loader

Better ammunition for intellectual property rights holders against counterfeiting and piracy – the new european customs enforcement regulation

Whether it is related to innovation, advancement of modern technologies, brand identity, or, even more importantly, to increased consumer protection or health and safety guarantees, intellectual property is an important parameter in people’s quest for better life standards and quality, efficiency and progress.

Equally clear, however, is the fact that developing, exploiting and defending intellectual property rights is an increasingly difficult task in today’s world where swift changes take place as markets, businesses and people evolve and interact. 

 

Background, Facts and Figures

 

With millions of pirated and counterfeit products discovered in the EU each year by customs authorities and with discussions ongoing for many years regarding a review of the existing legal framework on protecting intellectual property rights, the Council was prompted to request, in its Resolution of 25 September 2008 on a comprehensive European anti-counterfeiting and anti-piracy plan, that Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against products suspected of infringing certain intellectual property rights and the measures to be taken against products found to have infringed such rights, be reviewed.

 

On 5 August 2013, the European Commission published a new set of statistics based on detentions of articles suspected to infringe intellectual property rights, made by customs authorities under the existing procedures. The figures, compiled based on data transmitted by the national customs administrations to the European Commission, clearly confirm the continuing trend of high numbers of shipments suspected of violating intellectual property rights, with nearly 90,000 detention cases registered in 2012, resulting in approximately 40 million detained articles. The value of the equivalent genuine products is estimated to be just below €1 billion. Cigarettes are at the top of the list of detained articles (31%), followed by other goods (such as bottles, lamps, glue, batteries, washing powder) and packaging materials. Products for daily use (i.e. personal care articles, medicines, toys, electrical household items) accounted for 12.7% of the total number of detained articles. The main country shipping products to the EU that infringe on intellectual property rights continued to be China.

 

The New European Customs Enforcement Regulation

 

Against this backdrop, everyone agreed that the first and easiest way to protect European markets and consumers from exposure to pirated and counterfeit products was to prevent such products from entering the EU and that the customs authorities should represent the first line of defense. 

 

Published on 29 June 2013, the new Regulation (EU) No. 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights (the “Regulation”) repeals the previous rules, namely Council Regulation (EC) No. 1383/2003, and is to enter into force from 1 January 2014, with some of the Regulation’s articles applicable as early as 19 July 2013.

 

 

Its declared purpose is to “further contribute to an internal market which ensures right-holders a more effective protection, fuels creativity and innovation and provides consumers with reliable and high-quality products, which should in turn strengthen cross-border transactions between consumers, businesses and traders” (recital 8).

 

As before, the Regulation does not change intellectual property protection rules and does not contain any provisions on, “any criteria for ascertaining the existence of an infringement of an intellectual property right” (recital 10).

The main changes are outlined below:

 

1. Expedited destruction of suspected goods (article 23)

 

The Regulation sets forth clear and simpler rules, which are to be observed uniformly across all Member States (and not on a voluntary basis, as was the case until now), for the destruction of goods suspected of infringing intellectual property rights. Such goods may be destroyed under customs control, without any need to determine whether an intellectual property right has been infringed under the law of the Member State where the goods are found, if the following conditions are fulfilled:

 

(a) the applicant for customs action has confirmed in writing to the customs authorities, within 10 working days, or three working days in the case of perishable goods, of notification of the suspension of the release or the detention of the goods, that, in his conviction, an intellectual property right has been infringed;

 

(b) the applicant for customs action has confirmed in writing to the customs authorities, within 10 working days, or three working days in the case of perishable goods, of notification of the suspension of the release or the detention of the goods, his agreement to the destruction of the goods;

 

(c) the declarant or the holder of the goods has confirmed in writing to the customs authorities, within 10 working days, or three working days in the case of perishable goods, of notification of the suspension of the release or the detention of the goods, his agreement to the destruction of the goods.

 

Importantly, where the declarant or the holder of the goods has not confirmed his agreement to the destruction of the goods, nor notified his opposition thereto to the customs authorities, within those deadlines, the customs authorities may deem the declarant or the holder of the goods to have confirmed his agreement to the destruction of those goods (article 23).

 

The customs authorities may release the goods or put an end to their detention, immediately after completion of all customs formalities, where, within the periods referred to above, they have not received such written confirmations, unless they have been duly informed about the initiation of proceedings to determine whether an intellectual property right has been infringed.

 

 

2. Extended protection in case of other types of intellectual property rights (article 2)

 

Under the Regulation, the enforcement mechanism is extended to commercial (trade) names, topographies of semiconductors, utility models and devices which are designed for enabling or facilitating the circumvention of technological measures.

 

3. Destruction procedure in case of small consignments of suspected goods (article 26)

 

Due to the growing number of counterfeit goods sent by postal or express courier service, the customs authorities have been granted prerogatives to act with regard to goods dispatched by small consignments as well, containing three units or less, or which have a gross weight of less than two kilograms. Under a new fast track opt-in procedure for small consignments, goods may be destroyed without the need for holders of intellectual property rights to consent to each instance of destruction.

 

4. Other points of novelty

 

Other points of novelty are several provisions regarding the use and sharing of information among the holders of intellectual property rights, as well as between customs authorities in the EU and third countries.

 

5. Lingering concerns

 

Holders of intellectual property rights still have to incur all the expenses related to the enforcement of their rights, although they are entitled to seek compensation from the infringer or other persons that might be considered liable under the legislation of the Member State where the goods were found.

 

The Regulation is not applicable to products carried by passengers in their personal luggage, provided that such goods are for their own personal use and that there is no indication that they are meant for commercial use, nor to infringements resulting from the so-called illegal parallel trade (goods which have been manufactured by or with the consent of the holders of intellectual property rights, but which are imported into the EU without their consent) and overruns (products manufactured in quantities exceeding those agreed between the holders of intellectual property rights and the authorized manufacturer).

 

Concerns that the legitimate trade of generic drugs between non-EU countries could be affected were voiced during the adoption process. As such the Regulation sets forth that medicines may only be delayed during transport or confiscated by the customs authorities if there is substantial likelihood that they will end up on the EU market.

 

In addition, despite increased pressure after the controversial ruling in the Court of Justice’s decision in Philips and Nokia, the customs authorities have power to seize products in transit or under a suspensive procedure, only where there is a substantial likelihood that the products will be re-routed for sale on the EU market.

Authors

foto
DENTONS EUROPE - ZIZZI-CARADJA SI ASOCIATII - SPRL