National Customs Service carries out largest-ever seizure of counterfeit goods

Chile

On March 1 2017 the Chilean Customs Service seized, in the free port of Iquique, a shipment of 238,418 sport shoes bearing the trademark EILA, which was written in such a way as to resemble the original trademark FILA, owned by Fila Luxembourg SARL, thereby infringing Fila's IP rights. The goods came in 16 containers originating from China. This seizure is the largest-ever border measure carried out in Chile.

The seized products had been imported to be sold not only in Chile, but also in other South American markets. The official commercial value of the shipment was $10 million - despite the fact that the importer, a Chinese citizen called Di Lui, had declared that the value was only $1 million.

The seizure was carried out pursuant to the Chilean regulations on border measures, implemented to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights, and pursuant to the authority given to Customs by their own regulations and the tax law. These measures are also consistent with the intellectual property protection agreed by Chile in the free trade agreements signed with the United States, the European Community and many other parties.

The fake shoes are now under the jurisdiction of the Court of Iquique, which has received four complaints from Customs for smuggling and other illicit acts, and a criminal complaint from the affected party. The court must now decide on the fate of the goods. Further, as an administrative measure, the importer can be suspended or expelled as user of the free zone.

If the IP infringement and/or the other offences are confirmed by the court, it is likely that the merchandise will be destroyed after the corresponding criminal proceedings. According to statements by Customs and the local authorities in Iquique, the seizure was carried out in order to preserve the owner's IP rights and the credibility of the free port system, as well as the certainty of public trade.

International executives from Fila highlighted the efficiency of the Chilean customs officials, stating that such actions guarantee the existence of a credible commerce system and that, to the best of their knowledge, this was the largest seizure of fake Fila products worldwide. In this respect, it must be pointed out that the Chilean border protection system has well-trained officials, who work in partnership with prosecutors, the courts, the police and IP owners.

It is also noteworthy that, when an IP crime is involved, the cooperation of the IP owners is essential, as the merchandise may be released if the latter do not appear to pursue the case - thereby frustrating the whole system. On the contrary, when IP owners actively fight against counterfeiting and support customs and police activities, they give a strong signal to the market, showing that they will not tolerate the counterfeiting of their brands in a given territory. This has a dissuasive effect on offenders, who prefer to turn their attention to other trademarks.

It is also important to note that, usually, goods imported through the free port of Iquique are sold not only in Chile, but also in other countries in the region - especially Paraguay, Peru and Bolivia. In this respect, the courts have declared that illicit goods stored in Iquique while in transit to other countries may be the object of border measures by the Chilean authorities.

Sergio Amenábar and Felipe Pavez, Estudio Villaseca, Santiago

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