New rules strengthen the fight against illegal counterfeit goods

On 1 July 2021, new rules in the Customs Act enter into force intended to strengthen proprietors’ possibilities to protect their intellectual property rights (IP rights), including trademark, design, patent and copyright, and that combat illegal counterfeits pursuant to the Marketing Control Ac

The new rules simplify and streamline Norwegian Customs’ possibilities for detention and destruction of imported or exported goods infringing intellectual Property Rights, based on a model from the European Court of Justice. The changes will involve a considerable simplification compared to the current scheme and there are three changes in particular that will be of significance to proprietors.

1. Simplified approach to destruction of illegal counterfeits

The new rules entail a simplified approach to the destruction of consignments of illegal counterfeit goods, generally. According to the current rules, Norwegian Customs is required to notify both the proprietor and the recipient if it is suspected that an importation or exportation constitutes an intellectual property infringement. In principle, the goods can then be held for ten days, but in order for Norwegian Customs to be able to destroy the consignment, this has to be based on a decision from the courts in an infringement case (typically what is known as an ‘interim injunction’) or the written consent of the recipient. Once the new rules enter into force, however, failure of the recipient to reply within the ten-day time limit will be considered tacit consent for the destruction of the goods. This scheme thereby simplifies Norwegian Customs’ control, which can in many cases be an effective tool. If the recipient believes the consignment does not infringe any intellectual property rights, the person concerned will be encouraged to follow-up the enquiry, and if the good is wrongfully destroyed, the recipient will have a claim for damages against the proprietor, since the destruction occurs at the proprietor’s expense and risk.

According to the prevailing legislation, only goods being imported or exported can be detained by Norwegian Customs. However, the new rules also allow for the possibility to detain goods in transit. This only applies, however, if the trademark in question enjoys protection in the destination country.

2. Simplified approach to the destruction of small consignments

Additionally, separate rules are being introduced for the destruction of what is known as ‘small consignments’. According to the new rules, small consignments will include post or courier consignments that contain five or fewer units, or that have a gross weight of less than three kilograms. This is practical in light of the increase in online shopping globally, where illegal counterfeit goods are also shipped as small consignments, often in an attempt to circumvent the condition that the consignment has to be considered shipped as part of business activities (see also point 3, below, regarding the introduction of what is known as the ‘Rolex Rule’). Furthermore, enforcement in relation to such small consignments risks becoming disproportionately resource-intensive for the proprietor in relation to the value and scope of the goods being shipped.

Therefore, an additional simplification for small consignments is being introduced. The most important difference from the ordinary simplified approach is that the proprietor does not have to be notified and confirm that an infringement applies in the individual case or give (tacit) consent to the destruction of the goods. The proprietor may, nevertheless, demand to receive a notification regarding destroyed goods, and shall be notified if the recipient has objections to destruction. In the latter case, the proprietor has a time limit of ten days to document that an infringement case has been instituted, and the goods will be released if no documentation has been submitted by the expiry of the time limit.

3. It is sufficient for detention and destruction that either the sender or the recipient is carrying out business activities

It is only the importing and exporting of illegal counterfeit goods in business activities that are prohibited. This does not entail a ban on private importing and according to the current rules, it can be challenging to enforce rights in relation to consignments that contain few illegal counterfeit goods if the recipient or sender is a private individual.

Based on the model from the European Court of Justice’s case C-98/13 Rolex, a new rule is now being introduced entailing that it is sufficient that either the sender or recipient of the goods is a business operator, in order for the importation or exportation to be considered part of business activities (‘Rolex Rule’). In this decision, the European Court of Justice determined that the consignment containing a counterfeit Rolex watch to a private individual represented an infringement against watch manufacturer Rolex’s trademark rights because the sender was carrying out business activities.

Brækhus’ IP experts have extensive experience in assisting proprietors in relation to Norwegian Customs in cases concerning counterfeit goods, and in cases concerning parallel import and the regulatory framework relating to the importing or exporting of goods. Contact us for a conversation about how the new rules may present opportunities for your business.