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European Commission

MEMO

Brussels, 24 July 2012

Customs action to tackle fakes – Frequently Asked Questions

1. General information about Intellectual Property Rights (IPR)

Why is it important to protect Intellectual Property Rights (IPR)?

As the EU’s 2020 Strategy underlines, the protection of IPR is key to the EU economy. By giving people the incentive to be creative and innovative, IPR foster economic growth, creating and protecting millions of jobs.

What measures are in place at EU level to protect IPR?

Customs enforcement: in May 2011 the Commission proposed a new regulation that strengthens the provisions concerning the customs enforcement of IPR. This proposal was part of a comprehensive package of IPR measures aimed at modernising the legal framework in which IPR operate today (see IP 11/630, MEMO 11/327).

Patent protection: the Commission already launched proposals in April for a unitary patent protection under enhanced cooperation (see IP/11/470), so that innovators can protect their inventions at an affordable cost with a single patent covering the entire EU territory with minimum translation costs and without needing to validate that patent at a national level as they currently have to do. Today, obtaining a patent in Europe costs ten times more than one in the US. This situation discourages research, development and innovation, and undermines Europe's competitiveness. Meanwhile, work continues on the creation of a unified and specialised patent court for the classical European patents and the future European patents with unitary effect. This would considerably reduce litigation costs and the time it takes to resolve patent disputes. It would also increase legal certainty for business. At the European Council, the issue of the seat of the central division of the patent court was finally agreed, but the terms of the informal trialogue agreement with the EP were unfortunately altered. The Commission hopes that a deal can finally be reached early in the autumn.

Trade marks: trade mark registration in the EU has been harmonised in Member States for almost 20 years and the Community trade mark was established 15 years ago. However, there is an increasing demand for more streamlined, effective and consistent registration systems. The Commission intends to present proposals in 2012 to modernise the trade mark system both at EU and national levels and adapt it to the internet era.

IPR violations: the Commission is set to intensify its efforts in this area. Firstly, the Commission has reinforced the European Observatory on Counterfeiting and Piracy, which it launched in 2009, by entrusting its tasks to the Office for Harmonisation in the Internal Market (OHIM). This allows the Observatory to benefit from OHIM's intellectual property expertise and strong record of delivery in trademarks and designs. Secondly, there is an on-going assessment of the IPR Enforcement Directive (see IP/04/540), to help improve the current enforcement system in the EU. The Directive provides for civil law measures allowing right holders to enforce their intellectual property rights.

In addition to these measures, the Commission supports businesses in the protection and enforcement of their IPR: With projects like the Transatlantic IPR Portal or support offered directly to EU SMEs so they know about IPR challenges before they expand their business (China IPR SME Helpdesk, EU IPR Helpdesk).

What role do Customs play in the protection of IPR?

IPR infringing products could also be deceiving consumers, and could in some cases endanger their health and safety. Such goods should be kept off the market and customs is ideally placed at the border to enforce IPR effectively.

Is the detention of IPR infringing goods only a matter for customs authorities?

Customs administrations are the key controlling bodies at the external frontiers of the EU. However, co-operation with other enforcement authorities, and third actors, such as the right holders, also needs to be improved to keep the problem of IPR infringements under control.

In most Member States, law enforcement authorities other than Customs are also responsible for controlling IPR infringing goods within their territories, for example at open markets or production sites.

How important is industry's role in protecting IPR?

As the quality of IPR infringing goods has substantially improved and more and more highly technical goods are involved, customs have found it increasingly difficult to distinguish genuine products from the infringing products. Input from industry is therefore indispensable.

The identification and grounds for suspicion of an infringement relies on the information provided by industry (such as the type of IPR infringing goods, information on production and means of transport, physical characteristics of original goods, etc.). The European Commission, in collaboration with Member States has established a manual for right holders for lodging and processing applications for action. When right holders suspect that their rights might be infringed, they may lodge an application, requesting customs to take action.

Evidence of the close cooperation between customs and the private sector is shown in the evolution of the numbers of applications for action submitted to customs. Since 2004 the number of applications for action made in the Member States has increased from 2.888 to 20.566 in 2011.

Year

Applications

2004

2.888

2005

5.525

2006

7.160

2007

10.260

2008

12.866

2009

14.797

2010

18.330

2011

20.566

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

What happens to goods once they are detained by customs?

In over 90 % of the detentions, the goods were either destroyed or a court case was initiated to determine the infringement. In 7,5 % of the cases, the goods were released because they appeared to be non-infringing original goods or no action was undertaken by the right-holder after receiving the notification by the customs authorities.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

What is done to ensure customs cooperation on IPR with third countries?

In addition to EU controls at import, it is necessary to act at the source of the problem by stopping the export of IPR infringing goods and, where possible, by shutting down the production. This requires international cooperation.

For example, an agreement was reached with China in 2009, to develop a customs action plan on IPR enforcement (IP/09/193). The plan concentrates on 4 key areas, namely the exchange of statistical information, the creation of a network of customs experts in key-ports, the enhancement of cooperation with other enforcement administrations and development of partnerships with business communities. The plan was extended in December 2009 until the end of 2012 (IP/10/1079).

What is done to improve the current regulation on IPR enforcement in the EU?

The current EU rules on IPR enforcement date from 2003. After an extensive review, on 24 May 2011 the Commission proposed a new regulation that strengthens the provisions concerning the customs enforcement of IPR, whilst ensuring that the rights of the parties concerned are respected. This proposal was part of a comprehensive package of IPR measures (see IP 11/630, MEMO 11/327). The updated rules aim to widen the list of possible IPR infringements that can be controlled by customs at the border (e.g. illegal parallel trade and lookalike trade mark). In addition, customs would extend the categories of goods to which protected rights apply (e.g. trade names) and make it mandatory to destroy counterfeited goods in all EU Member States.

The new regulation has been adopted by the European Parliament in July 2012 and now discussions are expected to take off in Council for adoption.

2. Statistics on IPR

How many suspected IPR infringing goods were detained in 2011 compared to previous years?

In comparison to 2010, the number of goods detained has increased from 103 million in 2010 to 115 million in 2011, which represents a domestic retail value of nearly 1.3 billion euros.

What is the difference between cases and articles?

A case represents an interception by customs. Each case covers a certain amount of individual articles that can vary from 1 to several million and relate to different categories.

The total number of cases in 2011 reached 91.254, which represents an increase of 15% compared to 2010, and more than 1000% over the past decade.

 Number of cases

2001

5.056

2002

7.553

2003

10.709

2004

22.311

2005

26.704

2006

37.334

2007

43.671

2008

49.381

2009

43.572

2010

79.112

2011

91.254

 Number of articles

2001

94.421.497

2002

84.951.039

2003

92.218.700

2004

103.546.179

2005

75.733.068

2006

128.631.295

2007

79.076.458

2008

178.908.278

2009

117.959.298

2010

103.306.928

2011

114.772.812

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

Which are the most frequently detained articles?

In terms of numbers of detained articles, the top 3 categories are medicines (23.93%), packaging materials (21.21%) and cigarettes (17.63%). These last two are products often shipped in large quantities.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

In terms of cases, the top 3 categories are shoes, clothing and bags, wallets and purses.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

What types of medicines have been detained?

The most popular counterfeited medicines are life-style medicines (such as diet pills or Viagra type). However, medicines such as pain killers, anti-anxieties, against insomnia, antidepressants or antibiotics were also found as counterfeited medicines.

Where did the suspected IPR infringing goods come from?

China remains the primary country where the suspected IPR infringing goods were coming from at the moment of the detention. In 2011, almost 73% of the total amount of articles infringing IPR came from China. Other countries were the main source of provenance for different product categories, notably Turkey, Thailand, Hong Kong and India.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

Which means of transport were most used to import suspected IPR infringing goods into the EU?

The largest number of cases were detained through postal transport (49%), followed by air transport (19%) and express courier transport (7%). The number of cases in sea and road transport decreased by 4% and 20% respectively.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

In which Member States did Customs detain the most infringing goods?

Belgium, Germany, Italy, Netherlands, Spain and UK account for 76.94% of the overall amount of cases and for 45% of the overall amount of articles. UK leads the list in total amount of cases with 36% whilst Bulgaria accounts for the highest percentage of total amount of articles with 28%.

Source: Report on EU customs enforcement of intellectual property rights at EU border, 2011

See also IP/12/823


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