Border Control: An Effective Tool to Protect IP Rights in the Philippines
The Philippines used to experience an unabated influx of counterfeit goods from neighbouring Asian sources. Cheap branded items from designer apparel to light tools and machinery proliferated in the market until the government launched its drive to combat piracy and counterfeiting in violation of the Intellectual Property Code (Republic Act No. 8293) and other related laws. Veralaw's Bernadette Marie B. Tocjayao and Jennifer D. Fajelagutan explain how the Philippines is fighting to protect IP rights.
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 below 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 (U8$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 results 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.
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.
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.
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 favourable 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.
