Amendments to the Model Customs Law of the World Customs Organisation “Border Measures against Smuggling of Counterfeit Goods”

01 February 2003

The Intellectual Property Rights Strategic Group of the World Customs Organization is an international body coordinating the activity on perfecting of the national custom legislation and legal practice in attitude of the IP. The Group has distributed in the year 2002 the prepared amendments to the Model Custom Law “Border measures against the smuggling of the counterfeit goods” (adopted in 1988, with changes and amendments from 1995). The Model Law has a recommendational nature, but it is a kind of international standard in this area.

The mentioned Model Customs Law is directed on the practical application of the regulations of the strife with smuggling of the counterfeit foreseen in the Agreement on Trade Related Aspects of the Intellectual Property Rights (TRIPS) of the World Trade Organization. The specialists know that Special Border Measures take an important place among the provisions of the TRIPS Agreement to prevent the transfer of the counterfeit goods through the customs border. The requirements of the Model Law have been implemented into the national legislation of industrially developed countries-members of WTO in 1995-96, as well as in accordance with the TRIPS Agreement the developing countries-members of WTO had to enforce the concerned changes into their national customs legislation till January 1, 2001. The basic idea of the Model Customs Law is the right of the IP owner to apply to custom bodies to detain the imported goods counterfeit suspected. This right connected with the definite obligations for its owner (to prevent an abuse) is a real weapon in a strife with the counterfeit.

The suggested changes of The Model Law have been prepared by the World Customs Organization’s specialists and are based on the recent experience of the practical usage of it’s regulations by customs authorities, other law-enforcement bodies and by the IP right owners in the countries-participants. The various international organizations on the strife with the counterfeit have rendered the real assistance in the creation of the new edition of the Model Law.

It’s necessary to note that the number of novelties to the Model Law have been stipulated by the international agreements other then the TRIPS (e.g. by the Agreement of the World Intellectual Property Organization on the copyright, rights of performers, on tracks and Internet-technologies of 1996). And some of them go even further then the mentioned international agreements in the sense of the IP rights protection. By the opinion of the specialists it is extremely important for an effective strife with the counterfeit smuggling to implement the new edition of the Model Law into worldwide national legislation.

The proposed amendments to the different provisions of the Model Customs Law are presented below.
The IP right owner should not only be considered as the owner of the copyright or the rights of industrial property (as stipulated in the Model Law, paragraph “The definition and general statements”) but also as the person obtained the IP rights by the law or the owner of the neighbor rights. This category includes, first of all, the owners of the copyrights licences and rights of industrial property, and also the owners of the neighbor rights, who can be extremely interested in the suppression of the counterfeit import. Such changes correspond to the requirements of the Clause 51 of the TRIPS Agreement in line with the sense of the concept of the "counterfeit production". Such addition to the concept of the IP Right Owner is needed as the current Model Law does not provide the unconditional right to the licensee to apply directly (without the participation of the licensor) to customs authorities for detention of the production suspected on a counterfeit. For the time being this right can be given to the owner of the adjacent rights and license, but the customs authorities can require the owner of the "initial" IP rights to present. The licensor or the owner of the copyright in case of the adjacent rights is frequently located abroad and his engagement is connected with the known difficulties and significantly complicates the process or makes the process even ineffective. Thus it is proposed to include to the definition of the IP right owner and to the clause 2 of the Law the owners of the adjacent rights and licensees having an exclusive license for IP objects - to ensure their unconditional rights to apply to customs authorities.
The definition of the "Intellectual Property", which currently includes the patents for inventions, is proposed to expand with the missing term "Utility models" - to adjust the Model Customs Law to the nomenclature of the national patent laws of a number of countries.
In the time of digital technologies the IP rights owners frequently protect their production by cryptography. Such protection is being broken by the computer hackers with different hardware and software. It is offered to amend to the Model Law by the provisions about suppression of illegal transportation of such means through the customs border, which conform to the requirements of the WIPO Agreement in the area of Internets-technologies from 1996.

The changes in the Clause 4 of the Law propose to spread the rights of the customs authorities to detain on the proper application not only imported but also exported and transit goods suspected in a counterfeit. There is no such requirement in the TRIPS Agreement, but the similar legal mechanism is available in the EC countries and has proved its efficiency in the strife with a counterfeit.
In the Clause 9 of the Law it is proposed to increase the efficiency of customs measures by establishing of the period up to 30 days for the consideration of the IP right owner’s applications on the suppression of a counterfeit for general cases, and 3 days - for the cases where the certain shipment suspected in violation is mentioned in the IP right owner’s application.

To avoid any delays in the strife with a counterfeit the clause 12 of the Law is supposed to be expanded to the seven-days term for the answer of the owner of the suspected in a counterfeit and detained by the customs goods on the request of these customs authorities. The confiscation will take place in case of violation of this term. It is necessary to note that such a strict rule is not stipulated in the TRIPS Agreement, where the Clause 55 means that the owner of the detained goods or interested third party can appeal against the customs bodies actions in court.

The new edition of the Clause 13 of the Law obliges the customs bodies to grant to the legal owner the possibility to inspect the detained goods to confirm the fact of a counterfeit; the clauses 14 and 15 oblige these bodies to grant to the applicant the whole information about the owner, consignor and consignee of the detained shipment (the previous edition stated just the possibility to grant). The similar requirements are included to the Customs Legislation of the EU countries and demonstrate high efficiency.

The amendments of the Clause 19 propose to oblige customs bodies to detain the suspected in counterfeit goods by their own initiative (Ex Officio) - if they have the reasons for that and without the application of the legal owner. As per the previous edition it was the right but not the responsibility of the customs authorities. The changes in the clauses 13, 14, 15 and 19 are also out of the frames of the TRIPS Agreement and make the requirements to customs authorities on organization of the strife with circulation of the counterfeit even stronger.

The amendments of Clause 24 provide the customs bodies the right to scrap the confiscated goods without the adjudication in case of the "obvious smuggling", i.e. when the owner and the supplier evade to answer the requests and when the fact of a counterfeit is apparent.

The new edition of the Clause 25 means the customs procedures on detention of the goods suspected in a counterfeit are to be valid for personal luggage also, i.e. the cancellation of the exceptions related to the “goods imported for personal consumption " used before. This is due to the increased volume of smuggling of the counterfeit in the personal luggage.

To summarize, the proposed amendments to the Model Customs Law are directed on the assurance of the reliable protection of the IP owners’ rights.