Using customs to fight counterfeits

31-05-2017

Riikka Palmos

The steady increase in counterfeit goods presents a real challenge for IP owners. The only effective way to protect IP rights in Russia is registration at Rospatent. Based on registration, the owners are then able to use their rights exclusively and prohibit others from using identical or confusingly similar rights. Registration is also needed for fighting against counterfeits.

The steady increase in counterfeit goods presents a real challenge for IP owners. The only effective way to protect IP rights in Russia is registration at Rospatent. Based on registration, the owners are then able to use their rights exclusively and prohibit others from using identical or confusingly similar rights. Registration is also needed for fighting against counterfeits.

However, registration alone will not remove counterfeit goods from the market. Other means are necessary to reveal the counterfeits, stop their supply and punish the infringers.

The Customs Register of Intellectual Property Objects (CRIPO) was founded in 2004 to increase the efficiency of customs clearance. In addition to Rospatent, IP owners can register their IP rights here to prevent infringing goods from entering the Russian market. Registration enables the customs authorities to separate counterfeit and genuine products and allows the infringing goods to be destroyed more easily.

Trademark owners have recently started to take advantage of this, to protect their rights more effectively against counterfeiting. The number of IP registrations at the Customs Register has increased, with 400 to 500 new objects registered annually.

Currently the total number of registered IP rights is 4,295. Among the most popular goods are alcohol products, confectionery, sporting clothes, footwear and automobile spare parts. Compared to the total trademark registrations in Russia (over 300,000), customs registrations are still rare, but it is an increasing trend.

Customs are also developing their processes constantly. Officers have started to monitor and report suspected counterfeit goods even when there is no customs registration, with the help of the Trademark Register of Rospatent and the World Intellectual Property Organization.

Straightforward cooperation

Cooperation with Russian customs is straightforward for IP owners. Customs informs the owners about the suspected counterfeit goods and sets the deadlines for response. After a written confirmation from the owner, customs acts as a claimant against the infringer in the case. The owner is involved only as a third party. In short, customs handles the administrative court action against suspected counterfeit goods identified by its own operations.

"In addition to counterfeit goods, another threat to IP owners is parallel import, where an unauthorised party imports genuine goods."

In a clear case the process is simple: the court considers the case and orders the confiscation and destruction of the counterfeits at the cost of the state. Further, the infringer will be imposed with a fine. However, in the proceedings no compensation is awarded to the owner. To receive compensation for damages, the owner must start a separate civil court case. 

In 2016, customs brought 1,027 administrative court actions in the field of IP rights. Of these actions, 996 of the cases related to the illegal use of a trademark and 31 to the infringement of copyright and related rights. The trademark cases included counterfeit spare parts for motor cars marked with the trademark ‘Nissan’, toys with ‘Audi’ and brake shoes with ‘Toyota’. More than 20.4 million counterfeit product samples were revealed by customs in 2016—over two million more than in 2015.

In addition to counterfeit goods, another threat to IP owners is parallel import, where an unauthorised party imports genuine goods. In Russia, this practice is currently considered an infringement of exclusive rights.

In parallel import cases, customs notifies the owner of the suspected goods but cannot start an action against the importer. All claims, including arrest and the demand to destroy any counterfeit goods, must be brought by the owner.

The situation in respect of parallel import is expected to change. The Russian Federal Assembly is considering draft amendments to article 1487 of the Civil Code (Exhaustion of the Exclusive Right to a Trademark) that would legalise parallel imports.

The amendments would substitute the current principle of regional exhaustion of trademark rights with the international principle of exhaustion. According to the latest estimates, the changes may be implemented by 2020.

Riikka Palmos is a senior partner at Papula-Nevinpat. She can be contacted at: riikka.palmos@papula-nevinpat.com

Riikka Palmos, Papula-Nevinpat, , counterfeits, fight, customs, Civil Code

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