Alert 355 - United Kingdom – Full implementation of the Customs simplified procedure


The United Kingdom (UK) Government plans to introduce new subsidiary legislation to make it easier for Customs Authorities (Customs) to destroy counterfeit and pirated goods which they have seized.

The need for the new legislation became apparent when a Northern Irish Court held that Customs’ previous practice did not comply with the provisions of Regulation 1383/2003 (“the EC Regulation”).  That judgment led to a change in practice by Customs, which in turn led to owners of intellectual property (IP) rights having to take costly action to ensure that the goods were destroyed.
 
To overcome this difficulty, the UK Government is amending its earlier implementing legislation by a new Statutory Instrument, expected to come into force on 10 March 2010. The amendments fully adopt Article 11 (the simplified procedure) of the EC Regulation.

Crucially, Customs will be able to treat goods seized as abandoned and will be able to dispose of them, if they are satisfied that the declarant, holder or owner of the goods has impliedly consented to their destruction.

Existing Position
For many years Customs in the UK dealt with shipments of suspected infringing goods in a very simple manner.  Rights holders would be informed of a suspect consignment and would have a period of up to 20 days to inform Customs that the goods were indeed infringing. Customs would then inform the declarant, holder or owner of the goods and would destroy them unless an objection was received. Any such objection would result in Customs bringing “Condemnation Proceedings” in the Magistrates Court.

This was a highly favourable procedure to rights holders whose involvement, and therefore cost, was limited to simply identifying the goods as infringing. However, following last year’s Northern Irish judgment, temporary and informal amendments to procedure were announced by Customs.

Under these, rights holders had to (a) confirm that the goods infringed an IP right and (b) obtain the written consent of the  declarant, holder or owner of the goods to their abandonment and disposal. Failing this, the rights-holder had to issue proceedings to determine infringement or allow the release of the consignment, all within the 20 day period. These hurdles meant that in practice, many small consignments of counterfeits were released.

Changes
The new Statutory Instrument, SI No. 324/2010 “The Goods Infringing Intellectual Property Rights (Customs) (Amendment) Regulations 2010”, fully implements the simplified procedure allowed by Article 11 of the EC Regulation. As is currently the case, Customs will have no option but to release the goods unless proceedings are started, or the  declarant, holder or owner agrees to destruction of the goods, within the 20 day period. 

Crucially, however, Customs will now be able to assume that if the  declarant, holder or owner fails to respond to requests to abandon the goods and allow them to be destroyed, he has impliedly consented to their destruction.

Thus rights holders will no longer face situations where their only alternatives, when a  declarant, holder or owner fails to respond to communications, are to go to the expense of issuing proceedings or simply allow the infringing goods to enter.

Rights holders must, however, bear the expense and responsibility for the destruction of the goods, unless otherwise specified by Customs. While being in line with the EC Regulation, this remains a contentious issue and is currently being debated with the European Commission, which is considering amendments to the EC Regulation.

Benefits for Right Holders
This change brings the UK into line with most other Member States and will be welcomed by rights holders. It should mean that many UK Customs matters under the EC Regulation will now be concluded more effectively and at lower cost to rights holders.

We await a detailed guidance note which we hope will clarify what rights holders need to do to satisfy Customs that the declarant, holder or owner of the goods has been offered the opportunity to abandon the goods as the wording of the Statutory Instrument is a little ambiguous.

For more information, please email sadams@iprights.com.