Customs and intellectual property rights: new EU Regulation not far off from implementation

A discussion of the proposal for a regulation of the European Parliament and of the Council concerning customs enforcement of intellectual property rights (5129/2013/EC). 

8th February 2013

EU customs authorities are responsible for controlling and detaining those goods suspected of infringing certain intellectual property rights ("IPR") that are protected by EU and national laws.

On 24 January, the Internal Market Committee MEPs endorsed the proposal for a regulation of the European Parliament and of the Council concerning customs enforcement of intellectual property rights (5129/2013/EC), which will strengthen the enforcement of IPR and improve the effectiveness of customs controls to prevent suspected counterfeited or pirated goods entering the EU by lying down clear rules on the seizure, storage and destruction procedures.

In its press release announcing the endorsement, the European Parliament commented "imports that infringe Intellectual Property Rights (IPR) are a growing problem in the EU due in particular to the rising volume of goods bought by EU citizens online and shipped to them by post from countries outside the EU. Piracy and counterfeiting alone cost European businesses €250 billion in lost sales each year".

The adoption of the proposed regulation forms part of a comprehensive European anti-counterfeiting plan and a wide intellectual property strategy intended to revamp the EU legal framework so that it reflects the growing importance of online activities. It will replace Regulation (EC) 1383/2003/EC (incorporated into UK law by the Goods Infringing Intellectual Property Rights (Customs) Regulations 2004 (SI 2004/1473)) (as amended), introducing a number of changes to the current system of customs measures against counterfeited or pirated goods.

Extended protection
In addition to the IPR already covered, the proposed regulation will extend the protection to holders of IPR in trade names, semiconductor topographies, utility models and technology circumvention devices.

The proposed regulation does not apply to goods involved in illegal parallel trade or "overruns". Nor does it apply to small quantities of non-commercial goods carried by passengers in good faith in their personal luggage.

Accelerated procedures for the destruction of small consignments of counterfeit goods
On notification to the IPR holder, the proposed regulation will allow customs officials to work faster and more efficiently, by introducing a special procedure to speed up the destruction of small consignments of alleged infringing goods (including those sold over the internet), without having to initiate legal proceedings. Customs may treat a lack of response from an owner of that small consignment within 10 working days as tacit consent to the destruction.

On goods being left for destruction, the proposed regulation introduces the possibility for customs authorities to move and even release them for free circulation, if outside commercial channels.

Goods in transit
Goods that are merely in transit through the EU cannot be detained and destroyed because they are not considered to be infringing goods. However, the proposed regulation will allow the EU customs authorities to share information on suspected infringes of IPR with the customs authority in the destination third country. Regarding medicines in transit, it is clarified that they may only be delayed or confiscated if there is "substantial likelihood" of diversion of such medicines onto the EU market.

Destruction and storage costs
Normally, it is appropriate for an IPR holder who requests the customs authorities to enforce the IPR holder's rights to bear the costs of destroying and storing the alleged infringing goods. However, under the proposed regulation and in accordance with implementation by national law of the Member State where the goods are found, the IPR holder will be able to seek compensation from the infringer or other persons.

Next steps
Once the European Parliament has received confirmation of the Council's position, it will be asked to give its final plenary endorsement at a second reading without further changing the text and then, the proposed regulation will be adopted and apply directly in all Member States from 1 January 2014. With the purpose of eliminating the ever increasing international trade of counterfeited goods, IPR holders will broadly welcome the enforcement of the proposed new regulation.