The tools being implemented by Italian Customs are having a significant impact, both in fighting piracy and in
Published article on WTR (n.36 April-May 2012)
Over the years, the services provided by Customs have been augmented in order to provide an efficient system of watch services addressed in particular to rights holders.
Legislative decisions and the tools and organisation of Customs demonstrate how this branch of the public administration is heading towards the complete abandonment of hard-copy application forms, and paperwork in general, to provide fully internet-based and automated services.
Customs’ main aim is to have each rights holder manage its own package of services, especially watch services.
When Customs has reason to believe that infringement has occurred, it may act ex officio and suspend the release of the suspected goods. In such circumstances, the proceeding is brought to the attention of the rights holder and the goods must be released within three days if no counterfeiting is proven to have taken place.
Customs operations are ruled by the EU Customs Regulation (1383/2003, as amended by EU Regulation 1172/2007).
Apart from ex officio actions, suspension of release may take place at the request of the rights holder.
For almost a decade, Customs has operated AIDA, an integrated automation system for customs taxes, which represents its main database.
Requirements and application for watch services
In order to facilitate watch services, certain requirements must be met. First, the items must come from (or be going to) non-EU countries, as there are no customs checks across EU borders. Second, the applicant for the watch service must be the rights holder within the state in which the services will be enabled; it need not necessarily be the holder itself, since others (eg, licensees) which are authorised to act on its behalf may also apply.
Both ex officio and ex parte proceedings are subject to the preliminary evaluation of Customs, which means that to an extent, the aim of the public administration is to limit discretionary power as much as possible, even if such a preliminary analysis may eventually end up before the judiciary if a criminal law violation has occurred or for inter partes proceedings.
Applications are generally based on registered rights. Practitioners have discussed extensively the possibility of de facto IP rights as grounds for watch services.
Nonetheless, the basis for the application should include, among other things, one of the following acceptable rights:
• a registered Community trademark (while pending Community applications are not allowed as a basis for action in the European Union, national pending applications are considered valid grounds for action taken by Italian Customs);
• Italian trademark registrations or applications;
• Italian designs registrations or applications;
• Community design registrations; or
• copyrights issued by the Italian authority.
This list is not comprehensive, as the watch services also involve, among others, patents, drugs and geographical indications.
The more geographically extensive the protection, the better. Applicants have thus found it beneficial, under certain circumstances, for watch services to be extended to countries other than Italy.
When the applicant is also the holder of Community trademarks, designs and geographical indications pursuant to EU Regulations 510/2006 and 1943/1999, or other geographical indications under EU Regulation 110/2008, action may be required not only by Italian Customs, but also by the customs authorities of other member states. That makes a significant difference in terms of the effort involved in such operations. Practitioners are aware that most of the time, despite their uncontested enforceable rights, rights holders (especially smaller entities) do not believe it worthwhile to pursue a counterfeiter, notwithstanding the clear message sent by Italian Customs that, through it, they can also seek protection in countries other than Italy. In such circumstances, applicants feel that the national authorities still have control over operations outside Italy.
According to one customs officer in Rome, cooperation with other customs authorities plays a crucial role in achieving results faster and more efficiently, and the exchange of information between customs authorities in different countries is extremely valuable.
Facilitating such services simply requires additional English language copies of the applications – one for Italian Customs and one for each country whose customs authorities will be entrusted with the case.
Tips to enhance Customs’ efficiency
The ‘suspicion’ requirement, which allows customs authorities to act, is the key to facilitating the initial and most common remedy available: suspending the release of alleged infringing goods in order to prevent them from entering the Italian territory. Theoretically, Customs and the Italian
tax police have a duty to act against counterfeit goods to “safeguard the economic development of the country”. This power, pursuant to Legislative Decree 68/2001, is extended to all infringements, from the most well-known and reputed marks to unknown distinctive signs, and requires no action from rights holders.
It seems obvious that, despite their expertise, it is difficult for officers to prove their suspicions in connection with each protected trademark to distinguish infringing goods and services throughout the extensive channels of trade across the country.
An application for customs watch services gives officers notification of the specific subject matter of the control (instead of having to perform random checks), and provides additional, detailed information to assist them in this task.
The process of identifying potentially infringing goods is complex. Officers must spend time selecting relevant material in order to perform their checks. According to the officer at the Roma Customs, and information on Customs’ website, providing clear and detailed information will enhance the efficiency of Customs. There are usually two kinds of relevant information in this regard. The first is details of the original items, known as the ‘white list’. The application must include information about the places where the items were made or assembled, a list of importers, producers, transporters and licensees, and the names of individuals and companies authorised to deal with the items at issue. These authorised people will not be pursued by Customs. Instead, issues between IP holders and authorised people will be subject to inter partes proceedings. Additionally, a full description of the main channels of distribution and method of transportation is very helpful. As far as the items are concerned, it is recommended that details of the packaging be included in the application. Also, an awareness of any holograms, security devices, labels and guarantee symbols would further help to make Customs’ work easier. The second type of relevant information is details relating to counterfeit goods, known as the ‘black list’. Submitting watch service applications can be an effective precautionary measure and does not necessarily require that counterfeit goods have been found. However, when information leaks give the rights holder reasonable grounds to believe that counterfeiting is occurring or will occur, detailed information must be provided. The ‘black list’ information not only helps the rights holders itself, but will also help Customs to uncover particularly extensive infringement schemes involving other rights holders.
It is important to keep all of this information up to date. Customs relies on the details provided, so updating information may make a difference to operations by saving time and effort, which officers can deploy into more valuable tasks.
The watch service remains operative for a year following the date of acceptance of the application, and this period may be extended.
FALSTAFF and online services
The possibility to file watch service applications online is one of the most significant improvements achieved by Customs in recent years. The online database has been in use since 2004; but since March 2010, as well as rights holders submitting applications and documents online, it has been possible to manage applications and make amendments.
The officer in Rome confirmed that Customs’ main aim is to switch from hardcopy applications to a fully online system.
An online system would mean less paperwork and more time for officers to spend checking operations, while applicants could monitor their services remotely at any time. Despite this, it appears that IP firms are moving too slowly towards an online system.
The officer added that fewer online applications are being filed than had been expected (around 1,300), which means that there are fewer opportunities to test the system. The officer explained that controlling thousands of paper-only requests is almost impossible, as everything from well-known brands to small entities protecting niche products must be covered.
Managing online applications and amendments will improve the notification process. It is possible that in 2012 online applications might become the only way to submit requests for watch services.
Customs frequently arranges seminars about online issues and officers appear to have been responsive and cooperative in such matters.
Fully Automated Logical System to Avoid Forgery and Fraud (FALSTAFF) allows online applications to be managed by rights holders. According to one Italian tax law magazine, FALSTAFF, which has been operative since 2010 but was implemented many years earlier, is considered to be one of the pioneering projects in Europe. In 2005 it was awarded the Oscar 2005 at the Europe Awards for the best idea in connection with e-government.
In order to access the service, the profile must be accepted by the customs internet service.
Italian Customs provides comprehensive systems against counterfeiting and the violation of IP rights. The tools implemented (including FALSTAFF) are helping to facilitate big changes, both in fighting piracy and in public administration relations. Customs has shown competence in this matter and is eager to cooperate promptly and effectively with rights holders. Customs is taking advantage of tools to improve IP rights protection and assist in providing a cost-effective service by solving issues early on and preventing the spread of infringement.