Suspected counterfeits can be destroyed if not defended by importer, says HMRC

HMRC rules on imported fakes changed last summer, introducing a new requirement that the holder of the rights infringed by the goods, such as trade marks, had to initiate court proceedings for every consignment that it wanted to stop hitting UK markets.

Commentators said that the law change, which was forced by a court ruling, placed too heavy and expensive a burden on rights holders. The latest law change will ease that burden, according to one expert.

Rights holders can now write to the importer of goods stating their claim that the goods are fakes and asking to destroy them. If the importer agrees or fails to respond, the goods can be destroyed at the rights owner's expense.

If the importer replies and objects to the destruction then the rights holder must begin court proceedings or the goods will be released, a spokeswoman for HMRC said.

"Goods are not removed without court oversight; the right holder will write to the declarant or owner and seek their consent to consider the goods as abandoned for destruction," said the HMRC spokeswoman. "The owner can either explicitly consent or such consent can be presumed where the owner fails to respond to the request within a specified period."

"For many smaller consignments the receiver often ignores such requests assuming that the right holder will not initiate proceedings; now they cannot hide behind a cloak of anonymity. If they do not reply or specifically object to abandonment then consent will be presumed," she said.

"If however they dispute the claim and wish to take receipt of the goods then they simply inform the right holder or the case officer and the goods will then either be released (assuming all other customs issues have been complied with) or the right holder will ask for further a detention period whilst they initiate Court proceedings which will probably include a request for damages against the importer / owner," said the spokeswoman.

"We recognised when introducing the procedure that there would be occasions when it would not be possible for the IP right holder to contact or obtain a response from the declarant, holder or owner (normally the importer) of the goods when following the alternative procedure to Court proceedings," said an explanatory note produced by HMRC. "However, until now, there has been no option in such circumstances but to release the goods from detention (subject to satisfactory completion of customs procedures)."

"To cover these cases we are introducing new UK national legislation to implement a simplified procedure permitted by Article 11 of the Council Regulation that will allow for the abandonment and destruction of the goods without the need for Court action. The destruction of the goods will be carried out at the expense and under the responsibility of the right holder," it said.

The change will be welcomed by rights holders, according to Gillian Smullen, an intellectual property specialist at Pinsent Masons, the law firm behind OUT-LAW.COM.

"This will go some way to easing the burden on companies who are faced with having to go to court every time they want to stop counterfeits entering the country," she said. "At least it forces importers to defend their goods, which is a welcome step."

"This augmentation of existing procedures to make the simplified procedure generally available will not only assist right holders protect their rights but also help to prevent potentially unsafe counterfeit products being released onto the market," said HMRC's guidance.

Last June's change to customs law was prompted by a case at Belfast Magistrates Court in which HMRC was found not to be fully implementing EU law. The HMRC spokeswoman said that this change rectifies that.

"The crux of the Belfast case was that we were not acting strictly in accord with Council Regulation 1383/2003 in that our seizure action was not taking place following proceedings to determine whether an intellectual property right has been infringed under national law (Article 13)," she said. "However Article 11 of the Regulation sets up a simplified procedure which enables customs authorities to have goods abandoned for destruction without the need to determine whether an IP right has been infringed under national law. Article 11 is not directly applicable so required supplementary legislation to fully enable its use in the UK."

The new rules came into force from 16 April this year.