Author: Inga Lukauskiene, an Associate Partner at METIDA, an Attorney-at-Law and a Patent Attorney
As it has already been mentioned in the press, on 12th June, 2013, the European Parliament approved the regulation no. 608/2013 of the European Parliament and the Council concerning customs enforcement of intellectual property rights and repealing Council Regulation (EC) no. 1383/2003.
However, the annulment of the regulation which was valid for a decade does not mean that from now on the distributors and sellers of counterfeit and pirated goods will be able to easily rest. On the contrary, the new regulation, which will come into effect across the European Union (as well as Lithuania) from 1st January 2014, will only be stricter.
The regulation aims to enforce the protection of intellectual property rights at the customs authorities, extending the range of protected intellectual property rights. In other words, apart from the IP objects listed in the prior regulation, the new one will also include utility models (however, they are not protected in all the EU member countries, including Lithuania), as well as topographies of semiconductor products and any other intellectual property rights which are protected as the objects of the exclusive rights under the EU law.
Also, under the new regulation, a period is extended from three to four days during which the proprietor of the intellectual property rights can submit a request to apply customs’ supervision measures in respect to these goods when the suspected goods are detained by the customs authorities on their own initiative. This is particularly important for Lithuania, since it is often the case that the proprietors of IP rights are not Lithuanian companies. Therefore, examining whether the customs detained goods are actually counterfeit goods, as well as deciding whether to take any actions and submit a request to customs was not easy.
As for counterfeit goods destruction, its procedures remain largely unchanged. The goods concerned may be destroyed where, within 10 working days of notification of the suspension of the release or the detention of the goods, the declarant or the holder of the goods has confirmed to the customs authorities his agreement to the destruction of the goods.
Like under the prior regulation, the expenses of storing and destructing the detained goods without going to the court have to be covered by the intellectual property rights proprietor, however, according to the new regulation, they will be able to “negotiate” with the customs regarding the costs of storing goods and also depending on the rights of a respective Member State, they will be able to seek compensation for costs incurred from the offender. If it was not possible to find out an offender, according the regulation, the proprietor of the goods or any other person who possesses the disposition rights of the goods shall be obliged to be responsible for such compensation.
The new regulation introduces yet another novelty – a “small consignment” concept. In such a case when a single commercial package contains fewer than three items or weights less than two kilograms, the proprietor of the goods or the declarant may object to goods’ destruction only within five working days, and with consent or without objection these goods will be destroyed without the presence of the proprietor of IP rights. However, if an objection is received, the intellectual property rights proprietor should take legal actions regarding intellectual property rights protection within ten working days. This simplified procedure is available only if the intellectual property rights proprietor notes in his application for the customs authorities that he wishes to take advantage of this opportunity. It should be noted that the terms provided are only applicable if the detained goods are not perishable goods, as in those cases shorter time limits are applied or they are not extended at all.
Taking into account the innovations introduced by the regulation, the new application form for customs supervision measures will be approved. The Republic of Lithuania’s Customs department will also have to develop the new rules of destruction of the detained goods.
The application of customs supervision measures, although not simple, is very important for business and quite effective – the total number of the EU seized counterfeit goods during 2012 is nearly 40 million units, while Lithuania has detained only about 140,000 units. In Lithuania goods are detained virtually every day because in 2012 the counterfeit goods were seized 390 times. The country of origin of the counterfeit goods entering the EU is mostly China, Hong Kong and Turkey, and the goods brought to Lithuania are usually from China, Taiwan, Hong Kong, Singapore, UAE and India as well as noted “new” country of origin – Ukraine. From there counterfeit goods usually come in small consignments.
Currently, the Customs department administers about 900 requests for application of customs supervision measures. About 80 of them are presented to the Customs department as national requests, whereas the majority of requests are from other countries for application of customs supervision measures in the whole or part of the Community.
EU-wide counterfeit goods consist mostly of watches, haberdashery and clothing, mobile phones and their accessories. In Lithuania there is a lot of detention of fake clothing, footwear, haberdashery and mobile phones and their accessories.