Implementing regulation for new EU customs rules now in force

The regulation implementing Customs Regulation 1383/2003 on customs' powers against counterfeiting and piracy has come into force. The main regulation came into force on July 1 2004 to replace Regulation 3295/94 (see New rules make it tougher to get infringing goods across borders).

The new Customs Regulation sets out conditions under which customs authorities may intervene where goods are suspected of infringing IP rights. Customs officers now have the right to seize, on their own initiative, goods that they suspect of being counterfeit, without requiring an application from the rights holder.

The regulation also covers new IP rights, including geographical indications (GIs), designations of origin (DOs) and plant variety rights - a sad reflection of the increasing diversity and escalation in the number of counterfeit products, which now include as many food items as textile products.

The other provisions of the regulation may be summarized as follows:

• Applications for action submitted to customs authorities are free of charge. (The UK HM Customs & Excise abolished the UK administration fee in advance of implementation, although early indications are that pressure on storage and resources has led to a new customs practice of charging brand owners for storage and disposal. This appears to be occurring at Heathrow airport near London.)
  
  
• Rights holders may obtain more information about suspect goods, for example, as to their origin, and their actual or supposed quantity. Samples can be made available to rights holders for technical analysis.
  
  
• Rights holders may request that goods be destroyed, with the permission of the holder of those goods or the person who declared them to customs. There will be no need for substantive legal proceedings. This should, in theory, keep storage and associated costs low. The destruction of counterfeit products will also be speeded up in specific cases, for example, where goods present a risk to health and safety.

The implementing regulation was produced by the European Commission in conjunction with the Customs Code Committee. Annexed to the regulation are new forms for applications for customs action. The same forms will therefore apply throughout the European Union. The forms will (i) be valid for one year, and (ii) not be subject to a fee. Rights holders will receive an official confirmation that they have been received, and accepted or rejected, within 30 working days. The forms can be submitted online and will be available for downloading from the commission's and national customs' websites.

Every application for action in relation to a registered IP right must be accompanied by either (i) proof of registration with the relevant office, or (ii) proof that the application has been lodged. A copy of registration from the database of a national or international office may be considered to be proof for these purposes. In the case of a copyright, related right or design right that is not registered or for which an application has not been lodged, evidence of authorship or of the applicant's status as original holder must be provided. For protected DOs and GIs, the proof required must, in addition, establish that (i) the rights holder is the producer of the goods, and (ii) the DO or GI has been registered. Where the application is made by a representative of the rights holder, proof of authorization to act must also be provided.

Applicants are required to provide contact details for the person responsible for "administrative matters" and "technical matters" (ie, someone capable of saying whether or not an item is counterfeit). The application form invites applicants to provide as much information as possible about its genuine products, the technical description of counterfeit goods and any specific information the rights holder may have concerning the type or pattern of fraud. The information should be as detailed as possible to allow the customs authorities to identify suspect consignments simply and effectively.

Harmonization of the forms and procedures should ensure that rights holders can take more effective action across the European Union. In this respect, the commission recommends that applicants apply for actions covering a Community right, such as a Community trademark, wherever possible since this allows the applicant to register in one member state and then tick the relevant boxes for the application to operate in the others. The UK Anti-Counterfeiting Group (ACG) says that, bearing in mind the ease of changing import routes, asking for action in all states is highly recommended.

One minor drawback is that member states can insist on the applicant providing a translation of the application form. Another point to have been raised is that, while lodging an application entitles rights holders to more information than ever before, that information must be used for the purposes specified by the regulation (eg, formal infringement proceedings or procedures for the destruction of counterfeit goods). The regulations appear to preclude specifically use of information, such as the name and address of the importer of the counterfeit goods, for any other purpose. The ACG feels that this may make it difficult for rights holders who simply want to use this information in order to come to some amicable settlement with the importer/owner of the counterfeit goods. It remains to be seen how the regulation will work in practice.

Rachel Aaron, Hammonds, London