When can silence be taken as agreement to destruction of counterfeit goods?
At EU level, customs enforcement of IP rights is covered by the EU Customs Regulation (1383/2003). Under the regulation, if customs authorities have sufficient reason to suspect that goods infringe an IP right, they may suspend their release and inform the rights holder, the declarant and/or the holder of the goods (Article 9(2)). From this point, the rights holder in principle has 10 working days (extendable to a maximum of 10 additional working days) to inform the customs authorities that judicial proceedings have been initiated to determine whether its IP rights have been infringed under national law; failing this, Customs will release the goods (Article 13). However, Article 11 of the regulation allows EU member states to set up a simplified procedure to enable their customs authorities to destroy the goods without having to undergo formal and costly IP infringement proceedings.
Pursuant to Article 11, EU member states that implement the simplified procedure in national legislation must apply the following conditions:
- The rights holder must agree to use the simplified procedure.
- The rights holder must confirm that the goods infringe its IP rights.
- The rights holder must submit to Customs the written agreement of the declarant or goods holder to abandon the goods for destruction. In the absence of explicit opposition by the declarant or goods holder within the prescribed period, this agreement will be presumed.
The wording of Article 11 is unclear as to whether the rights holder must undertake any specific action to inform the declarant or the goods holder of its intention to use the simplified procedure and, if it must, which measures are sufficient to ensure that the declarant or goods holder has been informed and has an opportunity to challenge the procedure.
In several EU member states that have implemented the simplified procedure, it is commonly believed and accepted that this procedure can be applied only where the rights holder has previously sent a formal notice to the declarant or goods holder, and that in the absence of such a formal notice, the silence of the declarant or goods holder cannot be presumed to be implicit agreement to the destruction of the goods. This interpretation is based on the fact that Article 11(1) of the regulation states that the rights holder must "provide the authorities with the written agreement of the declarant, the holder or the owner of the goods to abandon the goods for destruction". This suggests that the rights holder must first formally notify the declarant or goods holder in order to obtain consent to the destruction.
On January 17 2013 a company specialising in the import and export of clothing items imported clothes bearing several known trademarks from Turkey. After control, the customs authorities suspended the release of the shipment on suspicion of counterfeiting. On February 1 and 4 2013 Customs notified both the importer and the representative of the relevant trademark owners of the suspension of release. On March 4 2013 the representative of the trademark owners informed Customs that the goods were indeed counterfeit and requested their destruction pursuant to the simplified procedure laid down in Article 11. On March 7 2013 – after the time limit set forth in Article 11 had expired – the importer requested the release of the goods on the grounds that no legal proceedings had been initiated by the trademark owners in accordance with Article 13 of the regulation. The customs authorities refused. The importer therefore submitted a claim before the president of the Brussels Court of First Instance for summary proceedings against the Belgian government.
The court had to decide whether the importer was entitled to request release of the goods, considering that he had failed to challenge expressly the destruction of the goods under the simplified procedure within the time limit set forth in Article 11. The importer claimed that Article 11 could not be applied by Customs, because the trademark owners had failed to send him a formal notice informing him of their intention to request the application of the simplified procedure (the representative of the trademark owners had in fact sent a formal notice to the importer, but to the wrong address). In essence, the court therefore had to decide whether the trademark owners were entitled to seek destruction of the goods under Article 11, despite the fact that the importer had not been informed of their intention to seek destruction of the goods in accordance with the simplified procedure.
In a June 6 2013 judgment (Docket 13/414/C, unpublished), the Brussels Court of First Instance ruled that, where the period mentioned in Article 11 has expired and the declarant has not expressly opposed the simplified procedure, its silence can be deemed as consent to use the simplified procedure, regardless of receipt of any formal notice. The court noted:
"According to Article 11(1) of Regulation 1383/2003, independent of whether [the holder of the goods] had received a formal notice or not, which [he] contests in the case at hand, it is clear that, in absence of any reaction, the delay within which the recipient of the goods is deemed to have abandoned them and to have accepted their destruction starts from the date of the notification provided for in Article 9.2. As an import-export professional, [the holder of the goods] knew or should have known that from the date of the notification made to him, the rights holder could decide to use the simplified procedure. It was therefore up to [the holder of the goods] to inform [the rights holder] of his refusal to abandon the shipment, from the date of the notification of the detention of the goods, rather than to wait until the expiry of the period referred to in Article 13 of Regulation 1383/2003." (emphasis added)
This decision will surely be welcomed by rights holders, as it makes it easier for them to request use of the simplified procedure.
Moreover, this decision can be seen as visionary, since Article 23 of EU Regulation 608/2013 concerning customs enforcement of IP rights – which will replace the existing Regulation 1383/2003 from January 1 2014 – not only makes the simplified procedure compulsory for all EU member states, but also relieves the rights holder of the requirement to provide Customs with the written agreement of the declarant (which was the basis for the main argument that the rights holder had to send formal notice to the declarant under Regulation 1383/2003).
However, it appears that the effective use of the simplified procedure based on implied consent under Regulation 608/2013 has become less certain. The new regulation suggests that the silence of the declarant or goods holder will no longer automatically be deemed to constitute agreement to abandon the goods for destruction – which has so far been the case under Regulation 1383/2003. Regulation 608/2013 states that:
"Where the declarant or the holder of the goods has not confirmed his agreement to the destruction of the goods nor notified his opposition thereto to the Customs authorities, within those deadlines, Customs authorities may deem the declarant or the holder of the goods to have confirmed his agreement to the destruction of those goods." (emphasis added)
In contrast, Regulation 1383/2003 states that "[t]his agreement shall be presumed to be accepted when the declarant, the holder or the owner of the goods has not specifically opposed destruction within the prescribed period" (emphasis added).
Sophie Lens, ALTIUS, Brussels
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