On the 1st of July 2021, new rules regarding the detention of goods suspected of infringing intellectual property rights entered into force. The changes were made to bring the Norwegian rules in accordance with legislation in the EU, as well as strengthen the position of right-holders.
This article reviews some of the key changes that were made in legislation in 2021. The changes have been continued in chapter 10 in the new Movement of Goods Act of 2023.
Background
Infringement of intellectual property rights affect all production with a commercial value. Such infringements are increasing in scope and are difficult for the ordinary person to identify. Counterfeit goods can have serious consequences for life and health in case poor product quality may be harmful or lead to accidents. In addition, infringements of intellectual property rights entail major financial losses, and can potentially harm the reputation of rightsholders.
Globalization, as well as the development of new technology, have made it so that up to half of all IPR products are purchased online. Where previously large shipments came in containers, there is now a trend in the direction of customers ordering goods online and having them sent to their home address, giving rise to a small number of goods in each shipment. These goods are often resold in classified ads and auctions on the internet.
Consignees can be difficult to trace and often make themselves inaccessible. On the other hand, the right-holder often does not see the benefit of pursuing a small number of goods in an individual shipment. The option of going through the court system to obtain a decision on detention and destruction is often viewed as cumbersome and expensive.
Only infringements of commercial activities are affected by the rules. However, the goods often appear to be imported for private use, and it is challenging for the rightsholder to prove that the import took place through commercial activities.
All these factors make it challenging for the customs authorities to identify the infringements and make it difficult to follow up the consignee and rightsholder.
The changes made in legislation the 1st of july 2021 aimed to remedy the abovementioned challenges by bringing the rules in the current Customs Act more in line with the EU’s rules in Regulation No. 608/2013. The changes are continued in their entirety in Chapter 10 in the Movement of Goods Act.
Detention and destruction of goods where only the consignor is engaged in a commercial enterprise
A condition for an import or export to be considered an infringement of an intellectual property right is that it takes place through commercial activities. Previously this meant that both the consignor and consignee must be engaged in a commercial enterprise. However, current legislation conditions that only one party is involved in commercial enterprise.
For example, goods sent to a private individual in Norway from a commercial seller in China, can according to current legislation, be detained by Norwegian Customs.
Detention of goods in transit
Under previous legislation, only the import and export of IPR goods could be detained by customs authorities. Section 4a of the Trademarks Act now prohibits the transit of counterfeit trademarks without the rightsholder's permission, and the customs authorities will be able to detain such goods (and labels). However, this does not apply if the trademark in question is not protected in the country of destination.
Application to the customs authorities for detention of goods
Under the new rules, it will be possible to apply to the customs authorities for assistance in detaining goods suspected of infringing intellectual property rights or certain rights under the Marketing Control Act. Applications must be submitted electronically to Norwegian Customs. On the basis of such an application, the customs authorities will be able to make a decision on assistance for the detention of goods. It will conserve resources if the customs authorities have contact information and know that the rightsholder is interested in following up the case. Rightsholders who use this option will also be able to take advantage of the new simplified procedures for destruction of goods in general and small shipments in particular (see below). The option of applying to the customs authorities for assistance will exist in parallel with the option of obtaining a preliminary court order from the courts, which is being continued for the present. However, if a preliminary court order is used it will not be possible to use the simplified procedures for destruction of goods.
Simplified procedure for destruction of goods
The new rules allow a simplified procedure for the destruction of goods. Goods withheld on the basis of a decision on assistance from the customs authorities may be destroyed if the consignee has been notified and has not objected to destruction within ten business days.
Simplified procedure for destruction of small shipments
The new rules also regulate a simplified procedure for the destruction of small shipments. What is considered a small shipment is stated in the customs regulations and includes postal or courier shipments that contain five or fewer units or have a gross weight of less than three kilograms. Like the general procedure for destruction of goods, the basis will be a decision on assistance from the customs authorities, and here too destruction can take place with the passive consent of the consignee.
General
The new rules in Chapter 10 of the Movement of Goods Act also contain detailed regulation of the various applications for detention to the customs authorities, the contents of the customs authorities' notices and decisions, examination of goods, declaration and liability for storage fees and revocation and lapse of preliminary orders or decisions on assistance.