Enforcement of Intellectual Property Rights with Particular reference to Border Security Measures

Introduction:

Protection for intellectual rights means ultimately a protection for the human mind. The human mind is a creative workplace that contributes to the rapidly growing technological world that we live in today. The importance of the proper enforcement of such rights cannot be fathomed enough as it is one of the most important rights for humankind and contributes tremendously to the industrial world. Intellectual Property Rights have reached new heights all over the globe. The basic definition of IP rights is the legal right given to a brand, design or invention or any other type of creation. The common types of intellectual property are copyrights, patents, design, trademarks, geographical indications, industrial designs, trade secrets, layout designs for integrated circuits and protection of new plant variety. The economic and trade policies of several nations have grown tremendously over the years, at the same time the illegal export and imports of goods have also increased. However, IP rights violations remain to pose an enormous threat. In this article, the current legal scenario of enforcement of IP rights, its history, legal provisions with regard to border security measures and the international perspective are discussed.

History of Intellectual Property Rights

The birth of Intellectual Property Rights in India dates back to 1856. The main aim was to promote new inventions, encourage inventors to protect such inventions and to grant exclusive rights. The first legislation relating to patent rights was Act VI. It was introduced in the year 1856. Second and new legislation was introduced in the year 1859. The act continued to be in force for 30 years with a single amendment. A bill was introduced in the year 1965 which was not passed. Later in 1967, an amended version of the bill was introduced and the Patents act was passed in 1970.

Legal Framework for IPR

The Indian Government has enacted various acts that govern the protection of IP rights. Certain laws came to force even before WTO’s existence, which India is a part of. After the birth of the TRIPS agreement, certain laws were subject to amendment.  By the IP rights guaranteed under Intellectual Property Rights (Imported goods) Enforcement rules of 2007, IP owners can exercise their rights. To do so, it is compulsory to have an explicitly registered IP right or trademark. Under Customs Act a 5-year protection period is provided after registration or till the expiry of the validity of registration. The IPR rules of 2007 provides for imported goods which infringe intellectual property rights.

Intellectual property rights are dealt by several ministries such as –

The Administrative Ministries 

• Ministry of Human Resources Development
• Ministry of Communications Information Technology
• Ministry of Agriculture
• Ministry of Commerce and Industry

Enactments for protection of IPRs

• The Copyright Act, 1957
• The Trademarks Act, 1999
• The Design Act, 2000
• The Patent Act, 1970
• The Geographical Indications of Goods Act, 1999
• The Protection of Plant Varieties Farmers’ Rights Act, 2001
• The Semiconductor of Integrated Circuits Layouts Design Act,2000

Enforcement of IP Rights Violations at the Border

Infringement of IP rights takes place when there is an unauthorized use, sale, distribution, importation or reproduction of protected goods or works. Infringement also occurs when a person uses a similar mark in relation to any similar goods or services that would lead to confusion amongst the consumers. Any aggrieved person can take legal action to protect his\her rights and can claim remedies guaranteed under the IP provisions.  The enforcement of IP rights can be done by civil courts and through the means of criminal prosecution. The Competition Act as well as IP laws have established procedures for such proceedings. The process of civil litigations has certain disadvantages such as large damages.

Damages can be claimed in the case of copyright infringement and other trademark infringements. One can also opt for Mediation or negotiation as an effectual form of dispute resolution.

Enforcement of IPR is divided into two categories-

• Territorial Enforcement – A civil or criminal action for violation of copyright or trademark may be initiated against the producers, distributors, wholesalers, retailers or even against consumers in a District Court or a Magistrate Court having jurisdiction.[1]
• Enforcement at the border – The goods at the border are of two types. One which is intended to be used within the dominion and the other which is in transit.

Border Security – Legal Provisions

• Section 11 of the Customs Act prohibits importation and exportation of goods of certain descriptions. The provision empowers the government to prohibit the import or export of goods for ‘the protection of patents, trademarks and copyrights.[2]
• Section 2 (n) of the Customs Act, 1962 – The Central Government is empowered to prohibit importation and exportation of any goods for the protection of Trademarks, Patents and Copyrights by issuing the notification.
• Section 53 of the Copyright act – the registrar of copyright can make the required enquiries and make an order or copies made out of India of a work which if made in India would infringe copyright.[3]

(A bill has been introduced to the Parliament which seeks to amend the provision of Section 53 of the Copyright Act. It proposes to eliminate the requirement of making an application to the registrar. The affected party can directly serve a notice to the Commissioner of Customs.)

• Section 140 of the Trade Marks Act,1999 – The registered licensee of a trademark can give notice to the collector of customs to prohibit the importation of goods that constitutes as infringement. Such notice is required to be in writing.
• Section 72 of the Copyright Act – The person aggrieved by the final decision or order of the registrar of Copyright, within a period of three months from the date of the order, can appeal to the Copyright Board.

Present Scenario of IPRs and Border Security

The government in the last five years have brought about many changes in the IP domain with the introduction of the National Intellectual Property Rights Policy and with the establishment of a cell for the purpose of IPR promotion and management. The Indian Government has also recruited examiners to examine and grant patents. There has been a steady increase in new start-ups who seek protection for their rights. India has been under the spotlight as the expectation for the Indian Government has risen due to the Special 301 Report issued by the Office of the United States Trade Representative (USTR) which has put India on its priority watch list. Border security provides national security to a country. It is a vital tool to curb terrorist attacks as well. The Indian Government has also introduced the CIBMS project which stands for Comprehensive Integrated Border Management System.

Border Security Measures in India

There exists a very serious issue in the global economy which is the production of infringing goods done at one particular nation and being imported to other nations. Such importation of illegal and pirated products can vastly affect the economy of certain businesses and in other cases, it might also be the reason for the withdrawal of an international market brand from a national market. Undertaking these illegal activities also affect the minds of the customers and the quality of the brand would suffer substantially. The essence of border measures is that it can be carried out against illegal imports from any country irrespective of whether it is a party to the international conventions or not. Thus, the enforcement of IP right is of utmost importance in the Indian jurisdiction as well as in the international perspective. Border security measures keep a check on pirated products entering into a particular jurisdiction. In India, customs authorities govern border security. IPR issues are dealt by The Central Board of Excise and Customs. The authorities under the customs department have the statutory right and powers to deal with and to prohibit the import and export of infringed goods or any such goods which contravene with the rights guaranteed under the purview of IP laws in India.

Procedure for Protection Against Import of Pirated Goods at the Border

Article 51 to 60 of the TRIPS Agreement provides for provisions relating to border security issues.

• By giving a notice to the Customs authorities after registration of trademark to initiate action against importing of illegal goods bearing false mark.
• It requires separate applications for every IP right.
• Online registrations require hard copies of the documents which are uploaded.
• The hard copies must be submitted to the IPR cell in the Custom House and must be submitted in the required format.
• After the infringed goods are detained the customs authority will inform the importer of such goods regarding the suspension of clearance.
• The holder must submit documentary proof to prove whether the detained goods are illegally imported or not.
• The holder would be required to join the proceedings within the prescribed time limit.
• If the holder fails to do so, the customs authorities will issue a notice to the importer.
• The importer will be provided with an opportunity to present his case.
• If the goods are proved to be violative in nature an order of confiscation will be passed by the adjudicating authority.
• The confiscated goods are either disposed or destroyed, after acquiring a ‘no objection certificate’ from the holder (such confiscation of goods in transit is not permitted according to the Paris Convention and TRIPS but is permissible by Indian laws).

Automated Recordation and Targeting System

India introduced the ARTS system to promote effective enforcement of trade. This is an automated e-application system that helps the right holders to register their rights with the Customs Authorities and provides for the protection and foolproof monitoring. It provides for the registration of rights at local as well as national levels.

IPR Cells

IPR cells are established at Custom Houses. They have the responsibility of verifying applications and works along with the Risk Management Division. Importations involving suspected infringements are handled by the IPR cell.

International Considerations

One of the main objectives of The World Trade Organization and the Trips Agreement is to prevent illegitimate trade and to minimize the barriers in legitimate trade. The protection of IP rights posed a challenge to the international arena of trade and commerce. To manage the abnormal increase in piracy and illegal trade the developed countries established the GATT regime. This was also done for the purpose of increasing foreign direct investment and to provide effective protection and enforcement of IP rights. India is a member of the World Trade Organization (WTO). It is mandatory as per the WTO guidelines that their member nations must include laws to protect IP rights. India is a signatory to some international agreements such as the Paris Convention, The Berne Convention, The Madrid Protocol and The Patent Cooperation treaty. There are several similarities between the global and Indian IP laws. To achieve effective control over illegal international trade, India signed the Customs Mutual Assistance Agreement.

Global Perspectives of Protection in the Border

Paris Convention

The member nations under the Paris convention are bound to seize all goods which have been unlawfully trademarked. The Convention provides that if a country lacks laws on seizure of unlawful goods, it must prohibit the importation of such illegal goods or goods bearing trademarks unlawfully. The convention mandates member nations to provide remedies for unlawful application of marks in goods. However, according to this convention the competent authorities cannot implement seizure of goods which are in transit. Such seizure can be carried out only at the request of the public prosecutor.

Berne Convention

Under the Berne Convention, member countries can seize infringing works that exercises legal protection. The seizure can be enforced on goods from countries where such work is not protected.

WTO and TRIPS

Under the WTO and TRIPS Agreement border-measures were introduced for the arresting of illegal goods at the border and entry points. Its main purpose is to eliminate loss to the original owners of the goods and to protect the national and international economies.

Case Laws

• In the case of M/s IVES laboratories V. R B Agarwal[4] a ban was imposed on the import of illegal and counterfeit goods.
• Gramophone Company of India V. Birendar Bahadur Panday[5]is a landmark case which deals with Section 53 of the Copyrights act. The appellant’s company exercised ownership in sound recordings. The appellant received information about prerecorded sound cassettes that have arrived at Calcutta from Singapore on its way to Nepal for dispatch. The ship contained pirated copies of sound recordings which belonged to the appellant. The appellant sought the intervention of the Registrar of Customs under Section 53 of Copyrights Act. The registrar failed to take immediate action. The appellant filed a writ petition under the Calcutta High Court. The High Court issued an order which directed the Registrar to proceed with the investigation of infringement as provided under section 53 immediately. The High Court also held that the appellant must pay damages in case the cassettes held back did not amount to infringement. The Division Bench held that the word ‘import’ did not solely mean bringing goods into the territory of India but also meant something more. They held that it can also refer to ‘Incorporating or mixing up pf goods imported with the mass of the property into the local area’. Dissatisfied with the decision of the High Court an appeal was made to the Supreme Court. The Supreme Court found the respondents liable. The Supreme court provided a broader meaning for Section 53 and established that it “it is not limited to the importation of commerce but also includes importation for transit made across the country”.
• In the case of State of Gujarat Vs Memon Mohomed,[6] the goods which were seized under the Customs Act were not properly kept and were disposed of by the order of the magistrate. The Supreme Court held that there the state has the obligation to return the goods and that the suit was maintainable. According to Article 41(5), TRIPS agreement does not affect the capacity of the member nations to enforce their law in general, it must be noted that in India, the Government can be sued directly for any wrongful detention done by the customs authorities.

Conclusion

The advancements being made around the globe for the protection of copyrights and goods are vast and seem to provide a promising and rapid growth to the international economy and trade. Nevertheless, there also exists the growth of illegal trade that poses a threat to the trade economy and the public at large. It fools the innocent public who put their trust in the quality of the rightful product. The rules provided by the Intellectual Property Rights (imported goods) Rules, 2007 can help to reduce the circulation of illegal goods in India and can further strengthen Customs provisions and provide better protection on the borders. Provisions must be made under the Patents Act, Designs Act and the Geographical Indications Act that can empower authorities to confiscate the products that are in violation of such acts. All the citizens and companies alike must be made aware of their IP rights and the steps which can be taken to protect their rights.

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References:

[1]  Section 62 & 70, Copyright Act,1957; and Sections 134& 115 Trade Marks act, 1999

[2]  Sections 11(2)(n), 111(d), 2(23) & 110, Customs Act,1962.

[3] Section 53, The Copyright Act, 1957

[4] CS (OS) No 1940 of 2006,Del

[5] AIR 1984 SC 667

[6]1967 AIR 1885

Other Sources:

• Intellectual property protection at Border – V Vijay Lakshmi and Aravind M Patro
• Intellectual property rights: Indian scenario – Sachin Mangal, Kedarnath Aggarwal, R.K Gupta Marg.
• https://www.conventuslaw.com/report/employing-border-security-measures-to-protect-ip/