Customs notices of objection – a powerful tool in an IAM strategy

Brand owners are becoming increasingly concerned about the quality of counterfeit goods imported into Australia. Counterfeit goods infringe IP rights and have the potential to be dangerous and cause harm, not only to those buying the counterfeit goods, but also to the brand owner’s reputation.

The Australian Customs and Border Protection Service assists brand owners in keeping counterfeit goods from entering Australia by enforcing those notices of objection which are in place. Notices of objection can be filed with Customs in respect of registered trademarks or copyright works. The seizure of goods at the border can substantially reduce, if not prevent, the amount of counterfeit products that are available for sale. Customs notices of objection can therefore be a powerful tool in any intellectual asset management (IAM) strategy, especially if implemented early.

Notice of objection process
The process of lodging a notice of objection is straightforward. The notice of objection is lodged with Customs, together with a security deed of undertaking. The security deed of undertaking is in place so that the trademark or copyright owner will pay Customs’ costs associated with seizing and destroying goods. In practice, costs are rarely requested and only for very large seizures where warehouses must be hired to store the seized goods, or where destroying goods can be hazardous or requires an expensive process.

Customs inspects parcels entering Australia by air and sea. If goods matching the details on the notice of objection are detected they are seized. The notice holder and the importer are made aware of the seizure. The notice holder can request photographs of the imported goods and the packaging. If the goods are indeed counterfeit, the importer has a short period of time in which to forfeit the goods; otherwise, the notice holder can take action.

Changes to seizure process
Presently, importers of counterfeit goods can sometimes avoid prosecution and still retain the goods. In Australia, legislation was recently passed which makes fundamental changes and addresses loopholes in the current customs seizure provisions in both the Copyright Act 1968 and the Trademarks Act 1995. Changes include permitting customs officials to provide more information to copyright and trademark owners about goods that are seized at the border, such as information about the exporter as well as the importer. Extending the information provided to include the exporter or consignor will assist trademark owners in identifying the source of infringement and repeat offenders. The changes also require that Customs release seized goods only if the importer lodges a claim for return, which must include the identity and address of the importer and be filed within a specified time period. If no claim for release is made within the claim period, the seized goods are forfeited to the Commonwealth. Presently, they are released to the importer.

The proposed changes are expected to come into effect in 2013 and will give the court discretion to award punitive or exemplary damages in flagrant infringement cases. The amendment will enable the court to award additional damages to penalise serious infringers and provide an effective deterrent to counterfeiting activities.

Assisting Customs to identify genuine and counterfeit goods
Customs also welcomes training from brand owners or their representatives on identifying counterfeit and genuine goods. Customs also encourages notice holders to provide additional information to assist with the seizing of goods including:

• Details for identifying genuine products.
• Individual or company names of known importers/exporters.
• Details of authorised distributors.
• Destination address in Australia of genuine imported goods.
• Overseas origin(s) of genuine products.
• Lists and images of genuine products sold.

This helps counterfeit goods to be detected and avoids genuine goods being unnecessarily held by Customs.

A powerful tool
Lodging a notice of objection with Customs shortly after a trademark is registered or copyright created sends a clear signal to counterfeiters that the trademark or copyright owner is serious about protecting its intellectual property. Seizure of goods provides the notice holder with valuable intelligence about importers, and in future once the new legislation comes into effect, intelligence about the exporter and origin of the goods. This will help to reduce the number of counterfeit goods in circulation and also deter counterfeiters from trying to copy products.

Therefore, if genuine goods are made overseas and imported into Australia or counterfeits are imported into Australia, customs notices can be another powerful tool in an overall IAM strategy.