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REPORT ON THE EU CUSTOMS ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS: RESULTS AT THE EU BORDER, 2017

The enforcement of intellectual property rights (hereinafter, “IPR”) by Customs is recognized as being a commonly investigated issue of the European policy initiatives. In the words of the Commission, “it is important to provide right-owners with the certainty that the fruits of their inventions will be protected. The competitiveness of European businesses depends on it”. In this regard, the past decade has seen a further boost in the European Customs administration, indeed, already known for its high enforcement ratio and effectiveness.

 

In light of the above, the present Report is an overview of the detentions carried out under Customs procedures in 2017. The topic is examined via statistics on the description, quantities and values of the goods seized, as well as on their provenience, the means of transportation and the type of IPR presumably infringed. In fact, thanks to Regulation (EU) No 608/2013, bulk of data concerning Customs enforcements of IPR are transmitted on a daily basis by the Member States to the Commission. Once elaborated and recapped, these information allowed to shed new lights on the performance and current trends of the enforcement actions.

 

Within this framework, the enforcement procedure ordinarily takes origin from the right-holder’s application for action. Specifically, the right-holder is entailed to request Customs, on a national or European basis, to act if there is the suspect that his IPR right has been violated. The 2017 “Report on the EU Customs enforcement of Intellectual property rights” shows that 2’776 national and 1’271 Union applications were lodged by right-holders. On the other hand, also the EU Customs have the power to autonomously undertake an action for detention. In such cases, the first step of the procedure consists in identification of the right-holder. Then, a national application has to be submitted within 4 working days to permit the Customs to continue the detention or suspension of the release of the goods. However, the past year has seen these officio procedures playing a rather limited role, adding up to 2% of the total.

 

As mentioned above, two of the most relevant information concern the number of seizures by the Customs and the number of articles detained. With reference to the first, it can be observed a decrease by 9% in 2017 of the air freights, sea transport and post modes. Appreciably, the latter almost halved.  On the contrary, the interceptions in express courier and road transport witnessed a slight increase compared to the 2016 records.  

 

In relation to the quantity of articles detained, each interception may amount to different volume of products, ranging from few to millions of unities. The total number of articles detained shows a decrease in the amount of 24% compared to the previous year: 34 million of articles were detained in 2017 vis-à-vis the 41 million of the precedent year. Interestingly, a decrease of approximately 50% marks out perfumes and cosmetics, clothing accessories, ink cartridges and toners, toys, cigarettes, lighters and packaging materials. Among these categories, the most significant decrease in absolute terms pertains to the cigarettes, with 7 million packages being less detained, representing 70% of the total decrease in articles. With reference to the domestic records, Lithuania excels in terms of number of articles detained, with more than 6 million of units, while Finland surged up of 2’185%, stepping from 18’191 to 415’728 units in the last year.

 

Following the detention by the Customs, more than two-third of the products have been destroyed following one of the two procedures depicted in Regulation (EU) No 608/2013. First, goods have been destroyed, under the ‘standard procedure’ pursuant to article 23 of Regulation (EU) No 608/2013, after a confirmation from the right-holder and an agreement from the holder of the goods. Second, Article 26 provides the applicant with the possibility of requesting the destruction of goods transported in a small consignment without the need to notify the right-holder of every shipment. Not surprisingly, this procedure led to a significant reduction in the administrative burden for both custom authorities and the right-holders, while, at the same time, it positively affected the counter-action towards counterfeit products transported by post and express couriers. This conclusion is further confirmed by the abovementioned decrease in these two transport modalities (i.e. post transport, as said, halved). In less than 10% of the detentions, goods appeared to be non-infringing original goods, or goods in relation to which the right-holder did not take any action. Similarly, one case of detention out of ten ended up with a legal action before the Court initiated by the right-holder in order to determine the infringement.

 

A global perspective of the countries of provenance shows that China is still the main source country of detained goods (73%). Moreover, and confirming the last decade trend, together with a group of eastern countries, China leads the rank of the so called “top exporters”: China, Hong Kong, Turkey, Vietnam and India export in Europe more than 90% of the total amount of detained products. Focusing on the value of the detained products, the trade from Hong-Kong is at the top of the rank in relation to the luxury segment. The reason lies on the detentions of high-value luxury goods.

 

Finally, as already examined in the past decade, approximately nine out of ten detained goods, both in terms of value and in terms of quantity, presumably violated an EU, International or National trademark.

 

In conclusion, while the numbers are slowly decreasing, illicit importations of counterfeit products are still a huge issue that may irreparably harm many EU business. Numbers show clearly that the system in place work, but it’s still a great burden on IP right holders and Customs authorities in order to keep up with the amount of infringements.