Question Q208
National Group:
The Philippines
Title:
Border Measures and other Means of Customs Intervention
against Infringers
Contributors:
In the name of the Philippine Group by
Rogelio Nicandro
Date:
(I)
Q: Do the laws of your country provide for border measures? If so, what is the
legal basis?
A: Yes.
1) Intellectual Property (IP) Code, Republic Act No. 8293 a. SECTION 166. Goods Bearing Infringing Marks or Trade Names. — No article of imported merchandise which shall copy or simulate the name of any domestic product, or manufacturer, or dealer, or which shall copy or simulate a mark registered in accordance with the provisions of this Act, or shall bear a mark or trade name calculated to induce the public to believe that the article is manufactured in the Philippines, or that it is manufactured in any foreign country or locality other than the country or locality where it is in fact manufactured, shall be admitted to entry at any customhouse of the Philippines. In order to aid the officers of the customs service in enforcing this prohibition, any person who is entitled to the benefits of this Act, may require that his name and residence, and the name of the locality in which his goods are manufactured, a copy of the certificate of registration of his mark or trade name, to be recorded in books which shall be kept for this purpose in the Bureau of Customs, under such regulations as the Collector of Customs with the approval of the Secretary of Finance shall prescribe, and may furnish to the said Bureau facsimiles of his name, the name of the locality in which his goods are manufactured, or his registered mark or trade name, and thereupon the Collector of Customs shall cause one (1) or more copies of the same to be transmitted to each collector or to other proper officer of the Bureau of Customs. 2) Tariff and Customs Code, Republic Act No. 1937, a. SECTION 603. Territorial Jurisdiction. — For the due and effective exercise of the powers conferred by law and to the extent requisite therefor, said bureau (Bureau of Customs) shall have the right of supervision and police authority over all seas within the jurisdiction of the Philippines and over all coasts, ports, airports, harbors, bays, rivers and inland waters navigable from the sea. When a vessel becomes subject to seizure by reason of an act done in Philippine waters in violation of the tariff and customs laws, a pursuit of such vessel begun within the jurisdictional waters may continue beyond the maritime zone, and the vessel may be seized on the high sea. Imported articles which may be subject to seizure for violation of the tariff and customs laws may be pursued in their transportation in the Philippines by land, water or air and such jurisdiction exerted over it at any place therein as may be necessary for the due enforcement of the law. b. SECTION 604. Jurisdiction over Premises Used for Customs Purposes. — The Bureau of Customs shall, for customs purposes, have exclusive control, direction and management of custom‐houses, warehouses, offices, wharves, and other premises in the respective ports of entry, in all cases without prejudice to the general police powers of the city or municipality wherein such premises are situated. 3) TRIPS Agreement April 15, 1994 a. ARTICLE 51‐ Suspension of Release by Customs Authorities Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. Members may enable such an application to be made in respect of goods which involve other infringements of intellectual property rights, provided that the requirements of this Section are met. Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories. b. ARTICLE 52 ‐ Application Any right holder initiating the procedures under Article 51 shall be required to provide adequate evidence to satisfy the competent authorities that, under the laws of the country of importation, there is prima facie an infringement of the right holder's intellectual property right and to supply a sufficiently detailed description of the goods to make them readily recognizable by the customs authorities. The competent authorities shall inform the applicant within a reasonable period whether they have accepted the application and, where determined by the competent authorities, the period for which the customs authorities will take action. 4) Customs Administrative Order (CAO) No. 06‐2002 – Enacted by authority of Section 608 of the Tariff and Customs Code of the Philippines, as amended, in relation to the Intellectual Property Code, certain rules and regulations were prescribed for seizure of infringing goods. (II) Q: Do the laws of your country provide for other measures of customs intervention against infringers? If so, which ones and what is the legal basis? A: Other than those quoted in the preceding number, none. (III)
Q: Are border measures and other measures of customs intervention against
(collectively referred to as “border measures”) only available for pirated
copyright and counterfeit trademark goods or also for goods infringing other
IP rights?
A: Also for goods infringing other IP rights.
Q: If so, for which types of IP rights are border measures available?
A: CAO 06-2002 provides that border measures and other measures of customs
intervention are available for:
1) Copyright and Related Rights 2) Trademarks and Service Marks 3) Geographic Indication 4) Patents for invention, utility model and industrial design 5) Lay‐out designs (Topographies) of Integrated Circuits 6) Protection of Undisclosed Information Q: Are border measures in particular available for goods infringing patents,
plant variety rights, common law marks, unregistered design rights, or
geographic indications?
A: Border measures are available for goods infringing patents, unregistered design
rights and geographic indications. No specific provision deals with plant variety rights,
unregistered design rights and common law marks.
Q: Is actual registration of the IP rights required or is an application to register
sufficient?
A: An application to register is sufficient as long as a decision or resolution of a court
or other competent authority declaring or recognizing the claim to an IPR is submitted
to the Bureau of Customs. In case of copyright and related rights, however, an
affidavit attesting that the copyright subsists at the time of application is sufficient.
Q: Does unfair competition, passing off or the like give rise to border
measures?
A: Yes.
(IV)
Q: Are border measures available for parallel imported goods?
A: There are no specific provisions in the Intellectual Property Code and CAO No. 6‐2002 that apply but case law prohibits parallel importation and recognizes the right of an exclusive distributor to prevent it as a proprietary right. However, its basis is not the IP Code but the Civil Code provisions on unfair competition under Article 28, inducement of breach of contract under Article 1314 and abuse of rights under Articles 19‐21. Parallel importation is allowed by TRIPS under certain circumstances, to make
cheaper medicines available to developing countries. In 2000, Administrative Order
No. 85 authorized the parallel importation of certain medicines by the Philippine
International Trading Corporation (PITC).
Q: Are border measures available for goods contained in a travelers’ private
luggage?
A: The Tariff and Customs Code authorizes persons having police authority under
Section 2203 to enter, pass through or search any land, enclosure, warehouse, store
or building, not being a dwelling house and also to inspect, search and examine any
vessel or aircraft and any trunk, package, box or envelope or any person on board, or
stop and search and examine any vehicle, beast or person suspected of holding or
conveying any dutiable or prohibited article introduced into the Philippines contrary to
law, without mentioning the need of a search warrant in said cases.
Q: Are there any other goods excluded by your border measures legislation?
A: None.
(V)
Q: Who is entitled to file an application for customs action?
A: IPR holder/ owner, or his agent. Q: Is there a centralized system for managing multiple applications for
customs action through a single contact point?
A: The Intellectual Property Unit of the Bureau of Customs (BOC) maintains an IPR
Registry where IP rights holders may record their IPR together with other relevant
information that the Bureau may use for the effective implementation and
enforcement of CAO 06-2002.
Q: What are the conditions for border measures? In particular, what level of
evidence for alleged infringement and other information is required by
customs authorities regarding the application for customs action?
A: Requirements and evidence required for application for customs action
If IPR Recorded with BOC
1) Affidavit attesting that the applicant is the rightful owner of the IPR sought to be recorded or in case of a representative or an agent, that he is duly authorized by the IPR holder to make the application, and that the person or other entities in the submitted list, if any, are so authorized or not so authorized to make the importation or distribution of such products covered by the IPR, together with a sufficient description of the products covered by the IPR sought to be recorded, together with samples thereof, if possible, to aid the Bureau. 2) Documentary Requirements a. In the case of IPR registered with the Intellectual Property Office (IPO), three certified true copies of the Certificate of Registration issued by the said office. b. In the case of IPR not registered with the IPO, three certified true copies of a decision or resolution of a court or other competent authority declaring or recognizing the claim to an IPR. c. In the case of copyright and related rights, an affidavit executed by the IPR holder/owner or his duly authorized representative stating that: i. At the time specified therein, copyright subsists in the work or other subject matter; ii. He or the person named therein is the owner of the copyright; and iii. The copy of the work or other subject matter annexed thereto is a true copy thereof. 3) Payment of P2,000 per product but in no case to exceed P20,000 per IPR holder/owner. ** These requirements may in certain meritorious circumstances be liberalized for as
long as the basic purposes for which the requirements are imposed are achieved.
** The recordation of the IPRs and product/s covered shall be valid for two years
from date of the recording and renewable every two years thereafter.
If IPR not recorded with BOC
The IPR holder/owner, or his duly designated agent, may request the Commissioner
of Customs or the District Collector of Customs concerned in case of ports of entry
outside of Metro Manila to issue an alert or hold order against any importation
suspected to contain infringing goods upon submission of the following documents:
1) Affidavit attesting that the applicant is the rightful owner of the IPR sought to be recorded or in case of a representative or an agent, that he is duly authorized by the IPR holder to make the application, and that the person or other entities in the submitted list, if any, are so authorized or not so authorized to make the importation or distribution of such products covered by the IPR, together with a sufficient description of the products covered by the IPR sought to be recorded, together with samples thereof, if possible, to aid the Bureau. 2) Documentary Requirements a. In the case of IPR registered with the IPO, three certified true copies of the Certificate of Registration issued by the said office. b. In the case of IPR not registered with the IPO, three certified true copies of a decision or resolution of a court or other competent authority declaring or recognizing the claim to an IPR. c. In the case of copyright and related rights, an affidavit executed by the IPR holder/owner or his duly authorized representative stating that: i. At the time specified therein, copyright subsists in the work or other subject matter; ii. He or the person named therein is the owner of the copyright; and iii. The copy of the work or other subject matter annexed thereto is a true copy thereof. Q: To which extent are customs authorities willing to receive training by the
right holder?
A: CAO 6-2002 generally prescribes that examinations be conducted in the presence
of the IPR right holder or his agent. However, even in the absence of the IPR
Holder/owner or his agent, the examining official may still proceed with the inspection
and make his findings and recommendations to the Commission or District Collector
of Customs, as the case may be.
Q: Do the customs authorities generally require the provision of a security?
A: No. But CAO No. 6‐2002 generally prescribes the payment of a recording fee of P2,000 per product which shall in no case exceed P20,000 per IPR Holder/Owner. Q: May the customs authorities take ex officio measures? A: Yes. On the basis of the recordation, the Bureau shall monitor and inspect on its own initiative suspect imports to determine whether or not they are liable to seizure and forfeiture pursuant to law. However, the exercise of such power shall be governed and circumscribed by existing rules and regulations on the issuance of alert or hold orders. The Bureau may also conduct on its own initiative, random inspection of goods/shipments under existing regulations on the issuance of alert or hold orders, in connection with the discharge of its police functions over imports and exports. The guidelines for the issuance of alert or hold orders for suspect goods are provided in CAO No. 6‐2002. Q: Are customs authorities liable in case of wrongful ex officio detention? A: There is no provision in CAO No. 6‐2002 specifically covering it. However, government officials are generally liable for irregular performance of duties under the Revised Penal Code. (VII) Q: Is only the right‐holder or also the owner, holder or importer of the allegedly infringing goods notified once the customs authorities detain goods? A: The owner, holder or importer of the infringing goods is also notified. Notification to Infringer Under the special provisions relating to seizure proceedings involving infringing goods (CAO No. 6‐2002), within five days from the date of seizure, the Collector shall give the claimant, importer or owner of the seized article or his agent a written notice of the seizure and shall give him the opportunity to be heard. Persons entitled to notice as stated above 1) Claimant, importer, or owner 2) Agent of the claimant, importer or owner 3) Importer, consignee or person holding the bill of lading shall be deemed the owner of the seized property described in the bill of lading 4) Person having legal possession of the property at the time of the seizure, if the owner or his agent is unknown or cannot be reached Q: How can the alleged infringer obtain information about the status of border measures and what information is provided by customs authorities to the alleged infringer? A: Information is given by: 1) Written notice 2) In case of an unknown owner or claimant, by posting for five days in public corridor of the customhouse of the district in which the seizure is made, and, in the discretion of the Commissioner, by publication in a newspaper, or by such other means as he shall deem desirable. (VIII) Q: What happens after notification? Briefly describe the procedure following notification. A: The procedure is: 1) If within ten days after due notification, no claimant, owner or agent appears or can be found, the Collector shall declare the property forfeited in favor of the government. 2) After due notice is served, the Collector shall immediately set the case for hearing. The case shall be decided within twenty working days from the date the case is set for hearing. 3) The provisions of the Tariff and Customs Code of the Philippines on appeal and automatic review shall be applicable in these cases. 4) The disposition of goods forfeited by final decree shall be governed by existing laws and regulations applicable in the premises with due regard to the statutory policy on IPR Protection. Q: Is the inspection of the allegedly infringing goods following notification usually carried out by the right holder or by an expert? A: It is usually carried out by the Examining official of the Bureau of Customs in the presence of the IPR holder/owner or his agent. Inspection or Examination of the infringing goods placed under Hold or Alert Orders 1) These articles shall be examined by the assigned customs examiner in the presence of the IPR Holder/Owner or his agent and the consignee or his duly authorized representative/s within twenty four hours from receipt of notice of the alert or hold order. 2) If upon examination of the goods, no basis is found to subject the goods to seizure proceedings, the alert or hold order shall immediately be lifted, and the processing of the import entry shall immediately continue. 3) In case there is prima facie basis to subject the goods to seizure proceedings, the matter shall, within twenty four hours, be referred to the Collector of Customs for the issuance of a Warrant of Seizure and Detention against the shipment. Q: Does your border measures legislation provide for a simplified procedure allowing destruction of the goods without there being any need to determine whether IP rights have been infringed? If so, in which cases? A: No. But the Tariff and Customs Code allows destruction of goods in the exercise of the functions of the Bureau under Sec. 602. Q: Are samples of the goods preserved for evidence purposes? A: Yes. Q: If proceedings must be issued to determine whether goods infringe IP rights, are both civil and criminal proceedings available to determine infringement? What are the advantages and disadvantages of the respective proceedings? A: Yes. The main difference between the two is that the criminal proceeding has a more coercive effect because it carries with it an imprisonment penalty. On the other hand, it is more difficult to prove because the quantum of evidence required in criminal proceedings is evidence beyond reasonable doubt while a civil proceeding only requires a preponderance of evidence. Q: What is the impact of a nullity action seeking to invalidate IP rights on the application for customs action? A: A final judicial decision invalidating an IP right is conclusive upon the Customs Authorities. Any deviation therefrom may subject them to contempt of court. If the action is pending, the Bureau of Customs may hold in abeyance any enforcement action if a proper remedy is applied for that purpose. Q: May customs authorities release goods suspected of infringing IP rights on provision of a security by the owner, holder or importer of such goods? If so, will such release depend on the type of IP rights? A: No specific provision is provided in CAO 6‐2002 but the Tariff and Customs Code prescribes a procedure for release of the goods under a bond filed for the purpose. However, it is of doubtful application because the Tariff and Customs Code was enacted way earlier than the enactment of the Intellectual Property Code and CAO 6‐2002. (IX) Q: If goods are found to infringe IP rights, may a right holder oppose exportation of infringing goods from your country, infringing goods in transit or placement of infringing goods in a free trade zone or free trade warehouse? A: A right holder may certainly oppose exportation of infringing goods, its transport, or placement in a free trade zone or free trade warehouse by applying for an appropriate injunctive remedy. (X) Q: If goods are found to infringe IP rights, do the judicial or customs authorities of our country generally order the destruction of the goods or do they have the authority to dispose of the goods outside commercial channels? A: Generally, the customs authorities have the power to order the destruction of the goods in relation to the functions of the Bureau under Section 602 of the Tariff and Customs Code. However, there is no legal basis for them to dispose of the goods outside commercial channels; hence, the customs authorities usually order the destruction of infringing goods. Q: May the competent authorities also order the infringer to give the names of his accomplices, upstream or downstream in the channels of production and distribution? A: Yes. Q: May judicial or customs authorities order the applicant to pay the owner, holder, or importer of goods appropriate compensation for any injury caused by the wrongful detention? A: Judicial authorities may do so. But as to customs authorities, no particular law expressly gives them the right to do so. Q: What is considered appropriate compensation and does it include attorney’s fees or other expenses? A: The appropriate compensation to be paid depends on a case‐to‐case basis. The judicial authorities generally have the discretion to determine appropriate compensation which may include attorney’s fees and other expenses. PROPOSAL FOR ADOPTION OF UNIFORM RULES 1) Q: Do you think that the adoption of uniform rules and best practice of customs authorities in the area of border measures and better coordination between countries and at an international level are desirable to improve enforcement? A: Yes. 2) Q: What should the scope of border measures be? Do you think that border measures should be available also for goods infringing IP rights for which your national law currently does not provide border measures? A: The applicable rules for border measures enforcement are already broad enough to cover almost all types of violations or infringements of rights under the IP Code. However, no particular provision covers enforcement of border measures for plant variety rights, common law marks and unregistered design rights. Ideally, they should also be covered. Since the Philippines is a signatory of TRIPS, its applicable provisions may be invoked, however. Q: Should unfair competition give rise to border measures? A: Yes. Unfair competition should give rise to border measures and it does here in the Philippines. Q: Which goods should be excluded by border measures legislation? A: Arbitrary search and examination of traveler’s private luggage should be expressly prohibited because they constitute invasion of a person’s right to privacy and it may also give rise to abuse. 3) Q: What rules should apply in relation to the lodging and processing of application for customs action? Should there be a centralized system for managing multiple applications for customs action through a single contact point? A: The rules stated in the CAO No. 6‐2002 are already extensive. As to the centralized system, there is the Intellectual Property Unit under the Bureau of Customs which may be considered a single contact point. Q: Should there be uniform rules on the provision of information by the applicant? What should the required level of evidence for alleged infringement be? A: Yes. There should be uniform rules on the provision of information by the applicant. The required level of evidence for alleged infringement should be substantial evidence which is the case here in the Philippines for proceedings that are administrative in nature. Q: Should there be uniform rules on the provision of information by the customs authorities? A: Yes. Uniform rules in as many jurisdictions as possible will simplify and expedite enforcement of border measures against infringing goods and avoid conflicting interpretations. 4) Q: What rules should apply in relation to the procedure following notification? A: The parties should be given the opportunity to be heard and extended due process in order to fairly determine whether or not the measures could be enforced against the goods in dispute. Q: Should there be a simplified procedure allowing the destruction of the goods without there being any need to determine whether IP rights have been infringed? A: No. This may amount to unlawful deprivation of one’s right to property without affording him due process and will be in direct contravention of the mandates of the Constitution on due process and fair play. Q: Should there be uniform rules on the examination of the goods by the right holder, security, and compensation in the case of wrongful detention of goods and disposal of infringing goods? A: Yes. This is desirable so as not to give excessive discretion on the IPR holders/owners and authorities and thus avoid possible abuses in the examination of goods. Provisions on security are also desirable to avoid the same evil but as regards compensation, the determination should be on case‐to‐case basis because the kind of goods and injuries may differ.