Fighting Against Brand Counterfeiting in Three Key European Member States.

Towards a More Comprehensive Strategy

14-17 June 11

PURPOSE OF THE COURSE

● Provide additional knowledge and enhance participants’ skills on operational practices and

strategies of detection, identification and seizure of counterfeit products and organized crime’s

involvement therein

1/op.

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CONTENT OF THE COURSE

2/op.

Section 1 -Intellectual property rights (IPRs): Basic definitions Copyright Patent Utility model Industrial design Lay-out design Trade name Trademark Designation of origin and geographical indicationInternational Treaties, Agreements and Conventions The Paris Convention The Madrid Agreement TRIPSSection 2 - Counterfeiting and Piracy

▪ Definitions Counterfeiting as a financial and IPR crime Negative impact of counterfeiting on: IPR holders; consumers

health and safety; national economy and society Types of counterfeitersImplication of organized crime The Palermo Convention The link with other serious organised crimes

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CONTENT OF THE COURSE

2/bis.

Section 3 - Counterfeiting at the European Union Level Relevant EC Regulations and Directives Remedies and actions against counterfeiting Statistics and data on seizures of counterfeited goods at the EU bordersSection 4 - Counterfeiting at the national level CZ Czech legislation Current situation and estimates of the problem: seizures at EU borders; countries of

origin; most commonly counterfeited products Civil and criminal sanctions in cases of counterfeiting Section 5 - Main concepts and suggested best practices Detection and identification methods Investigation Prosecution – Legal proceedings Closing: Revision of concepts Application of concepts learnt Management of skills and knowledge acquired Appraisal of the subjects studied

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LEARNING OUTCOMES

Broadening and consolidation of theoretical and technical knowledge on anti-counterfeiting legislation and strategies

Enhancement of the expertise and knowledge of the trainees;

Sharing of experience and practical knowledge;

Improvement of inter-sectorial cooperation;

Coordination and improvement of communication among various relevant public institutions at the national level

Sharing of best practices at the levels of detection, investigation, prosecution and assets recovery.

3/op.

SECTION 1 Basic Definitions of IPRs and Treaties, Agreements and Conventions at the

international level

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Copyright and related rights

Legal protection of “literary and artistic works”

Berne Convention for the Protection of Literary and Artistic Work

164 contracting State-parties

1/s.1

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The World Intellectual Property Organization (WIPO) Copyright Treaty

Adopted December 20th 1996

Complementary legal tool in the grant and protection of copyright

Applies to categories of works not included in the Berne Convention

2/s.1

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Copyright Protection

The copyright holder is granted exclusive rights

2 typologies of rights granted by copyright: economic rights and moral rights

Rights originating from copyright have their limitations

Copyright purpose: Protecting, Encouraging, Rewarding

3/s.1

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Exclusions

Fair use

Research

Education

4/s.1

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Patent

Exclusive right granted for an invention

Protection for the invention to the owner of the patent

Granted for a limited period

Patent protection –>patent owner's consent required

5/s.1

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Utility model

Exclusive right granted for an invention

Prevents others from commercially using the protected invention without authorization

Limited period of time

Similar to a patent

6/s.1

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Differences between utility models and patents:

Utility model requirements are less stringent than for patents

Term of protection for utility models is shorter than for patents

Patent offices do not examine applications as to substance prior to registration

Utility models: cheaper to obtain and to maintain

Utility model protection can only be obtained for certain fields of technology and only for products but not for processes

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Design

Ornamental or aesthetic aspect of an article

Applied to a wide variety of products of industry and handicraft

Industrial design is primarily of an aesthetic nature, and does not protect any technical features of the article to which it is applied.

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Designs 2

Unregistered Designs

Registered Designs

Industrial Designs

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Trademark

Type of industrial property, protected by intellectual property rights

Distinctive sign identifies certain goods or services produced or provided by a specific person or enterprise

Helps consumers identify and purchase a product or service

Provides protection to the owner of the mark

10/a

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Examples of Trademarks

10/b

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GEOGRAPHICAL INDICATIONS

Sign used on goods with a specific geographical origin and qualities, reputation or characteristics essentially attributable to that place of origin.

APPELLATION OF ORIGIN

Special type of geographical indication

▪ The concept of a geographic indication encompasses appellations of origin

11/a

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Examples of GI’s

Champagne Florida Oranges Parma Ham (Italian ham) Basmati (Indo-Pakistani rice) Feta (cheese from Greece) JABŁKA ŁĄCKIE (apples of different

varieties from Poland)

11/b

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Copyright and Related Rights IThe Berne Convention for the Protection of Literary and

Artistic Work (1886)

▪ Legal basis for the protection of “literally and artisticworks”.

▪ Basic principles: i.) “national treatment”ii.) “automatic” protectioniii.)“independence” of protection▪ Provisions determining the minimum protection to be granted▪ Special provisions for developing countries which want to make

use of them▪“Moral rights”: the right to claim authorship of the work and the right

to object to any mutilation or deformation or other modification of, or other derogatory action in relation to, the work which would be prejudicial to the author’s honour or reputation

▪ Czech Republic is Party to the Berne Convention (164 member states)

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Copyright and Related Rights IIThe WIPO Copyright Treaty (1996)

▪ Complementary legal tool of the Berne Convention on two subject matters: i.) computer programmesii.) compilations of data or other material (“databases”)▪ Grant to authors the exclusive rights of: i.) distributionii.) rentaliii.) communication to the public▪ Creation of legal obligations for each Member State:i.) enforcement proceduresii.) effective action to prevent infringements and remedies as deterrent to further infringements

▪ Czech Republic is Party to the WIPO Copyright Treaty (88 member states)

13/s.1

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Industrial Property IThe Paris Convention (1883)

▪ Basic reference document for:patents, utility models, industrial designs, lay-out designs, trade

names/firms and marks, designation of origin and geographical indications

▪ Basic provisions: i.) national treatmentii.) right of priorityiii.) common rules applying to all the categories of Industrial Property

defined by the Conventioniv.) repression of unfair competition▪ Conditions for filing and registration of trademarks

determined and regulated in each country by domestic legislations;

▪ Trademark registered in a country considered independent of marks registered in the other countries of the UE, including the country of origin.

▪ Czech Republic is Party to the Paris Convention (173 member states)

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Industrial Property IIThe Patent Cooperation Treaty (1970)

▪ Simultaneous patent protection by filing an "international" patent application

▪ International mechanism of control and verification of patentability and grant of patent

▪ Advantages for applicants:i.) More time to reflect whether:

seek protection in foreign countries / appoint local patent agents in each foreign country / pay national fees etc.;

ii.) Reduction / elimination of search and examination work of national patent offices;

iii.) Opportunity for third parties to formulate a well-founded opinion about the patentability of the claimed invention each international application is published together with a search report.

▪ Czech Republic is Party to the Patent Cooperation Treaty (142 member states)

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Industrial Property IIIThe Hague Agreement on Industrial Designs

▪ Protection for industrial designs single international application filed with the International Bureau of WIPO

▪ Currently constituted by two international treaties:i.) The Hague Act of 28 November 1960 ii.) The Geneva Act of 2 July, 1999

▪ International registration mechanism of Industrial Designs provided by the Hague System Concerning the International Registration of Industrial Designs

Advantage:Simplification of management of an industrial design registration it is possible to record subsequent changes or renew the

registration through a single procedural step with the International Bureau of WIPO

▪ Czech Republic is NOT Party to the Hague Agreement (56 member states)

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Industrial Property IVThe Washington Treaty on Integrated circuits and Layout-

designs (1989, not yet into force)

▪ Protection of Integrated circuits and Layout-designs within the territory of each of its members through:

i.) prevention of unlawful actions against Integrated circuits and Layout-designs; and ii.) appropriate legal remedies in cases of committed infringements.

▪ The establishment of a Union constituted by the Contacting parties for the purposes of the Treaty is foreseen in Art. 1

▪ Czech Republic is NOT a contracting party (10 member States)

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Industrial Property VThe Madrid System Concerning the International Registration

of Marks

Consists of:

i) The Madrid Agreement Concerning the International Registration of Marks (1891)

ii) The Protocol to the Madrid Agreement (1989)

Application for international registration based on a trademark application filed in the country of origin

Advantage: Protection of trademarks in several countries by filing one

application with the national or regional trademark office Simplification of management of the mark

▪ Czech Republic is Party to both the Madrid Agreement (56 members) and the Madrid Protocol (83 members)

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Industrial Property VIThe Singapore Treaty on the Law of Trademarks (2006)

▪ Establishes common standards for procedural aspects of trademark registration and licensing▪ Advantages:i.) allows national trademark offices to progress to an entirely electronic communication system as efficient alternative to paper communications ii.) non-traditional marks explicitly recognized in an international instrument dealing with trademark law (the Treaty is applicable to all types of marks, including non-traditional visible marks, such as holograms, three-dimensional marks, movement marks, and also non-visible marks, such as sound, olfactory or taste and feel marks)

▪ The Treaty does not impose any obligations on Contracting Parties to: i) register new types of marks or ii) implement electronic filing systems or other automation systems

▪ Czech Republic is NOT a contracting party (22 members)

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Industrial Property VIIThe Lisbon Agreement for the Protection of Appellations of

Origin and their International Registration (1958)

▪ Protection of appellations of origin

▪ Registration mechanisms:i.) Registration by the International Bureau of WIPO upon

request of the competent authorities of the interested contracting State

ii.) The International Bureau in charge of communicating the registration to the other contracting States.

iii.) A contracting State declares within one year, whether it can ensure the protection of a registered appellation

iv.) A registered appellation may not be declared to have become generic in a contracting State as long as it continues to be protected in the country of origin

▪ Czech Republic is Party to the Lisbon Agreement (27 members)

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The TRIPS Agreement WTO Agreement on Trade-related Aspects of Intellectual Property Rights

Introduction of IP rules into the multilateral trading system Attempt to narrow the gaps of IP rights protection around the world▪ Legislation on:▪ copyright; trademarks; geographical indications, including appellations of origin; industrial designs; patents; integrated circuit layout-designs; monopolies for the developers of new plant varieties; trade dress▪ Basic stipulations:i.) proper application of basic principles of trading system and other international intellectual property agreements;ii.) adequate protection to IPRsiii.) enforcement of these rights at national leveliv.) dispute settlement on IPR issuesv.) special transitional arrangements during the period when the new system is being introduced

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The TRIPS Agreement WTO Agreement on Trade-related Aspects of Intellectual Property Rights

▪ Basic principles:i.) “national treatment”ii.) the most-favoured-nation treatmentiii.) contribution of IP to technical innovation; transfer of technology for the benefit of producers and users should benefit Enhancement of economic and social welfare ▪ Czech Republic is Party to the TRIPS Agreement.

21/bis

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ACTA: The Anti-Counterfeiting Trade Agreement

The current negotiating parties of ACTA are a mix of developed and emerging economies: Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States

International Cooperation. Areas for possible provisions include: – Capacity building and technical assistance in improving enforcement – International cooperation among enforcement agencies.

Enforcement Practices. Areas for possible provisions include: – Formal or informal public/private advisory groups; – Fostering of specialized intellectual property expertise within law

enforcement structures to ensure effective handling of IPR cases; – Measures for raising consumer public awareness about the importance

of IPR protection and the detrimental effects of IPR infringements;

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ACTA: The Anti-Counterfeiting Trade Agreement2

Legal Framework: It is critical to have a strong and modern legal framework so that law enforcement agencies, the judiciary, and private citizens have the most up-to-date tools necessary to effectively bring counterfeiters and pirates to justice. Areas for possible provisions include:

– Border measures

– Civil enforcement

– Criminal enforcement

– Optical disc piracy

– Internet distribution and information technology

22/bis

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IPR Administration

WIPO OHIM EPO National offices

– National Patent and TM Offices– National Copyright Offices– e.g. Ministries of Agriculture for GIs

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SECTION 2Counterfeiting and Piracy and the Involvement of Organized Crime

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Definition

According to the TRIPS Agreement:

Counterfeit trademark goods: “any goods, including packaging, bearing without authorization a trademark which is essential to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation.”

Pirated copyright goods: "shall mean any goods which are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country of importation.”

1/s.2

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Counterfeiting according to the International Trademark Association:

inferior quality products; sale under a brand without the owner’s authorization

Identical or substantially indistinguishable from the registered mark for the same goods

2/s.2

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Piracy according to the UNESCO World Anti-piracy Observatory:

reproduction and distribution;

communication or making available on online communication networks

of copyrighted protected material WITHOUT authorizationof the rights’ owner

Does the notion of commercial purpose determine thepiracy (upload of copyrighted protected material online whenthe commercial purpose is often missing)?

3/s.2

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Deceptive and non-deceptive counterfeiting

Deceptive: purchase of counterfeit goods in “good faith”

Non-deceptive: knowledge of infringement of a trademark when purchasing a counterfeit product

4/s.2

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Allusion and Expropriation

Allusion: Goods very similar but intentionally not identical to thosealready commercialized on the market or to goods which recall otherbrands or trademarks of famous articles.

Expropriation: (a) the original brand is affixed to goods which belong to product

categories different from the original one(b) the original product is imitated in its format or design or

functionality(c) goods are produced almost identical to the original articles, by

coping brands trademarks, design, format and technical characteristics (total counterfeiting)

5/s.2

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Counterfeiting as an IP and Financial Crime

INTERPOL: “Intellectual Property Crime (IPC) is a generic term used to describe a wide range of counterfeiting and piracy offences”

IPC: Infringement of legal rights (copyright, trademarks and patents) which: guarantee the moral and economic rights of the creators recognize their creativity protect the dissemination of the creators’ workIPC: Informal economy operating in parallel to the formal economy

Because of IPC’s impact on the Industry and trade sector, IPC is considered a financial crime.

Counterfeiting and Piracy: IPC crimes and by extension financial crimesOther types of financial crimes: currency counterfeiting, money laundering, payment/credit card fraud.

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The Negative Impact of Counterfeiting on Consumers

Is counterfeiting a relatively harmless and “victimless” crime?

According to the Mainstreaming Methodology for Estimating Costs of Crime project, counterfeiting has 3-level costs:

i. Costs in anticipation of crime: incur when measures are implemented in a preventive way to reduce the vulnerability of goods to counterfeiting.

ii. Costs as a consequence of crime: correspond to any costs or losses incurred by victims as a consequence crime.

iii. Costs in response of crime: are equivalent to expenses incurred for the detection of a crime and the prosecution of offenders.

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The Negative Impact of Counterfeiting on Consumers:

Does the average consumer tend to consciously opt for counterfeit products when he/she cannot afford the original ones?

Aware and unaware consumers Are they both–> deceived?

Counterfeit pharmaceuticals and cosmetics; food and beverages; toys; vehicle spare parts–>Hazardous for consumers’ health and safety

≠

Counterfeit fashionable products that rarely harm consumers

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Is counterfeiting a harmless and victimless crime?

Costs deriving from counterfeiting: Direct costs: reduction in tax revenues Indirect losses: reluctance towards a government’s capacity to

comply with IPR, reduction in foreign investments, decrease of exports etc.

The State as a victim of counterfeiting

police costs justice costs costs deriving from criminal sanctions costs linked to the drawing-up of a legislative structure which

disciplines the crime penalties and costs necessary to have effective controls at

customs.

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Types of Counterfeiters (Staake and Fleisch)

Disaggregators: Goods produced are easily made and are often of poor quality.

Imitators: Produce replicas of medium quality, counterfeiting both brands and designs.

Fraudsters: produce low quality counterfeit goods.

Desperados: usually produce easily imitable goods.

Counterfeit smugglers: they profit by avoiding tax and violating custom laws.

Organised crime groups

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Definition of Organized Criminal Group“A structured group of three or more persons, existing for a period

of time and acting in concert with the aim of committing one or more serious crimes or offences established in accordance with

this convention, in order to obtain, directly and indirectly, an economic or other material benefit.” (Art. 2, UNTOCC)

* Structured group of three or more persons* Existing for a period of time* Wilful perpetration of serious crimes to obtain direct or indirect

financial or other material benefit+ interconnection with other forms of illegal trade (trafficking in arms,

drugs, human beings, etc.)+ exercise of illegal practices such as blackmail, extortion, corruption,

bribery, intimidation, murder etc. + adoption of marketing strategies and commercial practices+ transnational criminal networks

Well-organized transnational criminal activity (illegal mass producers)

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Further definitions according to the UNTOCC

Serious crime: Offence punishable by a maximum deprivation of liberty of at least 4 years (art. 2 b)

Convention offences (art. 5, 6, 8 and 23)

serious/ transnational/ involving organized criminal group

Participation in organized criminal group (art. 5) Conspiracy Active participation in criminal activities of the organized group

or other activities in the knowledge that participation contributes to the group's criminal aim

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Section 3Counterfeiting at the European Union

Level

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GREEN PAPER (1998)

Objectives(a) assessment of the economic impact of counterfeiting and

piracy in the Single Market; (b) review of the existing legislation in this field and identification

of the problems and the improvements to be made on the legal front;

(c) examination of the need for Community action (objectives of the Single Market).

Areas of possible improvement: monitoring by the private sector; use of technical devices; sanctions and other means of enforcing intellectual property

rights; administrative cooperation between the competent authorities.

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DIRECTIVE 2001/29/EC

EU Copyright Directive (EUCD) on the harmonization of certainaspects of copyright and related rights in the information society (in compliance with the WIPO Copyright Treaty)

▪ keep the legal framework of the EU Member States in line with the international Conventions on the subject of copyright

prevent and punish all forms of unauthorized use of works resulting from the activity of human intellect

harmonized protection at the Community level, especially diffusion of digital technology

guarantee of the exclusivity rights for the IPR holder (including those of economic use)

protection of the IPR holder’s right to manage the information related to his/her work

specification of the content of rights of: - reproduction; - communication to the public;

- distribution.

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DIRECTIVE 2001/29 /EC(Art. 6-7)

ensure adequate legal protection against the circumvention of the technological measures implemented by the right holders to prevent unauthorized acts on their works protected by copyright;

provide for adequate legal protection for rights management information (Art. 7)

Ratifying countries shall provide adequate legal measures against the manufacture, import, distribution or sale of devices, products or components:

a) are promoted, advertised or marketed for the purpose of circumvention of the said technological measures;

b) have only a limited commercially significant purpose or use other than to circumvent the technological measures;

c) are primarily designed, produced adapted or performed for the purpose of enabling or facilitating the circumvention of the technological measures (Art. 6.2)

The EUCD calls Member States for the provision of adequate legal protection against anyone who:

a) removes or modifies, without the authorization of the right holder, any rights management information;

b) distributes, imports for distribution, broadcasts, communicates or makes available to the public, protected works from which the rights management information has been removed or altered without authorization.

Examples of national implementation found in France, the UK, Finland, Italy etc.

3/s.3

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COUNCIL REGULATION 1383/2003 ON CUSTOMS COOPERATION

improvement of customs cooperation for the identification of goods infringing an IPR

distinction between “counterfeit” (goods unlawfully bearing a trademark identical or very similar to the registered one) and “pirated goods” (unauthorized copies of a work protected by copyright)

applied when products infringe:a) a patent registered in one of the EU member States, andb) an indication of origin. Art. 1: customs actions performed upon goods intended for

export, import and transit Art. 11: destruction of the alleged suspended or seized

infringing goods with the consent of the right holder Art. 16: after the end of judicial proceedings, the counterfeit

goods cannot:– enter the EU channels of commerce,– be exported and– must be suspended in case they were already into

commerce

4/s.3

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COMMISSION REGULATION (EC) No 1891/2004 definition of the natural and legal persons who may represent

the right holder or any other person authorized to make use of the right

specification of the nature of the proof of ownership of intellectual property

Absence of a unified EU customs entity→ commitment of the 27 member states to:

i. work togetherii. be subject to common regulationsiii. exchange information through a centralized information

system.

EU customs practices still have different characteristics in each member-State

Even if the means used to enforce IP rights have been harmonized, civil and criminal procedures are different in each member state.

5/s.3

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DIRECTIVE 2004/48/EC (IPR ENFORCEMENT DIRECTIVE)

commitment to obligations resulting from the TRIPs Agreement

Object: protection of IPRs including industrial property rights

presumption of paternity of the work to the advantage of the person who placed his/her name on the said work (Berne Convention)

applied in any case of the infringement of an IPR in a member-State or in the EU (without any prejudice to the application of a more stringent protection provided by other national or Community means)

Art. 3 §1: call to member states to adopt effective, proportionate and dissuasive remedies and procedures to enforce IPR

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DIRECTIVE 2004/48/EC

(IPR ENFORCEMENT DIRECTIVE) (Art.9 and 13)

possibility for the judicial authorities, and upon request of the claimant, to order the release of information on the infringer or to any person:

a) found in possession of goods infringing an IPR;b) commercially distributing such goods;c) providing services used in infringing activities;d) to any other person indicated by the before mentioned subjects. possible provisional measures by judicial authorities to prevent an

alleged IPR infringement or to forbid the continuation of an alleged infringing activity

possibility of seizure of the alleged infringing goods (including the blocking of her/his bank accounts and other assets).

compensation of damages upon 2 calculation standards: 1→ assessment of the economic consequences suffered by the damaged party 2→ assessment of the economic value of the IPR and of the licenses.

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DECLARATION 2005/295/CE

Enforcement of: royalties; rights in connection with the royalties; rights of makers of topographies; rights of trademarks; rights on designs and models; registered trademarks; rights coming from complementary, protective certifications; geographical indications; rights of public utility; sole right for vegetal inventions; commercial names if protected by sole right of the domestic

legislation.

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THE IP CRIMINAL ENFORCEMENT DIRECTIVE (CED)

Still at the stage of discussion within European Institutions Novelty for the legislative framework CED will specifically

address against counterfeiting and piracy Despite the criticisms to CED, by proposing criminal measures to

reduce counterfeiting and piracy the European Commission is recognizing

- that counterfeiting and piracy are supporting activities of organised crime

- that some counterfeit products are real threat for consumers’ health and safety

CED contains provisions on penalties to be inflicted for committing the crime and on confiscation of goods of the offender

Patents and Plants Varieties Rights are excluded from the sphere of application of the CED

CED is also applicable to activities - committed on commercial scale - intentional

Interesting provisions creation of joint investigation teams between Member States

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EU Observatory on Counterfeiting and Piracy The Observatory has been launched to:

– improve the quality of information and statistics related to counterfeiting and piracy on the Internal Market of the EU

– identify and spread national best practice strategies and enforcement techniques from both the public as well as the private sector

– help raise public awareness.

The Observatory is focused on active delivery and as such, it has already commenced work in a number of key areas:

– as an example, the Commission has carried out an exercise to identify structures and frameworks currently in place to combat IP infringements, within Member States

The Observatory is composed of members from both the private and public sector

– Private industry representatives from a broad range of European and national associations were invited to represent a wide diversity of sectors and geographical areas.

– In respect of public sector representatives, Member States have designated

national representatives to take part.

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NUMBER OF REGISTERED CASES 1999 - 2009

11/s.3

Source: TAXUD

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NUMBER OF ARTICLES DETAINED 1999 - 2009

12/s.3

Source: TAXUD

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COUNTERFEIT MEDICAL PRODUCTS DETAINED

13/s.3

Counterfeit medical products detained

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

2006 2007 2008 2009

Number of articles detained

Source UNICRI elaboration based on the TAXUD 2006-2009 reports

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COUNTERFEIT MEDICAL PRODUCTS

14/s.3

Counterfeit medical products

0

500

1000

1500

2000

2500

3000

3500

4000

2006 2007 2008 2009

Number of cases

Source UNICRI elaboration based on the TAXUD 2006-2009 reports

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COUNTRIES OF ORIGIN

16/s.3

Source: TAXUD

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STATISTICS ON THE INCIDENCE OF COUNTERFEITING WITHIN THE EU BORDERS

WCO Estimations statistics on the number of seizures by customs authorities within

member countries of the organization statistics collected through the Customs Enforcement Network

system (CEN)

In 2009 increase in the trade of counterfeit products potentially dangerous for consumers’ health and safety (pharmaceutical products and spare parts)

China, Italy and Mexico are in the top 10 category for what concerns:

- the number of cases registered- the number of items seized in 2009

Positive interpretation: great commitment of the national authorities in the fight against IPR infringements

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Source: WCO

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INCIDENCE OF COUNTERFEITING WITHIN THE EU BORDERS BASED ON SEIZURES

Cigarettes ▪ Wallets ▪ Electronics Tobacco products ▪ Medicines ▪ Children's toys Alcohol ▪ Pharmaceutical products ▪ Airline parts Perfumes ▪ Branded hair straighteners ▪ Olive oil Handbags ▪ Designer watches ▪ Toothpaste Coats ▪ Scarves ▪ Shoes Football shirts ▪ CDs and DVDs ▪ Branded condoms Razor blades ▪ Cosmetics ▪ Perfumes

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Section 4Counterfeiting in Czech Republic

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NATIONAL LEGISLATIONON IDUSTRIAL PROPERTY RIGHTS

Act No. 221/2006 Coll. on the Enforcement of Industrial Property Rights and on the Amendment of Industrial Property Protection Acts (incorporates the Directive 2004/108/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of IPRs and regulates the legal remedies serving for the enforcement of IPRs);

Act No. 527/1990 Coll., on Inventions and Rationalization Proposals, as amended;

Act No. 529/1991 Coll., on the Protection of Topographies of Semiconductor Products Topographies, as amended;

Act No. 478/1992 Coll., on Utility models, as amended; Act No. 206/2000 Coll. , on the Protection of Biotechnological Inventions and

on the Amendment to Act No. 132/1989 Coll. on the Protection of Rights to New Plant and Animal Varieties, as amended;

Act No. 207/2000 Coll., on the Protection of Industrial Designs and on the Amendment to Act No. 527/1990 Coll., on Inventions, Industrial Designs and Rationalization Proposals, as amended;

Act No. 452/2001 Coll., on the Protection of Designations of Origin and Geographical Indications and on the Amendment to Act on Consumer Protection as amended;

Act No. 441/2003 Coll., on Trademarks and on the Amendment to Act No. 6/2002 Coll., on Judgements, Judges, Assessors and State Judgement Administration and on the Amendment to some other Acts (Courts and Judges Act) as amended;

Act No. 378/2007, on Pharmaceuticals and on Amendments to Some Related Acts   

1/s.4

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NATIONAL LEGISLATION (other relevant Laws)

Act No. 40/2009 Coll., on the Penal Code, as amended;

Act No. 40/1964 Coll., on the Civil Code, as amended;

Act No. 99/1963 Coll., on the Code of Civil Procedure, as amended;

Act. No. 500/2004 Coll., on the Administrative Procedure Act, as amended;

Act. No. 191/1999 Coll., on Some Measures Regarding Import, Export and Re-import of Goods Infringing Certain Intellectual Property Rights and on Amendment to Certain Acts, as amended

2/s.4

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Legislation related to Organized Crime and Activities

Current Status of recent international treaties in Czech legislation:a. United Nations Convention against Transnational Organized Crime (2000):

signature on 12 December 2000 - Protocol to Prevent, Suppress and Punish Trafficking in Persons,

Especially Women and Children (2000): signature on 10 December 2002 - Protocol against the Smuggling of Migrants by Land, Sea and Air (2000):

signature on December 10, 2002 - Protocol against the Illicit Manufacturing of and Trafficking in Firearms,

their Parts and Components and Ammunition (2001): no actionb. United Nations International Convention for the Suppression of the

Financing of Terrorism (1999): into force since December 27, 2005 (ratification)c. United Nations Convention against Corruption (2003): signature on April 22,

2005d. United Nations Convention against Illicit Traffic in Narcotic Drugs and

Psychotropic Substances (1988): member since December 30, 1993 (through succession)

e. Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (1990): into force since March 1, 1997 (ratification)  

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Organized Crime and Organized Criminal Offences Definition of “Organized Crime” under the Czech Penal Code

Types of criminal activities:- Money laundering and legalization of criminal proceeds;- Trafficking in human beings;- Trafficking in narcotics and psychotropic substances;- Corruption;- Counterfeiting and Piracy

Interconnection of different types of criminal activities

Transnational character of the criminal modus operandi

National Authorities and Services in the fight against organized crime

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Trademarks in Czech Republic

The Trademarks Act Definition; Registration procedure; Protection

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Trademarks: civil infringement of the exclusive right of the trademark owner (Section 8, subsection 2, Trademarks Act)

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Use of: identical signs associated to goods and/or services similar to those for

which the trademark has been registered; signs identical or similar to a registered trademark affixed to goods and/or

services identical or similar to those for which the trademark has been registered creating confusion among the consumers as a result of the possible association between the counterfeit sign and the registered trademark;

signs identical or similar to a trademark in relation to goods or services not similar to those for which the trademark is protected, if the trademark is widely recognized within the Czech Republic, and if use of the sign, without due cause, takes unfair advantage of, or is damaging to, the distinctive nature and/or the repute of the renowned trademark

Prohibition of: affixing it to goods or the packaging thereof; offering goods or putting them on the market or stocking them for such

purposes under the sign; offering or supplying services under the sign; importing or exporting goods under the sign; using the sign on business papers or in advertising

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Trademarks: counterfeit goods (Section 2, Act No. 191/1999)

Definition: goods and/or packages thereof which bear, without the

consent of the registered owner of the trademark, a sign which is identical to or can be mistaken for the trademark registered for the goods in question;

all articles bearing a sign identical or similar to a registered trademark on packaging, labels, stickers, logos, tags, promotional leaflets, operating instructions, warranty documents etc.;

any mould or apparatus specifically designed and/or altered to produce counterfeit trademarks, or goods bearing such trademarks, or digital models of such trademarks

Section 8, Consumer Act: acts that may deceive consumers:

offering or selling goods which violate certain intellectual property rights;

storage of such goods with the purpose of offering or selling the same

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Remedies. Border measures

Act No. 191/1999: conditions under which customs are authorized to implement action in order to counteract parting, owning, holding, storing or selling goods by whose production intellectual property rights have been infringed

3 different procedures: Ex officio measures (in accordance with Article 4 of Regulation

1383/2003); Preventive application for action (in accordance with Article 5 of

Regulation 1383/2003); Simplified procedure (Section 14 of Act No. 191/1999)

The role and competencies of Customs authorities

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Remedies. Civil sanctions

Section 6, Act No. 221/2006 (implementation of the EU Directive 2004/48):

the Council Municipal Court in Prague shall provide court rulings, as the court of first instance, related to :

(a) disputes on claims concerning IPRs, on claims resulting from damages of an infringement upon the industrial property rights and on claims to surrender of the unjust enrichment acquired to the prejudice of the beneficiary of the IPRs;

(b) Community Trade Mark or Community Designs. This Court shall also review final administrative decisions issued by the IPO. All these proceedings are conducted and decided in specialized panels composed by three judges, before the Municipal Court in Prague.

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Remedies. Civil sanctions (2)

Section 2 of Act No. 221/2006: persons granted the exclusive right over a trademark:

(a) the right-holder or the proprietor of the trademark; (b) the person entitled to the right of use in accordance with the Trademarks

Act, in particular a licensee and a professional organization engaged in the protection of rights and which is duly recognized as an organization with authority to represent the IPRs holders or proprietors

The authorized persons may instigate the following claims and procedures:

a. Information rights;b. Proceedings on meritsUpon the establishment of the infringement, the registered trademark

owners can obtain the following corrective measures: dilatory action; removal action and destruction of infringing goods; damages; publication of the ruling Court

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Remedies. Criminal sanctions

According to the Czech Penal Code (Act No. 40/2009 Coll.):

Section 268, Infringement of rights to trademark and other signs.

An offender shall be punished for a term of up to two years, by a prohibition of activity or by confiscation of the object or other property value;

- If he/she gains significant profit or commits such an offence on a significant scale shall be punished for a term of six months up to five years OR for a term of three to eight years;

Section 269, Infringement of protected industrial property rights.

An offender shall be punished for a term of up to two years, by a prohibition of activity or by confiscation of the object or other property value;

- If the offence displays the features of commercial or other business activity, If he/she gains significant profit or commits such an offence on a significant scale shall be punished for a term of six months up to five years OR for a term of three to eight years;

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Remedies. Criminal sanctions

Section 270, Infringement of copyright, rights related to copyright and rights to a database.

An offender shall be punished by imprisonment for a term up to two years, by a prohibition of activity or by confiscation of the object or other property value;

- If the offence displays the features of commercial or other business activity, If he/she gains significant profit or commits such an offence on a significant scale shall be punished for a term of six months up to five years OR for a term of three to eight years;

Section 271, Falsification and imitation of a work of fine art. An offender shall be punished for a term of up to three years, by a

prohibition of activity or by confiscation of the object or other property value;

- if she/he commits the offence as a member of an organized group, gains significant profit or commits such an offence on a significant scale shall be punished for a term of one to six years OR of three to ten years.

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Section 5Main Concepts and Suggested Best Practices for

Investigations

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WAYS IN WHICH COUNTERFEITING INVESTIGATIONS CAN BE STARTED:

Receiving a complaint from the right holder, or

communications from other institutions;

Instances for Customs’ protection;

During normal controls of the territory;

Other police activities;

International cooperation and mutual

administrative assistance.

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ENCOUNTERING A SUSPECT COUNTERFEIT PRODUCT FOR THE FIRST TIME, CONSIDER:

What is the product and is it illicit or licit?

Where can I obtain assistance to confirm (or not) my

suspicions?

Where do I obtain evidence of rights ownership?

What evidence is available to support or disprove

allegations of IPR infringement?

What evidence do I require to support a prosecution?

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Additional info to be collected:

Companies and individuals involved in the production and distribution to recognize the possible involvement of an organised crime group.

Money transfers could provide important evidences for tracking illicit trading flows and obtaining the seizure and confiscation orders

Real estate and property also key points of the criminal chain

Details and registration of vehicles or other means of transport used in production and distribution

Details of mobile communications and IT hardware used

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WHEN AN INSPECTION IS CARRIED OUT:

Tax records; Customs documentation in case of international transactions; Commercial correspondence; Any documentation found in the premises/facilities (e.g. agendas, notes,

receipts, correspondence, addresses) Any technical documentation (as declarations of conformity, technical

documentation, reports, etc...) or documentation pertaining to the production;

Verification of permits, notices and licenses to conduct the business (also in the case of e-commerce);

Documentation proving ownership of trademarks, licenses, concessions, supply contracts, royalties, etc ...;

Analysis of the quantity and composition of computer equipments (e.g. personal computers, local networks etc.);

Acquisition of magnetic media for the identification of transactions, special attention to data in hard disks of personal computers (back-up);

Identification of personnel working in the enterprise.

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INFORMATION AVAILABLE IN EXISTING NATIONAL DATABASES

Analysis of other open sources; Analysis of databases on trademarks, patents, designs and

models, such as: - European trademarks (http://oami.europa.eu/) - International trademarks (http://wipo.int/portal/index.html.en) - European Patents Office - Other databases on designs and model.

National and regional IP enforcement associations; or Related industry associations (such as Union des

Fabricants, the pharmaceutical industry associations, etc.).

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POSSIBLE INVESTIGATIVE METHODS Inspections at borders; Collection of photographic evidences; Identification of people and means; Technical investigations; Identification of the production/distribution chain, financial and

flow assets; Inspections (documents inspections, verification of the

information); Shadowing; Ambushes; Use of informants; Raids; Retrieve declarations and information; Other investigation techniques; Undercover operations.

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The fake trainer is the one on the left, with the black Niketick. Did you get it right?

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TIPS FOR SPOTTING A FAKE

Extremely low prices should get your alarm bells ringing;

The logo might be off centre or slightly different to the genuine article;

Fake trainers and clothes usually have loose threads;

Colours might bleed into each other or it might not be consistent throughout;

Look out for poor quality zips and laces.

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INTERVIEW WITH INFORMANT/SUSPECT 1. Conduct interviews in a location which reduces unnecessary

interruptions or distractions.2. Establish rapport with the person being interviewed to put him/her at

ease.3. Listen to the person. Let him/her first tell the story in his/her own

way. Listen carefully to each side.4. Be genuine and at ease.5. After hearing the entire story, ask for more information to fill in

details.6. Ask for clarification of key points.7. Note-taking may put the person being interviewed on edge.8. For cases of counterfeiting/tampering, ask who was with the person,

what happened in the store, any problems noted with the product at the store, and other questions which will provide you with more information on when, where, or why events took place, who was present, etc. If two investigators are involved in the interview, one should take notes while the other asks the questions. Video / audio recording should also be considered.

9. Watch for changes in attitudes, body language, hesitation in speech, etc. Describe your observations of body language and personal characteristics in your report.

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THE USE OF INFORMANTS Informant: “A person who informs or prefers to provide an

accusation against another, whom she/he suspects of the violation of some penal statute”

The use of informants is fundamental to investigative work and provides the opportunity to receive clear intelligence on the activities of an individual or groups of persons acting illegally.

Scale of reliability for the informants:

● Reliable - no doubt of person's authenticity; past info reliable in all instances

• Usually Reliable - some doubt, but past info has been reliable in most instances

• Fairly Reliable - some doubt, but past info has been reliable on average

• Not usually Reliable - there is doubt, and past info has only been reliable on occasion

• Unreliable - there is great doubt; past experience has proven them to be unreliable but that doesn't mean that this piece of info now is not reliable.

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HOW TO OPERATE? Gathering information concerning the episode: charges, writtendocuments or complaints, interviewing, informed people and othercounterfeiters’ customers; Paying close attention in acquiring the notitia criminis, bypresetting information sources considered suitable; Aiming to detect the counterfeiting chain by activating eachinformative and investigation source whenever a criminalorganization is involved, according to the Palermo Convention’sdefinition; Contacting another law enforcement agency or a specializedorganisation if the assigned abilities do not allow to delve into somefiscal aspects, or other issues concerning immigration or jobconditions; Taking care data gathering to send to administrative centres inorder to improve the implementation of the prevention andrepression of those crimes; The rights owner should be informed in order for him to start,both a civil or criminal proceeding, and ask for compensation withprejudicial consequences for the counterfeiter.

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FINANCIAL INVESTIGATIONS Common techniques to launder the proceeds derived from counterfeit trading and in

the counterfeit industry: cash payments: electronic payments; bank transfers.Cash money transfer services (via registered or unregistered money service business)

are less preferred

Indicators of possible involvement in laundering the proceeds from counterfeiting useful during investigations

Frequency of Paypal or Internet payments crediting bank accounts; Individuals receiving Paypal or Internet payments and/or transferring fund who have

no declared profession or low income jobs; Money remittances to China or other Asian countries known to produce counterfeit

goods; Establishment of shell companies or transit accounts to facilitate laundering of

proceed derived from counterfeit industry (and no legitimate economic justification); Cash payments using underground banking services; Sale of counterfeit goods mixed with original goods; Suspicion transaction reports from customs authorities identified companies/persons

using importation trade documents when there; Prices of the goods abnormally low for branded goods to provide a cover for proceeds

of counterfeiting and other crimes; Bad criticism on chat lines and e-shopping websites about the quality of the goods

sold online;

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INTERNET INVESTIGATIONS

The Internet is an important supply channel for counterfeiters: it allows them to supply products at both the retail and wholesale level.

The Internet guarantees anonymity While carrying out the inquiries, information and documents must betaken note of: Precise webpage address, through the URL (Uniform Resource Locator) Download the webpage in a digital support. By doing this, it is possible toverify its content and the existence of any business advertisement related tothe products or services offered through the webpage (banners) Take note of day and time periods during which the non-authorizedactivities are carried on IP (Internet Protocol) addresses from which the actshave been realized Download of products or services offered in the web (to test or productsto buy) Certification made by the rights’ owner, in which it is proved that theinvestigated portals are not authorized to carry out these activities Take note of nicknames of forum users, the ones who make unauthorizedexploitations.

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INTERNET INVESTIGATIONS Operation Ocean Crossing, (February 2005)

The U.S. Immigration Customs Enforcement discovered a tradenetwork of counterfeit medicines originating from China and directedtowards the US, the UK and other European nations.The trade was managed by a Chinese criminal organization that waslinked to an American citizen.

Three Chinese citizens operating in the province of Tianjin were arrested andthe following was seized: more than 55,000 packages of counterfeit Viagraand Cialis, 75,000 loose pills, a device used to seal pharmaceutical packagesand a significant amount of counterfeit trademarks bearing the Viagrainscription.

In September 2005, a police operation was implemented in three facilitieswithin the region of Henanth.

This operation led to the arrest of eight Chinese citizens and the seizure ofmore than 222,000 pills of counterfeit Viagra, 70,000 loose pills, 260kilograms of raw materials and 580,000 counterfeit Viagra trademarks.

At the same time, U.S. authorities arrested a US citizen who subsequentlypleaded guilty to the charge of importing counterfeit drugs.

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ANTI-COUNTERFEITING TECHNOLOGIES I)Since there are many techniques to conceal counterfeit products and to makethem increasingly hard to be distinguished from the original ones, a variety of detecting measures have been elaborated in the recent years.

Two Australian chemists developed a new rapid forensic test for authenticating antique porcelain after discovering that all porcelain has its own unique ‘fingerprint’. The technology involves a laser sampling technique to determine the unique signature of the clay from any porcelain object to be authenticated.

Bayer CropScience launched its Qualidate fingerprint authentication technique, a new patented technology based on approved food additives developed to protect crop protection products.

In 2008 a new tool in the fight against counterfeit wine was launched, a particle accelerator that can authenticate a wine bottle’s age and detect counterfeits. This technique analyzes the composition of the bottles: the analysis focuses on the bottle’s glass and not its contents, thus the bottle can remain sealed during the test. The process does not harm the bottle in any way. The test results are then compared with information in a database to ensure their provenance.

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ANTI-COUNTERFEITING TECHNOLOGIES I)

Sanofi-aventis inaugurated its Central Anti-Counterfeit Laboratory which has a three-fold remit in respect of reducing the threat of counterfeit drugs.. conducting direct examinations of packaging items and leaflets as well as definitive chemical tests on suspect samples of commonly counterfeited products;. developing test methods and. distributing them globally.

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ANTI-COUNTERFEITING TECHNOLOGIES II)Authentication technologies, are an important tool for the

identification of a counterfeit product, and serve a source of evidence in court Markings are of four categories: overt (visible to human eye), hidden (elements incorporated into overt features or packaging

which are visible to human eye by means of tools such as reactive pens, laser pointed tools, optical filters or UV lights),

covert (elements which can only be detected with specific detection devices),

forensic (elements which can only be detected by means of an infield kit or through a laboratory analysis which allows for a more comprehensive analysis).

Track and trace technologies are used to follow and analyse the movement of products through supply chains and hence can help enforcement agencies during investigations.

They provide barcodes or radio frequency identification (i.e. an automatic identification method which is incorporated into a product and is transmitted through radio signals).

A good practice is GS1 Standards: they use RFID technology within barcodes to manage shipments, inventories & assets and to reduce counterfeiting.

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Inter - sectorial cooperation in Czech Republic

One platform established in July 1997 an agreement between 4 state administration authorities was signed.

Gradually, the necessity of cooperation with other subjects arose presently 8 state authorities in total cooperate within the framework of the agreement.

1. the Czech Commercial Inspection2. the Police of the Czech Republic3. the Industrial Property Office4. the Ministry of Finance – General Customs Directorate5. the Ministry of Industry and Trade – department of Trade Licensing6. the Ministry of Finance – Central Financial and Tax Directorate7. the Ministry of Culture8. the State Agricultural and Food Inspection

The set of measures adopted is as follows: 1) media policy area; 2) area of education; 3) analytical area; 4) technical and

organizational area; 5) area of legislation; 6) interdepartmental cooperation area and 7) international cooperation area.

Another platform of the cooperation interdepartmental advisory committee for the abatement of IPR infringement of the Ministry of Industry and Trade.

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Inter - sectorial cooperation in Czech Republic

Important field of cooperation is between the COI (Czech Commercial Inspection) and NGOs, such as the International Federation of the Phonographic Industry (FPI), the Czech Anti-Piracy Union (CPU) and with the right owners.

A comprehensive information system was created for all persons and institutions participating in the abatement of IPRS infringement; it is available since the 2004 at the internet site www.dusevnivlastnictvi.cz

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INTERNATIONAL COOPERATION I)International Agreements1. EU-US Action Strategy for the Enforcement of IPR (2006), main

goals:1. Promote enforcement of related laws by customs/border control officials2. Strengthen cooperation among the parties3. Promote public-private partnership.

2. The EU-China Project on the protection of the IPR (2007) defines which technical assistance shall be provided by EU to China:1. The training of customs officers2. The exchange of expertise, best practices, know-how3. Cooperation between a network of authorities4. Technique for a more effective enforcement of IPR regulations

3. According to the Agreement on Trade, Development and Co-operation between the European Community and its Member States and Republic of South-Africa, (2000), the Community may provide technical assistance to South Africa in:

the preparation of laws and regulations for protection of IPR the establishment and reinforcement of domestic offices and other

agencies involved in enforcement and protection, including the training of personnel.

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INTERNATIONAL COOPERATION I)

4. According to the Framework Trade and Co-operation Agreement between the European Community, its Member States and Korea, (2001), parties should:

respect the obligations contained in multilateral IPR conventions integrate the TRIPS within their national legislations facilitate cooperation between customs authorities.

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INTERNATIONAL COOPERATION II)International Operations

1. Joint Customs Operation “Infrastructure” November/December 2007 First IPR enforcement operation undertaken by CBP and the EU Reinforced the EU-US Action Strategy for the Enforcement of IPR Cooperation and exchange of information on counterfeit goods between EU and

US Customs 360,000 counterfeited integrated circuits bearing over 40 different trademarks

were seized2. Joint Customs Operation “Diabolo II” Signed by al 27 EU Members and 13 Asian countries; organized and coordinated

by the European Commission Focused on containers shipped from Asian ports of loading to EU ports of

discharge Seizure of more than 65 million counterfeited cigarettes and 369,000 other

counterfeited goods bearing 20 different trademarks3. Operation “Mamba” First combined INTERPOL and WHO operation targeting counterfeit medicines. Carried out by IMPACT, in Uganda and Tanzania Multiple law enforcement agencies joined their efforts to confiscate counterfeit

medicines Training course on methods and procedures of anti-counterfeiting to support

cross-agency efforts to combat transnational organized criminals An investigative guide produced by the Permanent Forum on International

Pharmaceutical Crime was also distributed.

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INTERNATIONAL COOPERATION II)International Operations

4. Operation “Matthew II” Joint Customs operation to detect smuggling of cigarettes entering the EU by

road Organized by Czech Republic in close cooperation with Poland and the

European Commision (OLAF) Europol and WCO/RILO WE also supported the operation by means of

analytical activity Seizures: more than 16 ml cigarettes, 241 kg tobacco products, 6,400 liters

of alcohol, 20 tonnes of counterfeit perfumes, 53,418 other counterfeit items (bags, coats, scarves, wallets) and 1,515.75 kg of cannabis

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THE ROLE OF THE PRIVATE SECTOR

In order to cooperate with law enforcers for a stronger intellectual property protection, the private sector should follow the following steps:

conduct a thorough investigation document all investigative steps preservation of evidence contact law enforcement agencies without delay assist in the identification of stolen intellectual property: share the results of internal investigations or civil lawsuits

with law enforcement participate in law enforcement task forces help train law enforcement authorities register IP by ‘privates’: help Customs to be helped by them: help train customs official: responding to inquiries regarding suspect goods following up on seizures

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The Interpol member countries working within the INTERPOL IPR Programme

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The INTERPOL Database on International Intellectual Property (DIIP) Crime

is an autonomous iBase database containing information abouttransnational and organized intellectual property (IP) crimes.

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COOPERATION INITIATIVES WITHIN THE BUSINESS SECTOR

1) Liaisons between EU Commission, EU customs administrations and pharmaceutical sector

A first meeting in Brussels, September 20009 Main issue discussed: the effectiveness of seizures of suspect goods

carried out by customs at EU borders EU customs authorities decided to extend and improve their

collaboration with EU pharmaceutical companies in order not to hinder the legal drugs trade through the detainment of suspected products

Customs should notify EU pharmaceutical companies about each case of goods suspected of IPR infringement.

2) Liaisons between Custom authorities and the semiconductor industry

The Liaison, in action since 2009, covers China, Chinese Taipei, European Union, Japan, Korea and the US

The liaison regards customs experts and manufacturers of semiconductor devices concerning anti-counterfeiting issues

Customs experts reaffirmed the need for governments to join forces and increase joint government/industry cooperation in the fight against counterfeit industry

An important countermeasure is providing customs officers with the access to information about products manufactured and processes implemented by the semiconductor industry.

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EXISTING GOOD PRACTICES IN EU ON ASSET RECOVERY

Asset recovery is a very recent field of international activity in countering different crimes. It involves an efficient and effective criminal justice system, sound preventive polices and transparent financial regulations.

Some EU countries legislations foresee such measures. In Austria, for example, for what concerns the civil remedies, and in

particular the proceedings on merits, “(b)“in case of negligence, the payment of damages – including lost of profits and moral damages – or the handing over of any asset made by the infringement” is foreseen.

In Belgium, the civil measures adopted deal only with the seizure – during the preliminary proceedings – of counterfeit goods, proceeds generated by illegal activity, personal or real goods of the suspected infringer and the freezing of the infringers’ bank account. As far as the damages within the proceedings on merits concern: “(c) the confiscation of all profits made by the unauthorized use of registered trademark” is stated.

In Estonia, under the civil law holders may claim compensation for damages, whether it is material or moral. Material damages may include damage to assets and loss of profits.

In the Czech Republic, within the proceedings on merit there can be the removal action and destruction of infringing goods, and in order to calculate damages the court shall consider the profits obtained through the violation of the law.

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ADMINITRATIVE AND JUDICIAL BEST PRACTICESCORRECTIVE MEASURES INVOLVING COUNTERFEIT GOODS

1. Destruction of counterfeit goods Destruction of goods infringing IPR should be the general principle In civil proceeding, costs of destruction should be paid by the infringer In criminal proceedings, destruction costs are born by the State Practices vary country by country: e.g., in Greece destruction costs are

born by State, in Belgium, Luxembourg and the Netherlands the destruction is a penalty and is imposed on the offender.

2. Secondary use of counterfeit goods The infringing items can also be donated to charities, recycled or reused Some precedents exist in Estonia, Denmark, Germany, Hungary, Italy,

Portugal, Romania, Sweden and UK while it is prohibited in France, Greece, Latvia, Belgium, Netherlands and Slovenia

In Denmark, Germany, Hungary and UK the secondary use is not allowed in customs proceedings.

3. Definitive removal of counterfeit goods from the channels of commerce

In order to be destructed, fakes must be removed from commercial channels

Compared to market recall, that is temporary measure, this is definitive and aimed at the destruction of goods

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ADMINITRATIVE AND JUDICIAL BEST PRACTICESCORRECTIVE MEASURES INVOLVING COUNTERFEIT GOODS

In many countries, when goods are already in the market, the infringer shall inform all customers on the infringement and offer them the possibility to sell back the fakes (Netherlands) and/or give back goods to the infringer at his own expense (Germany)

In other countries (UK), the order of Court to destroy the goods applies irrespective of whom holds the product.

4. Recall of counterfeit goods from commerce channels Recall of fake goods is temporary or precautionary measure This implies goods can be reversed or marketed again after the IPR

will expire According to EU Counterfeiting and Piracy Observatory: “This

interpretation seems to be inconsistent with the deterrence purpose of the measure. It gives the infringers the chance of retaining part ofthe economic benefit from the counterfeiting activity”.

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Thank you!www.unicri.it

http://counterfeiting.unicri.it/