Importers must exact fines for IPR violations

EXIM MATTERS

The government has notified new rules to enforce Intellectual Property Rights (IPR) at the imports stage. The notifications prohibiting import or export of goods that infringe on IPR have also been issued. These restrictions have been notified by the Finance Ministry under the Customs Act, 1962 and not by the Commerce Ministry.

Section 11 of the Customs Act, 1962 empowers the government to prohibit either absolutely or subject to fulfilment of conditions (to be fulfilled before or after clearance) import or export of goods for the protection of patents, trade marks or copyrights or for prevention of deceptive practices.

Exercising the said powers, the government has prohibited import of goods having false trade marks, false trade description, fraudulent or obvious imitation of goods made using design in which copyright exists, goods for which a patent exists, goods made through a patented process, goods bearing false geographical indication, except in situations where the patent or copyright holder has consented.

The procedures require the IPR holder to give notice to the Customs at the port of import in the prescribed form giving necessary details and documents along with a fee of Rs 200. The Customs will register the notice within 30 days and notify all Customs offices covered by the notice and also the importers. The IPR holder has to execute a bond undertaking to protect the importer, consignee and owner of the goods and authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till destruction or disposal of the goods.

Thereafter the Customs will determine whether the rights of the IPR holder have been infringed and if so satisfied, proceed to confiscate and then destroy or dispose of the goods after obtaining 'no objection' from the IPR holder.

The rules allow the Customs to take suo moto action to hold up the imported consignments and give necessary information and rights for examination of the goods to the IPR holder and the importer. Time limits have been prescribed for appearance at the proceedings, with lesser time for perishable goods. Goods brought in as baggage by travellers and small consignments are not subject to the rules. The rules also protect the Customs against any liability due to failure to detect IPR infringement, inadvertent release of such goods and any other bonafide action in good faith.

Export of goods which are required by a notification under Section 139 of the Trade Marks Act, 1999, to have applied to them an indication of the country or place in which they were made or produced or of the name and of the manufacturer or the person for whom the goods were manufactured, but which have not applied to them such indication in the manner specified in the notification and any goods which are required to be stamped under Section 81 of the Trade Marks Act,1999, but which have not been stamped in the manner specified in the Trade Marks Rules,2002 have lso been prohibited. However, no Rules have been prescribed in respect of the export goods.

Although the laws require the seller to offer for sale only those goods on which he has unfettered title, including the rights under the IPR laws, prudent importers should preferably obtain necessary indemnity against consequences of any IPR infringement by the seller.

tncr@sify.com