THE INTELLECTUAL PROPERTY RIGHTS (IMPORTED GOODS) ENFORCEMENT RULES, 2007 - AN OVERVIEW

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

Section 11 of the Customs Act, 1962 ('Act' for short) gives power to the Central Government to prohibit importation or exportation of goods.  Section 11(1) of the Act provides that if the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub section (2), it may, by notification in the Official Gazette prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification. One among the purposes referred to in Section 11(2) is the protection of patents, trade marks and copy rights.

In exercise of the powers conferred by Section 156(1) of the Act read with clauses (n) and (u) of Section 11(2) of the Act, the Central Government made 'the Intellectual Properties Rights (Imported Goods) Enforcement Rules, 2007 ('Rules' for short).

NOTICE BY THE RIGHT HOLDER:

A 'right holder' may give notice in writing to the Commissioner of Customs or any Customs Officer authorized in this behalf by the Commissioner, at the port of import of 'goods infringing intellectual property rights' in accordance with the procedures and under the conditions as set out in the Rules, requesting for suspension of clearance of goods suspected to be infringing intellectual property rights. The terms 'right holder' is defined by Rule 2(d) as a natural person or a legal entity which according to the laws in force is to be regarded as the owner of protected intellectual property rights, its successors in title, or its duly authorized exclusive licensee as well as individual, a Corporation or an association authorized by any of the aforesaid persons to protect its rights. The terms 'goods infringing intellectual property rights' as any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder.

The notice in respect of goods infringing intellectual property rights shall be given in the format prescribed in the Annexure to the Rules. In the notice the following information is required to be furnished:

* Proof of the evidence and ownership of a valid intellectual property right by the right holder;

* A statement of the grounds for the notice of suspension of release of the goods allegedly infringing intellectual property rights;

* In the case of a specific consignment of goods allegedly infringing intellectual property rights, details of the consignment and a statement of the ground for the notice including, prima facie, evidence of infringement;

* Detailed description of the goods with Customs Tariff Heading in respect of which an intellectual property right applies, together with a sample, model or photograph of a genuine product;

* Name of Customs airport/customs port/land customs stations to be covered.

Every such notice shall be accompanied by a document as specified by the Commissioner evidencing payment of application fee of Rs.2,000/- If any information as required is not provided, the right holder may be asked to provide within 15 days which may be extended on sufficient reasons being shown. The right holder shall inform Customs Authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property rights.

REGISTRATION OF NOTICE BY THE COMMISSIONER:

The Commissioner, within 30 days from the date of the notice or from the date of expiry of extended time, shall notify the applicant whether the notice has been registered or rejected. If the notice has been registered, the Commissioner shall indicate the validity period of the registration during which assistance by customs shall be rendered. The minimum validity period shall be one year unless the notice or right holder requests for a shorter period for customs assistance or action. The Commissioner granting the registration of the notice shall inform immediately through a letter by speed post or through electronic mode, all customs offices covered by the notice.

CONDITIONS FOR REGISTRATION:

The grant of registration shall be subject to the following conditions:

* The right holder or his authorized representative shall execute a bond with Commissioner of Customs for such amount with such surety and security as deemed appropriate by the Commissioner undertaking to protect the importer, consignee and the owner of the goods and the competent authorities against all liability and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal as the case may be;

* The right holder shall execute an indemnity bond with the Commissioner of customs indemnifying the customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods;

EFFECT OF REGISTRATION:

The import of allegedly infringing goods into India shall be deemed as prohibited once the notice is registered.

SUSPENSION OF IMPORT:

* Where the Dy. Commissioner of Customs or Asst. Commissioner of customs, based on the notice given by the right holder has a reason to believe that the import of goods are suspected to be goods infringing intellectual property rights, shall suspend the clearance of goods;

* The Dy. Commissioner of Customs or Asst. Commissioner of Customs, as the case may be, on his own initiative suspend the clearance of goods in respect of which he has prima facie evidence or reasonable grounds to believe that the imported goods are infringing intellectual property rights;

* The suspension of clearance of goods shall be intimated to the importer and the right holder or their respective authorized representatives by speed post or through electronic mode and shall state the reasons for such supervision;

* Where the right holder or his authorized representative does not join the proceedings within 10 working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962 have been complied with. The above time limit of ten working days may be extended by another 10 days in appropriate cases by the Commissioner of Customs or an officer authorized by him in this behalf;

* Where the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, has suspended clearance of goods on his initiative and right holder does not give notice or does not fulfill the obligations within 5 working days from the date of suspension of clearance of goods shall be released provided that all other conditions of import of such goods under the Act have been complied with.  After giving notice and fulfilled the obligations, if the right holder or his authorized representative does not join the proceedings within a period of 10 working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of their import under the Customs Act, 1962 have been complied with. The above time limit of 10 working days may be extended by another 10 working days in appropriate cases by the Commissioner of Customs or an Officer authorized in this behalf;

* The Customs may seek from the right holder any information or assistance including technical expertise and facilities for the purpose of determining whether the suspected goods are counterfeit or pirated or otherwise infringe an intellectual property right. The Commissioner of Customs or the officer duly authorized in this behalf shall allow a right holder and the importer or their duly authorized representatives to examine the goods, the clearance of which has been suspended and may provide representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right without prejudice to the protection of confidential information;

* At the request of the right holder, the Deputy Commissioner of Customs or Asst. Commissioner of Customs, as the case may be, shall inform the name and address of the importer and without prejudice to the protection of confidential information, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may also provide additional relevant information relating to the consignment which has been suspended from clearance. The information may be supplied to the importer also;

* In the case of perishable goods the period of suspension shall be three working days which may be extended by another four working days subject to the satisfaction that such extension shall not affect the goods. The right holder or his authorized representative shall join the proceedings failing which the goods shall be released;

* If the custom officer is having reason to believe that the goods infringing intellectual property rights and liable to confiscation under Section 111 (d) of the Act, may seize the same under Section 110 of the Act.

DISPOSAL OF INFRINGING GOODS:

If it is found that the goods detained or seized have infringed the intellectual property rights and have been confiscated and no legal proceedings are pending in relation to such determination, the goods shall be destroyed under the official supervision or disposed outside the normal channels of commerce after obtaining 'No Objection' or concurrence of the right holder or authorized representative.

If the right holder or authorized representative does not oppose or react to the mode of proposal by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within 20 working days after having been informed, or within such extended period as granted, he shall be deemed to have concurred with the mode of disposal as proposed.

The costs towards the destruction, demurrage and detention charges incurred till the time of destruction or disposal shall be borne by the right holder. These shall not be allowed the re-exportation of the goods infringing intellectual property rights in an unaltered state. Samples of goods infringing intellectual property rights prior to their destruction or disposal may be retained and provided to the right holder or importer if such samples are needed as evidence in pending of future litigations.

The goods of a non commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above rules.