Activities of the Bureau of Customs
To stop the proliferation of counterfeit products in the Philippine market, most IP owners usually file an action for infringement and/or unfair competition in the regular courts or administrative agencies, while some secure and enforce a search warrant before ultimately filing a criminal case for infringement, among others. It is seldom that IP owners use the enforcement mechanism of the Bureau of Customs (BOC) either in whole or as a part of their strategy to combat counterfeit products.
What most IP owners are not aware of is that, in recent years, the BOC has brought the implementation of border control laws to a higher level. The BOC has exhibited exemplary readiness and responsiveness to enforce intellectual property laws. In fact, the bureau accounted for over 50% of the total estimated value of seized goods in the country in the past three years.
Table 1 shows a summary and comparison of the IP enforcement activities of the BOC for the years 2005, 2006 and 2007 (January to August).
The figures in the table show a 100% increase in the value of confiscated goods every year over the past three years.
Based on the data made available to the authors, the estimated value of the articles detained and seized by the BOC from January to August 2007 alone, is estimated at P824 million (US$19.8 million), which accounts for about 36% of the total value seized by the four IP enforcement agencies in the Philippines over the same period. This translates to a total of 5.3 million pieces, or 4,683 boxes, of counterfeit goods. The seized items in 2007 include an assortment of items such as mobile phone casings and' accessories, tools, bags, men's and women's apparel, pharmaceutical products, cigarettes, general power engines and parts, watches, DVDs and replicating machines, among others.
Implementation of new guidelines
The developments described above were brought about by the bureau's implementation of administrative guidelines, through Customs Administrative Order 6-2002 (CAO 6-2002), intended to expedite the handling and disposition of goods, the importation of which is prohibited under the Intellectual Property Code of the Philippines and other related laws. In particular, CAO 6-2002 defines what constitutes prohibited importation, that is, items:
Which shall copy or simulate any mark or trade name registered with the Intellectual Property Office in accordance with the IP code, without authorization or consent of the registrant or its duly authorized agent;
Which shall copy or simulate any well-known mark as determined by competent authority, without the authorization or consent of the owner or its duly authorized agent;
Which are judicially determined to be unfairly competing with products bearing marks whether registered or not;
Which constitute as a piratical copy or likeness of any work, whether published or unpublished, on which a copyright subsists;
Which present themselves as a substantial simulation of any machine, article, product or substance duly patented under the IP code, without the authorization or consent of the patentee or its duly authorized agent; and
Which use false or misleading description, symbol, or label that is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of the imported goods with another person's goods; or those which misrepresent their nature, characteristics, qualities, or geographical origin.
For stakeholders, the positive result arising from the implementation of CAO 6-2002 is a realization of the value and importance of having one's intellectual rights recorded with the BOC either as a whole or part of its strategy in keeping counterfeit items out of the Philippine market. For one, a Certificate of Recordation with the BOC serves as a continuing complaint, valid for two years from date of recording and renewable every two years thereafter.
On the basis of the recordation, the bureau will monitor and inspect suspect imports to determine whether or not they are liable to seizure and forfeiture pursuant to law. The IP owner or its empowered agent will be notified of the suspect import through an Alert Order. Articles placed under hold or alert orders shall be examined by the assigned customs examiner in the presence of the IP rights holder/owner or his agent and the consignee or representative within 24 hours from the receipt of notice of alert or hold order. In case there is prima facie basis to subject the goods to seizure proceedings, a Warrant of Seizure and Detention will be issued against the shipment within 24 hours. Within five working days from date of seizure, the claimant, importer or owner of the seized article or his agent shall be given a written notice of the seizure and shall be given an opportunity to be heard. The rights owner/holder or his duly authorized agent shall likewise be informed of the seizure. With the seizure of goods, the burden shifts to the claimant to prove that the goods are not prohibited from importation.
Under CAO 6-2002, after the notice of seizure is served, the collector shall immediately set the case for hearing. The case shall be decided after all the parties are heard or given an opportunity to be heard or within 20 working days from the date the case is set for hearing.
Thus, the current basic work flow of the Philippine border control measures is as follows:
IP rights recordation;
Issuance of alert/hold order;
Physical examination;
Seizure;
Hearing;
Decree (forfeiture or not); and
Disposition of the forfeited goods
Pros and cons of border control
Like all legal tools available to an IP owner, the use of border control measures has its pros and cons.
The advantages of using the customs recordation process are cheaper costs, faster results and less formal rules of procedure. The disadvantages are that the process may not be taken seriously by respondent or claimant and little information about the system is available.
To the select number of IP owners who have chosen to use this system, it seems that the pros of using the customs recordation process greatly outweigh the cons, most especially if the immediate goal of the IP owner is to stop the entry of counterfeit goods into the Philippine market.
Conclusion
In the five years since CAO 6-2002 came into effect, enforcement of IP rights through border control measures has yielded more immediate results that are favorable to the IP owner. It is, therefore, an effective measure to stop the entry of counterfeit products in countries which are import-dependent, such as the Philippines.
About the authors
Bernadette Marie B. Tocjayao is co-head of the Intellectual Property and Information Technology division of VERALAW (Del Rosario Bagamasbad & Raboca). Primarily a litigation lawyer in IP law since she joined the firm in 7999, she has gained wide exposure and experience in enforcement actions against counterfeiters and infringers as well as in the prosecution of intellectual property violation cases for the firm's international and local clients. She manages border control programmes for multi-national companies. In non-contentious work, her practice covers trademark and patent prosecution.
She graduated with a BA in Humanities from the University of Asia and the Pacific. She received her law degree from the San Beda College of Law and was admitted to the Philippine Bar in 2000.
She is certified under the Southeast Asia patent drafting programme of the Federation Internationale des Conseils en Propiete Industrielle, and is a member of many international organizations such as INTA, ITMA, PTMG, MARQUES and APAA
Jennifer D. Fajelagutan is co-head of the Intellectual Property and Information Technology division of VERALAW. Since joining in 1995, she has been exposed to intellectual property law and commercial law. Currently, she is primarily in charge of the prosecution of patent (PCT and regular national patents), trademark and copyright registrations in the Philippines and internationally. ~he also manages the worldwide trademark portfolio of a number of Philippine companies in more than 50 jurisdictions worldwide.
She graduated with a BSc in Legal Management from De La Salle University, and subsequently received her Juris Doctor degree from Ateneo de Manila University. She then earned a Masters of Law in Intellectual Property, Commerce and Technology from Franklin Pierce Law Center, Concord, USA. She also worked with a prominent IP boutique in New York City before joining VERALAW
She is a member of INTA, FICPI, AIPPI, Asean IPA and APAA.
Activities of the Bureau of Customs 
