Customs authorities are playing an increasingly significant role in safeguarding intellectual property by preventing the entry of counterfeit or infringing products at national borders. With the rapid growth of global trade, customs agencies now carry a broader mandate that extends beyond traditional border security to include the enforcement of intellectual property rights. Intercepting and seizing infringing goods before they enter the market is widely considered one of the most effective measures for protecting these rights.
Cross-border violations of intellectual property rights particularly the trafficking of counterfeit goods pose serious challenges for the world economy and legal systems. Such unlawful trade undermines brand integrity, exposes consumers to harm, and drains economic resources. This reality underscores the pressing need for robust customs enforcement measures to combat these infringements.
Legal Framework: Customs Act
The Customs Act of 1962 plays a vital role in protecting India’s trade interests and intellectual property rights (IPR). As a comprehensive legal framework, it regulates the flow of imports and exports, ensuring compliance with both domestic statutes and international trade commitments. An essential aspect of the Act is its function in curbing the circulation of counterfeit and pirated goods.
Under Section 11, the Central Government is empowered pursuant to the provisions in subsection 11(2) to restrict the import or export of specified goods by issuing official notifications. Specifically, Section 11(2)(n), when read with Section 11(1), authorizes such prohibitions to safeguard patents, trademarks, and copyrights. Additionally, Section 11(2)(u) allows restrictions to prevent violations of any applicable law. Further, Sections 111 and 113 grant Customs the authority to seize goods that are imported or exported in breach of regulations.
Historically, the Central Government has exercised these powers to block the entry of goods that infringe intellectual property rights. For instance, in 1960, a notification was issued banning the export by land or sea of goods falling under Sections 78 and 117 of the Trade Marks Act, 1968. A subsequent 1964 notification prohibited the movement of goods bearing false trademarks, deceptive trade descriptions, or marks intended to mislead consumers.
Once an intellectual property right is recorded with Customs, the authorities actively monitor incoming consignments for potential infringements. Upon registration, the import of goods that violate the registered trademarks is considered prohibited under the provisions of the Customs Act, 1962.
Customs officers are empowered to halt the clearance of suspected goods either on receiving a complaint from the rights holder or on their own initiative, provided they have sufficient preliminary evidence or reasonable suspicion that the goods in question infringe the trademark.
If clearance is suspended, Customs must notify the rights holder. Following examination, if the goods are confirmed as counterfeit or otherwise infringing, they are seized. The importer retains the right to challenge this decision through an appeal. However, if the rights holder fails to furnish the required bond or does not participate in proceedings within the specified timeframe, Customs will release the detained goods.
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 and Amendment Rules, 2018
Under the Intellectual Property Rights (Imported Goods) Enforcement Rules, Rule 7(9) authorizes the seizure of infringing goods. Where sufficient grounds exist, a Customs officer may confiscate such goods pursuant to Section 111 of the Customs Act, 1962.
The IPR rules empower Customs to detain goods suspected of violating a rights holder’s trademarks at the border without first obtaining a court order. These provisions also outline the process through which intellectual property owners referred to as Rights Holders can register their notice with Customs. This process is known as Customs Recordal.
For the effective enforcement of IPR border measures, an electronic platform called ARTS (Automated Recordation and Targeting System for IPR Protection in India) has been developed. Through ARTS, rights holders can register their intellectual property at both the local and national level, ensuring coverage across all major Customs locations in India. Presently, the system operates via the portal http://ipr.icegate.gov.in.
International Agreements Governing Customs and IP
- The TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) establishes baseline requirements for the protection of intellectual property that all member nations are obligated to implement.
- The World Customs Organization’s SAFE Framework of Standards is designed to improve both the security and efficiency of global trade operations.
- The European Union’s Customs Regulation provides detailed guidelines for how customs authorities within EU member states should act in enforcing intellectual property rights.
Together, these frameworks reflect the international consensus on the need to align customs procedures and strengthen IP enforcement worldwide.
Case Laws
- LG Electronics India Pvt Ltd v Bharat Bhogilal Patel (CS (OS) No. 2982/2011)
In this matter, the Delhi High Court dealt with complaints brought by Mr. Patel, who had been granted two patents by examiners under the authority of the Controller of the Patent Office. He alleged that LG Electronics and other importers had infringed his patent rights. The Court referred to a 2009 circular issued by the Central Government explaining the application of the IPR Rules. The circular, particularly Clause 4, emphasized that patent, design, and geographical indication disputes are far more complex for customs officials to evaluate than trademark or copyright issues. It clarified that, in patent matters, customs officers are expected to enforce existing judicial decisions rather than conduct independent infringement assessments.
- Telefonaktiebolaget Lm Ericsson Torshamsgatan v Union of India and Ors (Ericsson) (LPA 1104 of 2011)
In a subsequent appeal, the Delhi High Court overturned the decision in LG Electronics decision. The Court determined that under Section 7 of the IPR Rules, the Deputy or Assistant Commissioner of Customs has the authority to suspend clearance of goods when they have a well-founded “reason to believe” that the goods infringe a registered patent. If the alleged infringer maintains that the issue is too intricate for customs to decide, and customs cannot justify its reason to believe, the Court may instruct the infringer to approach the competent civil court for a formal determination of patent validity or infringement.
- S. Ram Kumar v. Commissioner of Customs, Mumbai
In a more recent case, the question of patent infringement was directly addressed by customs authorities. The decision went against the patent holder, signaling the continued judicial caution in permitting customs to adjudicate complex patent disputes.
Author: Yashica Dhawan
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