European Regulation Strengthens IP Protection

When U.S. companies think about protecting their intellectual property rights, few consider global enforcement. For many, protecting their rights domestically seems daunting enough. They would rather not engage any additional time or resources to protect the brand abroad, especially if this means engaging substantial resources without witnessing tangible results. In Europe, however, there are easy steps that can be taken to collaborate with foreign customs in their fight against global infringement. This procedure has become even easier and more efficient since the Jan. 1, 2014, adoption of EU Regulation 608/2013 (repealing former Regulation 1383/2003), which strengthens and streamlines customs procedures relating to the enforcement of IP rights in Europe.

The new regulation includes many improvements over the previous rule. First, there is now a simplified procedure in all member states that allows customs to destroy imported goods suspected of infringing IP rights upon a mere agreement between the rights-holder and the owner of the detained goods. The new regulation also makes it clear that a lack of response from the owner of the suspected infringing goods within 10 days of notification is deemed a consent to property destruction.

In most instances, owners of infringing goods do not respond to notifications from customs, preferring the loss of a shipment to potential liability. Thus, this revision will also considerably streamline the customs seizure process. In practice, this means destruction of the majority of counterfeits imported into Europe upon a mere confirmation that these goods are infringing. The rights-holder will not incur any expenses.

Second, the new regulation has considerably reinforced the power of EU customs to intervene on a wider range of IP rights. Copyrights, trademarks, designs, utility patents and geographical indications were already covered under past legislation. Now, trade names, topographies or semiconductor products, utility models and technological protection measures are covered as well. This revision may have a substantial impact on technology companies.

Customs are also granted-upon the selection of such an option by the rights-holder in its original application and lack of opposition from the owner of the goods-a new power to destroy, on their own initiative, small consignments (less than three units or two kilograms) of counterfeit and pirated goods without the explicit consent of the rights-holder.

Finally, rights-holders are given much more freedom to use information provided by customs on suspected infringing goods, including information concerning the name and address of the owner of the goods. This revision is a major change, as previous regulations stated such information could only be used to start legal action against the importer or owner of the goods. By contrast, the new regulation offers rights-holders not only the possibility to contact the importer or owner of the goods directly to obtain compensation or destruction of the goods, but also to conduct their own investigations in case the goods turn out to be unauthorized genuine products.

To prevent abuse of the system, rights-holders will have to provide more specific information to help customs determine whether the imported goods are infringing, including specific technical data such as bar codes or images. A central electronic database will also be created by the European Commission to facilitate the exchange of information among customs authorities of the member states.

It should be noted, however, that the new regulation specifically excludes from its scope unauthorized genuine goods such as parallel imports (goods manufactured with the consent of the rights-holder but placed for the first time in the European market without its consent) and overruns (goods manufactured in excess by an authorized manufacturer), as well as non-commercial goods carried by passengers in person.

Likewise, the regulation does not address the specific issue of infringing goods in transit between two non-European countries unless customs can show that they have a reasonable suspicion that the goods will be diverted to EU customers. The European parliament recently voted on an amendment to EU trademark law that will give customs the power to block and destroy infringing goods in transit. Combined with the increased power conferred by the new regulation, this revision should give customs a major weapon in their fight against the importation and transit of infringing goods in Europe.