Intellectual Property Rights

 

Enforcement of Intellectual Property Rights: Customs and Cross – Border Measures

 

INTRODUCTION

 

Violation of intellectual property rights (IPR) continue to increase, having reached, in recent years, industrial propositions. Although, most of the member nations of WTO have already come up with their legislations to tackle and prevent infringement of Intellectual Property Rights, the cases of such infringements continue to grow, due to an evident lack of effective tools for the enforcement of these laws and regulations. It is therefore essential that a fresh initiative is taken with a renewed vigor to tackle the problem of IPR infringement and efficient administration of Intellectual Property Related Rights.

 

WCO Model Law

 

On the 20^th February, 2003 the WCO (World Customs Organization) Enforcement Committee adopted the new model law on Border measures. This document however is not binding upon the member nations. The measures listed in the document go beyond the minimal measures that are contained in the Trade Related Aspects of Intellectual Property Rights (TRIPS). The document contains new set of legislations for protection of IPR by the Customs authorities, and would also prove a very useful helping guide for all member nations in drafting their legislations with a view of tackling the problem of infringement in a more efficient manner.

The WCO Secretariat has further improved the legal text following suggestions of the World Intellectual Property Organization (WIPO).

WIPO has agreed to circulate the text to their Member Governments.

 

Import/ Export of Goods

 

Where there is any apprehension as to trademark infringement, through import or export of goods, special customs measures can be taken. The trademark owner can apply for a special or general customs inspection at the customs office in lieu of a fee.

 

The request for specific customs investigation is to be complemented by information regarding the expected export or import transaction, such as name and address of the sender or the receiver, type of goods, expected customs post, expected date and time of arrival or border crossing.  The request for general inspection should also carry as much information as possible, though the minimum is the trademark and the type of goods to which the protection is granted. The duration of general inspection is six months.

 

The customs office inspects the export and import of the goods specified in the petition and notifies the petitioner if something is found. The goods so found would be then taken in provisional custody, and the petitioner shall then initiate a trademark infringement suit against the party whose goods have been taken within a period of eighty days and a request for a preliminary injunction must be filed with the Court.

 

The customs office must be notified of all these steps. The customs office would extend the custody of the goods till the court has reached a decision on the preliminary injunction. If the Court decides to uphold the injunction, then the customs clearance would be rejected.

 

Customs inspection is not limited to instances of trademark infringement but also extends to copyright infringement.

 

The system of enforcement through Customs has proved an effective way of tackling infringement of Intellectual Property Rights. 

 

Intellectual Property Enforcement

 

In addition to Trademark Watch, it is also important to keep a watch over the market place. This may be achieved by providing encouragement to members of the trademark owners organization, including agents, employees, distributors and licensees, to keep a watchful eye on the market and to identify and report potential infringements.

 

Once a trademark owner is satisfied that the trademark owned by him is being exploited by some other person without the formers authorization, he may take such suitable action against the infringer as may be necessary. The action may be in form of an infringement proceeding, an action for unfair competition, or in British Law countries, an action for passing off, which is quite similar to unfair competition.

 

Almost all countries have developed laws to check unauthorized exploitation of Intellectual Property Rights; none have been able to come up with a legislation that is as far reaching as is the United States of America. There are some countries whose penal laws provide for criminal remedies against infringement and counterfeiting. These should be considered as an alternative to civil remedies/actions, since they are conducted by local authorities, thereby causing a great cost saving to the trademark owner. However many a times the law enforcement personnel may be reluctant to take action in cases of infringement of Intellectual Property Rights, or worse still they may be corrupt and biased towards the benefit of the defendants. In such cases, it has been widely observed that the defendants get a prior warning of a potential infringement raid, and so they make necessary arrangements for securing their goods, thereby failing the laws related to infringements.

 

In addition to trademark infringement many countries provide remedies for unfair competition, although the United States of America has by far the most flexible laws relating to unfair competition. In most of the countries that follow British Law, such as the United Kingdom, Ireland, Australia, New Zealand, Singapore, Hong Kong, and India, to name a few, there is no general cause of action for unfair competition. Rather, such countries have provided an action for passing off, which is a restricted kind of unfair competition. Passing off comprises of misrepresentation made by the traders in the course of trade to their prospective customers or end users, that is calculated to injure the business or goodwill of another trader and that actually does or will do damage to the business or goodwill of the plaintiff. Although actions for passing off may be effective in many circumstances, they are also quite complex and expensive proceedings when they are contested.

 

In certain countries, including the United States, it is also possible to deposit a local trademark registration with the local customs authorities, who will conduct spot checks of imported goods to make sure that the imported goods bearing the trademarks are authorized. If unauthorized uses of trademark are discovered, then the goods would be confiscated and the trademark owner would be notified, following which he may bring an action against the infringing goods, within a short period of time. This may well prove to be an effective tool in combating trademark infringement and counterfeiting. Although not all customs authorities are as proactive as in the United States, an increasing number, thanks to the requirements of the GATT TRIPS, WTO, will offer some procedure whereby trademark owners may notify the customs authorities of shipments suspected of containing infringing material, pursuant to which the officials may seize the allegedly offending goods until a judge can decide the merits of the dispute.

 

Intellectual Property Enforcement and the Customs

 

Indian IP laws and precedents have set standards for IP recognition and protection that match those prescribed in the US and UK. The laws offer criminal and civil relief for infringements but their ability to cause permanent deterrence is limited, due to delays in the prosecution and absence of compensation in contested matters. Counterfeiting and piracy have spilled from shops onto roads and trade in fakes has extended across borders. The internet along with numerous businesses to customer websites further enable the traders, even those living in the smallest and remotest of Indian towns and villages that has internet facilities to display offer and sell, goods that violate the trademark rights to customers worldwide. Thus it is has become impertinent to device new methods to check infringements across border and through internet.

 

Indian Customs law and practice

 

It is at the option of the enterprise to request Customs to seize any articles which may constitute infringement of the enterprises copyright. This is dealt with in the Copyright Act and involves a lodgment of security with Customs. Customs has the power to seize and destroy infringing articles.

 

The Indian Customs Act 1962 (the Act) empowers Customs to take action against any export or import of prohibited goods. The term Prohibited goods includes any goods the import or export of which is subject to any prohibition contained in this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been compiled with. Section 11 of the Act, defines the term illegal exports imports to include export or import of any goods in contravention of the provisions of the Customs Act or any other law for the time being in force.

Section 110 empowers Customs to seize any goods that are liable for confiscation under Section 111 and 113, including prohibited goods, that is, any goods attempted to be imported or exported or brought within the limits of the Customs area for the purposes of being exported or imported, contrary to any prohibition under the Act, or any other law for the time being in force, including the Indian Copyright Act, Indian Trademark Act, Indian Penal Code, etc. Thus, if one attempts to export stolen goods or goods linked with cheating or fraud or any goods that are prohibited under any law, the goods can be confiscated by Customs in exercise of its power under the Customs Act.

 

Import of IP violating goods

 

Until recently, complaints against imports of IP violating goods would be directed to Customs and courts. Customs held consignments on suspicion of IP law violation and informed the rights owner, asking them to initiate action either through the police or by a civil suit for injunction. Determination of these cases would take time and, if they were decided against the right owner of the Customs detention would be held unjustified and Customs would be called upon to bear the cost of demurrage. So Customs would only agree to initiate action against IP violating goods when the question of whether the import constituted a violation of an IP law was determined by an appropriate court or tribunal or if the right holder furnished an indemnification bond, undertaking to bear the demurrage or detention charges if the Court held the detention to be wrongful. In case the right holder refused to indemnify Customs the goods would be released under intimation to the right holder to take further action as deemed necessary by him, upon release from the Customs charge.

 

As far as foreign right holders were concerned, Customs view was that, if their product was not registered in India, there was absolutely no need to detain any consignment on suspicion unless there was a direction from the court. As regards exports, it was recommended to resort to action only when express powers to determine infringements were vested with Customs, under IP laws. In 2001 an Indian Customs IPR working group recommended that Indias IP law be amended but this has not been done, probably because Customs is broadly vested with powers under the Indian Customs Act, to seize and confiscate goods that violate any law.