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Customs Enforcement on IP Rights

Keltie LLP

K2 IP Limited

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customsBackground

Regulation (EU) No. 608/2013, which concerns the enforcement of Intellectual Property Rights (IPR), has been in force since January 2014, replacing the previous Council Regulation (EC) No. 1383/2003. The aim of the 2013 legislation is to simplify and clarify the procedure and existing system.

Importantly, the new Regulation extends the scope of IPR covered by Customs enforcement to:

  • trade marks
  • trade names
  • copyright
  • design rights
  • patents
  • utility models
  • devices designed, produced or adapted for the purpose of enabling or facilitating the circumvention of technological measures
  • supplementary protection certificates for medical products or for plant protection
  • plant variety rights
  • topography of a semi conductor
  • geographical indications

The Regulation also provides an accelerated procedure for the destruction of certain goods without the need to undergo infringement proceedings before the Courts and without the explicit agreement of the owner of the goods, if certain conditions are met.

Essentially, the new legislation is intended to improve the position of IPR holders in dealing with infringing goods intended to be put on the market in the EU. However, following the recent implementation of Regulation (EC) No. 207/2009 on the European Union Trade Mark (EUTM), EUTM holders may also now prevent goods entering the EU in transit, where the goods bear an identical mark or a mark that “cannot be distinguished in its essential aspects from the trade mark”, unless the owner of the goods can demonstrate that the goods would not infringe the rights of the trade mark holder in the country of destination.

Customs remain unable to take action in respect of parallel imports (goods that are manufactured with the right holder’s consent but marketed for the first time in the EU without rights holder’s consent).

Brexit

It is worth stating that, for now, the UK remains a member of the EU. Article 50 of the Treaty on the European Union must be triggered to start the process for leaving the EU, with the process itself taking at least a further 2 years. During that time, matters such as IP rights and transitional and conversion issues affecting the same will be negotiated. In the event that the UK finally leaves the EU, there remain obvious benefits in utilising the EU customs enforcement system, even if the UK is precluded. Accordingly, we recommend that clients continue to utilise the EU customs enforcement systems as they would have done previously.

Keltie continues to represent clients directly before the EUIPO and will do so even in the event that the UK finally leaves the EU.

Application for Action (AFA)

The Regulation enables IPR holders to file an Application for Action (AFA) directly with Customs offices in either (1) specific EU member states where the IPR holder has rights or (2) all EU member states if the IPR holder has an EU-wide right, such as a EUTM. This asks that suspected counterfeit goods be detained at the relevant border(s). An AFA can be specific or general and is valid for one year, after which it can be renewed for a further year. Should use of the IPR in relation to the products change, an AFA can be updated to reflect this.

What information is required for an AFA

It is advisable to provide as much detail as possible within the AFA so as to best enable Customs to distinguish between infringing and genuine goods. In this regard, we would need to provide:

  • proof of ownership of the IPR (eg trade mark registration certificate);
  • a sufficiently detailed description of the goods;
  • specific technical data on the authentic goods, for example markings, bar codes, and images;
  • the technical differences, if known, between the genuine and suspected infringing goods;
  • places of manufacture and distribution;
  • importation routes of genuine goods;
  • details of authorised entities to import and distribute genuine goods; and
  • information regarding any previous infringements.

Why do I need an AFA?

Although it is possible for Customs to seize goods for which there is no AFA, in such situations, the process for ensuring destruction of the goods is generally more complicated and expensive.

In cases where there is no AFA, Customs has only one working day to identify a likely IPR holder otherwise the goods are released to the owner. If a potential IPR holder is identified and it wants to have the goods destroyed, the IPR holder has four working days to submit an AFA to cover that particular seizure. If the AFA is not submitted in time, Customs are required to release the goods. If a potential IPR holder is not identified, the goods are released and you would not be made aware of the possible infringement.

In this regard, an AFA provides a higher level of certainty that infringing goods will be identified, seized and reported to you. Without an AFA, infringing goods may slip through the net as Customs may be unaware of the differences between genuine and infringing goods.

If goods are detained under an AFA, IPR holders generally have 10 working days (extendible by another 10 working days in certain circumstances) to judge whether the goods are infringing and, if so, give consent for destruction of the goods. If the goods are perishable, the period of detention is reduced to 3 working days.

Also, Customs will typically provide a sample of the infringing products, which often provides businesses with beneficial intelligence in identifying infringing products and can assist in forming anti-counterfeiting policies internally.

Customs will also notify the owner of the goods of the seizure and they will have 10 working days in which to consent or object to the destruction of the goods. Unless the owner explicitly objects to destruction of the goods, they will be destroyed provided the IPR holder has consented to destruction. In this regard, failure to respond by the owner within the required time is considered to be implied consent. If the owner explicitly objects to destruction of the goods, the IPR holder will have to bring court proceedings to confirm that there has been an infringement and obtain destruction of the goods.

Additionally, where small shipments are identified, namely a postal shipment weighing less than 2kg or comprised of three units or fewer, Customs can automatically destroy such shipments without obtaining specific instructions from the IPR holder, provided that the relevant section is completed on the AFA, and provided that the owner has not refused consent. This reduces the cost and time spent in reviewing small seizures and replying to Customs.

New Database of AFAs

Details regarding AFAs are now held on a central database that can be viewed by all customs offices within the EU. The database is known as COPIS (the anti-Counterfeit and anti-Piracy Information System). All deadlines, including renewal deadlines, are administered through this system.

Costs

The cost of preparing and filing an AFA is around £2500 – £4000 + VAT.

If no amendments are required, the annual renewal costs will be around £300 + VAT. Should amendments or additions be required, this will likely cost around £500 to £1000 + VAT depending on the extent of the amendments and additions.

Charlotte Wilding 8 August 2016


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