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To accommodate provisions of applicable laws such as the Patent Act, Copyright Act, Customs Act, Foreign Trade Act, and Code of Civil Procedure, the Directorate General of Customs ("DGC"), Ministry of Finance promulgated the "Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Trademark and Copyright" in 2003 June to provide border measures for intellectual property rights. Through specific procedures, Customs may detain goods when it discovers any import/export of infringing products and assist investigations by judicial authorities. In June 2005, the name of the Operation Directions was changed to the "Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Patent, Trademark and Copyright" to reflect additional protections given therein to patent rights. Since the 2005 changes, patent holders have been also able to utilize the border measures through statutory procedures. Further amendments to the Operational Directions were effected in September 2008 to ensure balance between the rights and interests of importers/exporters and rights holders ("2008 Directions").
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To address changes in the new Trademark Act that came into force on 1 July this year (2012), the DGC removed the sections on trademark protection from the 2008 Directions and reformulated the relevant measures as the "Implementation Rules for Customs Authorities in Trademark Rights Protection" ("2012 Customs Rules for Trademark"), which became effective on 9 July 2012. As for the presently effective 2008 Directions, the DGC also published a draft amendment in early September of 2012 and changed the name to "Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Patent and Copyright" ("Draft Directions"). The DGC is currently collecting opinions in preparation of a final version.
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Border measures against trademark and copyright infringement
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For owners of trademark rights and copyright, the border measures implemented since June 2003 are relatively effective mechanisms to prevent the export/import of infringing goods. According to the 2008 Directions, Customs may implement related measures in the following four situations:
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A trademark or copyright holder reports that specific exported/imported goods infringe his trademark right or copyright.
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| (2) |
A trademark or copyright holder presents general information about certain unspecified imported/exported goods suspected of infringing his trademark right or copyright.
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| (3) |
Another agency reports that the imported/exported goods are suspected of infringement.
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| (4) |
Customs independently discovers from the appearance of the imported/exported goods that such goods are suspected of infringement while performing its mandate.
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Regardless of which these situations is involved, when Customs becomes aware of goods suspected of infringement, it will notify the rights owner and also the exporter/importer to confirm and provide supporting documents, and may detain, discharge, or transfer goods to related agencies for processing after performing relevant statutory procedures.
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Required conduct by rights owners
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Although the Customs border measures provide effective enforcement mechanisms to owners of trademark and copyright, to take the rights and interests of importers/exporters into account, certain rules of conduct must be observed by rights owners to prevent abuse or misuse of the measures as means of unfair competition. For example, in the 2012 Customs Rules for Trademark, it is clearly stipulated that a trademark holder who wishes to report to Customs that specific imported/exported goods infringe his trademark rights must file a written application along with the following documents and information:
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| (1) |
Facts of infringement and explanations sufficient to identify infringing goods, as well as data (with electronic files) helpful for confirming that the goods are infringing, such as samples, photos, catalogues, or images of the genuine goods and the counterfeit goods.
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| (2) |
Specific data such as company name of importer/exporter, name of goods, import/export port, date, flight or voyage number, container number, storage location, etc.
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| (3) |
Trademark registration supporting documents.
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In addition, a trademark holder who wishes to seek approval from Customs for one-year protective measures by presenting to Customs general information about certain unspecified imported/exported goods suspected of infringing his trademark rights, according to the 2012 Customs Rules for Trademark, information on actual imported/exported goods (i.e. the second item mentioned above) is not required, since the object is not yet identified.
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After receiving a report or presentation, Customs will evaluate whether its contents are sufficiently concrete, and may require the trademark holder to provide explanation in person if necessary.
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According to the 2012 Customs Rules for Trademark, after accepting the report or presentation, if Customs finds through inspection of relevant imported/exported goods that the situation is consistent with the trademark holder's assertion, it will notify the trademark holder and the importer/exporter by phone and fax. In such case, the trademark holder must examine the goods in person at Customs within a prescribed time (within 4 hours for goods pending export by air; 24 hours for goods imported by air and goods to be exported by sea), and provide evidence of infringement within 3 business days (which can be extended once by 3 days for justified reasons). Should the trademark holder fail to fulfill the aforementioned obligations, or the imported/exported goods are confirmed as non-infringing, the goods will be discharged according to clearance regulations, provided no other violation of clearance regulations is involved.
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These time limits can present a burdensome imposition on rights owners. Some have argued that it is unreasonable to expect rights owners to arrive at Customs within 4 hours of notification. However, the DGC considers such rules necessary to look after the rights and interests of the importers/exporters. In fact, even tighter restrictions are imposed in the 2008 Directions, which require inspection "within one business day" rather than 24 hours for goods imported by air and goods to be exported by sea.
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Required conduct by importers/exporters
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To balance the needs of both sides and prevent cases from being dragged out, the current border measures impose procedural obligations and time limits not only on trademark and copyright owners, but also on importers/exporters.
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For example, in the 2012 Customs Rules for Trademark, when an importer/exporter receives notice from Customs that its goods are suspected of infringing intellectual property rights, the importer/exporter must provide within 3 business days supporting documents to prove that a legal license has been obtained, or other supporting documents to demonstrate that there is no infringement. The above time limit of 3 business days can be extended once by 3 days for justified reasons.
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After receiving these documents, Customs will issue a notice giving the trademark owner 3 business days to apply for detention of goods in accordance with Paragraph 1, Article 72 of the Trademark Act. Should the trademark owner fail to apply for detention of goods within the time limit or it is clarified that there is no infringement, under the circumstance where no other clearance regulations are violated, Customs may simply take some representative samples and discharge the goods according to related clearance regulations.
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Border measures against patent infringement
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Compared with the detailed border measures for trademark and copyright infringement, Customs does not provide similar mechanisms for cases of patent infringement, and the requirements for border protection of patent rights are even stricter. Both the current 2008 Directions and the Draft Directions are the same in this respect. As mentioned above, a trademark or copyright owner can directly provide information to report or present to Customs without first getting a judicial decision. A patent holder, however, must first file to the court for a preliminary injunction. After the injunction is granted, the patent holder can petition with the court for sending execution orders to Customs for assistance in enforcement. Before carrying out the measures required in the execution orders, Customs will request the patent holder to provide specific information on the goods involved, such as the import/export time and location, name and number of voyage/flight of the transportation vehicle for import/export, and even the serial number of import/export customs declaration.
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It is not uncommon in Taiwan for a patent holder, after acquiring an order of preliminary injunction from the court, to seek the Customs border protection measures to prevent the import and sale of infringing products; however, due to the difficulties in confirming from public channels the import details of infringing goods, such as time, location, voyage/flight numbers, or declaration number of import/export, it is not easy to get effective and fruitful results.
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Potential reasons for the differences in Customs' practice in patent infringement cases include the difficulty officials face in determining based merely on appearance whether the technologies employed by the goods actually infringe a patent. The protected objects of trademark rights, on the other hand, are mainly logos consisting of text, graphics and marks, while those of copyright are the expression of the works. The directly tangible aspects of objects protected by trademark and copyright make them an easier target for Customs to evaluate for potential infringement than the more technical and less immediately observable aspects involved in patent infringement.
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Conclusion
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Awareness of intellectual property right protection has been rising in recent years, along with reliance on legal action as a key weapon in the arsenal of an enterprise in a competitive market. Both intellectual property rights owners and importers/exporters or manufacturers or sellers of various products should pay close attention to changes in Customs border measures and institute appropriate internal guidelines for potential scenarios.
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