Out-Law / Your Daily Need-To-Know

Government revokes old rules on border counterfeit detentions

24 Feb 2010, 12:13 pm

The Government has revoked regulations governing the way that counterfeit goods are handled at UK borders. The revocation will come into effect on 10 March.

Her Majesty's Revenue and Customs (HMRC) announced last summer that it would change its policy on goods detention after a court ruling which said that UK rules were incompatible with EU law.

HMRC reversed its policy on the burden of proof in relation to seized goods and now requires rights holders to take court action if they want goods to be impounded or destroyed. If no court action is taken, the goods will be released.

The policy change was announced last year but the Government has only just published the Statutory Instrument that will implement the changes. It was laid before Parliament on 16 February and will come into force on 10 March. It amends the Goods Infringing Intellectual Property Rights (Customs) Regulations of 2004.

The Statutory Instrument revokes the old rules and implements new rules about how goods can be destroyed. It does not put legislation in place about the seizure of goods, but it has produced guidance which companies must follow.

Before the change HMRC had accepted a witness statement from a company as confirmation that seized goods infringe that company's intellectual property rights. It will no longer do so and will only seize them on the orders of the court.

"We now accept that the burden of proof should be upon the rights holder who must confirm the infringing nature of the goods by taking legal proceedings," said a letter HMRC sent to businesses last year about the issue. It said it would contact rights holders when goods are detained and keep them for 10 days.

"This changes the nature of the Customs activity," John MacKenzie, a Pinsent Masons intellectual property expert, said at the time. "Previously they were seizing the goods, but now they are just detaining them on behalf of the rights owner, and it is up to the rights owner to take the case to court, otherwise the goods are let go."

"The solution for brand owners is to establish a process to quickly and cost efficiently identify fake goods and get into court. Otherwise the cost of dealing with fake goods at an early stage is likely to be prohibitive," he said.