Utilising the Australian Customs Service to protect trademark rights

Brand owners are increasingly utilising the Australian Customs Service (ACS) to assist in keeping counterfeit goods from entering Australia by filing a trademark notice of objection with the ACS. Seizure of goods at the border can prevent, or at least substantially reduce, the amount of counterfeit products that are available for sale. In our experience, customs officers are more than willing to assist brand owners in protecting their rights.

The notice of objection is lodged with the ACS, together with a security deed of undertaking for the trademark owner to pay to the ACS the costs associated with seizing and destroying goods. In practice, costs are generally requested only for very large seizures where warehouses must be hired to store the seized goods.

Once the notice has been lodged, the ACS officers look for any potentially unauthorised or counterfeit goods bearing the trademark entering Australia; if located, they seize such goods. While the majority of goods entering Australia by air and sea are checked, the ACS cannot guarantee that every parcel or container will be. Therefore, from time to time the trademark owner may become aware of counterfeit products en route to the border. In these cases, ACS officers are pleased to receive details of such shipments and will act to inspect such cargo.

ACS officers are good at recognising counterfeit goods. However, often the use of the trademark on genuine goods includes specific dimensions, colours and orientations. It is important that both the attorney representing the client and the ACS are aware of these design specifications to assist the officers in recognising unauthorised use. To this end, ACS officers are happy to meet with representatives of the trademark owner to receive training on the composition of the genuine trademark. For example, it may be that the length of the trademark is exactly twice the height, or the device component appears directly over only two letters. It is these specifics that Customs needs to know. In addition, when designing the trademark it is worth keeping in mind how to police the use of the mark by unauthorised persons.

Once unauthorised goods are seized by the ACS, a streamlined process is implemented. Upon seizure, the objector (trademark owner) and the notional owner (intended recipient) of the counterfeit goods are notified. The objector then has 10 working days to file an infringement action in the Federal Court; otherwise the goods are released to the intended recipient. It is possible to extend this period for a further 10 working days if necessary upon request.

The timeframes are tight, and deliberately so. It is not the intention of the ACS to seize goods for an indefinite time and thus potentially harm the notional owner of the goods. In some cases the goods may be legitimate or, if the objector is not concerned about the goods, it would not be fair on the owner to continue the seizure. As a result, the trademark owner should have some ready-made procedures in place to deal with customs notifications.

In the past it has been beneficial to apply for an extension of time automatically once we have become aware of a seizure on behalf of a client. Usually we also make arrangements to view the seized goods to determine the likelihood that the goods are unauthorised prior to reporting the seizure to the client. In any event, given the tight timeframes, the client needs to have some idea of how it will proceed in such cases as early as possible. It may be that it will take action if a certain quantity of product is exceeded or if a repeat offender has surfaced. In many cases the intended recipient will voluntarily forfeit the goods upon receiving notification from the ACS or upon receiving a demand to do so from the trademark owner.

Unfortunately, persons who make a living from the importation of such unauthorised goods know some of the commercial realities of big business. Products may be sent in relatively small quantities in anticipation that the trademark owner will not proceed with a court action because of the small volumes and likely court costs; or the notional owner of the products may differ from shipment to shipment to avoid being detected as a repeat offender. However, similar addresses and importation trends may arise. Thus, maintaining a database of such use, even if legal action is not always taken, can help the trademark owner to ensure that the mark is not abused.

The ACS is also looking for ways to improve border enforcement and two current proposals may be particularly helpful to brand owners. The first proposal is to allow the ACS to release the name of the person exporting the goods to Australia. At present, the ACS is able to release only the name of the importer, and thus brand owners cannot easily track back the source of the counterfeit products. The second proposal would require importers to provide written notification either that the seized goods are forfeited or that they intend to claim them back. This should improve the administrative process and also present a greater deterrent to those importing counterfeit goods. These proposals were published for comment late in 2008 and the deadline for submission closed on 27th February 2009.

Despite the current perceived shortcomings, the ACS does make regular seizures based on objections lodged, although very few are widely publicised. As an example, late in 2008 the ACS seized 1,180 Minnie Mouse tops entering into Australia. Disney Enterprises, Inc is the owner of the MINNIE MOUSE trademark and there was evidence that the tops were made neither by Disney nor with its permission. As a result, customs officers have been ordered not to release the tops until they receive a further order from the court. Assuming that Disney prevails and the tops are unauthorised, the customs procedures that Disney has put in place will have worked to prevent the tops from being sold on the Australian market.

If passed, the proposed changes would assist brand owners and increase deterrents for those in the piracy trade. However, filing a notice with the ACS is not a substitute for monitoring use on the market; nor is the Australian border the only source of unauthorised product. However, the customs protection measures are an effective addition to the arsenal of the trademark owner and should not be overlooked.