A More Effective and Wider Customs Regulation?
A new Customs Enforcement Regulation, to replace Regulation 1383/2003 has been adopted by the Parliament and Council of the EU. The new Regulation comes into force in January 2014. The main changes are: (i) the extension of the regime to cover more IPRs and types of infringement; (ii) the adoption of the simplified procedure throughout the EU; and (iii) the introduction of a new even more simplified procedure in respect of small consignments. The new Regulation also helpfully expands the situations in which rightsholders are able to make use of information obtained from Customs.
New protected rights
The new Regulation covers: rights in trade names, semiconductor topographies, utility models and devices which are designed to circumvent technological measures. Significantly, it also broadens the scope of trade mark infringing goods that can be seized to include those that would infringe trade marks under Articles 9(1)(b) and (c) of the CTM Regulation, potentially therefore applying not just to identical marks on identical goods, but also to the use of similar marks (such as obvious misspellings) on goods, and in relation to goods that are similar (or, in the case of marks with a reputation, even dissimilar) to the goods in respect of which the trade mark is registered.
The original proposal also included a bid to bring parallel imports and unauthorised overruns within the scope of the Regulation. The fact that these will remain excluded may frustrate some rightsholders, but any disappointment may be lessened by the inclusion of new types of infringement and the relaxation of rules covering the use of information.
Compulsory simplified procedure
Under the "simplified procedure" Customs can already destroy certain goods without the need for the rightsholder to commence infringement proceedings, for example where the declarant does not oppose the destruction (which can be inferred by their silence). Under the old Regulation the simplified procedure, adopted by the UK in 2010, was voluntary. It will now be mandatory across the EU which will make action easier and the approach more uniform for rightsholders regardless of where the goods were seized.
New approach to small consignments
Small consignments are defined as postal or express courier consignments containing three units or less or with a gross weight of less than 2kg. If rightsholders opt in then, under the new system, Customs will be able to destroy suspected counterfeit or pirate goods in small consignments without the need for the rightsholder's involvement provided that, when notified by Customs, the declarant does not oppose destruction (which, as with the simplified procedure, can be inferred by their silence). This is a welcome step as it will undoubtedly reduce the administrative burden on rightsholders dealing with small consignments which, with the increase in online sales, are becoming ever more common. Rightsholders, however, should note that they could still be required to fund Customs' costs of this new procedure and that it applies only to goods defined as counterfeit or pirate (e.g. not to the other types of trade mark infringing goods referred to above).
The use of information received from Customs
The restriction on the use of information obtained from Customs (such as declarants' names and addresses and the origin, provenance and destination of goods) under the current Regulation means that it can only be used for certain purposes, such as deciding whether a right has been infringed, utilising the simplified procedure and/or initiating proceedings. The new Regulation will enable this information to be used much more widely, including to initiate civil or criminal proceedings and/or to seek compensation from the infringer after destruction of the goods. This is good news for rightsholders – it means that if items seized turn out to be unauthorised parallel imports, for example, rightsholders can use the information obtained from Customs to take civil action against the infringers (something restricted under the current regime).
Exchange of information between Customs authorities
The new Regulation provides for greater exchange of information between Customs authorities in Member States by requiring the establishment of a central database of information by 2015. Goods in transit are a tricky area and, although the original proposal had suggested incorporating the criteria in the Nokia and Philips cases into the new Regulation to increase the certainty over how Customs should deal with them, again this was dropped. As the new Regulation expressly allows sharing of information on goods in transit, the exchange of information provisions may help tackle the problem. A more effective solution may be to amend the substantive law to make "transiting" an infringement, but at present the factors determining whether goods in transit will be seized remain as set out in the CJEU decisions in Nokia and Philips.
Overall, the new Regulation undoubtedly represents a step in the right direction. The extension of the Regulation to cover new types of infringement is a significant departure from the old Regulation and will enable Customs to seize a far wider range of goods at borders. The expansion of the simplified procedure and new approach to small consignments will reduce the administrative burden on rightsholders, while the new rules concerning the use and sharing of information can only be a good thing in the continuing fight to identify and put a stop to IPR infringements.