Customs steps up efforts in fight against counterfeit cosmetics

In a recent interview, the Hong Kong Customs & Excise Department has highlighted the efforts made to tackle counterfeit cosmetics on the Hong Kong market, and urged IP rights owners to record their rights with Customs to facilitate such anti-counterfeiting efforts.

Customs officers, in particular, mentioned Customs' recent success in dealing with counterfeits of several popular Korean cosmetics brands. From March 2013 to February 2015, Customs investigated 51 cases involving counterfeit cosmetics; 74 people were arrested and goods worth over HK$1.3 million were seized. In the first two months of this year alone, Customs has already made three seizures involving counterfeits of a popular Korean cosmetics brand; six people were arrested and a total of 109 counterfeit items, including CC cream, lip gross, mascara and face masks, were seized. Customs indicated that the seized goods would be submitted to a government laboratory to test whether they contain any harmful substances.

Customs emphasized the importance for brand owners to record their IP rights with Customs in order to facilitate enforcement actions. To this end, Customs has reached out to the Consulate General of the Republic of Korea to encourage Korean brand owners to record their IP rights in Hong Kong.

It is worth noting, however, that as a condition for Customs to launch a criminal investigation, in addition to recording its IP rights with Customs, the IP right owner must also appoint an authorised examiner who can assist Customs in differentiating between counterfeit and genuine goods and give evidence in court, if necessary.

Moreover, in an attempt to facilitate the recordal process (especially for overseas brand owners), in April 2014 Customs set up an electronic recordal co-ordination centre, introducing video conferencing and 3D printing technologies. For overseas brand owners, arranging for the required documentation and logistics may take time and, sometimes, it may also be practically difficult for the overseas representatives to come over to Hong Kong. However, since the launch of the centre last year, Customs can now arrange video conferences with the brand owner’s authorised examiner (who may be overseas), which saves the need for the examiner to be physically present in Hong Kong. The introduction of 3D printing technology also allows Customs to print actual 3D samples of the genuine products, which facilitates the verification process. Customs cited the example of a hair curler manufacturer who took advantage of this 3D printing technology, which allowed Customs to take swift enforcement action in a trade fair last year.

Under Customs’ recordal system, IP owners may record their copyright and/or Hong Kong registered trademarks with Customs when there is a suspected case of infringement. With the recordal, Customs will then be able to investigate suspected counterfeit goods, either on its own initiative or upon report by the rights owner. During the recordal meeting, Customs will take the opportunity to assess whether the authorised examiner is capable of differentiating between the counterfeit and genuine goods, and whether he or she is a competent witness.

The initiatives described above demonstrate Customs’ determination to strengthen IP protection in Hong Kong. Brand owners, wherever they are located, are advised to record their IP rights with Customs when a suitable opportunity arises – this would even include cases where the counterfeit goods are not manufactured or sold at a physical place in Hong Kong, but are accessible to users in Hong Kong via the Internet (which has become increasingly common).

Alan Chiu and Eugene Low, Hogan Lovells, Hong Kong