INTELLECTUAL PROPERTY RIGHTS (IMPORT OF GOODS) ENFORCEMENT RULES, 2007 – AN OVERVIEW

Prohibited goods

Section 11 of the Customs Act (‘Act’ for short) gives powers to the Central Government to prohibit importation or exportation of goods.  The said probation may either be partially or fully.  Section 11(2)(n) provides that the Central Government may give prohibitions to the goods to protect the patents, trademarks, copy rights, designs and geographical indications. 

Rules

For the purpose of Section 11(2)(n) of the Act the Central Government framed a rule called as ‘Intellectual Property Rights (Import of Goods) Enforcement Rules, 2007 (‘Rules’ for short), vide Notification No. 47/2007-Customs-NT, dated 08.05.2007.  The said Rules came into effect from 08.05.2007.  These rules apply to all imported goods.  Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules.

Right holder

Rule 2(d) defines the expression ‘Right holder’ as   a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.

The right holder shall inform customs authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property right. 

Notice by Right holder

Rule 3 provides that a right holder may give notice in writing, in the prescribed form, to the Commissioner of Customs or any Customs officer authorised in this behalf by the Commissioner, at the port of import of goods infringing intellectual property rights requesting for suspension of clearance of goods suspected to be infringing intellectual property right.  Such notice shall be accompanied by the required documents.  A fee of Rs.2000/- is to be paid by the Right holder. 

The Authorised Officer, on receipt of the notice, may require the Right holder to submit any information to him within 15 days from the date of receipt of notice or further extended 15 days, for sufficient cause.

Goods infringing intellectual property rights

Rule 2(a) defines the expression ‘goods infringing intellectual property rights’ as  any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder.

Registration of notice

The Authorised Officer shall, within 30 days from the date of notice from the Right holder, notify the applicant whether the notice has been registered or rejected.  The validity of the registration period is one year or for a short period as requested by the Right holder.  The Authorised Officer shall inform the registration of the notice with validity period to the Right holder by speed post or through electronic mode to all Customs Officers covered under the notice of the Right holder.

Conditions for registration

The registration of notice issued by the Right holder is subject to the following conditions-

• The right holder shall execute a bond with the Commissioner of Customs for such amount with such surety and security as deemed appropriate by the Commissioner, undertaking to protect the importer, consignee and the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be.
• The right holder shall execute an indemnity bond with the Commissioner of Customs indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods.

Prohibition of imported goods

After the grant of the registration of the notice by the Commissioner on due examination, the import of allegedly infringing goods into India shall be deemed as prohibited within the meaning of Section 11 of the Act.

Suspension of clearance of imported goods

The Authorised Customs Officer, on receipt of the notice from the Right holder believes that the imported goods mentioned in the notice are suspected to be the goods infringing intellectual property rights, shall suspend the clearance of goods.  The said Officer shall inform the importer and the Right holder immediately through a letter by speed post or through any of the electronic modes. 

On the above said intimation the Right holder shall join the proceedings within 10 days from the date of receipt of the information.  If the Right holder does not join the proceedings within 10 days or within the extended time of another 10 days, the case will be decided on merit by the Officer. The Authorised Officer may seek from the right holder any information or assistance, including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right. The clearance of the goods may be ordered subject to the compliance with the other conditions as prescribed in the Rules. 

In the case of perishable goods suspected of infringing intellectual property rights, the period of suspension of release shall be 3 working days which may be extended by another 4 days subject to the satisfaction of the Commissioner or the officer authorized by him in this behalf that such extension shall not affect the goods.  The Right holder is to join this proceeding within 3 days of intimation or within further extended period of another 3 days, by executing a bond.  If the Right holder fails to join the proceeding then the goods shall be released.

Examination

The Authorised Officer shall allow a right holder and the importer  to examine the goods, the clearance of which has been suspended, and may provide representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right, without prejudice to the protection of confidential information.

Supply of information

At the request of the right holder, Authorised Officer shall inform the name and address of the importer and without prejudice to the protection of confidential information the Authorised Officer may also provide additional relevant information relating to the consignment which has been suspended from clearance.

At the request of the importer, the Authorised Officer shall inform the name and address of the Right holder and any other information relating to the consignment.

Confiscation

If within 10 working days or the extended period and within 3 working days or the extended period in the case of perishable goods, the right-holder or his authorized representative joins the proceedings, the Authorised Officer,  having reasons to believe that the goods are goods infringing intellectual property rights and liable to confiscation under section 111 (d) of the Customs Act, may seize the same under section 110 of the Customs Act.

Disposal of infringing goods

Where upon determination by the Authorised Officer, it is found that the goods detained or seized have infringed intellectual property rights, and have been confiscated under section 111 (d) of the Act and no legal proceedings are pending in relation to such determination, the Authorised Officer shall  destroy the goods under official supervision or dispose them outside the normal channels of commerce after obtaining 'no objection' or concurrence of the right holder or his authorized representative:

 If the right holder does not oppose or react to the mode of disposal as proposed by the Authorised Officer, within twenty working days after having been informed, or within such extended period as may have been granted by the Authorised Officer, at the request of the right holder, not exceeding another 20 working days, he shall be deemed to have concurred with the mode of disposal as proposed by the Authorised Officer.   

The costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder.  Such goods are not allowed to re-export in an unaltered state.  The Authorised Officer may on his own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigations.

Protection of action

The Customs officers when acting in good faith and having followed the procedures set out in these Rules shall not be liable for:

(a) any failure to detect goods infringing intellectual property rights,

(b) the inadvertent release of such goods, and

(c) any other action in respect of such goods.