Introduction. (b) The application by the rights owner for Customs protection. New Customs Strategies in Europe, ASEAN and Other Parts of The World

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1 5 New Customs Strategies in Europe, ASEAN and Other Parts of The World C ECAP II 2007 (a) I Introduction mprovements in Customs procedures and strategies must be matched by an adequate legal and judicial system in order for Customs to be effective and motivated in their work. Best practices used by other Customs authorities must be adapted by the authority of each country to suit its own situation. It will be necessary for the Customs to develop a simple, low cost, user-friendly system of applications for Customs protection. This will help to encourage rights owners to apply for protection and increase the effectiveness of the IP enforcement regimes operating in the country. It will also provide Customs officials with good quality information and help to motivate them. (b) The application by the rights owner for Customs protection Customs protection for IP rights owners is normally initiated by the application made by the owner of the IP right. The intention of this registration process is for customs to be alerted to the IP right and be in possession of sufficient information to enable to monitor and intercept suspect shipments. The features and content of an ideal application are: Proof of ownership of the right; an indication of the registered user (licensee) in the country and some information about the usual distribution of the products in the country. The application will normally be made in the language of the relevant country, but it may be beneficial for authorities to have the possibility also for registration in English. A copy of the WCO s Model Application form is attached as Annex 5. 38

2 (c) Processing of applications and IP co-ordination In some countries the applications are dealt with at local level by individual Customs offices at ports. This is undesirable, and leads to the inefficient use of resources and a possible lack of co-ordination. The alternative approach followed in a number of European Customs Administrations is to establish a central Unit. This unit can deal with general policy issues, act as a main contact point for business and provide a central processing service for rights holders applications for protection. Such a centralised system provides some obvious and immediate benefits: Provides a central application service and ensures uniform standards throughout the country; Acts as a central point for expertise in the subject of IPR; Collects all the information in a central point necessary for deciding on issues and individual cases; Collates information and intelligence for the national computer system, which can be accessed by front-line officers at ports; C ECAP II 2007 Provides a central contact point for the commercial sector. (d) Fees, securities and bank guarantee Another important formality which can prevent companies from filing an application are the fees and or securities required. The fees must be reasonable and ought not be in excess of the actual costs borne by the administration. In general, fees of about USD per application are reasonable. In the UK the fees are significantly higher, but UK Customs do not require a security or bank guarantee to be made. They also make no charge to rights holders for the costs of storage and destruction. This approach might be attractive to business and also reduces the volume of administrative work for both parties. Copyright March 2007 ECAP II European Commission/European Patent Office 39

3 With regard to the storage of the suspected goods, many countries pass these costs on to the rights owners. A much better and fairer solution is to charge the costs to the freight agent who acts for the counterfeit trader. Under this system, if the application proves to be unjustified the rights owner automatically becomes liable for these costs. It is normal practice to include a compulsory provision to this effect in the Customs application form. In this way the Customs are indemnified from costs whatever the outcome and in successful cases, the damaged party, the rights owner, is not faced with the impossible task of recovering these costs from the foreign counterfeit trader. Such traders normally fail to co-operate or communicate with any company or legal authority in the importing country following a successful border interception. Many Customs Administrations require a bank guarantee to be arranged when approving the application for Customs protection. This provides an effective and simple solution and indemnifies Customs from risk and financial penalty. The value of the bank guarantee should be carefully considered, since setting the level too high will deter applications; too low and it will be ineffective. If dealt with on a case by case basis, then the level recommended would be equivalent to the declared Customs value of the goods. A more professional solution is to allow rights holders to set one bank guarantee, at the time of making the application for Customs protection, to cover all future cases. This avoids the extra administration required each time a suspect consignment is detected and allows the Central Unit the ability to monitor and adjust the range of guarantees being held. C ECAP II 2007 (e) Communication, Notification and Identification A crucial stage in the Customs procedure is the notification by the Customs authority to the rights holder, that the clearance of a suspect consignment has been suspended. The process requires the goods to be identified by an expert of the rights owner and for both parties to act professionally and speedily. This requires clear and open communication between Customs and business. For many Customs authorities this is a new and unusual way to operate. 40

4 is restricted the parties involved will be unable to act in a speedy and professional manner and there is an increased chance that the counterfeiter s distribution network can remain intact. C ECAP II 2007 National legislation normally prohibits government departments from disclosing official information to third parties. In the case of imported counterfeit and pirate products this would include the identity of the consignor and consignee. However, the TRIPs Agreement envisages that such information may be made available. A crucial feature of the success of border control of IP rights is then collaboration which should exist between the public authorities and the commercial community. Good communication between business and Customs has advantages for all the parties involved. If the goods can be identified quickly and proceedings can be initiated in a short time period, goods do not have to be kept in storage for long periods. In contrast, if the information flow The risk that the rights owner might abuse the information provided can also easily be limited, by requiring the rights owner to make a declaration within the application form. Here he should agree liability for any wrongful or unapproved use of the Customs procedure and the information provided. (f) Best Practices in Europe The principal institution that represents and upholds the interests of the European Union (EU) is the European Commission. Within the EU there have been a number of important IPR enforcement initiatives in recent years. In 1998, the Commission issued its Green Paper on Combating Counterfeiting and Piracy in the Single Market. As a result of responses to the Green Paper, the Commission presented an Action Plan, on 30 November This Action Plan recommended a Directive to Member States to harmonise the enforcement of intellectual property rights 18 within the Community and a Regulation to improving the mechanisms for customs 18 The Enforcement Directive was formally adopted in April The text is available at: en/intprop/piracy/index.htm 41

5 action against counterfeit or pirated goods. 19 It also recommended the extending of Europol s powers to cover piracy and counterfeiting and a study on a methodology for the collecting, analysing and comparing of data on counterfeiting and piracy. The Commission s Action Plan comprises following elements: Harmonisation among all EU members of legislation to protect intellectual property rights. Improved law enforcement training programmes. Education programmes to raise awareness among consumers of the negative consequences of purchasing counterfeit and pirated products. The launching of a study for defining a methodology for collecting, analysing and comparing data on counterfeiting and piracy. In the long-term, the Action Plan suggests undertaking studies to determine the advisability and/or need of: Establishing mechanisms for administrative and operational co-operation. Harmonising minimum thresholds for sanctions and criminal proceedings. Extending the powers of Europol, the European equivalent of Interpol, for combating counterfeiting and piracy. The European Commission is organised into 36 departments, known as Directorates-General (DGs) and services (such as the Legal Service). Each DG is responsible for a particular policy area and is headed by a Director-General who is answerable to one of the commissioners. It is the DGs that actually devise and draft the Commission s legislative proposals and technical co-operation activities. A number of the Directorates General of the European Commision are concerned with the enforcement of intellectual property rights; foremost among these are: DG Trade, DG Taxation and Customs Union, DG Internal Market and DG Enterprise. The technical cooperation undertaken by the DGs of the European Commission include: legislative advice, exchanges on how to organise the administrative infrastructure, awareness promotion in the private sector and civil society and human resources training and capacity building. (i) Directorate General, Trade DG Trade has responsibility, among other things, for devising and monitoring internal or external intellectual property policies in accordance with the trade policies of the EU. A key policy of the EU is to secure a better recognition 19 COM (2003) 20 final, of 20/01/2003, available at: 42

6 and enforcement of intellectual property rights. DG Trade recently announced the EU Strategy for Enforcement of IPR in Third Countries. The purposes of the Strategy are to: Provide a long-term line of action for the European Commission with the goal of achieving a significant reduction of the level of IPR violations in third countries; Describe, prioritise and co-ordinate the mechanisms available to the Commission services for achieving their goal; Inform rights holders and other entities concerned of the means and actions already available and to be implemented, and raise their awareness for the importance of their participation. This Strategy is not intended to: Impose unilateral solutions to the problem. Propose a one-size-fits-all approach to promoting IPR enforcement. It will be necessary to have a flexible approach that takes into account different needs, level of development, membership or not of the World Trade Organization (WTO), and main problems in terms of IPR (country of production, transit or consumption of infringing goods) of the countries in question. Copy other models of IPR enforcement or create alliances against certain countries- The Commission has declared its readiness to improve co-operation and to create synergies with countries sharing its concerns and facing similar problems. It is, however, important that this strategy remains primarily focused on positive and constructive efforts. The Strategy seeks to: Identify priority countries: EU action will focus on the most problematic countries in terms of IPR violations. These countries will be identified according to a regular survey to be conducted by the Commission among all stakeholders. Awareness raising: promote initiatives to raise public awareness about the impact of counterfeiting (loss of foreign investment and technology transfer, risks to health, link with organised crime, etc.) and make available to the public and to the authorities of third countries concerned a Guidebook on Enforcement of Intellectual Property Rights. Political dialogue, incentives and technical co-operation: ensuring that technical assistance provided to third countries focuses on IPR enforcement, especially in priority countries; exchanging ideas and information with other key providers of technical co-operation, like the World Intellectual Property Organization (WIPO), the US or Japan, with the aim of avoiding duplication of efforts and sharing of best-practices. IPR mechanisms in multilateral (including TRIPs), bi-regional and bilateral 43

7 agreements: raising enforcement concerns in the framework of these agreements more systematically; consulting trading partners with the aim of launching an initiative in the WTO TRIPs Council, sounding the alert on the growing dimension of the problem, identifying the causes and proposing solutions and strengthening IPR enforcement clauses in bilateral agreements. At the EU Japan Summit of 2003, the Commission and Japan agreed to establish an improved dialogue in a number of areas, including IPR. An EU - Japan Joint Initiative for IPR Enforcement in Asia was established, focusing on elements like (i) the close followup of the progress of Asian countries in the field; (ii) coordinating technical assistance programmes and responsibilities; (iii) enhancing EU- Japan efforts to raise awareness in the fight against piracy and counterfeiting and to promote the strengthening of IPR enforcement; (iv) exploring the possibility to cooperate in other areas of IPR. The initiative is implemented by an Annual Work Plan containing specific activities. Similarly, the EC and China at the 2003 EU-China Summit to hold, at least once a year, a EU-China Dialogue on Intellectual Property. Among other issues, the discussions should focus on efforts to combat piracy and counterfeiting, institutional reforms, C ECAP II 2007 C ECAP II 2007 enforcement related areas such as central and sub-central enforcment by customs, police, administrative and judiciary bodies, public awareness of consumers and rights holders. Technical Assistance is an activity favoured by the EU for its contribution towards poverty alleviation and development. It is thus important to show that adequate IPR enforcement can contribute to this goal by making a link with investment opportunities, transfer of technology and know-how, protection of traditional knowledge, improvement of health and safety standards, etc. 44

8 A flexible approach will be followed that takes into account the recipient country s different needs, level of development, membership or not of the World Trade Organization (WTO), and main problems in terms of IPR (country of production, transit or consumption of fake goods). Cooperation programmes will only be effective if they are prioritised and indeed felt as important in the recipient country. It is also relevant to share information and to ensure a minimum level of synergy between the main providers of technical assistance, such as WIPO, the World Customs Organization (WCO), the Member States and third countries like Japan, the US and others. The idea is to share best practices and to avoid a duplication of efforts. There are a number of EU programmes that cover IPR, such as ECAP II, for the ASEAN countries, and the recently concluded EU-China IPR programme. ECAP II comprises a regional and a national component and covers all areas of IPR. It has a value of 9 million. Dispute settlement-sanctions: recall the possibility that rights holders have to make use of the Trade Barriers Regulation or of bilateral agreements, in cases of evidence of violations of TRIPs; in addition to the WTO dispute settlement, recall the possibility to use dispute settlement mechanisms included in bilateral agreements in case of non-compliance with the required standards of IPR protection Creation of public-private partnerships. There are numerous companies and associations which have been active in the fight against piracy/counterfeiting for many years. They constitute an invaluable source of information, but also a key partner for any awareness raising initiatives. Supporting/participating in local IP networks established in relevant third countries; using mechanisms already put in place by Commission services (eg IPR Help Desk 20 ) to exchange information with rights holders and associations; build on the co-operation with companies and associations that are very active in the fight against piracy/counterfeiting. Awareness raising-providing better information to the public is another very relevant dimension of the Strategy. This can be divided into the following components: (i) Raising the awareness of users / consumers in third countries. This is to be done from two perspectives: (a) to promote the benefits of IPR in terms of promotion of creativity, investment, transfer of technology, protection of traditions and quality; (b) to inform about the dangers of IPR violations to public health, consumer protection, public security, etc. The Commission has made available, through its website a Guidebook on Enforcement of Intellectual Property Rights. This Guidebook is mainly intended to assist public 45

9 authorities of developing and least developed countries in their efforts to put in place systems and procedures for the effective enforcement of IPR. In particular, the guidebook considers the most common difficulties confronting those countries in the enforcement of IPR and provides guidance on how to achieve effective and long-lasting protection for such rights. The guidebook identifies useful resources which may be of assistance to authorities and rights holders facing difficulties. (ii) Directorate General, Taxation and Customs Union The Customs Union is an essential element in the creation of an integrated single European market and of a common commercial policy. The role of DG Taxation and Customs Union is to maintain and defend the Customs Union and to ensure the uniform application of the nomenclature and origin rules. The Directorate General takes full part in international commercial negotiations which have an effect on the common customs policy and surveys in particular the application of the rules of origin and the preferential trading systems. A valuable source of information about the origin, the itinerary and the nature of counterfeit and pirated goods destined to, or in transit via the Community are the annual statistics released by DG TAXUD about the goods originating from third countries seized by Customs at the Community border. 21 The Customs 2007 initiative of TAXUD, which will run between 1 January 2003 to 31 December 2007, will provide a legal and financial base for: electronic information exchange systems between national administrations, training seminars for customs officials and experts, the exchanges of officials between national administrations and the basis for an electronic system which will allow business to move towards a paperless customs environment. This programme includes candidate countries for accession to the EU. Customs 2007 uses a range of instruments such as IT systems, exchanges of officials, seminars, workshops and project groups to achieve its objectives. From an EU perspective, the protection of Community interests requires good co-operation and mechanisms for the exchange of information. 21 http//europa.eu.int/comm/taxation_customs/customs/counterfeit_piracy/index_en.htm 46

10 (g) Interpol The international police agency (Interpol) has identified counterfeiting and piracy as an enforcement priority. The Secretary General of Interpol, recently stated that counterfeiting is a full fledged criminal activity. It is not peripheral to other criminal activities but at the very heart of them. It established a Working Party on Product Counterfeiting and Piracy in At the Interpol General Assembly (Rhodes, Greece, 2000) a resolution on IP crime was adopted. It clearly mandated the Interpol General Secretariat to take action not only aimed at raising awareness of the problem, but also to provide a strategic plan in close co-operation with private industry and in the same year it finalised a co-operation agreement with the International Chamber of Commerce (ICC). The First International Conference on IPR was organised by the Interpol General Secretariat and held in Lyon, from15 to 16 November One of the results was that the General Secretariat was mandated to create the Interpol Intellectual Property Crime Action Group (IIPCAG) Group of Experts on IP crime, comprising all the stakeholders including customs authorities, international agencies and the private sector. The Action Group was inaugurated at a joint international meeting in Lyon on 23 July The group is intended to function as a forum for the exchange of information and facilitation of investigations into IP offences and will also offer support through tailored training programmes. The group will be multi-agency, drawing its membership from public and private sectors. During the initial meeting the IPR working group identified the following areas of focus for the committee to review and provide recommendations to enhance cooperation and facilitate enforcement actions. Training. Identify international training needs at the strategic, operational and legislative levels. Develop tailored IPR training programs Best Practices. Identify methodologies for circulating details of successful IPR programs (new legislation, training, IPR awareness, enforcement actions) Information Exchange/ Databases. Identify best-suited format and opportunities to the exchange of timely information regarding emerging trends, product notices and enforcement actions. Contact Points. Establish a centralised repository of key worldwide contact representatives within the law enforcement community and the private sector regarding IPR matters. Public 47

11 marks, industrial designs, geographical indications, undisclosed information and layout designs for integrated circuits. Article 1.4 and 1.5 envisages the establishment of an ASEAN patents and trade mark system, including ASEAN Patent and Trade Mark offices. The Framework Agreement recites in Article the obligation of Member states to implement intra-asean intellectual property arrangements in line with their international intellectual property obligations under the TRIPS Agreement. 48 Awareness. Identify and formulate strategies to highlight the overall IPR impact and the efforts of Interpol and the working group. Identify and focus message on key audiences. (h) ASEAN The first Asian regional industrial property arrangement is that which was established by the Association of South- East Asian Nations (ASEAN). On 15 December 1995, the ASEAN Member countries, then comprising Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, adopted a Framework Agreement on Intellectual Property Cooperation. 22 Article 3.1 of the Agreement envisages intellectual property cooperation in the fields of copyright and related rights, patents, trade 22 See Annex 1 23 See Annex 2 Among the co-operative measures to enhance the enforcement of intellectual property rights, the Framework Agreement proposes co-operation in crossborder protection and the networking of ASEAN judicial authorities and enforcement agencies. An ASEAN Intellectual Property Right Action Plan , was formulated pursuant to this proposal. 23 This was designed to build on the progress which has been achieved in collaboration among ASEAN governments, ASEAN dialogue partner countries and institutions, and civil society organisations. It places regional co-operation in IP and IPRs in a larger and mutually supportive context of the social, economic and technological development of ASEAN and, at the micro level, of the dynamism, efficiency and flexibility of ASEAN enterprises, both large and small.

12 The Mission stated in the IPR Action Plan is to: foster collaboratively the development of a culture of learning, innovation and creativity in ASEAN, optimising on the diversity of Member Countries. develop a regional identity and profile in IP and IPR generation, registration, commercialisation, protection and enforcement. encourage cross-border collaboration and networking for the widening and deepening of ASEAN S&T base and R&D activities, and the registration and commercialisation of their results and outputs. The objectives are: To help accelerate the pace and scope of IP asset creation and commercialisation inside and outside ASEAN, and the formation of domestic and crossborder linkages in S&T fields and R&D activities. To develop and harmonise an enabling IPR registration, protection and enforcement framework of policies and institutions in the region. To promote greater public awareness, and the building up of human resources and institutions relating to IP and IPRs in ASEAN. To further empower national IP Offices in the collaborative provision of BDS in support of the above objectives. The IPR Action Plan does not expressly focus on IPR enforcement and border control issues as a specific subject. However, three of the principal Focus Programs and Projects of the IPR Action Plan are underpinned by an effective IPR enforcement regime : these are: 1. Fostering IP Asset Creation in ASEAN The creation of IP assets is dependent both on local creativity and also upon investment in research and development and technology transfer. In the absence of effective IPR enforcement, certainly investment in R & D, as well as the transfer of technology into ASEAN will be undermined. As the IPR Action Plan explains the sustainability of crossborder linkages and strategic alliances depends on the age-old issue of trust, reliability, quality and timeliness in delivery among partners and stakeholders. It is thus conditional on the effective protection of the IP assets which are created. The ASEAN IPR Action Plan in relation to the promotion of IP asset creation places a general emphasis on encouraging (a) more linkages and strategic alliances among S&T and R&D both within and outside ASEAN; and (b) closer relationship and interaction between these institutions and private industries and businesses. 49

13 2. Developing a Framework for Simplification, Harmonisation, Registration and Protection of IPR The IPR Action Plan acknowledges that the collective transformation of ASEAN into an innovative and competitive region depends greatly on the availability of a conducive framework of IP policies and institutions. Although primarily addressed to the registration of patents and other industrial property rights. The Action Plan notes: A third issue is the robustness of IPR protection from misuse or unauthorised application. WTO members or signatories to various IPR treaties tend to have strong IPR regimes in principle. In practice, however, the vigour of monitoring and enforcement varies greatly because of, among other reasons, weak capacities and limited resources for implementation in most ASEAN countries. Indeed, IPR protection and enforcement is probably among the weakest links in the chain. Collaboration at the regional level in the border control of IPRs, will go some way towards dealing with this weak link. 3. Promoting greater awareness and building up IP capacity Experience in Europe has shown that IP capacity depends in part upon an awareness of the significance and effectiveness of IPR enforcement. Certainly, as the Action Plan acknowledges the TRIPs Agreement has linked for the first time the protection of IPRs directly to multilateral trade rights and obligations as an integral element of the international trading system administered by the World Trade Organization. An awareness of the role of Customs authorities in TRIPs enforcement is a first step, together with an awareness and familiarity with the IPR systems and instruments within the general public and among business enterprises, SME especially. The ASEAN IPR Action Plan , proposes the organisation of IP-related workshops and training courses and human and institutional capacity building, including the conduct of regular workshops and training courses on various IP-related subjects, and the exchanges of policy experiences. 50

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