Counterfeiting – protecting your intellectual property rights

Posted by Ben Evans on
Counterfeit goods and illicit trade severely impacts legitimate business and is an increasing problem across the world.

According to PricewaterhouseCoopers it is estimated that the revenue made from the sale of counterfeit goods across the globe is in the region of US$650 billion a year. The EU Commission's annual report on customs actions stated that in 2012, 38 million products were impounded by customs in Europe alone with an estimated value of €1billion.

Moreover, Immigration Minister Mark Harper said: "the international trade in counterfeit goods is serious organised crime and is a serious threat to the UK economy in terms of lost profits and tax revenues and are estimated to cost the economy around £1.3 billion a year."

Businesses are suffering at the hands of organised counterfeit crime which is gradually damaging their brand, reputation and revenues. Therefore it is important that businesses are aware of their rights and how extra protection of their brand can be sought.

HM Revenue & Customs (HMRC) is the UK customs authority responsible for national policy governing IP rights enforcement at the UK's external border. HMRC together with Border Force (a law enforcement command within the Home Office) are responsible for carrying out frontier interventions that implement this policy against suspected counterfeit goods. In January 2014, the EU further enhanced national customs authorities' powers by enacting the Customs Enforcement Regulation 608/2013 (the Regulation).

To benefit from the enhanced powers under the Regulation businesses must own intellectual property rights in the UK or Europe. Intellectual property rights owners (IP owners) can apply for further protection from HMRC.  This requires the IP owner to complete a National Intellectual Property Rights Application for Action (AFA) which will register the rights in a specified jurisdiction. An EU AFA can be filed to gain registration across all EU member states. The protection granted by the AFA lasts for an initial period of one year and can be renewed each year thereafter. The Applicant will be asked to provide specific information about their goods as set out in Article 6 of the Regulation.

Once the IP owner has successfully registered their rights, customs authorities will intercept goods that they suspect may infringe those rights. If suspicion arises then Border Force can detain the goods. The IP owner will be notified of the detention and invited to confirm whether or not they believe the goods to be infringing. The IP owner will be given 10 working days to assess non-perishable goods and 3 working days to assess perishable goods.

If goods have been detained and the IP owner has been notified by Border Force then the IP owner must then decide on a course of action and whether it wants the goods to be destroyed. There are three courses of action: allow the good to be released by customs; ask for the importer's permission for the destruction of the goods; or initiate court proceedings.

  • Allowing the goods to be released may be the appropriate decision if the IP owner does not believe the goods are infringing. Alternatively, it may be commercially viable for the IP owner to permit the release of the goods when considering the costs it could be liable for if further action is pursued.
  • If the IP owner seeks permission for the destruction of the goods from the importer and it is granted, it must provide evidence to Border Force who will then destroy the goods. If the importer refuses to permit destruction, the IP owner can issue civil court proceedings in order to maintain detention of the goods. A Court issued Claim Form and proof that the proceedings are in relation to those goods must be provided to Border Force.
  • Finally, if the importer does not respond, Border Force may assume that their consent has been granted and destroy the goods. It should be noted that if the importer later claims that the goods were not infringing, the IP owner may be financially liable for the value of the goods destroyed.

Costs for the storage and destruction of detained goods are the responsibility of the IP owner. The IP owner may exercise their right to initiate proceedings to recover these costs.

If your business has intellectual property rights it wishes to register for extra protection or you would like more information about counterfeiting and the effects it could have on your business, please contact the Blake Morgan intellectual property team.


About the Author

Ben is a dual-qualified Solicitor and chartered trade mark attorney and advises clients on both contentious and non-contentious intellectual property matters.

Ben Evans
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