CUSTOMS CROSS-BORDER MEASURES AND CONTROLS

Overview of the Law 

 

The Maltese Parliament promulgated a law entitled the ‘Intellectual Property Rights (Cross-Border Measures) Act, 2000’, (Act VIII of 2000) (the ‘Act’) which has as its object the withholding of the release of goods by the Comptroller of Customs (the ‘Comptroller’) where it is claimed that the same may infringe the intellectual property rights of another party. Section 4 of the Act specifically prohibits the importation into Malta, and the exportation or re-exportation from Malta, the release for free circulation, temporary importation, placing in a free zone or free warehouse of goods in contravention of intellectual property rights. 

 

In addition, Malta Customs are obliged to observe the terms of Council Regulation (EC) No. 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights. 

 

Section 2 of the Maltese Act, dealing with the interpretation of certain words and clauses found therein, gives an encompassing definition of the term “goods infringing an intellectual property right”. In fact, this term spreads over three major pillars of intellectual property including trademarks, copyright and patents. Thus: 

 

(a) counterfeit goods, namely goods including the packaging thereof bearing without authorisation a trademark (including trademark symbols such as logos, labels, stickers, brochures, instructions for use or guarantee documents, or packaging material bearing the trademarks of counterfeit goods), which are: 

 

(b) pirated goods, i.e. goods which are or embody copies made without the consent of the holder of the copyright or neighbouring rights, or the holder of a design right, whether registered under national legislation or not, or of a person duly authorised by the holder in the country of production, where the making of those copies, if it had taken place in Malta, would have infringed the right in question under Maltese law; and 

 

(c) goods infringing a patent under Maltese law, 

 

are all included within the meaning of the term “goods infringing an intellectual property right”. Furthermore, the Act lays down that this term is to be interpreted to include also all materials and implements the predominant use of which has been towards the creation or manufacture of such goods. 

 

The applicability of the Act is restricted to any of such goods which bear such unauthorised trademark, unlawful copy or which infringe a patent under Maltese law but it does not apply to any goods which represent an authorised trademark, patent or which have been lawfully authorised by the copyright holder even though such goods have entered Malta without the consent of the holder of the right, trademark or patent. 

 

In addition to the above, Article 2 of EC Regulation 1383/2003 includes within the definition of ‘goods infringing an intellectual property right’ those goods infringing a supplementary protection certificate, national and Community plant variety rights, designations of origin and geographical indications. 

 

Who may ‘Arrest’ the Goods? 

 

The Holder of the Right 

 

The holder of the right may ask the Comptroller of Customs to instruct Customs authorities to take all necessary measures to withhold the release of goods infringing the right-holder’s intellectual property rights. These instructions to Malta Customs would need to be stated in a Community Customs Application filed with Customs itself. Such application must contain a sufficiently detailed description of the goods, proof that the applicant is the holder of the right for the goods in question and that prima facie the goods infringe that right. 

 

Thus, in the case of an alleged infringement of a trademark, patent or design right, the proof would consist in the registration of the right or lodging of the application with the Maltese Industrial Property Registrations Directorate or with the Office for the Harmonisation in the Internal market (OHIM) whilst that in the case of an alleged violation of copyright, neighbouring right or unregistered design right, the proof would consist in authorship or the person’s status as original holder. 

 

If the Comptroller approves the application, he must direct the Customs authorities to withhold the release of or detain the goods for a specified period of time (generally for a period of 10 working days, which may be extended by application for a further 10 working days period). During this mentioned period, the holder of the right should initiate the necessary civil judicial proceedings seeking remedy and redress for the violation of his rights at law. If the Comptroller refuses to grant the application, the holder of the right has three working days to lodge an appeal with the Minister responsible for Customs. 

 

The Act than lays down that subject to any law on the protection of personal data, commercial and industrial secrecy, and professional and administrative confidentiality, if the Comptroller is requested by the holder of the right to give him the name and address of the importer, consignee, the exporter or the owner of the goods (the ‘declarant’), the Comptroller must comply and give such details so that the holder of the right is put in a position to institute judicial proceedings to safeguard his interests. The holder of the right is also given the right and the opportunity to inspect the goods, the release of which has been suspended or which have been detained. The Comptroller himself, when examining the goods, may even take samples in order to expedite the above-mentioned procedures related to the said goods. 

 

The goods will be released if the Comptroller is not given proof that civil judicial proceedings leading to a substantive decision on the merits of the case have been initiated or if the Comptroller himself had not suspended the release of such goods and ten working days (or subsequent to the further 10 working days period extension) from when the applicant was served with a notice of the suspension of the release of the goods have elapsed. 

 

The Comptroller of Customs 

 

Section 6 of the Act places an obligation on the Comptroller that if in the course of checks carried out under one of the Customs procedures and before an application by the holder of the right has been lodged or approved, it appears prima facie evident to the Comptroller that certain goods are goods infringing an intellectual property right, the Comptroller may notify the holder of the right, where known, of the infringement thereof. The Comptroller may either detain the goods for three working days or suspend their release so as to enable the holder of the right to lodge an application as above-mentioned. 

 

The Outcome of the Action 

 

If the Maltese Civil Court finds that the goods are goods infringing an intellectual property right the Court is given the authority by section 8 of the Act, which makes it also mandatory on the Court to take due account of the need for proportionality in its decisions, to either (i) order the Comptroller of Customs to dispose of the goods outside the channels of commerce in such a way as to preclude injury to the holder of the right or (ii) order the Comptroller to take such measures which would have the effect of effectively depriving the persons concerned of the economic benefits of the transaction, or (iii) order the Comptroller to take all necessary measures to destroy the goods. However, in all judgments which have been delivered so far by Maltese Courts on such issues, the Court has always instructed the Comptroller of Customs to destroy the goods, in any case without compensation of any sort to and, at the cost of, the importer, exporter or owner of the goods.