This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
Facts
The ever increasing new off- and online technologies have made counterfeiting one of the fastest growing economic crimes worldwide.
Technology has enabled counterfeiters to produce better copies than ever before. The massive growth of the internet continues to open new marketing channels for counterfeits.
Today, everything is or can be counterfeited: clothing, jewellery, perfume, beverages, fruit, pharmaceuticals, agrochemicals, media & telecom products, software, machine parts, etc.
EU customs authorities have been known for years for their high standard of enforcement of IP rights. In 2013, customs authorities opened almost 87.000 detention cases for a total of nearly 36 million articles. The retail value of these articles represented 768 million Euros.[1]
EU Custom Enforcement Regulation No 608/2013
On 1 January 2014 the New EU Customs Enforcement Regulation No 608/2013 ("Regulation 608/2013") entered into force, replacing the former Regulation 1383/2003.
Regulation 608/2013 mainly aims to improve operational performance, international cooperation with industry and awareness-raising, responding to the problem of internet sales.
Further objectives of Regulation 608/2013 are: expanding the range of IP rights covered; introducing new standard application forms ensuring that high quality information is provided to customs; creating a central database for recording customs applications and exchanging information between customs authorities; harmonising the so-called "simplified procedure"; establishing a new procedure for small consignments where goods may be destroyed without the involvement of the right-holders.[2]
Rights covered
Under Regulation 1383/2003 the customs authorities' actions were limited to mainly trade marks, copyrights, design rights, patents, plant variety rights and designations of origin.
Regulation 608/2013 now covers the wide range of IP rights, including rights in relation to trade names, semi-conductor topographies, plant varieties and circumvention devices.
The definition of counterfeit goods is extended to packaging, labels, stickers, brochures, etc. and similar items identical or similar to a trade mark and to goods which are the subjected of infringing an IP right.
The significance of the new action possibilities, for instance to circumvention devices, is considerable, knowing that the use of these devices is drastically contributing to the explosion of internet piracy.
Over the past decades, customs have proved to be very effective in acting against pirated video games or audio-visual recordings distributed in physical form. However, in the videogame, software or audio-visual sectors, pirated products nowadays are not only dispatched in physical form.They are downloaded from the internet and used on PC's or played on other digital devices through the use of "circumvention devices".
New common Custom Actions Application Forms
National and Union application forms
The implementing Regulation No 1352/2013 contains standard application forms to be used by rights-holders to request border measures by customs authorities.
There is still a distinction made between "National applications" and "Community applications" (now called "Union applications").
A "national application" is an application requesting the customs authorities of a Member State to take action in that Member State.
A "Union application" is an application submitted in one Member State, requesting the customs authorities to take action in different or all EU Member States.
These application forms include detailed information as to the applicant's IP rights and original products, analysis of the risk of infringement, facilitating and stimulating the customs authorities to identify counterfeit goods.
Applications now have to be submitted using electronic data-processing techniques. Regulation 1383/2003 only provided that the Member States had to "encourage" rights-holders to lodge applications electronically.
COPIS Electronic data interchange system
The EU Commission has been working to set up a central database called "COPIS"[3], in which all customs applications filed under the Regulation should be stored electronically.
Regulation 608/2013 requires all EU customs authorities to indeed notify the Commission of all applications for action (incl. photographs, images, and brochures), as well as all decisions granting, amending, suspending, or revoking such applications and such in view of centralisation and exchange of data.
Custom actions:ex-officioor based on an earlier application
Like its predecessor, Regulation 608/2013 provides for two types of custom actions in case of suspected counterfeit: (1) actions based on an earlier submitted application for action (+/-97%) (2)ex-officioactions in case no prior application had been submitted (+/-3%).
Under both procedures customs authorities detain the goods and notify the rights-holder, or his representative, who has to confirm the counterfeit.
The custom authorities also have the power to actex-officio- in cases where no prior application had been submitted - if there is a suspicion of an IP right infringement. In such cases, customs have to identify the right-holder and an application must be submitted within 3 working days in order for customs to be able to continue the detention. In the absence of said application the release of the suspected counterfeit good(s) will automatically be granted.
In both scenarios, if the rights-holder confirms the infringement, customs will not release the goods, in which case the goods will either be destroyed in application of the Simplified Procedure or, if the declarant, the holder or the owner of the detained goods opposes to the destruction, Court proceedings will be initiated.
In the last decade the number of applications for action made in the Member States has constantly increased, from 10.260 in 2007 to 26.865 in 2013.[4]
In line with previous years, the majority of customs actions were initiated with prior application by the right-holders. The number of ex officio actions has dramatically decreased over the last years (26.5% in 2008 compared to 2.6% in 2013)[5].
Under Regulation 608/2013,ex officioactions against "perishable goods" are even no longer available, which is regrettable considering the alarming fact that counterfeit perishable goods often have worldwide injurious impacts on consumers' health.
The simplified procedures
Simplified procedure: destruction at the rights-holder's request
The simplified procedure gives custom authorities the power to have the detained goods destroyed without any obligation for the applicant to initiate proceedings in order to have the alleged IP right infringement confirmed by a Court.
Under the simplified procedure, customs authorities may presume that the declarant, the holder or the owner of the detained goods has agreed to their destruction where there has been no opposition to the request for destruction within 10 working days of notification.
While this procedure was only "optional", Regulation 608/2013 has now made simplified procedures compulsory in all EU Member States.
New simplified procedure: automatic destruction of small consignments
More significant is the introduction by Regulation 608/2013 of the simplified procedure for the destruction of small consignments.
A small consignment is defined as a "postal or express courier consignment that comprises three units or less or has a gross weight of less than 2 kg". Those can be logos, labels, stickers, brochures, instructions for use, guarantee documents, or packaging materials bearing a counterfeit trade mark.
Right-holders may opt-in or opt-out of participation in the new small consignments procedure through a simple tick-box on the application form.
This new procedure is a key benefit for right-holders considering the massive rise in internet shopping and the resultant increase in small consignments.
It is indeed aimed at adapting the existing customs enforcement to the growth of e-commerce and the consequent development of express freight systems. It also aims at reducing the administrative burden and costs relating to increased trade in fakes in small consignments purchased on the internet.
The stats and figures published in the 2013 EU Commission's[6] Report on EU customs enforcement of IP rights reveal that counterfeiters are increasingly using postal or express couriers.
The increase in the amount of counterfeit goods travelling through the postal system is indeed spectacular: from 2009 to 2010, the number of cases concerning detentions of postal parcels tripled from 15,000 to over 48,000. In 2013, customs authorities opened almost 87.000 detention cases for a total of nearly 36 million articles. Between 2010 and 2013, the cases of detentions by customs related to postal traffic increased from 62 % to 72 % (compared to 23 % in 2006).
The present charts[7] clearly demonstrate that, as in the past years postal, air and express transport remain the most important means of transport in number of cases detained, whereas sea transport of containers is the main transport modality in number of articles.
This scheme provides a simplified overview of the current custom action procedure:
How Olswang can help
Olswang ensures a close relationship with key EU customs authorities; this ensures that custom actions can be considered efficiently.
We strongly encourage IP holders to submit applications for custom actions with the EU Custom Authorities.
At Olswang we are able to provide adequate advice and help with filing applications, improving customs authorities in their combat against counterfeit, which is undoubtedly beneficial to IP holders' businesses.
Contact
Please let us know whether you would like additional information or a discussion with us in respect to EU custom actions.
For any questions, please do not hesitate to contact Christine De Keersmaeker or Sébastien Lardinoit of the IP/MCT Team at Olswang Brussels.
[1] Report on EU customs enforcement of intellectual property rights. Results at the EU border - 2013.
[2] Communication from the Commission to the European Parliament of 17 May 2013, concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council concerning customs enforcement of intellectual property rights COM(2013) 282 final, p.2-3 .
[3] The anti-Counterfeit and anti-Piracy Information System.
[4] Report on EU customs enforcement of intellectual property rights. Results at the EU border - 2013.
[5] Report on EU customs enforcement of intellectual property rights. Results at the EU border - 2012 ( http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/statistics/2013_ipr_statistics_en.pdf).
[6] Report on EU customs enforcement of intellectual property rights. Results at the EU border - 2013.
[7] Report on EU customs enforcement of intellectual property rights. Results at the EU border - 2013.
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