Member Article

Customs has changed, with immediate effect, the way in which they deal with goods suspected of infringing brand owners' intellectual property rights.

The changes are bad news for brand owners who now have to initiate court proceedings each and every time they wish Customs to seize a consignment of infringing goods.

The old system
If HMRC suspected that goods were infringing a brand owner's intellectual property rights, they detained the goods and sent the brand owner a sample to examine. The brand owner would then return a witness statement to Customs confirming which particular IP rights had been infringed; Customs would then seize the goods.

If the owner of the goods objected to their seizure, the onus was on him to challenge the seizure via legal proceedings.

The new system
The burden of proof now switches to the brand owner as, in accordance with the new system, it is the brand owner that must bring legal proceedings to confirm that the goods in question are infringing its intellectual property rights.

The procedure is now as follows:

• when Customs detect goods which they believe infringe a brand owner's intellectual property rights, they will contact the brand owner or their nominated representative e.g. Shoosmiths, and will detain the goods for 10 working days
• the case officer will supply to the brand owner's nominated contact relevant information with regard to the goods. The brand owner can request a sample of the goods for the purpose of analysis and to facilitate the procedure
• Customs will only detain the goods for 10 working days. The period of detention can be extended by a maximum of a further 10 working days, if requested, but it should be noted that the detention period cannot exceed 20 working days if court proceedings have not been initiated
• the brand owner must initiate proceedings in court alleging that the goods infringe its intellectual property rights OR reach written agreement with the owner of the goods that he abandon the goods. Either course of action must be taken within 10 working days of notification from Customs (or 20 working days if an extension has been agreed with Customs)
• once court proceedings have been initiated, Customs will detain the goods pending the outcome of the proceedings. If the goods are found to infringe the brand owner's intellectual property rights, Customs will then seize the goods. If not, the goods will be released back to the goods owner.

An important exception to the above time limits applies when the goods in question are perishable. In such cases, the detention period within which court proceedings must be initiated will not exceed 3 working days and cannot be extended.

what does this mean?

 

Brand owners, in particular those who deal with perishable goods, will have to be quick off the blocks in initiating court proceedings once they have received notification of a potential infringement from Customs. Failure to do so within 10 working days (3 working days if the goods are perishable) could mean that the infringing goods are released from Customs and therefore open to be sold on the UK market. It would then prove much harder for the brand owner to track down all the goods and obtain possession of them.

what should you do?

 

• talk to Shoosmiths about how we can help your business deal with these new procedures e.g. we can be your nominated representative, we can liaise with Customs directly and train them to identify parallel imports and counterfeit goods that infringe your intellectual property rights
• put in place a company procedure which sets out how notifications received from Customs should be dealt with
• train staff to understand the procedure and its importance to the brand
• if you have not already done so, inform Customs of your nominated representative to whom Customs should send notifications, whether it be an internal representative or Shoosmiths; and
• be prepared to act quickly once a notification is received

 

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