- A simplified procedure for destroying fake goods in Europe
- New laws make customs officers free to act
- A step towards the more efficient fight against counterfeiting
As the number of infringements upon intellectual property rights keeps growing each year, the statistics of fake goods remains shocking and calls for more efficient combating of counterfeiting. Both customs officers of the Republic of Lithuania and owners of intellectual property rights or their representatives are in constant search for new ways and methods of reinforcing control over copying and counterfeiting of goods.
On 28 July last year, the Chief Customs Officer of the Customs Department of the Republic of Lithuania passed an order regarding approval of the rules for organising destruction of goods controlled by the customs in the customs offices of the Republic of Lithuania, which gave more freedom to customs officers to organise procedures of destruction of counterfeit goods more effectively, which prompted trademark owners to take more active steps in cooperation with the customs.
According to previously effective rules for destruction of goods controlled by the customs, if during an inspection of shipments officers suspected that goods might be fake, they were detained. Customs officers used to inform the trademark owner or a representative indicated by them of the detained goods and if the owner confirmed that the detained goods were really fake and expressed a wish to start their destruction procedure, the representative appointed by the trademark owner had to submit a request for destruction of goods under the simplified procedure and, upon satisfaction of the request, to organise the destruction procedure. Such a procedure often used to deter trademark owners from taking of active actions towards the destruction of goods, as most counterfeit goods were marked by trademarks owned by foreign companies. Taking that into account, trademark owners were forced to appoint their representatives in Lithuania, i.e. to hire law firms in order that lawyers from such law firms would make requests to the customs on behalf of the trademark owners and would initiate and organise destructions of goods. It is obvious that such destruction of goods was very expensive for the owners and no losses were compensated. It is all the more so that most goods were detained in very small quantities, therefore owners refused to initiate destructions of goods and customs officers, having no confirmation from the trademark owner that the goods were fake, did not have the right to destroy such goods on their own initiative. Therefore, in such cases, customs officers had to return these fake goods to owners of the goods, i.e. recipients of the goods.
For example, owners of GUCCI, LACOSTE, NINA RICCI, MOSCHINO, PACO RABANNE and CAROLINA HERRERA trademarks very often refuse to take actions towards destruction of goods if it is only one or several bottles of perfume or items of clothing that are detained, as it simply does not pay off to trademark owners to invest into destruction of such small quantities of goods. Of course, there are exceptions. For example, the owner of trademark ROLEX always, even if only one item with this trademark is detained, initiates destruction of the goods. Much depends also on the type and value of the detained goods, because if several gloves or scarves are detained, it is hardly probable that the trademark owners will undertake anything, but if car wheel rims, watches, cell phones, etc. are detained, it is highly probable that the trademark owners will want such goods to be destroyed, though only one or several items are detained.
However, the above-mentioned new rules for destruction of goods facilitated the goods destruction procedure both for customs officers and for trademark owners. Currently, according to the new rules, when the customs detain suspicious goods, it is enough for customs officers to have only a confirmation of the trademark owner that the goods are fake and their wish that such goods be destroyed. If the owner confirms that the goods are fake, customs officers themselves initiate destruction of the goods and destroy them. Therefore, the trademark owners become subject only to the obligation to compensate for expenses related to the destruction of the goods, which, taking into account that the customs officers destroy goods after collecting a fairly big quantity of counterfeit goods, are minimal.
On the other hand, after counterfeit goods are destroyed under the simplified procedure, owners of counterfeit goods remain unpunished and successfully continue trying to order the same goods again as the customs officers are not capable of examining absolutely all shipments, therefore often counterfeit goods get into the country unnoticed. Even if the goods are detained and then destroyed, the recipient of the goods loses only the goods themselves but remains unpunished for the committed intellectual property infringement. On the other hand, currently, there is a trend that some trademark owners no longer put up with such behaviour of infringers and seek not only destruction of counterfeit goods but also that infringers are held liable. Upon detection of counterfeit goods, such trademark owners do not wish the destruction of such goods in the customs office, they immediately go to court for the defence of the trademark owner’s rights. In such cases, the court is requested not only to order the infringer to destroy the goods at their own expense and compensate for all expenses in connection with storage or transportation of the goods but also to award damages and litigation costs. In addition, the court is requested to prohibit such a person from selling, supplying to the market, importing, exporting, accumulating and using any products or their parts, which are marked with trademarks without authorisation by their owner. The case law on this issue is always unfavourable for the recipient of counterfeit goods.
If customs officers detained goods ordered by you and the trademark owner initiates a lawsuit regarding counterfeit trademarks, the fake goods may in some cases cost you over 100 times more than you paid for them. For example, if one attempts to have a shipment of a fake item, which cost EUR 10, and it turns out to be fake, after the lawsuit the infringer not only loses the very item but, in addition, court orders to compensate for litigation costs which may amount to over EUR 1,000. The trademark owner may also claim damages, in which case the infringer’s expenses increase even more. Of course, such a person will think twice next time before ordering a cheap item with a well-known trademark.
In such cases, counterfeit goods, though destroyed, may become many times more expensive for the consumer than an analogous original product.