On 22 June 2009, HM Revenue & Customs announced new procedures for dealing with the detention and seizure of goods suspected of infringing intellectual property rights. The changes have been introduced with immediate effect, although further legislation is expected.
Background
The old procedure differed from many other EU Member States in that counterfeit and pirate goods could be seized on the basis of a straightforward declaration from the rights holder. The matter was only referred to a Court if the importer (or other interested party) appealed against the seizure. This administrative procedure was straightforward, but arguably out of line with Art. 13 of Council Regulation 1383/03 ("the Regulation").
The old procedure differed for goods suspected of infringing a patent or design right, where rights holders were required to commence proceedings.
New procedure
Rights holders will now be required to either initiate proceedings to determine whether an IPR has been infringed or reach agreement with the importer (or other interested party) to abandon the goods. If they do not, the goods will be released. Rights holders will be under significant time pressure, having to conclude their examination of samples and commence action or obtain consent to destruction within a maximum of 20 days from the date of detention. Perishable goods must be dealt with even more quickly (3 days, with no possibility of an extension).
The new 'simplified' procedure applies to all types of IPR infringements covered by the Regulation, introducing the possibility of seeking consent to destruction in all cases.
Rights holders will now be responsible for the destruction of seized goods at their expense. Previously, Customs organised the destruction of most goods and only certain Customs offices passed on these costs to rights holders.
There is a very brief transition period for detentions initiated under the old procedure.
Our Comment
The old procedure was cost-effective in securing the seizure of counterfeit and pirate goods. The new procedure will require substantially more work from rights holders and their representatives to secure the seizure of such goods. This may lead some to introduce higher thresholds for action, or the abandonment of working with Customs altogether. On the plus side, direct communication from the rights holder and the threat of civil proceedings is likely to be more of a deterrent against future infringement than mere administrative seizure.
The introduction of the 'simplified procedure' will also be welcomed by patent and design right holders.
