the detained goods and to provide a written opinion as to whether the goods are counterfeit or pirated and the reasons why they infringe.

In common with most EU Member States the UK operates a “simplified procedure” as an alternative to infringement proceedings. By this procedure the rights holder may secure consent for destruction of the goods from the declarant. There is a presumption of consent if the declarant fails to respond to such a request. Customs will release the goods if proceedings have not been initiated or a settlement reached within 10 days.

The principal changes
The principal changes introduced by the Regulation are:

  • the “simplified procedure”, whereby the destruction of goods can be brought about without the need to initiate proceedings provided there is express or deemed consent from the declarant or holder, will no longer be a discretionary procedure that member states can choose to adopt – i.e. it will be standard procedure throughout the EU
  • the Regulation extends the categories of IP rights that are covered by the above procedure – this now includes rights in trade names, semiconductor topographies, utility models and devices designed to circumvent technological measures
  • applications by rights owners to Customs to take action to detain suspected counterfeit or pirated goods will be made on a single new form (the AFA Form). The AFA Form gives rights owners the option to choose to request national or EU-wide Customs action. The AFA Form includes undertakings by the rights owner regarding the costs incurred by Customs, including as to storage, handling and destruction, and undertakings regarding the costs of samples not returned or damaged (where they are found not to infringe)
    Customs will be able to take ex officio action, i.e. even where there is no AFA Form in respect of an IP right. Customs will give written notification to both the rights owner and the declarant or holder in such cases
  • the Regulation introduces a procedure allowing “small consignments” of counterfeit or pirated goods to be destroyed without the need for the explicit agreement of the applicant in each case, provided the applicant has made a general request for destruction, by opting on the new AFA Form. This is an EU-wide procedure, i.e. it cannot be used in respect of one or a handful of Member States only. A “small consignment” is a postal or express courier consignment which contains 3 units or less or which has a gross weight of less than 2 kilograms, although this does not cover perishable goods. If the rights owner opts in to this procedure, Customs will notify the declarant or holder only of the fact of detention. The declarant or holder will then have 10 days in which to object to or consent to destruction. Silence will be deemed to constitute consent. Customs will then invoice the rights owner for the costs of destruction

The Regulation does not apply to goods in transit within the EU, between non-EU countries. Nor are grey market goods covered by the Regulation. The EU Parliament is considering proposals to amend the position so that goods in transit may, at least in certain circumstances, fall within the Regulation. Any such amendment is not, however, imminent.

Finally, a new EU-wide centralised database called COPIS has come into operation (from 1 January 2014). COPIS will handle and record all AFAs and renewals of AFAs and retain data on infringements.

The Walker Morris Intellectual Property Group would be happy to advise you further in how to make the most of the Regulation and help you manage your anti-counterfeit/piracy systems.

[1] Regulation No 608/2013