Counterfeit & Substandard ICT Devices
ITU Headquarters
Geneva, 17 November 2014
The Fight Against
Counterfeiting and Piracy:
The Contribution of the WTO's
TRIPS Agreement
Roger Kampf
WTO Secretariat
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Economic Relevance (1):
Mobile Cellular Subscriptions
(% of population)*
*Source: World Bank World Development Indicators
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Economic Relevance (2):
Active Trademarks in Selected Sectors*
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Trademark Applications Since 1995*
Status: Active
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Active TMs by Selected Origin*
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Enforcement under TRIPS
• TRIPS = first international treaty with detailed
section on enforcement
• Objective = make available (→ private rights)
effective tools to guarantee application of
substantive rules, including:
– Expeditious remedies to prevent infringements
– Remedies constituting a deterrent to further
infringements
• Application of basic principles:
– Minimum level of protection, but not harmonisation
at multilateral level
– Freedom to determine appropriate method of
implementation
– Non-discrimination rules
– WTO dispute settlement
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All Types of IPR Infringements
• General obligations characterized by search for a
balanced regime:
All Stakeholders: Principles of Due Process
Fair and equitable procedures
Decisions on the merits of a case
Opportunity for review by a judicial authority
Right Holders
Users
Effective enforcement
Procedures not to become
barriers to legitimate trade
Remedies: injunctions,
damages, other
Built-in safeguards against
abuse of procedures, including
indemnification of defendant
Right of information
• Prompt and effective provisional measures must
be available
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Counterfeiting and Piracy:
Additional Obligations
Border Measures
Conditions/safeguards
•adequate evidence
•detailed description of the goods
•security or equivalent assurance
•indemnification
Criminal procedures
Conditions:
(i)wilful act
(ii)of trademark counterfeiting or
copyright piracy
(iii)on a commercial scale
Procedures
•notice of suspension
•10 working days to initiate
proceedings
•right of inspection and information
Remedies:
•destruction
•disposal of infringing goods
outside channels of commerce
Remedies:
•imprisonment and/or
•monetary fines sufficient to
provide a deterrent
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Counterfeit: Definition / Scope
Art.51 Fn. 14(a):
•defines « counterfeit trademark goods »
•Establishes clear link with trademarks
•Distinct from other forms of TM infringements
• Counterfeit TM:
– slavish copying of
TM
– deliberately gives
impression of being
genuine product
– fraud usually
involved since
confusion between
genuine product and
copy is intended
• Ordinary TM
infringement:
– infringer’s mark is
sufficiently close to
registered mark
– leads to likelihood of
confusion
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Members’ Legislation and Practice
• From a narrow to a broader meaning ?
• Some Members laws and practice link term to
other IPR categories in addition to trademarks
– EU Communication (IP/C/W/471):
•
•
« counterfeiting of medicines has also undergone
considerable mutations (…), commercial shipments are
being discovered to contain hundreds of kilos of
products infringing patent rights, whereas a while back
they would have infringed trademark rights. »
« confining the scope of customs intervention to
trademark or copyright goods is no longer appropriate,
(...). Fraud rings (...) now prefer to counterfeit patents,
geographical indications or plant varieties (...). »
• Consequence of « loose usage » of terminology:
– EU Commission Report on Customs Activities on
Counterfeit and Piracy 2007: Switzerland as main
source of counterfeit medicines ?
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Selected Optional Provisions
• Border measures with respect to:
– IPRs other than counterfeit trademark
and pirated copyright goods
– exports and goods in transit
– parallel imports
– de minimis imports
– ex officio action
• Criminal procedures with respect to:
– IPRs other than counterfeit trademark
and pirated copyright goods
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How to Handle Goods In Transit (1):
The EU Example
• Nokia Corporation v HM Commissioners of
Revenue & Customs, High Court, England and
Wales, 27 July 2009:
– Customs detained suspect telephones/accessories
• Bearing Nokia trademark
• Shipped from Hong Kong, China to Colombia
• Nokia confirmed that telephones were fake
– Justice Kitchin:
• No threat of goods being released on the Union market
• Hence, not to be treated as counterfeit goods
• But recognition that result is not satisfactory: “I can only hope it
provokes a review of the adequacy of the measures available to
combat the international trade in fake goods by preventing their
transhipment through Member States.”
– Appeal by Nokia:
• Question referred to CJEU for preliminary ruling
• Reason: divergent interpretation of EU Customs Regulation in
other EU member States (Sisvel v Sosecal, Court of The Hague, 18
July 2008 and Philips v Far East Sourcing Limited, Antwerp Court
of First Instance, 4 November 2009)
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How to Handle Goods In Transit (2):
The EU Example
• EU Customs Regulation 1383/2003:
– Extended to goods in transit
– Commission Communication 2005: controls, including
during transhipment protect not only the EU but also
other parts of the world and, in particular, LDCs
• CJEU Decision (joined cases C-446/09 and C495/09, Philips/Nokia, Dec.2011)
• Commission Guidelines (Feb. 2012)
• Regulation 608/2013:
– Recital (11): substantial likelihood of diversion of
medicines onto EU market to be taken into account
– Nothing is said about handling of other products
• Trademark reform: right holders to be entitled to
take action against infringing goods, regardless
of release for free circulation
• Remember: coverage of goods in transit optional
under TRIPS
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Ad hoc discussions in TRIPS Council
• Communications EU, US, CH, Japan (2005-07):
– Called for information exchange, awareness raising,
examination of TRIPS compliance and best practices
– Suggested focus on border measures, based on right
holders’ involvement, Customs coordination
• Communication US (2012):
– Set out initiatives to secure supply chains
– Reported on infringing mobile phones as representing
one-third of seized consumer electronic goods in 2011
• Communication Japan (2012):
– Reported on trends in Customs seizures and action
taken to enhance Customs officers’ expertise
– Mobile phones / accessories represented 2% of the total
number of cases of suspension by Customs
– Number of cases almost doubled in six years (563 cases
in 2011, as compared to 289 cases in 2007)
• In-transit generic medicines (2009-10)
• FTAs/RTAs/ACTA
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Enforcement Provisions in RTAs
• Survey of 245 RTAs with IP provisions notified to
the WTO as of Feb.2014
• Provisions on border measures covered by:
– 100% of RTAs between developed countries
– 62% of RTAs between developed-developing countries
• Source: Valdés/McCann, IP Provisions in RTAs,
WTO Staff Working Paper (June 2014)
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Useful Sources of Information at WTO
• Review of TRIPS implementing legislation
• Checklist of Issues on Enforcement:
– Responses submitted by 104 Members
– But: not regularly updated by all Members
• Use of Article 63.3 to gather information
• Notification of contact points (Article 69):
– Exchange of information on trade in infringing goods
– Promotion of cooperation between customs authorities
with regard to counterfeit trademark / pirated copyright
goods
– Objective: elimination of international trade in goods
infringing IPRs
• TPR reports - example of Chinese Taipei (2014):
– Cell phones among main imported commodities
infringing trademarks – general trend = decreasing
– Counterfeit mobile phones also lead export
commodities infringing trademarks – general trend =
increasing
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Dispute Settlement Cases (1)
• China - Measures affecting the Protection and
Enforcement of IPRs (WT/DS362):
– Customs measures:
• Goods destined for exportation: application of
remedies in Art.59 not mandatory
• Imports:
– auctioning/donation of infringing goods not prohibited
(Art.59, 46 first sentence)
– note US reference to counterfeit mobile phone
batteries and related risk of donating defective or
dangerous goods
– but sale of goods after simple removal of trademark
inconsistent with Art.59, 46 fourth sentence TRIPS
– Criminal procedures and sanctions (Art.61):
• Criminalization of all copyright / trademark
infringements not required
• Meaning of “commercial scale”
• Thresholds not endorsed, but lack of evidence
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Dispute Settlement Cases (2)
• EU and member State – seizure of generic drugs
in transit: consultations requested by India
(WT/DS408/1) and Brazil (WT/DS/409/1)
• Measure at issue:
– EU Customs Regulation 1383/2003 and other EU / Dutch
legislative provisions, as well as Dutch Court decisions
• Requests refer, among others, to:
– GATT: Art. V (freedom of transit), Art. X:3
– TRIPS:
• Art. 28 in conjunction with Art.2 and Art.4bis Paris
Convention, para.6(i) of August 2003 Decision (limits to
patent rights conferred)
• Art.41, 42 (barriers to legitimate trade)
• TRIPS interpretation and implementation in light of Art.7
and 8, Doha Declaration on TRIPS and Public Health, as
well as International Covenant on Economic, Social and
Cultural Rights
• Both cases pending
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Beyond TRIPS: TBT Committee
• 2011 Measure - conformity assessment
procedures for mobile phones in Viet Nam:
– Import only through three international seaports
– Additional Customs documentation with consulate
approval in exporting countries
• Concerns raised in TBT Committee (June 2011June 2012):
– US et alia: measures create new requirements, such
as submission of quality control certificate;
designation of specific ports of entry; selection of
products?; non-discriminatory application?; etc.
– Viet Nam: measures aim at preventing smuggling and
import of counterfeit mobile phones, protecting
consumers’ safety and health; cosmetics, alcohol and
mobile phones among largest group of imported
counterfeit products
• TPR report (2013):
– Measure abrogated with effect from 1 January 2013
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The Way Forward (1)
• TRIPS Agreement can contribute
– To fighting counterfeit ICT equipment
– Not to combating substandard ICT equipment
• Need for a sector-specific debate on
counterfeit ICT equipment in TRIPS Council?
• And if so, what are the lessons to learn from
earlier discussions, in particular regarding
counterfeit health technologies:
– Potential health impact of counterfeit
products
– Link between affordability and marketing of
counterfeit products
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The Way Forward (2)
• Need to ensure:
– Concise use of terminology:
→ substandard ≠ contraband ≠ counterfeit
– Coherence at all levels
– Adequate capacity building and awareness
raising: to begin with collaboration among
relevant IGOs
• Is there a need to:
– Cover other types of IPR infringements?
– Address the «secondary» impact of
counterfeit and substandard ICT equipment,
e.g. where used to trace other counterfeit
products (medicines)?
– Gather additional facts and empirical data?
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