Out-Law / Your Daily Need-To-Know

Blockchain could be used by customs authorities to share best practices on the enforcement of intellectual property rights (IPRs), according to a proposed action plan backed by EU law makers.

The Council of Ministers endorsed a new EU customs action plan to combat infringements of IPRs on Tuesday. The plan, originally drawn up by the European Commission last year, would apply for the years 2018 to 2022.

One of the actions outlined in the plan is for there to be "exchange of best practices on the customs follow-up of internet trade" between the European Commission and EU member states. Blockchain could be used for this purpose, according to the plan.

"Best practices are available to customs administrations in order to strengthen ecommerce enforcement by customs," it said. "New tools and techniques (e.g., blockchain) should be used where available and appropriate. New legal provisions should be developed where necessary."

The action plan also calls for "reinforcement of customs cooperation on IPR" with China, Hong Kong and other "third countries", and said EU customs authorities could also provide technical assistance, share experiences and exchange officials with neighbouring countries to support their "capacity building…on IPR enforcement".

Intellectual property expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said: “One of the most practical and effective ways of delivering an anti-counterfeiting strategy could be the use of blockchain. However, the implementation of the technology within the proposed time frame on a scalable basis makes it a hugely ambitious proposal."

According to EU statistics, more than 41 million items were detailed in 2016 as a result of customs enforcement of IPRs in the trading bloc. The value of those items totalled nearly €672m.

The Council of Ministers said (22-page / 418KB PDF) that "the trafficking of IPR infringing goods remains … a widespread and ever increasing phenomenon", with 2.5% of global trade made up by trade in counterfeit products, according to figures from 2013.

"It is essential to improve framework conditions for business to innovate and to reduce the damage to its legitimate interests caused by counterfeiters taking advantage of the investments, efforts and brand reputation of right-holders," the Council said. "The fight against international organisations engaged in fraud and organised crime, often searching for easy gains and economic benefits from the trade in counterfeit and pirated goods, also requires specific attention, as well as the risks that counterfeit and pirated goods may cause to consumers and end-users."

"A comprehensive IPR legal framework must be combined with effective enforcement. Business and consumers rely heavily on the responsiveness of enforcement authorities. Customs play a key role in enforcement: once IPR infringing goods have entered the single market, they are much more difficult to interrupt. Coordinating and planning European customs activities to combat IPR infringements related to cross-border trade is paramount," it said. 

The Council has invited EU member states and the European Commission to "implement the action plan" and said the Commission should take the lead on preparing a "roadmap" for that implementation by spring 2019.