New EU regulation to fight counterfeiting and piracy
The European Council of Ministers has adopted a regulation that will give harmonized, simplified and low-cost access to customs actions within the European Union for use in relation to goods suspected of infringing intellectual property (IP) rights. The text, which will come into force on July 1 2004, will replace Council Regulation 3295/94 while maintaining its underlying principles.
Firstly, the new regulation will extend the scope of competence of customs authorities to cover (i) goods that infringe rights in plant varieties, geographical indications and designations of origin, and (ii) goods included in travellers' personal luggage within the duty free allowance if they are suspected to be part of larger-scale traffic. The aim is to detect criminal networks hidden behind mules - the people carrying the goods through customs.
Secondly, the scope of the procedures that can be carried out at the customs authorities' own initiative will be extended to include asking rights owners to provide any information needed to confirm customs' suspicions of IP rights infringement. It is suggested that customs do this as a matter of course, as such information is often vital to the apprehension of infringers. Customs authorities will also be able to detain goods suspected of infringing rights in plant varieties, geographical indications and designations of origin for up to three working days (the same as for other IP rights such as trademarks). This will give rights owners the time to submit a formal application for action to the competent authorities.
Other procedural changes include the following:
- Applications requesting that customs seize infringing goods will no longer require the payment of a fee or a security check (which can deter applicants). Instead, they will have to be accompanied by an undertaking to cover liability arising from customs actions (eg, storage costs).
- The application form to be filled in by rights owners and the information required of them will be standardized; electronic submission will be encouraged. The period of validity of the application will also be harmonized and last up to one year, subject to extension.
- Rights owners will receive detailed, frequent information from customs authorities about suspect consignments. They will be entitled to (i) receive samples for analysis, and (ii) have illegal goods destroyed with the agreement of the person holding or declaring the goods, without the need for substantive litigation (which is a hurdle under the existing regulation).
- Information provided to rights owners by customs may only be used for specific purposes, but this does not include negotiating with the alleged infringer to achieve an out-of-court settlement. Breach of this restriction can lead to civil liability, suspension of the application for action and refusal to renew it.
The regulation's aims look likely to be achieved. However, this will not obviate the need for businesses to take action themselves. They will continue to need to monitor and exchange information within their industry, as well as auditing, inspecting and tracking goods through distribution channels.
Jeremy Drew, Ashurst Morris Crisp, London
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