Enforcement of Intellectual Property Rights by Indian Customs

1. Statutory and Regulatory Framework

The enforcement of intellectual property rights (IPRs) at the borders of India is governed by the Customs Act, 1962 and the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

Under Section 11 of the Customs Act, the Central Government is empowered to prohibit the import or export of goods that infringe intellectual property rights recognized under Indian law. Further, Section 111 provides for the confiscation of goods that are prohibited or imported in contravention of the Act.

The IPR (Imported Goods) Enforcement Rules, 2007 were notified to operationalize border protection against counterfeit and pirated goods. These Rules prescribe the procedures for recordation of IPRs with Customs and the mechanism for suspension of clearance, examination, and disposal of suspected infringing goods.

2. Recordal of Intellectual Property Rights with Customs

A right holder—such as the proprietor of a registered trade mark, copyright, design, or geographical indication—may apply for recordation of their intellectual property with the Central Board of Indirect Taxes and Customs (CBIC) through the online IPR Recordation Portal.

The application must include documentary evidence of ownership, valid registration certificates, product specifications, photographs, distinguishing features of genuine goods, and details of authorized importers and licensees. Upon approval, Customs issues a Unique Permanent Registration Number (UPRN), which remains valid for a period of five years, renewable thereafter.

The right holder is required to execute a bond and an indemnity undertaking, agreeing to bear the costs of detention, storage, and destruction of infringing goods and to indemnify Customs and the importer against potential liabilities arising from wrongful detention.

3. Interception and Suspension of Clearance

When imported goods are suspected to infringe recorded IPRs, the Deputy or Assistant Commissioner of Customs may, either suo motu or upon request from the right holder, order the suspension of clearance of the goods under Rule 7 of the 2007 Rules.

Upon such suspension, Customs must promptly notify both the importer and the right holder, providing reasons for the detention. The right holder must join the proceedings within ten working days (extendable by an additional ten days) to substantiate the claim of infringement; failing which, the goods are released if otherwise eligible for import. In the case of perishable goods, the period may be reduced.

4. Examination and Determination

During the examination stage, Customs permits the right holder or its authorized representative to inspect the detained goods or to review photographic or documentary evidence to determine whether the goods infringe the recorded IPR.

If the right holder confirms infringement and Customs, upon due assessment, concurs with the finding, adjudication proceedings are initiated under the Customs Act. The infringing goods are thereafter confiscated and ordered to be destroyed or disposed of outside the normal channels of commerce, under the supervision of Customs and in the presence or with the consent of the right holder.

5. Rights and Responsibilities

(a) Rights Holder

• To record intellectual property with Customs to enable proactive intervention.
• To be notified in the event of suspected infringement.
• To examine or inspect the goods and participate in the determination proceedings.
• To bear all costs and indemnify Customs for detention, handling, and destruction.
• To update Customs regarding any change in ownership or validity of the recorded rights.

(b) Importer

• To receive notice of detention and the opportunity to respond.
• To have the goods released if the right holder fails to substantiate the infringement claim within the prescribed period.

(c) Customs Authority

• To intercept, detain, examine, and, where appropriate, confiscate infringing goods.
• To ensure fair and timely communication between the parties.
• To supervise the disposal or destruction of counterfeit goods.
• To maintain the national IPR Recordation system and coordinate enforcement actions.

6. Limitations and Exceptions

The IPR Enforcement Rules presently exclude patents from border protection measures; hence, patent holders cannot record patents with Customs. Goods of a non-commercial nature, including items in personal baggage or small consignments for personal use, generally fall outside the scope of IPR enforcement at the border.

Customs action is administrative and preventive in nature; it does not constitute a judicial determination of infringement. Rights holders may pursue further civil or criminal remedies in competent courts to seek damages or injunctive relief.

7. Objectives and Economic Significance

The border enforcement mechanism serves a dual purpose:

1. Protection of Intellectual Property Rights – by preventing the importation of counterfeit and pirated goods that infringe trademarks, copyrights, designs, or geographical indications.

2. Protection of Government Revenue and Market Integrity – by deterring misdeclaration, undervaluation, and the influx of substandard or counterfeit products which distort fair trade and consumer safety.

Through these measures, Indian Customs operates as the first line of defense against cross-border trade in counterfeit goods, thereby reinforcing the integrity of domestic markets and safeguarding both legitimate rights holders and national revenue.

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