How Online Recordation of IP Rights with Customs Works?

Introduction

Cross-border counterfeiting and infringement of goods can have severe long-term consequences for an economy. In order to protect the IP rights of the holders as well as to secure the economy from such breaches, the government formulated Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. These rules are aimed to prevent counterfeiting and infringing good from entering into the market. In order to benefit from the rules, right holder has to fulfill certain procedural obligations. The whole procedure is known as recording of IP Rights with the Customs. This process can now be done online through Indian Customs IPR Recordation Portal (https://ipr.icegate.gov.in).

What are ‘goods infringing intellectual property rights’?

According to Rule 2(a) of the IP Rules, “any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder” fall under the ambit of ‘goods infringing intellectual property rights’. The definition is thus, wide enough to encapsulate all the goods that the respective IP Statutes deem infringing the rights of IP right holders.

Indian Customs IPR Recordation Portal

The portal was created for easy facilitation of recordation of IP rights with the Customs. The portal provides for recordation of the major IP rights i.e. trademark, designs, copyright and geographical indicator.

Procedure for recordation of IP rights with the Customs

  1. The right-holder must file application for recordation of a trademark, patent, design, copyright or geographical indication and submit the following electronically on http://www.ipr.icegate.gov.in/.
  2. The first step of filing an application will involve creating a unique id and a password on the website and thereafter, submit the relevant and fill the online forms. The information submitted will be saved and can be edited later. However, any post-recordal edits will be subjected to approval of the Custom authorities.
  3. Where the applicant is seeking to record multiple IP rights, separate forms must be filled for each IP right.Similarly, where the applicant holds multiple registrations (for example: four registrations for one trademark, each in a single class) for single IP right, a separate application for each registration has to be filed. Likewise, if one multi-class registration is owned in three classes, one application shall cover all the three classes.
  4. Thereafter, a unique temporary registration number will be generated.
  5. The physical copies of the which were uploaded along with a print out of the application form filed online are required to be filed at the Customs Office of the Right holder’s choice which has an IPR cell along with a demand draft towards payment of the official fee of INR 2000.
  6. Thereafter, the concerned IPR Cell of the relevant Customs Office will scrutinize the , register the notice of the Right holder and thereafter issue a Unique Permanent Registration Number (UPRN). This process could take upto 30 days.
  7. Once the UPRN is generated, the design, trademark, copyright, or geographical indication is formally recorded with the Customs authorities and this information is made simultaneously made available at all ports.

to be Submitted with the Application Form

Following are to be submitted along with the application form:

  1. Proof of ownership of the IP right and a scanned copy of the registration certificate of such IP right.
  2. Serial number of the demand draft of INR 2000/-. The demand draft must be issued by any nationalized or scheduled bank in India and made out in favour of the Commissioner of Customs of the opted location.
  3. Scanned copy of power of attorney in favour of counsel / advocate / agent who is filing the Application.
  4. A statement of exclusivity outlining the scope of the IP right sought to be recorded.
  5. Digital of genuine goods (for trademarks and designs)
  6. Statement of grounds of suspension of infringing goods
  7. Digital of infringing goods (if applicable/available).
  8. Differentiating features of genuine and infringing goods (not mandatory but advisable for trademarks and designs).
  9. The IEC code of the rights holder and/or other authorized importers (not mandatory but advisable).
  10. Customs Tariff headings of the applicable goods (if available).
  11. In case of geographical indications, description of the geographical indications, geographical area of production and map.
  12. The General Bond or Centralised Bond

Application of Bonds in the Setup

The procedure provides for the application of three kinds of bonds: General Bonds, Centralised Bonds and Indemnity Bonds.

During the registration, the right holder may opt to submit a General Bond in form of an undertaking that s/he will submit the specific consignment-wise security bonds at the time of interdiction of infringing goods. The forms for General Bond and a Consignment Specific bond are available here. When required, the right holder is required to execute the Consignmentspecific Bond of an amount equivalent to 110% of the value of the goods detained by the Customs, along with security, in the form of a bank guarantee or fixed deposit, equivalent to 25% of the bond value at the port of interdiction within 3 days of interdiction of the consignment.

Alternatively, the right holder can file a Centralised Bond for a value that is sufficient in their judgment, to correspond to value of suspected allegedly infringing goods all over India. This security amount will then be used against future interdiction of goods that infringe the IP right holder. The format of the Centralised Bond is available here.Right hold has to furnish a security for an amount equivalent to 25% of the value of the Centralised Bond with the relevant Customs authority. Once the above requirement is fulfilled, the relevant Customs Office will create an on-line centralised bond account and security account. The system will generate a unique Bond Registration Number (BRN) and the same will e-mailed to the Right holder or his/her authorised representative.  All future correspondence relating to bond management shall be with reference to this BRN only. There will be a single BRN for an Right holder which may cover more than one Unique Permanent Registration Number (UPRN).

Through the centralised bond, the IP right holder is at the liberty to ‘top-up’ the bond at any time without worrying about producing a consignment-specific bond in a short period when infringing goods are interdicted. In case, the amount of the Centralised Bond and the security is not enough to cover the value of the goods interdicted, then the right holder is required to furnish a supplementary bond within three days of interdiction.

Further, an indemnity bond is also required to be furnished by the right holder. This is done to protect the Custom authorities against any liability and expenses that may be incurred as a result of detention of the goods. A format for the indemnity bond is provided here.

After furnishing these bonds and completing other procedural requirements, the recordation process is completed. The recordations remain effective for a period of five years or expiry of the IP, whichever is earlier

Detaining of Goods by the Custom Authorities and Remedies to the Right Holder

After detaining goods, Customs gives notice of invite to both the importer as well as the rights holder to join the proceedings. Failure to join the proceedings within the given time period shall result in release of the goods to the importer. At this point, the right holder is required to furnish bonds as discussed above. After the completion of this procedure, the right holder (or its authorised representative) is provided with the photographs or serial numbers of the products or samples of the products for scrutiny and testing to ascertain whether the products are infringing or not. The right holder can request for the name, address, serial number, import and other relevant information to aid in his/her determination as to whether the goods are infringing.The inspection must be finished within ten working days from the date of notice. Thereafter, a follow-up action is taken. If no action is taken within that period, the goods are released. This limitation is further restricted to three working days (may be extended to seven) in case of perishable goods. If the relevant Customs officials conclude that the goods are infringing the IP right holder’s rights and no other legal proceeding is pending then, the infringing goods will be destroyed or disposed outside the normal channels of commerce after obtaining a “no objection” or concurrence of the Right holder. All the cost of detention, demurrage and destruction is to be borne by the right holder. Goods of non-commercial nature contained in personal baggage or meant for personal use of the importer are not subject to the above Rules.

Powers of the Commissioner

A Commissioner can on his/her own motion suspect the clearance of the imported goods if there is prima facie evidence or s/he has reasonable grounds to believe that the goods infringe IP rights even where the said rights are not recorded under the IPR Rules. Given that situation, the rights holder is required to comply with the requirements of recordal within 5 days, else the suspension shall be cancelled.

Conclusion

The setup has become quite convenient for the IP holders after the launch of the portal. With proper recordation, Custom authorities are at a better position to tackle cross-border counterfeiting and infringement of IP rights. However, efficiency of the setup depends to a great extent on the right holder.

Author: Parimal Kashyap, Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

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