How effective are Indian border measures?

In recent years India has amended its customs laws to create easier and more effective enforcement of intellectual property.

The earlier law did not authorise customs to enforce IP and required the rights holder to approach the court for an order to make customs confiscate infringing goods. The law was silent on questions such as who would bear the costs while the order is being sought and who would be held liable if the confiscated goods were found to be genuine. No party was ready to take the risk and liability. This paved the way for the amendment, which I helped customs to draft.

Under the current law, the Indian government enforces IP only during import and not export, as Article 51 of TRIPS provides an option to signatories in relation to enforcing IP during export, whereas Article 36 makes enforcement of IP during import mandatory. India opted out of the obligation to enforce IP during exports. This gap is being exploited by counterfeiters.

Process at customs

Customs has been authorised to determine infringement (including passing off) not only of trademark and copyright but also of patents and designs. Initiating the process requires intelligence input by the rights holder. Customs intervenes and seizes only if there is a registered complaint by the rights holder along with the required intelligence.

"CUSTOMS INTERVENES AND SEIZES ONLY IF THERE IS A REGISTERED COMPLAINT BY THE RIGHTS OWNER ALONG WITH THE REQUIRED INTELLIGENCE."

Customs authorities have complained that if they take the initiative, rights holders do not always respond or co-operate. In order to participate in the process, the rights holder has to provide for a deposit equivalent to 25 percent of the value of the goods; verify the authenticity of the product and provide a report; finally, it must represent itself in legal proceedings conducted by customs.

Awareness, intelligence and initiative

Despite the best efforts of law-makers and the co-operation of high-level customs officials, there is lack of awareness of IP and the significance of counterfeiting in organised crime as well as its impact on the country’s economy, especially among root officers. Indian borders are porous and the priority is to prevent more heinous crime. In fact, the import of counterfeit products is increasing, especially from China, Thailand and Bangladesh.

There is no policy or process in place to gather intelligence or build a database at customs. The importers use various identities (using different company names) to dodge rights holders and customs.

Any new rule or law takes time to get used to and to be uniformly enforced. In my experience, cohesive initiatives by rights holders can help.

Contribution by rights holders

There is also an acute shortage of actionable intelligence and initiative among rights holders. Not many in India have any firm policy or resources allocated for consistent actions at borders. In a criminal action pursuant to police action and arrests, few rights holders pursue the matter in court.

"IN ORDER TO TACKLE LARGE-SCALE COUNTERFEITERS, INDIA SHOULD AMEND ITS LAWS TO ENFORCE IP DURING EXPORT."

It is the state that prosecutes, without any guidance or support from rights holders. In my experience, it is very rare that IP owners allocate resources for legal or evidential support to the State Prosecutor once the police enforcement action has finished.

Solution

In order to tackle large-scale counterfeiters, India should further amend its laws to enforce IP during export. Further, when the same police department with limited resources is burdened with day-to-day law and order, providing security to politicians, tackling terrorism and other crimes, priority for enforcement of IP is defi nitely going to be low. In order to provide adequate thrust to IP enforcement and send the right message, there is a need for a separate force and not a shared department to enforce IP.

But does India have the funds and the will to make it happen? Rights holders should explore options as to how they bring in resources and change the mindset.