This guide was last updated in January 2018.
What are counterfeit goods?
Counterfeit goods are goods, including any packaging, label, sticker, brochure, operating instructions, warranty document or similar items which are sold under a brand's name without the brand owner's authorisation. Specifically, this relates to trade mark and geographic indication infringement.
EU Regulation 608/2013 authorises EU member states' custom authorities, such as HMRC, to detain goods thought to be counterfeit.
The Regulation replaced Regulation 1383/2003 and came into force on 1 January 2014.
The Regulation does not apply to:
- parallel imports (goods manufactured with consent of the right holder but placed on the market for the first time in the EEA without consent);
- overruns (goods manufactured with consent of the right holder but in quantities exceeding the agreed amount); or
- goods in transit through the EU (goods merely passing through the EU on the way to a non-EU destination) unless there is reasonable indication that goods will be rerouted to the EU market.
What should IP right holders do?
Rights holders (or their representatives) should complete and send a Rights Application for Action (AFA) to HMRC to get Customs action. This should either be a National AFA for Customs action at the UK borders only or an EU AFA for Customs action in two or more EU member states. The application must contain proof of rights, such as a copy of the registered trade mark certificate. Help to complete the form is available from the IP Authorisation Unit or here.
The AFA should be sent 30 working days before you suspect the counterfeit goods to be imported or exported, or when you want the monitoring period to commence.
An AFA has a maximum duration of one year but may be extended upon request.
If HMRC believes that it has identified infringing products it will detain the goods. HMRC contacts the rights holder and gives it certain information about the nature of the allegedly counterfeit goods. If requested, further information can be given to the rights holder such as the names and addresses of the importer and recipient of the goods and the origin and provenance of goods.
In addition, the rights holder is entitled to inspect the suspect goods. Following the inspection of the goods, the rights holder must advise the relevant customs authority whether or not it is going to commence court proceedings.
Failure to commence court proceedings means that the relevant customs authority will release the goods back to the importer.
To cut down on administrative fees, right holders may also opt for the small consignment expedited procedure where the goods are not perishable. Small consignments are postal or express courier shipments which contain 3 units or less or have a gross weight of less than two kilograms. In these cases, the right holder does not need to explicitly ask for the destruction of detained good. Instead, no reply within 10 days of notice is considered authorisation to destroy the goods.
The time frame
The company's inspection of the goods must take place within ten working days of its notification by HMRC that the goods are being held. It is possible to apply for an extension of a further 10 working days.
The period for inspection for perishable goods is three working days, with no possible extensions.
If there is an identifiable right holder and counterfeit goods are detected when there is no AFA in place, the right holder will be notified. In this situation there is a much stricter time limit as the right holder is required to lodge an acceptable AFA within four working days of notification in order to consent to destruction of the goods.
Where there is no AFA and no right holder has been identified within 1 day of the detection, the goods will be released.
There are no administrative fees for submitting an AFA however rights holders are liable for all costs from the moment of detention to the release of goods. For example, this includes storage, destruction and litigation costs.
A variety of rights can be protected in this way, including trade marks, design rights, copyright and patents.