UK: Customs Seizures Throughout The European Union

by Isabel Davies

On 1 July 2004 European Union Regulation 1383/2003 came into force, simplifying the procedures for seizure by Customs of infringing goods throughout the EU. Businesses should consider their current customs seizure arrangements, as significant efficiencies are now available. Preventing counterfeit or pirated goods from entering the EU can be much more efficient than trying to stop distribution once the goods enter the EU.

There are two routes available to IP rights owners:

1. A Community application can be made in respect of EU-wide intellectual property rights, such as Community Trade Marks and Registered Community Designs. The procedure requires one application to be made to one Customs Authority, for example, HM Customs & Excise in the UK, with a request that the application covers any or all of the 25 Member States of the EU. Once the Community application is granted, a copy of the decision with the supporting information and any necessary translation is sent to the other nominated Member States.
2. National applications can be made in respect of national intellectual property rights, such as UK or French trade marks and patents. The procedure requires a separate application to be made to each of the relevant Member States in which national intellectual property rights are held and Customs seizures are desired. Community-wide rights (such as CTMs) can also be notified using the national route.

An application requires two nominated representatives. These representatives will be required to liaise with Customs regarding the legal procedures and provide technical details to authenticate suspected goods that have been seized.

Accompanying an application is a declaration of liability, to be completed by the owner of the intellectual property rights. This is a standard form of undertaking whereby the owner agrees to reimburse costs incurred by Customs in respect of any seizures and the value of any goods destroyed. The reimbursement is only required in the event that an action is discontinued due to the act or omission of the owner, or where the goods in question were found not to infringe the owner’s rights. This procedure is less cumbersome than that previously in place, which required payment of a security cash deposit equivalent to the value of the goods seized.

The application should include information about the IP rights owner’s products, any specific information on the pattern of fraud suffered and a list of the owner’s relevant IP rights together with evidence of ownership. In practice, Customs often only requires the last of these, proof of rights.

It would also be useful to list legitimate importers to avoid genuine products being detained.

In respect of a Community application, there are advantages to nominating HM Customs & Excise in the UK initially to process the Community application and subsequently circulate the granted application to the other Member States. This is because many of the Member States accept the granted Community application in English. HM Customs & Excise use precedent "covering letters" which they have already translated. Many of the Member States only require the Community Trade Mark registration numbers and do not normally request a translation of the Community Trade Mark certificates. However, if any country does require any further translations (e.g. translations of the information regarding known frauds) it would duly request it and HM Customs & Excise would let the nominated representatives know.

Once an application has been granted it will be valid for one year and renewable annually.

If Customs suspects goods are counterfeit, it may detain the goods and suspend release for a maximum of 20 working days. Immediately following detention, the Customs Officer must inform the Customs Authority which in turn contacts the applicant. Inspection of the suspected goods is permitted and samples may be handed over at the applicant's express request.

Once it is ascertained that seized goods are counterfeit, two options are available. The first option is to initiate court proceedings, which, due to the cost of such an action, would only be advisable where a sizeable fraud had been uncovered and broader relief such as damages is sought.

The second option is to seek agreement with the infringer that Customs may destroy the suspected goods. The negotiation with the infringer may elicit further information regarding the source of the goods. In addition, it is advisable to seek an undertaking from the infringer to cease such activity and pay Customs’ costs of destruction for which the owner is otherwise liable. Certain time limits and procedural requirements are relevant to both of these options.

To put together the packs and complete the application forms for the first year of registration will be effectively a "one off" cost. The subsequent years’ renewal procedures will be limited to providing updated information regarding any new intellectual property rights which may have been obtained.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.