Mon 29th Oct 2018

Customs watch: How to protect your brand from counterfeit imports (part 1)

Service: Trade marks

Sectors: Brand owners

In a typical year, counterfeit goods with a retail value of over €600 million are seized by customs across the European Union. Counterfeits entering the European Union include goods from China, Iran, Turkey, India and Hong Kong. Around 5 per cent of the seizures in the EU are in the UK.

The sheer volume of counterfeit articles seized demonstrates the scale of the problem. Fortunately, there are ways you can help your position in the fight against counterfeit products.

 

James Cornish, head of trade marks and brand protection at Page White and Farrer, explains the benefits of setting up a customs watching service.

 

The aim of a customs watching service is to give intellectual property rights holders the ability to seek active intervention from the Customs authorities in the EU in connection with suspected counterfeit goods, thereby providing them with more effective protection, fuelling creativity and innovation, while providing consumers with reliable and high-quality products, which, in turn, strengthens transactions between consumers, businesses and traders.

 

The scale of the counterfeit problem is reflected by the fact that around 40 million articles are seized each year. Around 2.8 million in the UK alone. By setting up a watch, you can preserve your market share, maintain profits, prices and the reputation of your product, by seeking to stop low quality, infringing imports, that infringe your valuable intellectual property rights.

 

In around 90% of customs actions, goods are destroyed, which amounts to about 75% of the articles seized. If each EU country is counted individually, there are around 35,000 customs watches in place.

 

What can be monitored via a customs watch?

A customs watch can be set up for different types of intellectual property. Although around 92% concern trademarks, they can extend to registered and unregistered designs, copyright, trade names [in certain countries], patents, certain utility models, geographical indications, plant variety rights, supplementary protection certificates and the topography of semiconductor products.

 

Customs watches can extend to both identical brands and to a brand that cannot be distinguished in its essential aspects from the earlier trade mark. Any packaging, label, sticker, brochure, operating instructions, warranty document, or other similar item, even if presented separately, can also be the subject of action.

 

How do you apply for a customs watch?

Those with intellectual property rights can apply to customs to look for and detain counterfeit and other infringing goods for a one-year period, which is renewable for further 12 month time periods.

 

You will need to provide certain information, including the following:

  • details of your IP Rights;
  • the EU member states you wish to cover;
  • details of your legal and technical representatives to be contacted with queries;
  • details of the genuine goods, for example distinctive features, or typical packages; and
  • details of likely infringing goods, for example, information regarding packaging.

 

You also need to give certain undertakings, including:

  • to inform customs if the intellectual property right ceases to have effect;
  • to inform customs if you cease to be entitled to submit the application;
  • to inform customs if there is any change in the information provided in the application;
  • to forward and update any relevant information to customs;
  • to assume liability if an act, or omission, leads to a customs action being discontinued;
  • to assume liability if samples are not returned, or damaged, due to your act, or omission;
  • where detained goods are found not to infringe, you will be liable to the owner of the goods who has suffered loss.

 

Bear all storage and/or destruction costs incurred by Customs

 

Work with the customs officials

Provide as much relevant material to customs as possible concerning potentially infringing goods. File ‘Red Alert’ forms where there is specific intelligence which helps customs identify imports, as well as ‘New Trends’ forms where there is information concerning a general practice in counterfeit imports. Work with customs, build a relationship with them, help train them to sport infringing imports.

 

Remember that the information provided will be circulated amongst customs departments in EU member states and available via a central computer database. However, you can request ‘Restricted Handling’, meaning that certain information is only visible to customs authorities in the EU member states where action is requested.

 

What are the costs?

The Application for Action request and subsequent renewals are free of government fees.

 

However, the following costs should be considered, before establishing a customs watch:

  • costs of your legal representative liaising with you, Customs and the infringer when detentions are notified;
  • costs of storage and handling detained goods;
  • costs of providing samples;
  • legal costs and compensation for civil liability, if the goods are not said to be infringing by a court;
  • destruction costs, including under the simplified procedure and small consignment procedure;
  • customs administrative costs; and
  • possible translation costs, when involving customs authorities in other countries.

 

Please note that should the seized goods be found to be counterfeit, the applicant may be able to recover such costs from the infringer by way of damages.

 

What can the information obtained from a customs watch be used for?

Information obtained from a customs watch can be used for the following purposes:

  • civil proceedings to determine whether an intellectual property right has been infringed;
  • criminal investigations concerning infringement, for example by Trading Standards;
  • criminal proceedings;
  • seeking compensation;
  • agreeing with the owner the destruction of the goods; and
  • agreeing security (guarantee) payments allowing for the early release of goods.

 

How can Page White and Farrer assist?

Page White and Farrer are experts in intellectual property law and can assist in all aspects, including:

  • applying for and administering customs watching services;
  • advising on and discussing your general intellectual property strategy;
  • obtaining national and European registered rights; and
  • sending cease and desist letters.

Author

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