Trademark Infringement and Customs

Trademark Infringement and Customs  

According to Section 11 of the Customs Act, 1962 import of goods infringing intellectual property rights into India is prohibited.

Even though the term counterfeiting of trademarks is not defined under the Trademarks act, 1999, section 102 of the act relating to “falsifying and falsely applying trademarks” corresponds to the concept of trademark counterfeits. The trademark law further sanctions criminal penalties for selling and applying goods and services under false trademarks. Furthermore, counterfeiting of property or other marks, using or selling of goods marked with a counterfeit property mark  and making or possessing any instrument for counterfeiting a property marks, is a criminal offence under sections 481 to 487 of the Indian Penal Code, 1860. 

An entity shall register their brand as trademark and shall also record their IP Rights through the Indian Customs IPR Recordation Portal within the jurisdiction of India, in order to attain the right to serve notice in writing to the Commissioner of Customs or any Customs officer requesting suspension of clearance of goods suspected to be infringing intellectual property right as provided under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. 

According to the  Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, the grant of registration of notice is subject to the furnishing of consignment specific bond bank guarantee and indemnity bond by the right holder with the Commissioner of Customs.  Post the registration, the import of allegedly infringing goods into India is deemed as prohibited within the meaning of Section 11 of the Customs Act, 1962. Once the clearance of goods is suspended by the deputy/assistant commissioner of customs, the importer and the right holder are informed about the same and are required to appear for the proceedings within a period of ten working days from the date of suspension of clearance. This period on valid grounds can further be extended by another 10 days. The consequence of delay in joining the proceedings by the right holder, can result in the goods being released to the importer. The right holder is thereafter provided with photographs, serial numbers or samples of the product for examination of goods in order to assist in determining whether the goods are pirated, counterfeit or infringes an intellectual property right. On receiving evidence of infringement, the customs then issues a notice to the importer and provides the importer with an opportunity to present their case. The goods infringing IPR are then confiscated by the customs and are destroyed or disposed of outside the normal channels of commerce after obtaining “no objection” or concurrence from the right holder or his authorized representative. 

The examination procedure helps in proving whether the goods infringes trademarks or other IPR, wherein the importer shall be given a fair opportunity to present their case and respond to the show cause notice served upon them. The adjudicating authority passes an order of confiscation, on being satisfied that the goods indeed infringed a company’s trademark or other IPR. Further, on completion of all the proceedings and after receiving a ‘no objection’ from the company’s right holder, the infringing goods are destroyed by the custom officials. 

Conclusion- 

• The Central Government in view of Section 11 of the Customs act, has the power to prohibit import or export of goods that, inter alia, violate intellectual property rights such as trade marks
• The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (IP Rules) lays down conditions and procedures for prohibition of import of goods infringing intellectual property rights.
• Counterfeiting is a criminal offence according to the Indian Penal Code, 1860. 
• “Falsifying and falsely applying trademarks” corresponds to counterfeiting under the trademarks act 1999 and sanctions criminal penalty. 
• Recordation of IPR with the Indian Customs shall be complied with, in order to apply for suspension of clearance of goods infringing Intellectual Property Rights. 
• The issuance of a Unique Permanent Registration Number (UPRN) confirms the recordation of IPR. 

Author- Vartika Prasad, Advocate