Border seizure in the European Union
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Many products commercialised in the European Union today are manufactured not in EU member states, but rather in countries outside the internal market, either in Europe or further afield (eg, Asia and the Americas). Although the import and export of products present many advantages for private consumers and national economies – such as lower prices, larger product selection, customs revenues and cultural enrichment – many problems and risks nonetheless arise from international economic exchanges. These problems derive from the fact that imported goods are often manufactured under different circumstances and standards from those that apply in the European Union. Apart from a lack of quality control in some cases, certain countries tolerate the counterfeiting of branded articles. As a result, many counterfeit products of dubious origin enter the EU territory – often hidden in regular shipments – every day.
Due to the varying quality standards of imported products, one of the main tasks of the EU customs authorities is the detection of consignments that do not comply with customs regulations. However, the authorities must detect not only poor-quality products, but also counterfeit products – especially where they have been asked to monitor the specific IP rights of individual rights holders under EU Regulation 608/2013 or national law. While the customs authorities can intervene in the case of goods that are suspected of infringing IP rights without an explicit prior request, Regulation 608/2013 stipulates that such intervention is not guaranteed without a prior application for intervention. Therefore, rights holders are advised to take advantage of the possibilities afforded by this regulation.
Advantages
The protection of IP rights under Regulation 608/2013 is an efficient means of combating counterfeiting. It is a particularly effective way to stop counterfeit goods from entering the EU territory within a short timeframe. In the case of a border seizure, release of the goods will be suspended and, depending on the legislation, the goods will be destroyed shortly thereafter, without the need to start ordinary legal proceedings.
Moreover, an EU border seizure allows the rights holder to prevent counterfeit goods from being marketed within the European Union – and unlike usual infringement proceedings, without conducting long and expensive searches or test purchases to obtain detailed information or proof of the counterfeiting and the counterfeiters’ identity.
On the other hand, border seizure allows the rights holder to collect evidence for potential future court actions or settlement proceedings against professional infringers known to the rights holder. The goods may be detained easily at the border, and successful seizure of the goods and the risk of imminent destruction may put the rights holder in a good position for settlement proceedings with the infringing party.
Further, if the customs authorities suspend release of the goods to the owner or declarant according to Regulation 608/2013, the rights holder need conduct only one legal proceeding instead of several separate proceedings, as in usual infringement proceedings for the same level of enforcement for goods found on the market which have been separated and delivered to retailers.
The import, export and sale of counterfeit goods not only do considerable damage to companies that have made significant investments in their IP rights, but also deceive consumers – in some cases endangering their health and safety. Therefore, counterfeit goods should, as far as possible, be kept off the EU market. Enforcing IP rights at the border, where the goods are under customs supervision or control, is an efficient way to quickly and effectively provide legal protection to both companies and consumers.
In short, in light of the short timeframes and few formalities involved, border seizure under Regulation 608/2013 is a fast way to protect IP rights within the European Union.
Requirements
According to Regulation 608/2013, rights holders can activate customs surveillance of their products by filing an application for intervention. The application permits the confiscation of goods suspected of infringing IP rights within the entire territory of the European Union.
Which IP rights can be enforced?
The application for intervention of the customs authorities can be based on EU trademarks, registered Community designs, international trademarks and designs (through the World Intellectual Property Organisation) designating the European Union, plant variety rights and geographical indications of origin. Further, action may be taken against goods attempting to circumvent copyright protection. Border seizure covers goods imported into and exported from the European Union, as well as goods registered for re-export.
How to file an application
The application should be filed using a specific form in compliance with the regulation, which can usually be found on the websites of the national customs authorities. There are two types of application:
- a national application for the exclusive intervention of the customs authorities of the relevant EU member state; and
- an EU-wide application presented to the customs authorities of one member state for the intervention of the customs authorities in some or all member states (according to the rights holder’s interests).
Customs surveillance has an initial duration of one year and can be extended for further one-year periods before the deadline expires.
Who can present the request for intervention?
According to Article 3 of the regulation, the parties specified in Table 1 are entitled to submit the application for intervention.
Table 1.Parties entitled to present the request for intervention | ||
|
National application |
EU application |
Owners of cited IP rights |
x |
x |
IP collective rights management bodies |
x |
x |
Professional defence bodies (eg, law firms) |
x |
x |
Particular groups of producers relating to geographical indications under EU law |
x |
x |
Holders of exclusive licences covering the entire territory of two or more EU member states (authorised by rights holder) |
x |
x |
Non-exclusive licensees (authorised by rights holder) |
x |
|
Particular groups of producers relating to geographical indications under national law |
x |
|
What information must be provided in the application?
The information provided in the application should allow the customs authorities to detect and identify counterfeit products. The more detailed the information, the higher the chances of success in finding counterfeit products.
Apart from the relevant IP rights, the application should contain the following information for both the original products and, if possible, the counterfeit products:
- specific and technical details of the products, such as a description of their characteristics (eg, the position and appearance of labels, tags, holograms and buttons) and pictures of the products;
- specific characteristics of the packaging (eg, appearance, materials, colours, pallet shipments or single pieces);
- details of the place of manufacture of the products and the companies involved (eg, importers, suppliers, manufacturers, couriers and addressees);
- details of possible authorised distributors (eg, addresses and company numbers); and
- information on the transit accompanying documents.
Procedure for destruction of goods in small consignments
The rights holder may opt in to the procedure for small consignments of counterfeit and pirated goods, allowing for the automatic destruction of such products without the rights holder’s explicit prior agreement. Small consignments, generally arriving by post or courier, contain three units or less and have a gross weight of less than two kilograms.
If the rights holder has opted in to this procedure, the customs authorities will inform the declarant or owner of the counterfeit goods within one working day of the seizure and the intended destruction of the products. The customs authorities will proceed with automatic destruction 10 working days after such notification if the declarant or owner of the counterfeit goods has agreed to destruction or failed to notify its opposition.
Since the procedure for destruction of goods in small consignments is intended to reduce expenses in terms of costs and time incurred during border seizures, the rights holder is not informed of the seizure. Therefore, if it has opted in to the procedure, it is advisable to request an annual report of the goods destroyed, with particular regard to cost control, since the rights holder must bear the costs of destruction. In this respect, it is noteworthy that due to the automatic destruction of the goods, valuable evidence that could be used in civil claims may be destroyed.
Procedure where counterfeit goods are detected
Having identified goods that are suspected of infringing IP rights covered by the rights holder’s application, the customs authorities will suspend release of the goods and notify the declarant or owner of the suspected consignment within one working day of suspension. With respect to the rights holder, two possible scenarios apply:
- The rights holder has not applied for intervention – in the case of goods that are suspected of infringing IP rights, the customs authorities will try to identify and notify the rights holder concerned, giving it the possibility to apply for intervention within four working days. In this case, the rights holder must provide the customs authorities with the aforementioned information and will be notified within two days of the customs authorities’ decision regarding the application. In the affirmative, the rights holder must proceed as described below.
- The rights holder has applied for intervention – the rights holder will be notified by the customs authorities of the details of the potential infringement (ie, the actual or estimated quantity and nature of the goods and potentially available pictures thereof), and will be given the opportunity to inspect the goods. On request, the customs authorities may take samples and send them to the rights holder for analysis (subject to various strict conditions). Within 10 working days (extendable by a further 10 working days) of notification of suspension of the release of the goods – or three working days in the case of perishable goods – the rights holder must confirm in writing to the customs authorities that it believes its IP rights have been infringed. Consequently, the goods are destroyed under customs control, unless otherwise provided under the laws of the specific EU member state. If the customs authorities receive no communication within the above deadline, the goods will be released.
Italian versus German systems
Certain differences regarding border seizures in Italy and Germany are noteworthy, due to specific provisions of national laws.
German law provides for the possibility to seize goods that are manufactured with the rights holder’s consent, but imported without its consent (ie, parallel imports and non-authorised sales), and goods whose sale breaches competition law. Further, border seizure can be based on patents, utility models, supplementary protection certificates, semiconductor topographies, national trademarks and designs, and copyright. However, in purely national border seizure procedures under German law, Customs can order seizure only if the IP rights infringement is obvious; while under EU border seizure procedures, the mere suspicion of IP rights infringement is sufficient.
Article 747 of the Italian Criminal Code does not allow for the immediate destruction of imported counterfeit goods. After the rights holder has confirmed the infringement, the customs authorities will inform the responsible public prosecutor, who – depending on the circumstances – may decide to conduct a pre-trial investigation. At the end of this investigation, the public prosecutor may order immediate destruction of the goods (in general in the case of unknown parties) or involve the competent criminal court in order to start criminal proceedings against the potential infringer. Destruction may be ordered at the end of the criminal trial. If desired, the rights holder can take part in these proceedings as an injured party in order to seek compensation for damages (participation is not mandatory).
Strategic cooperation with customs authorities
Considering the large amount of shipments that arrive every day in the European Union, the customs authorities’ chances of finding infringing goods depend on the information provided in the application and on collaboration with the rights holder. Hence, particular features of the relevant IP right, genuine products and known counterfeits should be provided in the border seizure application in as much detail as possible, but also as clearly as possible. Moreover, it is advisable to enclose pictures of genuine products and known counterfeits. If the rights holder has concrete facts about individual consignments – such as the time and means of transport, the transport route or the persons involved – this information should be passed on to the customs authorities as well.
Border seizure is a valid and effective means of protecting IP rights. Nevertheless, for complete protection, it should be accompanied by a comprehensive IP protection strategy that includes monitoring dubious websites and sales platforms and taking immediate legal action via internal conflict resolution proceedings or preliminary injunctions, as well as monitoring new trademark and design applications and filing oppositions.
GLP Intellectual Property Office
Via Luciano Manara 13
Milan 20122
Italy
Tel +39 0254120878
Fax +39 0254121214
Web www.glp.eu
Davide Luigi Petraz is the managing partner of GLP and a European patent attorney. He started his career at a prominent IP firm in Washington DC, where he obtained a master’s degree in IP law. He is also a professor at the University of Trieste. His academic background is complemented by significant experience in drafting agreements and analysing and managing IP assets. His practice includes advising in litigation regarding all aspects of intellectual property, from infringement to unfair competition and the disclosure of trade secrets. He has gained considerable experience in representing companies before the European Patent Office, demonstrating strong expertise that encompasses a unique mix of technical and legal acumen.
Laura van der Heide is a German lawyer with extensive knowledge and experience of German and Italian law and practice. After a study visit and internship in Belgium, she obtained a degree in law from the University of Regensburg (Germany). Following her admission to the German Bar, she worked for an international law firm in Munich.
She later joined the legal department of GLP, where she deals with questions in the fields of intellectual property, unfair competition and commercial contracts. Her expertise ranges from counterfeiting litigation to trademark infringement cases, with a focus on the Italian and German jurisdictions.
Carmela Barilà is an Italian lawyer working in the trademark and legal department of GLP. She graduated in law from the prestigious University Luigi Bocconi in Milan and, after her legal clerkship at one of Italy’s top law firms, was admitted to the Italian Bar. At GLP she deals with (among other things) legal opinions and agreements and advises clients in proceedings mainly regarding trademark and design infringement.