The European Commission has published a Consultation Paper to review the current Counterfeit Goods Regulation, with a view to replacing it.

The four main areas that the Commission seeks to review are: the scope of the Regulation; the voluntary simplified destruction procedure; provisions concerning small consignments of goods; and the costs of storage and destruction of infringing goods.

The Consultation will be welcomed by brand owners as it looks to address their key concerns with the current system.

Responses to the Consultation must be received by 25 May 2010. CMS Cameron McKenna LLP will be submitting a response to the Commission. In this regard, if you have any comments in respect of the Consultation Paper or issues regarding the proposals we would be happy to discuss these with you. Equally we would be interested to hear from any brand owners intending to submit their own response.

Please click here to access the Consultation documents.

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The European Commission has published a Consultation Paper to review the current Counterfeit Goods Regulation (1383/2003/EC) (the "Regulation"), with a view to replacing it.

The Regulation concerns customs action against goods suspected of infringing intellectual property rights. It provides a system for owners of IP rights to request national custom authorities to take action (such as seizure and detention) against counterfeit goods. Custom authorities also have the power to detain goods on their own initiative and then invite IP rights holders to make a formal request for action by the customs authority.

The four main areas that the Commission seeks to review are: the scope of the Regulation; the voluntary simplified destruction procedure; provisions concerning small consignments of goods; and the costs of storage and destruction of infringing goods.

1. Scope of the Regulation

In which situations are customs authorities competent to take action?
Article 1 of the Regulation sets out the conditions for action by customs when goods are suspected of infringing an IP right, in particular when they are entered for release for free circulation, export or re-export, or found under customs supervision during transit. The Commission asks in which situations of infringing goods, customs authorities should take action. The Commission also makes clear that the Regulation should not affect the substantive IP law of Member States.

What range of IP rights should be covered by the Regulation?
Article 2 of the Regulation defines "goods infringing an IP right" as: counterfeit and pirated goods; and goods which, in the Member State in which the application for customs action is applied, infringe: patents, supplementary protection certificates, national plant variety rights or a designation of origin or geographical indication.

Under this Article the IP rights covered vary widely from counterfeit trademark goods and pirated copyright goods, to any IP infringement, namely; copyright and related rights, trademarks, geographical indications, industrial designs, patents, utility models and plant variety rights.

2. Simplified Destruction Procedure

Should the simplified destruction procedure remain optional, made compulsory or deleted from the Regulation altogether?
Article 11 establishes a simplified procedure enabling customs authorities to have infringing goods abandoned for destruction under customs control, without there being any need to determine whether an IP right has been infringed. This provision is not mandatory for Member States and so results in a lack of uniformity in approach.

Is there any possible derogation for which customs will not be competent to take action?
 Article 3 of the Regulation contains several derogations of possible IP infringements which are excluded in its scope, concerning:

  • small quantities of goods of non-commercial nature contained in a travellers personal baggage;
  • certain violations of licence contracts considered an IP infringement by substantive IP law, known as product "overruns"; and
  • parallel trades

The consultation will consider whether any, if not, all of the derogations should be kept in or withdrawn from the Regulation.

3. Small Consignments

Should there be a simplified procedure to deal with small consignments?
There is a growing problem of small consignments of infringing goods being sold over the Internet and distributed by post or couriers. The Commission envisages a simplified procedure to deal with this problem, where rights holders would not necessarily be involved and the goods could be destroyed under customs' supervision. Such a procedure would require the concept of small consignment to be defined, as well as a further procedure if the holder of the goods did not agree to abandon the goods for destruction.

4. Costs of Storage and Destruction

What should the scope of the provisions regarding costs in the Regulation be?
Article 6 provides rights holders with the responsibility for the costs of keeping goods under customs control. Concerns have been raised by rights holders as to the attribution of these costs resulting from storage and destruction of infringing goods; who have suggested that capacity and costs of storage and destruction create a serious obstacle to the effectiveness and efficiency of the Regulations.
With this in mind, the Commission considers whether the regulation should refer to any costs or be limited to the costs incurred by customs authorities? It also questions to what extent responsibility of costs be borne by each of the economic operators involved, such as, shippers, consigners, and customs declarants?

Intellectual property right infringements are a growing concern, particularly in a globalised economy. As well as negative economic consequences for industry, infringing products may pose serious health and safety risks to consumers.

The Consultation will be welcomed by brand owners as it looks to address their key concerns with the current system.

Responses to the Consultation must be received by 25 May 2010. CMS Cameron McKenna LLP will be submitting a response to the Commission. In this regard, if you have any comments in respect of the Consultation Paper or issues regarding the proposals we would be happy to discuss these with you. Equally we would be interested to hear from any brand owners intending to submit their own response.

Please click here to access the Consultation documents.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 20/04/2010.