Counterfeit goods are recycled instead of re-exported in landmark customs case

United Arab Emirates

Over the past three years, when counterfeit goods were found in Dubai, the Dubai Customs Authority re-exported them back to where they came from. This was generally seen as unsatisfactory for brand owners, as the counterfeit goods still existed and could move to other markets, or even be sent back to Dubai by other means.

Finding alternatives to the re-exporting of counterfeit goods in trademark cases was one of the most discussed topics during a workshop conducted by the Dubai Customs Authority in November 2014. The workshop was attended by senior delegates, brand owners’ representatives, diplomatic commercial attachés in the region, IP attorneys and others. The director general of Dubai Customs re-affirmed his commitment to support all border measures that protect the rights of IP owners. As a result of this workshop, as well as Dubai Customs' desire to implement a new policy, extensive efforts were made to take practical steps to enhance the procedures and promote the adoption of alternative options in cases involving seizures by Customs.

After many years of receiving unsatisfactory decisions (ie, orders to re-export counterfeit goods and/or release them), Al Tamimi & Company’s intellectual property department worked closely with brand owners to develop a discussion with Dubai Customs to change the re-exporting policy in IP cases. As a result, a new mechanism to dispose of counterfeit products was adopted, which is practical and environmentally friendly: recycling.

Dubai Customs’ re-exporting policy was based on environmental concerns, since the volume of counterfeit goods seized was so massive that, if destroyed, it would create a huge and unexpected burden on the waste sites managed by the Dubai Municipality. Consequently, the Dubai Municipality objected to the destruction of the goods. Recycling, however, avoids the creation of additional waste while also destroying the counterfeit goods, so that they can do no further harm to the public or brand owners.

The new recycling policy, as an acceptable way of destruction, is now in place.

In a recent case before Dubai Customs involving a major tobacco company, a promising, unique and pro-trademark decision was issued and executed for the benefit of the brand owner.

During an ad hoc inspection conducted by Jabel Ali officials, a suspected shipment containing around two million counterfeit cigarettes was found at the storage facility of a logistic company. Forensic inspection of samples was undertaken, and the goods were found to be counterfeit. An official customs complaint was lodged on behalf of the brand owner to seek confiscation and destruction, through recycling, of the counterfeit goods at an accredited service provider arranged by the tobacco company. This was accepted by Dubai Customs and, on March 18 2015, the goods were recycled.

This case establishes an important precedent for trademark owners in customs cases and encourages the Dubai Customs Authority to revisit its border protection strategy. Customs showed its willingness to work with brand owners on alternative solutions in IP cases and to swap its re-exporting policy for a more environmentally-sound recycling policy. There are indications that the customs authorities in the wider United Arab Emirates are trying to implement the recycling policy uniformly, as evidenced by contractual undertakings with local UAE recycling companies.

Another positive feature of the case is that this precedent was established by the Dubai Customs officials in Jabel Ali Port, which is the busiest seaport in the region. Their willingness to conduct ad hoc inspections of logistic companies and service providers in the free zones, and to put extra efforts in ensuring compliance with trademark rules, is a monumental step in the right direction for the implementation of the recycling policy, and the enforcement of IP rights generally.

This landmark decision may revitalise the excellent co-operation between brand owners and Dubai Customs on different IP protection strategies. This will hopefully open a new era of co-operation in IP enforcement with border authorities, and set a new protocol to dispose of counterfeit products using environmentally-friendly technologies, which is of the utmost importance for all stakeholders involved in this process.

Munir Suboh, Al Tamimi & Company, Dubai

Al Tamimi & Company acted for the brand owner in this case

Get unlimited access to all WTR content