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New IPR rules in the Customs Act

On 1 July 2021, new rules in Chapter 15 of the Customs Act concerning the detention of goods that infringe intellectual property rights will enter into force. The purpose of the rule changes is to bring the Norwegian rules in line with EU rules and strengthen the position of rightsholders. This article reviews some of the key changes.

Background

Infringements of intellectual property rights affect all production that has a commercial value, and infringements of these rights are increasing in scope and are difficult to identify. Counterfeit goods can have serious consequences for life and health in the event of poor product quality that is harmful or leads to accidents. In addition, infringements of intellectual property rights entail major financial losses and can potentially harm the reputation of rightsholders.

Globalisation and the development of new technology have meant that up to half of all IPR products are purchased online. Where previously there were large shipments in containers, there has been a trend in the direction of customers who order goods online and have 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 rightsholder 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 new rules aim to remedy the above challenges by bringing the rules in the Customs Act more in line with EU rules in Regulation No. 608/2013.

Detention and destruction of goods where only the consignor is engaged in a commercial enterprise

A condition for deeming an import or export an infringement of an intellectual property right is that it takes place through commercial activities. Under current law, this means that both consignor and consignee must be engaged in a commercial enterprise. However, following the European Court of Justice C-98/13 "Rolex" judgment, the commercial activities concept in the new rules must be understood to mean that it is sufficient that only the consignor is engaged in a commercial enterprise. For example, goods that are sent to a private person in Norway from a seller in China (e.g. after purchase online), will therefore be detainable under the new rules. The commercial activities condition will be met by the sale from China to Norway.

Detention of goods in transit

Under current rules, only the import and export of IPR goods can be detained by the customs authorities. A new rule will now be introduced in Section 4a of the Trademarks Act that 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 will regulate 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 will also regulate a simplified procedure for the destruction of small shipments. What is considered a small shipment will be stated in the customs regulations and will include 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 15 of the Customs Act will 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. The rules will in part continue current law.

The amendments to the Customs Act will enter into force at the same time as amendments to, among other things, the Trademarks Act, which implements a new trademark directive with EEA-relevance.