Detention of goods at customs due to infringement of intellectual property

One of the most effective ways to prevent the importation of goods infringing intellectual property rights, including copyrights, trademarks, designs and patents, is through customs authorities who can detain and prevent the entry of the infringing goods at ports and borders.

Request for Goods Seizure

The trigger for customs seizure can be a substantiated complaint filed with customs by the intellectual property rights holder, who identifies that in their opinion an infringement of their rights has occurred. Alternatively, customs officials themselves may initiate the process if they suspect an infringement has occurred.

It is emphasized that it is very important to formulate the complaint in a convincing manner, while at the same time, not providing information that could assist counterfeiters in the future. Therefore, it is highly recommended to seek assistance at this stage from an experienced intellectual property attorney with expertise in rights infringement.

When submitting the complaint, it is required to attach the trademark registration certificate and/or additional documents evidencing the rights, as well as a photograph of the suspected infringing goods or documents describing them. In the case of a suspected design infringement, the request should include as much detail as possible to help customs officials locate the goods, including: a description of the goods, details of the importer or container number, expected import date, expected port of entry, and more. A copy of the registered design, a detailed description of the design, including photographs, and an indemnity letter to the importer and customs in case they suffer damages due to the goods seizure, should also be attached. If the rights holder is represented by an attorney, a power of attorney should also be included with the request.

Decision on Goods Seizure

Upon receipt of the complaint about suspected infringement, the customs director acts to locate and detain the goods. If the goods are found, the head of the customs seizure unit will determine whether there is a basis for the infringement claim and, if so, order the goods to be detained for three working days (which can be extended by an additional 3 days under certain circumstances) and open an investigation file into the infringement. In parallel, the supervisor will notify the importer and the complainant in writing, and inform the complainant that they must deposit the bank guarantee within 3 working days.

If the head of the seizure unit finds that there is no basis for the infringement complaint, they will notify the complainant in writing of their refusal to detain the goods.

If only part of the shipment is suspected of being infringing and the other part is not, customs will only detain the infringing part, unless the customs legal department approves detaining the entire shipment.

It should be noted that the amount of the guarantee that the complainant must deposit in the case of goods seizure will be determined by customs representatives, and the complainant may deposit a cash deposit instead. There is also the possibility of depositing an annual global guarantee, and at the end of the year the guarantee will be extended or canceled and returned to the complainant upon request. The purpose of the global guarantee is to release the complainant from the need to deposit a separate guarantee for each infringement complaint, and if necessary, customs may request from time to time to increase the amount of the guarantee.

Examination of Goods Samples

After the complainant deposits the guarantee, customs representatives will provide the complainant with the importer’s details and samples of the detained goods and/or photographs of them. The complainant has the right to receive physical samples, and the responsibility for the examination and coverage of the examination expenses lies with them. Upon completion of the examination, and no later than 10 days from the arrival of the goods, the complainant must return the sample to the customs representatives, unless the sample will serve as legal evidence or has been completely destroyed during the examination.

Customs-Initiated Goods Seizure

In cases where the decision to detain goods was made on the initiative of customs, a customs representative will request that the rights holder submit within 3-6 working days a detailed and reasoned expert opinion as to why the goods infringe the rights, an indemnity letter, and a commitment document to join as a party to a countersuit if a lawsuit is filed against customs for the return of the goods.

Upon receipt of the documents, customs will notify the importer in writing of the goods seizure.

If the rights holder notifies that the goods do not infringe their rights, or if they do not submit the required documents on time, the goods will be released from customs.

Filing a Lawsuit in Court

If, at the end of 10 working days from the notification of the goods seizure, the complainant has not filed a lawsuit against the infringing importer, the seizure will be canceled, except in special cases where additional time is required to formulate the lawsuit or to reach a settlement agreement. The head of the seizure unit has the authority to extend the period by an additional 10 days.

If a lawsuit is filed in court, the goods will be detained in customs until the decision is made whether to destroy them or release them – fully or subject to certain conditions. Until the decision is made, customs is not authorized to destroy the goods or sell them.

Short Forfeiture Procedure

When there is a suspicion of infringement of a registered trademark or copyright only, the head of the customs seizure unit has the authority to decide on a short forfeiture procedure, in which the goods will be detained in customs for 3-6 working days. During these days, the trademark owner will be asked to check whether their trademark has been infringed. If, in the opinion of the registered trademark owner, there has indeed been an infringement, they will be required to submit a reasoned expert opinion to customs, and the importer of the goods will be allowed to review it. The trademark owner will also be required to undertake to compensate the customs department and/or the importer for the damage caused by the detention, and to commit that if the importer sues customs, they will join customs as an additional defendant.

 

The information in this article and on this website should not be considered legal advice, and the written statements should not be seen as a substitute for personalized legal advice, but rather as a personal opinion and/or general explanation only. Of course, one should not rely on or act according to the above without obtaining personalized legal advice from an attorney.

For any questions on this topic, contact us

     

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