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2.11. Patents, Copyrights and Use of Trademarks with Respect to Imports

Goods imported into the EU must not infringe any intellectual property rights, including patents, copyrights and trademarks, which other operators may hold in the EU. Hong Kong traders should inquire into whether the goods they want to export to the EU are already subject to a patent, copyright, trademark or any other intellectual property right in any of the EU Member States, and obtain, if necessary, an appropriate licence from the right-holder. Otherwise, as explained below, the imported goods could be seized at the time of importation or afterwards.

2.11.1 Border Measures

a) Most Frequent Products Subject to Counterfeiting in the EU

The European Commission has reported for the first time a decreasing number of customs enforcement activities, with 43,570 seizure actions in 2009 (a decrease of around 12% as compared with 2008) and with 118 million objects seized in 2009 (decreasing from 178 million in 2008). The European Commission points out that the decrease in the number of cases is mostly due to the global downturn in trade last year. Yet, the number of customs interventions remains at a relatively high level compared to previous years. While counterfeiting has traditionally been applied to luxury items, in recent years it has increasingly been applied to household consumer goods (e.g., shampoos, toys or household appliances) and products potentially dangerous to health (e.g., food or medicines), accounting for 18% of all seizures. In 2009, more than 4.8 million counterfeit cosmetics/personal care products and more than 3 million foodstuffs & beverage products were seized at the EU external border, out of a total of 118 million fake objects. Also seized were counterfeit cigarettes and other tobacco products, electrical appliances and toys.

The European Commission is particularly worried about the booming trade in counterfeit medicines with more than 11.5 million products seized in 2009.

Cases Registered and Articles Seized by Product Type (2009)

Product

Cases registered by customs

Number of articles seized

Comparison:
2008 and 2009

Foodstuffs and drinks (incl. alcohol)

42

3,022,482

24%

Body care items (incl. perfumes and cosmetics)

1,942

4,802,340

4%

Clothing and accessories

18,932

12,528,409

-29%

  • clothing

11,649

6,292,154

20%

  • clothing accessories

1,498

1,663,190

-67%

  • shoes

5,785

4,573,065

-29%

Electrical equipment

4,991

3,226,642

-36%

Computer equipment (hardware)

267

273,537

-34%

CD (audio, games, software), DVD, cassettes

1,968

6,417,435

-92%

Personal accessories (incl. watches and jewellery)

8,267

4,056,208

164%

Toys and games

1,640

7,226,986

46%

Other

2,007

23,955,840

96%

Cigarettes

140

40,985,038

-2%

Medicines

3,374

11,464,381

29%

Total

43,570

117,959,298

-34%

b) EU’s Customs Action Plan to Combat Counterfeiting

On 16 March 2009, The Council adopted a resolution endorsing an EU customs action plan, for the 2009-12 period, aimed at combating infringements of intellectual property rights.

The action plan is intended to tackle the growing threat posed by counterfeit goods to health and safety and to the environment, through strengthened cooperation between administrations and between customs authorities and businesses.

The European Commission and the EU Member States reviewed activities in the EU relating to customs enforcement of intellectual property rights (IPR) from 2005-2008, with the period of the previous anti-counterfeiting customs action plan.

The European Commission considered that the efforts undertaken by the customs authorities to protect the economic interests and the health and safety of citizens must continue and a further action plan was recommended. Such a plan should cover the main areas contained in the previous plan, namely legislation, operational performance, industry cooperation, international cooperation, and communication. The new plan should take into account relevant developments in the customs area, such as the modernised Community Customs Code, as well as external factors, such as the increase in sales over the Internet. In particular, the new EU Action Plan should focus on:

  • improving and where necessary modifying, existing IPR legislation;
  • improving cooperation with right holders;
  • strengthening operational cooperation between customs in the EU and with third countries;
  • developing further international cooperation on IPR enforcement;
  • improving publicity and awareness; and
  • responding to the problem of Internet sales and delivering ad hoc training to customs officers.

The new plan should also take into account other new trends and forms employed in the distribution of counterfeit goods dangerous to society, resulting from the globalisation of world trade, and growing involvement of organised crime. In particular, it was concluded that the future customs action plan should tackle four main challenges presented by counterfeiting: (i) dangerous counterfeit goods, (ii) organized crime, (iii) globalisation of counterfeiting, and (iv) sale of counterfeits over the Internet.

The resolution calls on the EU Member States and the European Commission to submit a new anti-counterfeiting customs plan for the period 2009-2012 and to implement the plan effectively.

c) Customs Action against Goods Suspected of Infringing Certain Intellectual Property Rights and the Measures To Be Taken against Goods Found to Have Infringed Such Rights (Regulation 1383/2003)

To tackle counterfeiting, the EU has adopted a procedure which allows for the suspension of the entry into its territory of counterfeit and pirated goods as well as of all goods infringing intellectual property rights. This procedure is contained in Council Regulation 1383/2003. The Regulation sets out the conditions under which customs authorities may intervene where goods are suspected of infringing intellectual property rights, and provides harmonised procedures by which right holders may apply for action to be taken.

i) Initiation of the Procedure

The procedure is lodged at the request of the owner of the intellectual property right (i.e. trademark, patent, copyright, design, etc.) which is violated because of the import of counterfeit or pirated goods. The application should include a sufficiently detailed description of the goods to enable the customs authorities to recognise them and a proof that the applicant is the holder of the right for the goods in question. The application should also include information concerning the nature of the fraud and the name and address of the contact person appointed by the right-holder. The right-holder may also request the intervention of the customs authorities of one or more Member States if he is the holder of a Community trademark, design or model, a designation of origin, or a geographical indication or designation protected by the EU.

ii) Consequences if a Violation of IPRs is Found

If there are sufficient grounds for suspecting that goods infringe intellectual property rights, the customs authorities of the EU Member States may suspend the release of the goods into the territory of the EU or detain them. A procedure is established to assess the effective violation of intellectual property rights. The law in force in the EU Member State within the territory of which the goods are placed applies when deciding whether an intellectual property right has been infringed under national law.

If a violation is finally found, the goods in question cannot be allowed to enter into the EU nor can they be removed from the EU’s customs territory. In accordance with the rules of each EU Member State, the counterfeit or pirated goods can be destroyed or disposed outside commercial channels, regardless of the penalties and/or fines which could be imposed.

iii) Penalties

In cases of violation, Member States are required to apply penalties that are proportionate and dissuasive. Under certain conditions, infringing goods could be destroyed without the obligation to initiate proceedings to establish whether an intellectual property right has been infringed.

2.11.2 Internal Measures

The enforcement of intellectual property rights (Directive 2004/48)

The objectives of this Directive are to harmonise national laws on the enforcement of intellectual property rights, including all copyright, trademarks and patents, among EU Member States and to establish a general framework for the exchange of information between the competent national authorities. The Directive also aims to quell the controversy over the non-payment of royalties, by trying to ensure that licence fees are paid to right-holders on all types of goods, which would include DVD players and other electronics.

a) Initiation of Actions

The Directive widens the scope of persons who are entitled to attack manufacturers and importers of infringing goods: the right-holder itself may seek application of remedial measures, but so may all other persons who are authorised to use those rights, in particular other licensees and organisations eligible to defend right-holders’ interests.

b) Powers of the Investigating Authorities

Judicial authorities are expressly provided with powers to obtain evidentiary information from an alleged wrong-doer: included are banking, financial or commercial documents under his control. Moreover, before the commencement of proceedings, judicial authorities can order, without even the alleged wrong-doer being heard, effective provisional measures such as the seizure of allegedly infringing goods and/or the materials or implements used in their production.

The judicial authorities are, in addition, entitled to demand and obtain information on the origin and distribution network of infringing goods, the quantities produced or made available, and other details, from the infringer and any other party, be it the seller of such goods, the manufacturer or importer. The authorities can prevent, by issuing an injunction, any imminent infringement, or demand a recurring penalty payment where such infringement continues.

Other actions against wrong-doers include permanent seizure or delivery up of goods, the blocking of bank accounts and of any other assets in the possession of the infringer.

c) Measures in Case of Violation

Corrective measures which can eventually be taken at the outcome of a case include product recalls and permanent removals from the channels of commerce, or even destruction of the infringing goods, all at the expense of the infringer. The infringer may also be ordered to pay damages to the right-holder, appropriate to the actual prejudice suffered by him as a result of the infringement, such as lost profits, or unfair profits gained by the infringer or the moral prejudice caused to the right-holder.

The Directive makes express reference to non-payment of royalties or licence fees: a judicial authority may set the damages as a lump sum on the basis of elements such as the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question. This provision reflects the rising concern in recent years of imports being made into the EU of unlicensed products which can, at a stretch, be worth as little as 10% of the price of the same but appropriately licensed product.

 

Content provided by Hong Kong Trade Development Council
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