AIPPIe-News
No.1
April 2008
April 2008
AIPPI General Secretariat |Toedistrasse 16 | CH-8027 Zurich
Tel. +41 44 280 58 80 | Fax +41 44 280 58 85
enews@aippi.org | www.aippi.org
Border control: an effective tool to protect Intellectual Property Rights in the Philippines
Bernadette Marie B. Tocjayao and Jennifer D. Fajelagutan, Makati City, PhilippinesIn a developing country like the Philippines, the influx of counterfeit goods from neighbouring Asian sources used to be unabated. Cheap branded items- from designer apparel to light tools & 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.
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 would 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 either in whole or as a part of its strategy in combating counterfeit products.
What most IP owners are not aware of is that in recent years, the Bureau of Customs (BOC) 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 (3) years.
Hereunder is a summary and comparison of the IP enforcement activities of the Bureau of Customs for the years 2005, 2006 and 2007 (January to August):
Numbers show that the implementation of CAO 6-2002 resulted in a 100% increase in value of confiscated goods every year the past three years.
Based on the data made available to the authors, the estimated value of the articles detained and seized by the Bureau of Customs from January to August 2007 alone, is estimated at PHP824 million (equivalent to USD 19.5 Million), which accounts for about 36% of the total value seized by the four (4) IP enforcement agencies in the Philippines for the same period. This translates to a total of 5.3 million pieces, or 4,683 boxes or 26 containers of counterfeit goods. The seized items in 2007 include an assortment of items from mobile phone casings and accessories, tools, bags, men's and women's apparel, pharmaceutical products, cigarettes, general power engines and parts thereof, watches, DVDs and replicating machines, among others.
The foregoing developments were brought about by the Bureau's implementation of administrative guidelines, through Customs Administrative Order 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, to wit:
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 Bureau of Customs 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 (2) years from date of recording and renewable every two years thereafter.
On the basis of the recordation, the Bureau shall 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 IPR Holder/Owner or his agent and the consignee or representative within twenty four (24) hours from 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 shall issue against the shipment within twenty-four (24) hours. Within five (5) 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 IPR owner/holder or its duly authorized agent shall likewise be informed of the seizure. With the seizure of goods, the burden shifts to the claimant to prove that its goods are not "prohibited importation".
Under CA0 6-2002, after the notice of seizure is served, the Collector shall immediately set the case for hearing. The case shall be decided after all the parties are heard or given an opportunity to be heard or within Twenty (20) working days from the date the case is set for hearing.
Thus, the current basic work flow of the Philippine Border Control Measures is as follows:
However, like all legal tools available to an IP owner, the use of border control measures has its pros and cons.
A summary of the advantages and disadvantages of using the Customs Recordation Process are:
Advantages:
Disadvantages:
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.
In the five (5) years since CAO 6-2002 came into effect, enforcement of IP rights through border control measures yields more immediate results that are favorable to the IP owner; it is an effective measure to stop the entry of counterfeit products in countries, which are import-dependent, such as the Philippines.
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 would 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 either in whole or as a part of its strategy in combating counterfeit products.
What most IP owners are not aware of is that in recent years, the Bureau of Customs (BOC) 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 (3) years.
Hereunder is a summary and comparison of the IP enforcement activities of the Bureau of Customs for the years 2005, 2006 and 2007 (January to August):
| 2005 | 2006 | 2007 | |
| Estimated Value (in PHP) | 392,722,480 | 722,765,810 | 823,759,771 |
| No. of Warrant, Seizure & Detention Orders |
26 | 26 | 28 |
| Pieces | 68,475 | 416,392 | 890,699
includes four (4) replicating machines
|
| Boxes | 3,092 | 5,771 | 2,651 |
| Containers | 1 | 0 | 4 |
Numbers show that the implementation of CAO 6-2002 resulted in a 100% increase in value of confiscated goods every year the past three years.
Based on the data made available to the authors, the estimated value of the articles detained and seized by the Bureau of Customs from January to August 2007 alone, is estimated at PHP824 million (equivalent to USD 19.5 Million), which accounts for about 36% of the total value seized by the four (4) IP enforcement agencies in the Philippines for the same period. This translates to a total of 5.3 million pieces, or 4,683 boxes or 26 containers of counterfeit goods. The seized items in 2007 include an assortment of items from mobile phone casings and accessories, tools, bags, men's and women's apparel, pharmaceutical products, cigarettes, general power engines and parts thereof, watches, DVDs and replicating machines, among others.
The foregoing developments were brought about by the Bureau's implementation of administrative guidelines, through Customs Administrative Order 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, to wit:
- Which shall copy or simulate any mark or trade name registered with the IPO 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;
- 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 Bureau of Customs 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 (2) years from date of recording and renewable every two years thereafter.
On the basis of the recordation, the Bureau shall 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 IPR Holder/Owner or his agent and the consignee or representative within twenty four (24) hours from 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 shall issue against the shipment within twenty-four (24) hours. Within five (5) 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 IPR owner/holder or its duly authorized agent shall likewise be informed of the seizure. With the seizure of goods, the burden shifts to the claimant to prove that its goods are not "prohibited importation".
Under CA0 6-2002, after the notice of seizure is served, the Collector shall immediately set the case for hearing. The case shall be decided after all the parties are heard or given an opportunity to be heard or within Twenty (20) working days from the date the case is set for hearing.
Thus, the current basic work flow of the Philippine Border Control Measures is as follows:
- IPR Recordation
- Issuance of Alert/Hold Order
- Physical Examination
- Seizure
- Hearing
- Decree (Forfeiture or not)
- Disposition of the forfeited goods
However, like all legal tools available to an IP owner, the use of border control measures has its pros and cons.
A summary of the advantages and disadvantages of using the Customs Recordation Process are:
Advantages:
- Cheaper costs
- Faster results
- Less formal rules of procedure
Disadvantages:
- Not taken seriously by Respondent or Claimant
- 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.
In the five (5) years since CAO 6-2002 came into effect, enforcement of IP rights through border control measures yields more immediate results that are favorable to the IP owner; it is an effective measure to stop the entry of counterfeit products in countries, which are import-dependent, such as the Philippines.
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