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Tackling the importation of counterfeit goods - new simplified Customs procedure
16 April 2010
A new, simplified procedure for HMRC officers dealing
with goods suspected of infringing an intellectual property (IP)
right will come into effect today, 16 April 2010. The new procedure
will help IP rights holders to avoid bringing full infringement
proceedings, even when a response is not received from the
importer.
In June 2009, HM Revenue & Customs (HMRC) changed the
mechanism by which they deal with suspected counterfeit goods
detained at the border. This revised procedure was introduced
following the case of Her Majesty's Revenue and Customs v Penbrook
Enterprises Ltd [2008] NIMag2). Regrettably, the practical
consequence of this new approach was that, in many cases, absent
co-operation from the importer meant rights holders had no choice
but to either allow HMRC to release the detained goods or to bring
full infringement proceedings against the importer in the High
Court or Patents County Court.
Historically, HMRC had been prepared to seize items in reliance
on a short witness statement from the rights holder, confirming
that the detained goods were in breach of the IP rights. If the
importer objected to their destruction, HMRC would launch
condemnation proceedings in the local magistrates' court for a
determination on whether the goods had, in fact, breached the IP
rights. This provided rights holders with an effective and cost
efficient anti-counterfeiting tool.
However, following a detailed analysis of this policy in
Penbrook, the court took the view that existing HRMC practices did
not comply with the EU Customs Regulation: specifically, the burden
of proof should be on the rights holder to confirm the infringing
nature of the goods by taking legal proceedings.
So what has changed?
In view of the deficiencies in this regime, Parliament
introduced The Goods Infringing Intellectual Property Rights
(Customs) (Amendments) (No. 2) Regulations 2010, which establish a
new ‘simplified procedure’, so that if the importer does not
specifically oppose the destruction of the detained goods within
the time limit, HMRC may treat the detained goods as abandoned for
destruction.
How can we help?
The new simplified procedure will be applicable to all goods
detained on or after 16 April 2010. Browne Jacobson offers a fixed
cost anti-counterfeiting protocol which has been enhanced to
reflect the new procedure.
Protocol for responding to notification that
suspected infringing/counterfeit goods have been detained by
HMRC
- Notification by HMRC that suspect goods have been detained
(“Notification Date”). Via this notification the rights holder will
be provided with information about the consignor and importer and
details of the suspected counterfeit goods (which may include
samples or photographs). These details should be sufficient to
enable us to assess whether the goods are, indeed,
counterfeit.
- Within two working days of receiving the above notification, we
will send a letter to the importer asserting the client’s
intellectual property rights, notifying it of the infringement and
inviting it to confirm, within ten working days of the Notification
Date, that HMRC may dispose of the goods. At the same time, we will
provide HMRC with a copy of this correspondence and request an
additional ten working days by which to notify HMRC of initiated
proceedings.
- If the importer fails to object to destruction of the goods
within ten working days of the Notification Date, we will confirm
to HMRC that none of the interested parties have specifically
opposed the destruction of the goods within the specified period.
Typically, HMRC will then treat the goods as abandoned under the
new simplified procedure and they will be destroyed (at the rights
holder’s cost).
- In the unlikely event that we receive a response from the
importer claiming that the goods are authentic, we will issue
proceedings in the Patents County Court for trade mark infringement
seeking, amongst other things, a declaration that the items are
counterfeit and that the HMRC be directed to destroy the goods
detained. We will then send a witness statement to HMRC confirming
that proceedings have been issued (who will continue to detain the
goods pending determination of the proceedings) and, once
processed, serve a copy of the sealed claim form on the
defendant.
- Once served with formal proceedings, the defendant will have 14
days to acknowledge service and (assuming service is acknowledged)
a further 14 days to file a defence. We anticipate that, in the
majority of cases, no acknowledgement will be filed and it will be
possible for us to apply to court for Judgment to be entered in
default (essentially a purely administrative process). If a defence
is filed, we will advise as to how proceedings may be best (and
most economically) resolved, which may include an application that
judgment be entered summarily.
If the claim is defended, which we anticipate will be the
exception rather than the norm as importers of counterfeit goods
are unlikely to wish to be drawn into court proceedings, it will be
necessary to take those proceedings forward in the usual way
outside the terms of this protocol.
It has been our experience in applying the protocol since July
2009 that in most cases the importer has responded to our letter
before action within the timescales and voluntarily forfeited the
detained goods. However, this new simplified procedure will now
avoid clients having to issue proceedings even when a response is
not received.
If you feel that you might benefit from having a similar
protocol in place, we would welcome the opportunity to work with
you to ensure that your rights are adequately protected. For
further information on tackling the importation of counterfeit
goods or infringement of intellectual property rights, please
contact our team.
talk to us
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