New rules on holding back goods infringing intellectual property rights
Rights holders will get new simplified procedures to enforce their rights after changes to the Norwegian Customs Act recently entered into force. It will be easier to detain goods that infringe intellectual property rights.
Globalisation and expanded internet shopping increases the volume of products shipped to Norway from abroad. The new rules aim to simplify the control with goods infringing intellectual property rights (counterfeit products).
The most important changes are a new system to detain and destroy goods based on a decision from the customs authorities, simplified procedures for destruction of goods, and expansion of the rules to goods imported by private individuals. Both rights holders and importers should in particular notice that the new simplified procedures for destruction remove the requirement for the importer's written consent or a court order to destroy detained goods. Instead, under the new rules, goods may be destroyed if the consignee does not respond to the notification from the customs authorities within ten business days.
Detention of goods based on a decision from Norwegian Customs
Under the new rules, rights holders may apply directly to the Norwegian customs authorities for assistance to detain goods, as an alternative to seeking a preliminary injunction before the courts. The new system aims to be more efficient and lower the costs related to pursuing infringing goods.
Rights holders who use this option will be able to take advantage of a new simplified procedure for the destruction of detained goods in general when the consignee does not respond, and the specific procedure described below for the destruction of small shipments.
An outline of the new system step by step:
Step 1: Application
The rights holder applies for assistance to detain goods suspected of infringing the rights holder's trademark, patent, design, copyright, etc. Applications must be submitted electronically using the customs authorities form (currently only available in Norwegian).
Step 2: Decision on assistance
The customs authorities consider the application and potentially pass a decision on assistance. To pass a decision on assistance, it is sufficient that it is "reasons to believe" the imported goods infringe the rights holder's intellectual property rights.
If assistance is granted, the decision defines the intellectual property rights concerned, what goods the customs authorities may detain, and how long the customs authorities shall seek to detain such goods.
Step 3: Inception of goods under the custom's control
When the customs authorities pass a decision on assistance, they shall seek to detain goods covered by the scope of the decision when such goods are under the control of the customs authorities. For example, goods will be under the control of the customs authorities when a Norwegian Customs office at an airport controls shipments arriving from abroad by plane.
If the rights holder suspects a particular shipment containing infringing goods covered by the scope of the decision, they may also tip the customs authorities, and in that way, attempt to target the custom authorities' inception towards possible infringing goods.
Step 4: Detention of goods
If the customs authorities detect and detain infringing goods, they shall immediately notify both the consignee and the rights holder. The parties are requested to respond to the notification within ten business days and answer whether they consent to destroy the goods. Upon request, the customs authorities may extend the deadline to twenty days.
At this stage, the customs authorities are allowed to detain the goods until the expiration of the ten (twenty) business days deadline.
Step 5: Release, destruction, or further detention of the goods
The customs authorities' further handling of the detained goods depends on whether the rights holder and consignee respond to the notification from the customs authorities:
- If the rights holder does not respond, the customs authorities will release the goods as soon as cleared through customs.
- If the rights holder respond, and not the consignee, the new rules establish a simplified procedure for the destruction of detained goods. Goods detained based on a decision on assistance may be destroyed if the consignee has not objected to destruction within the deadline, provided that the rights holder responds and accept destruction within the deadline.
- If both the rights holder and the consignee respond, and the consignee opposes the destruction of the goods, the customs authorities will give the rights holder additional ten business days to initiate legal proceedings towards the consignee.
At this stage, the customs authorities are allowed to detain the goods until the expiration of the ten days deadline. To further detain the goods the rights holder has to take legal proceedings against the consignee. Otherwise, the goods are released as soon as cleared through customs.
Simplified procedure for destruction of small shipments
The new rules also establish a simplified procedure for the destruction of small shipments. Small shipments include postal or courier shipments that contain five or fewer units or have a gross weight of less than three kilograms. For other shipments, the system described above will apply.
Note that the value of the goods is not relevant under the definition of small shipments. Hence, more expensive goods (for example, watches and electronics) may also be defined as small shipments and compromised by the new simplified procedure.
The new simplified procedure follows the general procedure for detention of goods based on a decision on assistants from the customs authorities. However, rights holders do not have to consent to destruction of the goods on a case by case basis. Instead, rights holders inform in the application for assistants that they want the customs authorities to destroy all small shipments. If rights holders consent to destruction of such shipments in general, they will only receive notification from the customs authorities if the consignee opposes destruction.
The new simplified procedure is aimed against obvious counterfeit goods. However, the wording of the new legal provision is not limited to such cases and includes all infringements of trademark rights, design rights, rights to geographical indications, and copyright and related rights. Therefore, it is uncertain to what extent the simplified procedure is also applicable in other cases than obvious counterfeits, such as illegal parallel imported goods or similar products. This potential wider scope is particularly important to notice since non-counterfeit goods are more likely to have a high value than counterfeit goods, and, as mentioned above, the new simplified procedure is not limited related to the value of the goods.
Detention and destruction of goods if the consignee is not engaged in commercial activity
Previously, the customs authorities could not detain and destroy goods where the consignee was not engaged in commercial activity. Following the European Court of Justice Rolex-judgment, it is clarified under the new rules that it is sufficient that only the consignor is engaged in a commercial enterprise. For example, goods sent to a private person in Norway from a seller abroad after purchase online may be detained under the new rules. Together with the new simplified procedure for destruction of small shipments, this change will enable rights holders to better pursue counterfeit consumer goods.
What should rights holders be aware of?
The new rules straighten rights holders' position and provide simplified procedures to pursue counterfeit goods. Hence, rights holders who previously have considered detention of goods as a less attractive option should reconsider their position.
When considering filing an application for assistance to the customs authorities, rights holders should, among other things, consider the following questions:
Is a preliminary injunction or an application to the customs authorities the best option?
The new application system exists in parallel with the option of obtaining a preliminary injunction before the courts. When choosing between filing an application for assistance and a preliminary injunction, rights holders should ask whether it is important to destroy the detained goods, and whether the consignees are likely to oppose destruction. If obtaining a preliminary injunction, the detained goods may only be destroyed if the consignee explicitly consents to destruction or according to a judgment by the court. When the detained goods are of less value or evident counterfeit products, the consignee often has little interest in responding to the notification from the customs authorities. Hence, rights holders may find it challenging to get the customs authorities to destroy the detained goods without obtaining a court order. On the other hand, the new application system provides a simplified process for destroying detained goods; the customs authorities may destroy detained goods unless the consignee responds and oppose destruction.
Are the goods involved sent in small shipments?
If the shipments involved have a gross weight of less than three kilograms and the goods are sent in packages including five or fewer units, rights holders should consider giving a general consent to destruction of small shipments. This is particularly relevant when the goods involved are smaller consumer goods usually ordered from foreign online stores on a per item basis. However, since the value of the goods is irrelevant, also exclusive and more expensive products of a smaller size may be defined as small shipments.
Am I prepared to follow up on the detention of goods?
Considering the short deadlines to respond and take out legal proceedings, rights holders who apply for assistance should be prepared to follow up detained goods on short notice. This includes both responding to notifications from the customs authorities and prepare for potential legal proceedings.
Do I hold the relevant intellectual property rights?
In the application, rights holders must document to hold the relevant intellectual property rights. The system under the Customs Act includes a wide range of intellectual property rights; inter alia trademark rights, rights to company names and other business characteristics, design rights, copyright, patents, supplementary protection certificates (SPCs), and plant breeders' rights. In addition, the rules apply correspondingly for violations of Section 25, 26 and 30 of the Marketing Control Act that pertains to imitating another party's product, distinguishing marks, advertising material or other produced items.
What information is relevant to include in the application to facilitate the custom authorities' control?
A good application for assistance to the customs authorities will provide the authorities with the necessary information to detain goods infringing the rights holder's exclusive rights. This includes information on how to identify and distinguish authentic and infringing goods.