Stopping counterfeits - how to get Customs Notices in place to protect your intellectual property

Earlier this year, New Zealand Customs destroyed a significant number of counterfeit Ab King Pro machines that were being imported into New Zealand. That they were able to do so was a direct result of the rights-holder having a border protection notice in place (i.e. a Customs Notice).

A Customs Notice enables New Zealand Customs to detain any imported item where they form the opinion that the imported item may be counterfeit. They are the first line of defence against counterfeit goods but are woefully under-utilised.

In this article we look at how to get a Customs Notice in place and discuss the ways in which the relevant legislation can be used to protect your intellectual property.

Background

In 1995 in order to comply with its obligations under the World Trade Organisation's Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), New Zealand enacted border enforcement provisions designed to enable certain rights-holders to prevent the entry of counterfeit product into the New Zealand market.

The relevant legislation is now contained in the Trade Marks Act 2002 and the Copyright Act 1994. The provisions allow the owner of a trade mark or copyright to lodge a notice with the Customs Service requesting the detention of counterfeit goods, while those goods are subject to Customs control.

However, Customs may only take action in respect of such counterfeit goods if the owner of the relevant trade mark or copyright has lodged a Customs Notice.

A Customs Notice will be valid for five years or until the relevant trade mark registration expires or the copyright in the work expires – whichever comes first.

Requirements

At the time of lodging a notice, the rights owner is also required to complete a form of indemnity to cover any costs that may be incurred by the Customs Service (such as storage, transport or legal) in enforcing the notice.

A standard security bond of $5,000 is also required. This is refundable when the notice expires, less any costs incurred.

To be accepted, a Customs Notice must comply with the requirements of the Copyright Act 1994 or the Trade Marks Act 2002. The key to this is to ensure that in the case of a:

• Notice requesting detention of goods infringing a registered trade mark or marks: the mark(s) relied on is/are correctly referred to and a copy of the registration(s) is/are attached to the notice; and

• Notice requesting detention of pirated copies pursuant to the Copyright Act 1994: the details which identify the relevant copyright work or works are supplied correctly and the basis of the right-holder's claim to copyright is outlined.

What happens when Customs detains goods pursuant to a Customs Notice?

Customs make a determination (i.e. forms an opinion) as to whether the goods appear to be counterfeit or pirated. Customs will detain any goods which it considers infringe a trade mark or copyright covered by a Notice. The determination is issued to the right holder, and includes details of the importer and the goods. A copy is also sent to the importer. The detention period is 10 days. During the period of detention, the right holder can commence action in the High Court against the importer, including for an order to obtain possession of the goods. If the right holder initiates court proceedings within this period, the relevant goods will continue to be detained by the Customs Service pending the decision of the court.

If the Customs Service has not been served with a notice of court proceedings during the detention period, the goods will be released to the importer after the 10 days.

Practical considerations

Of course, simply lodging the Notices will not guarantee that Customs will identify infringing products and detain them. Any information you can provide to the Customs Service that will assist them to identify counterfeit or pirated products will greatly improve the chances of those products being intercepted as a result of the Notices. Useful information falling into this category would be the names and addresses of suspected suppliers, importers or consignees of the goods and ways by which legitimate goods can be distinguished from fakes.

Need more information?

For more information on Customs Notices or anti-counterfeiting please call Garry Williams on 64 9 916 8661.