DRAFT
CIRCULAR
(To
elicit response/Comments only)
Disclaimer:-
This Draft Circular has been put up only to elicit public response. No final decision
has been taken by Government/ Board. Government/ Board will proceed further
in the matter only after due examination of the responses received.
Responses
to the draft circular may please be sent to Director
(ICD) on fax 2309-3760, e-mail: indiacustoms@gmail.com by
11.9.2007
Circular
no. /Customs
F.
No. 305/96/2004-FTT (Pt-I)
Government
of India
Ministry
of Finance
Department
of Revenue
Central
Board of Excise & Customs
Dated
the 2007
To
The
Chief Commissioners of Customs (All)
The
Chief Commissioners of Central Excise (All)
The
Chief Commissioners of Central Excise & Customs (All)
The
Director General of Revenue Intelligence/ Central Excise Intelligence/Systems
and Data Management/ Audit/ Export Promotion
The
Chief Departmental Representative (CESTAT), Delhi
Sir,
Subject:
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007
instructions for implementation reg.
Section 11 of the Customs Act,1962 provides that the Central Government,
may, by issuance of notification in the official Gazette prohibit either
absolutely or subject to such conditions as may be specified import or export of
goods for the purposes specified in
sub-section (2) of section 11 of the Customs Act, 1962. The Central Government
may restrict or prohibit import and export of goods infringing trademarks,
patents and copyrights under clause (n) of subsection (2) of section 11 of the
Customs Act, 1962. Similarly, the Central Government may restrict import and
export of goods for the purposes of prevention
of the contravention of any law for the time being in force, under
clause (u) of subsection (2) of section 11 of the Customs Act, 1962.
2.
Prior to 8-5-2007, notification no. 1/64-Cus dated 18-1-64 prohibited
import of goods infringing trademarks and designs under the Trade and
Merchandise Marks Act 1958 and Indian Patents and Designs Act, 1911
respectively.
3
Representations
were received from the trade for issuance of a notification to prohibit import
of goods infringing other IPR laws as well. Further, considering our obligation
to implement border measures as envisaged in Articles 51 to 60 in the WTO Treaty
on Trade Related Aspects of Intellectual Property Rights (TRIPS), the need was
felt to define the role of Customs precisely in combating IPR infringement at
the borders. Accordingly notification
No 49/2007-Customs dated
8-5-2007 has been issued, which prohibits
import of goods infringing
intellectual property rights of the right holders under The Copyright Act, 1957,
the Trade Marks Act,1999, the Patents Act, 1970, the Designs Act, 2000 and
the Geographical Indications
of Goods (Registration and Protection) Act, 1999. Besides, the procedure for
registration of the notice with the Customs by right holders, the condition for
such registration, etc. have been laid down in the Intellectual Property Rights
(Imported Goods) Enforcement Rules, 2007 notified under notification
47/2007-Customs (NT) dated the 8th May,2007 (hereinafter
referred to as the said Rules). The said Rules lay down a detailed
procedure to be followed by the right holders or their authorized
representatives as also by the Customs for seeking suspension of release of
suspect imported goods.
4.
It is pertinent to mention in this regard that the said Rules have gone
beyond the mandate of TRIPS in that Articles 51 to 60 of the TRIPS dealing with
border measures are restricted to Copyright and Trade Marks infringement only,
whereas, the said Rules deal with Patents, Designs and Geographical Indications
violations as well, in conformity with the practice prevailing in some other
countries, notably EU countries. While it is not difficult for Customs officers
to determine Copyright and Trade Marks infringement at the border based on
available data/inputs, it may not be so in the cases of other three violations,
unless the offences have already been established by a judicial pronouncement in
India and the Customs is called upon or required to merely implement such order.
In other words, extreme caution needs to be exercised at the time of
determination of infringement of above three intellectual property rights.
The said Rules, inter alia, provide for
(i)
the filing of a notice by the right holder;
(ii)
registration of said notice by the Customs;
(iii)
Time limit for right holders to join proceedings;
(iv)
single point for registration of the notice filed by
the right holder;
(v)
adequate protection to the rightful
importer;
(vi)
adequate protection to the Customs for bonafide act;
(vii)
suo-moto action by the Customs
in specified circumstances;
(viii)
disposal of the confiscated goods.
(ix)
no action against goods of non
commercial nature contained
in personal baggage or sent in small
consignments intended for personal
use of the importer.
5.
The right holders would be required to give notice
for registration in the
manner detailed in para 10 of this circular , to
any of the Commissioners of Customs
at the port where counterfeit goods
are likely to be imported infringing the IPR in respect of any trademark,
copyright, patent, design or geographical indication. The grant of
registration by the
Customs is subject to the execution of a bond along with surety and security by the
right holder or his authorized
representative in terms of Rule
5(a), undertaking to protect the
importer, consignee and the owner of the goods and the competent authorities
against all liabilities and to bear the costs towards
destruction, demurrage and detention charges incurred till the time
of destruction or the disposal of the infringing
goods. The registration is also subject to execution of an indemnity bond
by the right holder in terms of Rule 5(b), indemnifying the Customs authorities
against all liabilities and expenses on account of suspension of the release of
allegedly infringing goods.
6.
However, considering the fact that
at the time of registration but prior to importation it may be difficult
to fix the bond amount
corresponding to the
value of suspected
infringing goods not yet imported, and also
taking into account that this would lock in right holders money
in the form of security , it has been decided that,
the right holders may
furnish a General Bond
without security to
the Commissioner of Customs in the
format as prescribed at Annexure-A to this circular prior to the grant
of registration, undertaking to
execute the Bond and indemnity Bond as
required under Rule 5(a) and Rule 5(b) respectively
of the said Rules within three days
from the date of interdiction of any allegedly infringing imported consignment . Prior to grant of registration, the right
holder shall also be required to furnish an indemnity bond in the format as
specified at Annexure-C to this
circular, in addition to the General bond. Thus, the registration would be
subject to execution of the General Bond as specified at Annexure-A and
indemnity bond as specified at Annexure-C. The specimens for
consignment-specific Bond to be executed in terms of Rule 5(a) and the indemnity
bond to be executed in terms of Rule 5(b) are enclosed for guidance at Annexure-B and Annexure-C
respectively. Necessary amendments may be made to suit the requirements, on case
to case basis.
7.
The surety and security shall be on consignment basis and shall be
furnished along with the bond to be furnished consequent upon interdiction of
consignment allegedly infringing rights of the right holders.
Keeping in view the value of the goods and other incidental expenses, it
has been decided that the Bond amount should be equal
to 110% of the value of goods. However, the amount of security to be furnished
along with the bond may be decided by the respective Commissioners in whose
jurisdiction the bond is executed. The right holder may furnish security in the
form of bank guarantee or fixed deposit. However, if the right holder
fails to execute the consignment specific bond and furnish security within three
days of intimation of the suspension of release of goods, the same must be
released forthwith.
8.
In
case it is found at any stage that the right holder has furnished any wrong or
false information, the registration accorded under Rule 4 of the said Rules may
be cancelled forthwith.
9.
If
, after the registration is granted , the right holder
wants any modification on
account of any amendment in
registration granted to them by
the respective registry of
the departments enforcing the
parent IPR law or
on account of any other
reason, the right holder shall be required to seek
fresh registration in place of the old
registration and would be
required to undergo all the processes of
registration again, like making fresh application, payment of fees, execution of
bond etc.
10.
The said Rules provide that notice would be given in the format
prescribed in the Annexure to the said Rules. However, as a trade facilitation
measure enabling right holders to file the notice electronically, a user
friendly web- enabled application form is being devised. The right holders would be required to log into http://www.icegate.gov.in.
Thereafter, they can choose the Custom House, where
they wish to record their notice, irrespective of the port of importation of the
suspected counterfeit goods. Option
has been provided to separately record different IPR notice rights viz.,
Copyrights, Trade Marks, Patents, Designs and Geographical Indications. As
regards payment of registration fees, option has been given to the applicants
either to use on-line credit card mode of payment or the conventional mode of
paying the fees through Demand Drafts, drawn in favour of Commissioner of
Customs of the Commissionerate with which they wish to get their notice
registered. For
every separate right, the right holder shall be required to submit a separate
notice (Application). After completing the formalities on-line, the
application can be submitted on the website. A Unique Temporary Registration
Number (UTRN) will be generated by the System. The System would also prompt the
Applicant to take a print- out of the Application. This printed application
form, along with the Demand Draft and physical copies of Bond and indemnity Bond
(as prescribed under Rule 5 of the said Rules) and as detailed above, would be
required to be submitted to the Commissioner of Customs along with samples,
models or photographs.
11.
After the receipt of the application, the Commissioner of Customs shall
verify the genuineness of that application and the veracity of declarations made
therein. If required, cross-verification of particulars furnished can be carried
out with the concerned authorities with whom the rights are originally
registered in accordance with the parent enactments. The Commissioner may call
for any additional information from the applicant(s). On being satisfied with
the application, the bond (general) and the indemnity bond as required under the
said Rules, the particulars would be required to be entered in the CBEC web-site
duly furnishing the details. The system would then automatically generate a
Unique Permanent Registration Number (UPRN), which will be communicated to the
applicant for all future correspondence. Simultaneously, a formal communication
to this effect shall be sent, within 24 hours, to the Risk Management Division (RMD),
Mumbai and all other Custom Houses, who can access the details through the user
names and pass-words given to them. On the contrary, if the Commissioner or his
authorized officer of Customs has to reject the application leading to denial of
protection, principles of natural justice may be followed.
It may be noted that the temporary registration number granted by the
system does not accord any protection to the right holders. The temporary
registration is only an acknowledgment of the application filed by the right
holders and can not be taken as actionable. The registration will be granted
only after the Commissioner of Customs has
completed verification of
the documents and facts and after the
right holder has furnished the General Bond and Indemnity Bond. The protection
of rights will be accorded only on grant of permanent registration number to the
right holders.
12.
To begin with, while the web-enabled electronic registration system is
being put in place, the field Commissioners are advised to accept the
applications in the format as prescribed in the Annexure to the said Rules.
However, in order to have a centralized registration
, it will be mandatory for all applicants to file applications on-line, once the
system is geared up for accepting electronic on-line registration. The trade
will be intimated the date of coming into force of the electronic regime.
13.
It may be noted that though the notice/application for registration may
be submitted to any Commissioner of Customs in India and all formalities
associated with the registration are undertaken by that Commissioner, protection
will be accorded at all the ports as specified in the notice. Therefore, there
is no apparent need for the right holders to make several notices/applications
with all the Commissioners of Customs covered under the notice. It may be
emphasized that for protection of separate rights under separate IPR laws, the
right holder would be required to apply for separate registration for each such
right.
14.
In
case of suspension of clearance of
goods by Customs on its own
initiative, the right holder is
required to give notice as laid down
under rule 3 of the said Rules and to
execute bond as specified
in rule 5 of the said Rules within five days
from the date of suspension of clearance.
The procedure of registration would be as stated in the foregoing
paragraphs. However, the right holder would be required to execute a Bond in the
format as specified in Annexure-B along with security and the indemnity Bond in
the format as specified in Annexure-C prior to grant of registration.
15.
Rule 4(2) provides that
registration may be granted for a minimum period of one year unless the right
holder wants the same for a lesser period. It has been decided that the period
of validity of the registration under the said Rules would be 5 years. The
Commissioners, therefore, may keep a watch on the expiry of this period.
However, once the period of validity of registration has lapsed and the right
holder does not apply for renewal, the registration
would automatically cease to have effect after the validity period. In
case the right holder desires to renew the registration, he would be required to
furnish fresh notice, pay the fees as applicable, execute
general bond etc as done at the time of initial registration.
16.
It may be appreciated that systematic enforcement of IPRs is new to
Customs. Further, the nature and
scope of implementation of IPR regime is different in EDI as well as non-EDI
locations. Besides, RMS has not
been implemented in all EDI locations. It
may be noted that while national-level targeting of consignments can be handled
by RMD, Mumbai on the basis of the information furnished by the applicants, and,
under normal circumstances, consignments suspended by the national targets will
be sent with appropriate instructions to the officers to handle the suspect
consignments, any intelligence driven interdictions on the own initiative of
officers cannot be discouraged. However, such ex-officio intervention by
officers needs to be regulated and exercised with utmost caution, given the fact
that the liability for wrong detention in an ex-officio case would rest entirely
with the department. In EDI locations where RMS is not implemented, all the
consignments are necessarily assessed before clearance. Therefore, officers in
Groups and Sheds at such locations may be sensitized about the IPR registration
database so that they can keep a watch on suspect imports. Apropos, the non-EDI
locations, where officers do not have access to the icegate, copies of the
applications along with the accompanying documents shall be sent by the
Commissioners who are handling the registration of Rights to such locations by
e-mail or by speed post.
17.
It
may be noted that the terms and the phrases used in the notification and the
Rules made in terms of section 11, have the meanings, with all grammatical
variations and cognate expressions, assigned to them in the respective parent
enactments like The Copyright Act, 1957, The Trade Marks Act, 1999, The Patents
Act, 1970, The Designs Act, 2000 and The Geographical Indications Act, 1999.
Thus, it may be emphasized that determination of the fact whether a
particular consignment infringes the rights of the right holder would be done
taking into account the provisions of the parent acts.
18.
It is important to adhere to the time lines prescribed in Rule 7. The
Customs and the right owners/holders seeking protection are under obligation to
follow the time lines indicated in various sub-rules that cover practical
situations that may arise in the field. Since every suspension of clearance has
its concomitant legal implications, the trade as well as field officers dealing
with the infringing goods, may be adequately sensitized about the importance of
timely action.
19. Sub-rule (9) of Rule 7 of the said Rules, provides
for seizure of infringing goods, if there are reasons to believe that the goods
are liable to confiscation in terms of section 111 of the Customs Act, 1962. In
this context, it may please be borne in mind that, Customs is enforcing laws in
personam while protecting intellectual Property rights. Thus it is important to
make sure that the right holder participates in the Customs proceedings. In case
the right holder abstains, the Customs have no obligation to continue with the
detention and the goods shall be released forthwith, if otherwise in order.
20.
Rule 8 enables examination of goods and drawl of samples on the request
of right holders or importers. The regular procedure for sampling may be
followed. Representative samples must be kept in the safe custody
of Customs till the proceedings are concluded. The expenses involved in
sampling, testing of samples etc have to borne by the right holders.
21.
For smooth implementation of the IPR regime, it is desirable that IPR
Cells may be constituted in each Custom House. The IPR Cell may be vested with
the responsibility of verifying the applications, completing web-enabled
registration formalities and making correspondence with the Risk Management
Division and other Customs formations. Further, any import involving suspected
infringement of IPRs may have to be invariably handled by the IPR Cell. Any
instance of suo-moto interdiction of the import consignments by the Customs,
involving possible infringements, should also be referred to such IPR Cell. The
job is time bound and sensitive and hence it is advised that officers of
proven caliber may only be posted in the IPR Cells.
22.
Wide publicity of this Circular may be given by way of issuance of public
notice and standing order.
23.
Difficulty, if any, faced in the implementation of this circular, may be
immediately brought to the notice of the Board.
24.
Please acknowledge receipt.
25.
Hindi version follows.
Yours
faithfully
(P.
S. Pruthi)
Commissioner
(Customs &EP)
Copy
for information to :
PS
to Chairman and Members of the CBEC
To
all sections of the Board Office
To
all Directorate under CBEC
Joint
Secretary (Administration),CBEC
ANNEXURE-A
BOND
EXECUTED IN PURSUANCE OF REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH
INDIAN CUSTOMS
[See
Rule 5(a) and 5(b) of Intellectual Property Rights (Imported Goods) Enforcement
Rules, 2007]
[To
be executed by the Right Holder(s)]
(General
Bond)
KNOW ALL MEN BY THESE PRESENTS THAT I/we
.. residing at
hereinafter referred to as Right Holder
(which expression shall include its successors / heirs, executors,
administrators and legal representatives) am/are held and firmly bound unto the
President of India hereinafter called the President (which expression
shall include his successors and his representative officers like Commissioner
of Customs and his authorized officers) in a sum as may be determined at the
time of interdiction and suspension of release of suspect goods imported in
violation of the Intellectual Property Rights (hereinafter abbreviated as
IPR ) held by me / us, to be
paid to the President for which payment well and truly to be made, I / we bind
myself / ourselves, my / our successors / heirs, executors, administrators and
legal representatives firmly by these presents.
Sealed with my / our seal(s) this
. day
of
..
20
.. .
WHEREAS
The Commissioner of Customs or his authorized Officer at
(hereinafter called the Proper Officer) has agreed to register the IPR
held by me/us and to suspend clearance of goods suspected to be infringing the
IPR held by me/us, depending on the information furnished by me/us and on the
basis of the declarations made by the Importers
in the course of importation, I/we
the Right Holder hereby agree to furnish such bond, security and surety,
as may be prescribed by the Proper Officer, in terms of Rule 5 (a) of the
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 and also
agree to indemnify the Customs as detailed under Rule 5(b) of
the ibid Rules.
NOW,
IT IS HEREBY AGREED AND DECLARED that
(i) The Right holder shall execute proper consignment specific bond(s) with the proper officer of customs at the port/airport/land customs station, where suspect goods have been interdicted and clearances of the same have to be suspended, along with such amount of surety and security, as may be determined at that time in terms of Rule 5(a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 within three days from the date of interdiction of the import consignments failing which the consignment shall be released.
(ii) The Right Holder shall keep the Customs abreast of validity of registration obtained by him under the IPR laws namely The Copyright Act, 1957; The Trade Marks Act, 1999; The Patents Act, 1970; The Designs Act, 2000 and The Geographical Indications of Goods (Registration and Protection) Act, 1999 ; expiry of the term of registration and renewal thereof, if any; cancellation; grant of compulsory licence in accordance with the law etc
(iii)
The Right holder, having recognized limitations of international trade
and understood the general functioning of Customs, shall share the trends and
information with Customs on an on-going basis, about suspected imports of
infringing goods violating the IPR laws, as may be required to interdict
consignments and to suspend the clearance thereof .
(iv)
The Right Holder undertakes to protect the importer, consignee and owner
of the goods as well as the competent authorities against all liabilities
that are incidental and ancillary to the act of suspension of clearance of
allegedly infringing goods, in case it is established that the suspension is
vexatious.
(v)
The Right Holder shall bear all the costs towards sampling, destruction,
demurrage and detention charges incurred till the time of destruction or
disposal of such infringing goods, upon being confirmed.
(vi)
The Right Holder shall join the proceedings as per the time lines
prescribed in terms of the ibid Rules, failing which, they agree, to not to
object to the release of the goods.
(vii)
This bond shall remain in force for a period of
five years from the date of completion of registration under
Rule 4(2) and the liability of the Right holder shall be in respect of
all such interdicted consignments, whose clearance has been suspended by the
Customs in bonafide exercise of their duties.
(viii)
The President or the Proper Officer, without prejudice to any other mode
of recovery may, inter alia, adjust the security deposit / securities in part or
full towards the dues arising out of clause (iv) and (v) supra.
(ix)
*This bond shall be enforceable against the surety notwithstanding that
proceedings have not been undertaken against me/us.
IN
THE WITNESS WHEREOF the Right Holder has herein set and subscribed its hands and
seals the day, month and year first above written.
SIGNED AND DELIVERED by the Right Holder at
.. in the
presence of :-
1
..
2
.
xxxxxxxxxxxxxxxx
Accepted
For
and on behalf of the President of India
(Signature
of the Proper Officer with Official Stamp and Seal )
Note:
* Mandatory in case any surety has been prescribed.
Strike
off, if irrelevant.
ANNEXURE-B
BOND
EXECUTED IN PURSUANCE OF REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH
INDIAN CUSTOMS
See
Rule 5(a) of Intellectual Property Rights (Imported Goods) Enforcement Rules,
2007
[To
be executed by the Right Holder(s)]
(Bond
with Provision for Security Deposit and Surety)
KNOW ALL MEN BY THESE PRESENTS THAT I/we
.. residing at
hereinafter referred to as Right Holder
(which expression shall include its successors / heirs, executors,
administrators and legal representatives) am/are held and firmly bound unto the
President of India hereinafter called the President (which expression
shall include his successors and his representative Officers like Commissioner
of Customs and his authorized officers) in the sum of Rs
(Rupees
. only)
to be paid to the President for which payment well and truly to be made,
I / we bind myself / ourselves, my / our successors / heirs, executors,
administrators and legal representatives firmly by these presents.
Sealed with my / our seal(s) this
. day
of
..
20
.. .
WHEREAS
The Commissioner of Customs or his authorized Officer at
(hereinafter called the Proper Officer) has agreed to register the
intellectual property right (hereinafter abbreviated as IPR) held by me/us
and to suspend clearance of goods suspected to be infringing the IPR held by
me/us, depending on the information furnished by me/us and on the basis of the
declarations made by the Importers in the course of importation,
the Right Holder hereby agrees to furnish such bond, security and surety,
hereinafter specified , in terms of Rule 5 (a) of the Intellectual Property
Rights (Imported Goods) Enforcement Rules, 2007.
The Right Holder has deposited with the Proper Officer at
..,
the securities as mentioned in the Schedule hereunder written of the face value
of Rs
.. (Rupees
only) endorsed in favour of
. as security for the due observance and performance of the terms of
conditions on the part of the Right Holder, prescribed as per the ibid Rules.
NOW,
IT IS HEREBY AGREED AND DECLARED that
(i)
The Right Holder shall keep the Customs abreast of validity of
registration obtained by him under the IPR laws namely
The Copyright Act, 1957; The Trade Marks Act, 1999; The Patents Act,
1970; The Designs Act, 2000 and The Geographical Indications
of Goods (Registration and Protection) Act, 1999
; expiry of the term of registration and renewal thereof, if any;
cancellation; grant of compulsory licence in accordance with the law etc
(ii)
The Right holder, having recognized limitations of international trade
and understood general functioning of Customs, shall share the trends and
information with Customs on an on-going basis, about suspected imports of
infringing goods violating the IPR laws, as may be required to interdict
consignments and to suspend the clearance.
(iii)
The Right Holder undertakes to protect the importer, consignee and the
owner of the goods and the competent authorities against all liabilities
that are incidental and ancillary to the act of suspension of clearance of
allegedly infringing goods, in case it is established that the suspension is
vexatious.
(iv)
The Right Holder shall bear all the costs towards sampling, destruction,
demurrage and detention charges incurred till the time of destruction or
disposal of such infringing goods, upon being confirmed.
(v)
The Right Holder shall join the proceedings as per the time lines
prescribed in terms of the ibid Rules, failing which, they agree, to not to
object to the release of the goods.
(vi)
This bond shall remain in force for a period of five years from the date
of completion of registration and the liability of the Right holder shall be in
respect of all such interdicted consignments, whose clearance has been suspended
by the Customs in bona fide exercise of their duties.
(vii)
The President or the Proper Officer, without prejudice to any other mode
of recovery may, inter alia, adjust the security deposit / securities in part or
full towards the dues arising out of clause (iii) and (iv) supra.
(viii)
*This bond shall be enforceable against the surety notwithstanding that
proceedings have not been undertaken against me/us.
The Schedule of Securities above referred to
[Particulars of the amount deposited, along with consignments, if any ]
IN
THE WITNESS WHEREOF the Right Holder (and the Surety)* has herein set and
subscribed its hands and seals the day, month and year
first above written.
SIGNED AND DELIVERED by the Right Holder at
..
In
the Presence of :-
XXXXXXXXXXXXXX
1
.
.
2
.
*SIGNED AND DELIVERED by the Surety at
..
.
In the presence of :-
1
2
.
xxxxxxxxxxxxxxx
Accepted
For
and on behalf of the President of India
(Signature
of the Proper Officer with Official Stamp and Seal)
In
the presence of :-
1
..
2
Note:
* Mandatory in case any surety has been prescribed. Strike off, if irrelevant.