New customs department will combat counterfeit and pirated goods

In an attempt to comply with EU requirements, Hungary has established the Intellectual Property Enforcement Department (IPED) within the Hungarian Customs and Finance Guard. The IPED is designed to prevent the importation of pirated and counterfeit goods from non-EU countries, and the regulation contains measures to prohibit the release of such goods into circulation.

The IPED may take action either independently or at the request of the goods' IP rights owner. Owners may, following the payment of a deposit covering the potential storage or destruction costs of the goods concerned, ask the IPED to seize the goods. The formal application, which will be dealt with within five days of filing, must include:

• a description of the goods;
  
  
• proof that the applicant is the rights holder; and
  
  
• in the case of pirated goods, additional information regarding, for example, the identity of the importer/exporter, and the location or intended destination of the goods.

Alternatively, where in the course of customary checks it appears that goods are counterfeited or pirated, the customs authority shall notify the rights holder (if known) of the infringement and of his/her right to lodge an application with the IPED. In such cases the customs authority may suspend release of the goods for a period of three working days to enable the rights holder to lodge an application. If no application is lodged, the suspension will be lifted and the goods will be released, leaving them free to enter commercial circulation.

If the identity of the rights holder is not known, the customs office shall notify the Hungarian Patent Office or, in the case of copyright or neighbouring rights, the relevant collecting society. If the patent office or the collecting society fails to provide information on the rights holder's identity within five days or it does not wish to take action, the goods will be cleared.

If a court rules that goods are counterfeited or pirated, the customs authority will follow the instructions set out in the judgment. If ownership of the goods is waived in favour of the state, which is one option available to the importer, the authority will arrange for the goods to (i) be destroyed, or (ii) be used non-commercially (eg, by donating them to charity).

There is only one problem with the new rules: the governmental decree setting up the IPED and containing the above procedural rules was modelled on an EU regulation that was, as of July 1, repealed and replaced by Council Regulation 1383/2003 (see New rules make it tougher to get infringing goods across borders). The decree has not been updated to take account of the new rules. The new governmental decree that will set out specific rules to complement the new regulation is still under discussion at the Ministry of Justice.

Dr Ivan Bartal, Oppenheim és Tásai Freshfields Bruckhaus Deringer, Budapest