AIPPI 2011 – Forum Workshop VIII
Border measures and goods in transit
Klaus Haft, Partner,
Reimann Osterrieth Köhler Haft
Germany
Content
A. Introduction
B. Overview on proceedings
C. Details on customs seizures
D. Particularities concerning trade fairs
E.Defences and remedies
F.Conclusion
Priviledged and Confidential
2
A. Introduction
I. General
- Customs seizures provide effective measure in
protecting IP rights
- Traditionally strong background in enforcement
of trademarks
- In recent years growing number of applications
based on patents
- In the EU 43 % of all detained articles found to
infringe patents in 2008
Priviledged and Confidential
3
A. Introduction
II. Legal basis - Europe
- Under European Community law, intervention of customs
authorities governed by Council Regulation (EC) No
1383/2003 concerning customs action against goods
suspected of infringing certain intellectual property rights
and the measures to be taken against goods found to
have infringed such rights (hereinafter referred to as the
1383 Regulation)
- Provisions for implementation laid out in Council
Regulation (EC) No. 1891/2004
- Amended by Council Regulation (EC) No. 1172/2007
Priviledged and Confidential
4
A. Introduction
II. Legal basis – Europe (cont’d)
• Regulation (EC) No 1383/2003 applies to entry,
export and re-export into/from EC (Art. 4, 1, 2)
of the following:
• Counterfeit (trademarks) and pirated (copyright, design)
goods
• Patent / supplementary protection certificate infringing goods
• National or Community plant variety rights infringing goods
• Designations of origin or geographical indications infringing
goods
Priviledged and Confidential
5
A. Introduction
II. Legal basis – German national law
• Additional national implementation provisions found in
individual laws concerning protection of intellectual
property rights
• National laws (theoretically) apply on:
• Goods in free circulation (in the European Union
moving between Member States)
• Non registered trade marks
• Utility models and protected semiconductor
products
Priviledged and Confidential
6
A. Overview on proceedings
I. European Law
Proceedings following the 1383 Regulation twofold:
- ex officio measures (w/o formal request)
- measures upon application
Priviledged and Confidential
7
B. Overview on proceedings
I. European law (cont‘d)
•
Suspension of release / detention of goods without
formal request of IPR owner (Art. 4 EC)
- by customs authorities
- upon their discretion prior to application of rightholder
- if sufficient ground for suspicion of infringement
- for 3 working days
- little relevance for patents
Priviledged and Confidential
8
B. Overview on proceedings
I. European law (cont‘d)
•
Application for action to central customs
authority of Member state (Art. 5 (1), (4) EC;
Zentralstelle Gewerblicher Rechtsschutz OFD
Nürnberg, located in Munich)
–
–
Use EC-wide standardized application forms (Art.
5(5)): Information regarding the protected right,
holder, contact persons (e.g. lawyers); no
administrative charges
Sign declaration re: liabilities and costs if IPR are
not infringed (Art. 6)
Priviledged and Confidential
9
B. Overview on proceedings
II. German proceedings
• Basic proceeding parallel to 1383 Regulation
• 3 Steps: application, seizure, release or destruction:
- application filed with central customs authority
- seizure / detention of goods in import / export situations
- based on „evident / obvious“ infringement
- applicant is given opportunity for inspection of detained goods
- importer may oppose within two weeks following notifictaion
- in case of opposition, applicant must iniate national
proceedings
Priviledged and Confidential
10
B. Overview on proceedings
III. Relation of proceedings
• Community law provisions in their area of
application take precedence over the
national provisions
• National protective provisions only apply:
- when mere national action is required and EU law
leaves room, e.g. utility models, unregistered
trademark rights
- to the extent that controls take place in internal
trade
Priviledged and Confidential
11
C. Details on customs seizures
I. Application phase
• Application usually accepted for maximum
period of one year (Art. 8 (1))
• Announcement to all local authorities
where the goods supposedly cross the
border (Art. 8 (2)) by means of Customs
Intranet
• Seizure by local customs authority
Priviledged and Confidential
12
C. Details on customs seizures
I. Application phase (cont‘d)
• Application for seizure in several or all
Member states, Art. 5 (4), if:
•
•
•
•
•
Community Trademark
Registered Community Design
Community Plant Variety Right
Protected Designation of Origin or
Protected Geographical Indication
Priviledged and Confidential
13
C. Details on customs seizures
I. Application phase (cont‘d)
• Advantage of Art. 5 (4):
– Apply for action by customs authorities of
several or all Member states by only one
request
– Request is valid for 1 year and renewable
– Good experiences according to customs
authorities in Germany, France, UK, Spain,
Italy, Netherlands, Poland, Finland, Austria
Priviledged and Confidential
14
C. Details on customs seizures
I. Application phase (cont‘d)
• Application must contain all relevant information
needed to enable the goods in question to be readily
recognised, Art. 5 (5)
• Customs do not conduct legal assessment regarding
patent infringement; detention/seizure on suspicion
alone
• Thus, provision of detailed information (e.g.characteristics of original vs. counterfeit product, info on
trade channels, means of transportation, specific
shipment etc.) essential
Priviledged and Confidential
15
C. Details on customs seizures
I. Application phase (cont‘d)
• Sole description of product may be sufficient (e.g.
SISVEL: all mp3-players)
• Black and white lists very helpful (e.g. all shipments
from one known infringer; none of known licensees)
• Customs maintain Intranet database with information provided
• Customs authorities generally accept training from
IP-right holder
Priviledged and Confidential
16
C. Details on customs seizure
II. Seizure phase
1.
General practice
– If goods suspected to infringe IPR are identified, rightholder is informed on kind and amount of such goods
(Art. 9), as well as – upon request - addresses of
sender, recipient, declarant, holder, owner, origin of
goods etc.
– Then: obligation
• Of IPR owner to initiate legal procedure
• (or of good owner to agree on destruction of goods; however,
corresponding fast track procedure not reduced to practice in
Germany)
within 10 (20) working days (Art. 13)
(perishable goods : 3 working days)
Priviledged and Confidential
17
C. Details on customs seizure
II. Seizure phase (cont‘d)
2.
Level of evidence
- Following Art. 5 application, customs take action if
suspicion established that IP right is infringed by
particular goods; sufficient precondition
„predominant likelihood“ of infringement
- German proceedings following sec. 142a Patents
Act require higher level: obvious property right
infringement
- As corrective for low standard, the1383 Regulation
requires IP right holder to accept liability in case no
IPR is infringed by signing declaration, Art. 6
Priviledged and Confidential
18
C. Details on customs seizure
II. Seizure phase (cont‘d)
3.
Seizure scenarios
-
-
-
(EC) No.1383/2003 applies to any type of entry, export and re-export
into/from European Union
Transit of goods generally not deemed a patent infringement
according to German case law (e.g. Federal Court of Justice (BGH),
GRUR, 1957, 321 – Taeschner/Pertusin)
Position subject to criticism: Transit also bears danger that goods, in
contrast to initial purpose, are being introduced to national market
European Court of Justice (ECJ) ruled in re Polo Ralph
Lauren/Dwidua and Rolex that transit of pirated trademark material
constitutes infringement
Hamburg District Court adopted ECJ rule for patents; German
Appelate Courts do not follow
Priviledged and Confidential
19
C. Details on customs seizure
II. Seizure phase (cont‘d)
4.
-
-
Main proceedings
regarding main infringement proceedings,
Art. 10 of the 1383 Regulation refers to
national law of the Member States
Standard procedure: initiation of patent
infringement proceedings with the competent
national courts for establishment of
infringement, Art. 13
Priviledged and Confidential
20
C. Details on customs seizure
II. Seizure phase (cont‘d)
- However, unclear whether application for
preliminary injunction qualifies for such
proceedings
- Wording of provision open, leaves room for
either interpretation
- Criticism: Preliminary injunction proceedings
insufficient; destined to safeguard position not
rule out case
- Issue not clarified by case law
Priviledged and Confidential
21
C. Details on customs seizure
III. Release of goods
1. Release of goods on provision of security
(Art. 14) overview:
-
IPR: design right, patent, supplementary
protection certificate or plant variety
Legal procedure initiated within 10 days
Customs formalities completed
Provision of security (sufficient to protect
interests of right-holder)
Priviledged and Confidential
22
C. Details on customs seizure
III. Release of goods (cont‘d)
2. Release of goods (Art. 13):
-
-
Within 10 (20) days of receipt of notification
of seizure
No legal procedure started
No right-holder‘s agreement to destruction of
goods according to simplified procedure
Completion of all customs formalities
Priviledged and Confidential
23
C. Details on customs seizure
IV. Criticism
- Complexity of patents makes dissatisfactory that
suspension/detention is undertaken on grounds of
suspicions/obviousness
- Compensation for easy suspension/detention necessary
- Two possibel approaches:
1. possible encroachment for potential infringer should
be accounted (e.g. are goods presumably trade fair
goods and will detention put fair attendance at risk?)
2. release for security quick (within hours) without further
requirements
Priviledged and Confidential
24
C. Details on customs seizure
IV. Criticism (cont‘d)
• Customs seizures regime should be
amended
• Currently danger of misuse due to lack of
substantial infringement control
• Establishment of suspected property right
infringement should be left to specialised
courts
Priviledged and Confidential
25
C. Details on customs seizure
V. Damages / unjustified seizures
• The 1383 Regulation does not specifically provide
regime for damages
• Art. 6 of the Regulation requires applicant to sign
declaration accepting liability for the event that:
– Procedure iniated pursuant Art. 9 (1) is
discontinued owing to an act or ommission of the
right-holder,
– the goods in question are subsequently found not
to infringe IPR
Priviledged and Confidential
26
C. Details on customs seizure
V. Damages / unjustified seizures
(cont‘d)
• Art. 19 (3) of the 1383 Regulation stipulates that liability
of applicant / right-holder shall be governed by law of
individual member states
• In Germany unjustified detention and possibel
destruction of goods triggers claim to compensation
• Compensation regurlarly is restitution; monetary
damages also possible
• The latter may include attorney‘s fees and other
expenses associated with unjustified detention
Priviledged and Confidential
27
C. Details on customs seizure
VI. Licensing negotiations
•
•
Border Seizures may be (and are) used
for creation of leverage for licensing
negotiations or settlement of pending
proceedings
Of particular relevance in case of
standard related IPR where
FRAND/antitrust law based claims would
otherwise help to lower royalty rates
Priviledged and Confidential
28
D. Particularities concerning trade fairs
I. Ex ante measures
• Create clear position for evidence by registering IP-right
• Application for border measures with the Central
Customs Office
• Additionally, helpful to contact local Customs Office
responsible for trade fair
• Provide detailed information with application; submit
original product
• Appropriate evidence is necessary for showing
infringement; bring evidence to trade fair:
– Submission of original documents or certified copies of
certificates for patent, trademark, registered design or utility
model is necessary
Priviledged and Confidential
29
D. Particularities concerning trade fairs
II. Measures taken at fair
• If IPR is infringed right-holder may typically
request signing of cease and desist letter
or request a court order for preliminary
injunction
• Above measures often unsatisfactory, e. g.
time consuming, not effective, too slow
Priviledged and Confidential
30
D. Particularities concerning trade fairs
II. Measures taken at fair (cont‘d)
• Border Seizure Procedures are particularly
useful for measures on trade fairs
• Customs may collect all suspicious goods
for inspection by IPR owner (including
catalogues) before opening of the fair
• Significantly higher efficiency than just
relying on preliminary injunction
proceedings
Priviledged and Confidential
31
D. Particularities concerning trade fairs
II. Measures taken at fair (cont‘d)
1. Former approach:
- before fair opened, customs allowed for inspection of
goods at customs‘ premises, provided Art. 5 application
was filed
- upon notice of IP right-holders seizure was undertaken
- practice now abandonded because assembly of fair booths
was significantly aggravated / delayed
Priviledged and Confidential
32
D. Particularities concerning trade fairs
II. Measures taken at fair (cont‘d)
2. Current approach:
- Local Customs Offices offer inspection of fair (including
individual booths) before opening; Prosecution authorities
not involved
- Such inspection not governed by statutes; discretion of local
Customs Office (e.g. Düsseldorf reluctant, Frankfurt apt to)
- Reserved to IP right-holders who had filed Art. 5 application
- Seizure undertaken upon notice of applicant in order to gain
evidence for criminal proceedings
Priviledged and Confidential
33
D. Particularities concerning trade fairs
II. Measures taken at fair (cont‘d)
2. Current approach:
- Seizure comprehensive; including catalogues but not booth
- If such seizure is undertaken, applicant must initiate criminal
proceedings
- Approx. 2 days after seizure, follow-up inspection
- New approach proves succesful: attenuation of
consequences for aggrieved party, avoidance of undesired
publicity
Priviledged and Confidential
34
D. Particularities concerning trade fairs
III. Example case
• DRUPA 2008 example
– DRUPA world’s largest printing equipment exhibition
every 4 years in Düsseldorf
– X and Y, two non EU companies producing printing
machines, engaged in several patent litigations
– Ex ante: Y filed Art. 5 application for parts of printing
machine which X wanted to exhibit at the DRUPA
Priviledged and Confidential
35
D. Particularities concerning trade fairs
III. Example case
• DRUPA 2008 example (c’ted)
– At fair: infringing parts of X’s printing machine were
confiscated by customs at DRUPA before opening
– Customs rejected X’s motion to immediately release
machine parts; release date set was after end of
DRUPA
– X then applied for interlocutory injunction obligating Y
to consent to release of detained machine parts
– court turned down motion
Priviledged and Confidential
36
D. Particularities concerning trade fairs
III. Example case
• DRUPA 2008 example (c’ted)
– Y in turn obtained interlocutory injunction prohibiting X
exhibition of machine parts; in addition court ordered
for machine parts to be handed out to bailiff acting as
sequestrator
– Customs authorities gave machine parts to the
sequestrator
– X could not exhibit machine parts at DRUPA;
proceedings on the merits confirmed infringement
Priviledged and Confidential
37
E. Defences and remedies
I. For the applicant
Appeal according to national law
-
Regulation (EC) No 2913/1992 establishing the
Community Customs Code:
-
-
In Germany:
-
-
Appeal (Art. 243)
Procedure determined by Member States (Art. 245)
No suspensive effect (Art. 244)
Sec. 347 German Fiscal Code
Objection within 1 month
No suspensive effect
Without practical relevance
Priviledged and Confidential
38
E. Defences and remedies
II. For declarant, holder or owner
• No defence or remedy against application for customs action;
before action is taken, no need for legal relief on behalf of
declarant, holder or owner of goods
• Following suspension / detention declarant, holder or owner
may appeal
• Appeal can only be based on procedural errors
• Establishment of IPR infringement reserved to main
proceedings according Art. 10 of the Regulation
• No interest for legal relief before expiration of Art. 13 period
• After expiration, declarant probably will easier achieve release
against security than by way of preliminary injunction
Priviledged and Confidential
39
F. Conclusion
• Effective, strong and cheap means for
IPR-holders “sharp blade”
• Release for security options need to be
enhanced for patent seizures
• Appeal means need to be enhanced
Priviledged and Confidential
40
Thank You!
Priviledged and Confidential
41