The following table provides a simplified scheme of the detention procedure. Detention is carried out by the customs authorities without in-depth analysis of the validity and infringement of the IP right. Once goods are seized, however, proceedings may shift to the regular courts, where the patent rights are analysed.
If customs detects goods that it suspects infringe, according to the information found on the customs intranet, it will detain these goods. According to Article 2(7) of the Regulation, such goods are basically goods “with regard to which there are reasonable indications that they are prima facie subject of an act of infringement”. Accordingly, the determination of the infringement of the IP right apparently depends on a review of the factual information and documents provided by the right holder to customs. The infringement must apparently be more than a mere assumption.
In Germany the trend may be toward greater review by customs authorities, but ultimately the likelihood of any substantial legal review, now or in the future, in the customs clearance process is low, because customs officers do not have any particular IP-related expertise.
As soon as the customs authorities have detected suspected goods, they take action with regard to the detained goods. The right holder is provided the following information:
Actual or estimated quantity, and the actual or presumed nature of the detained goods, including available images thereof, as appropriate, the names and addresses of the declarant or the holder of the goods, the origin, provenance and destination of the suspected goods.
The right holder has an opportunity to inspect the detained goods.
The importer (usually the declarant) of the goods also will be informed about the detention. It may happen that innocent products are detained by customs. In such a situation, the right holder should clear the situation as soon as possible and take the necessary steps such that the detained goods are quickly released to minimise any further interference in the customs clearance and to avoid possible liabilities.
This procedure may result in the destruction of the detained products:
The right holder confirms within 10 working days from the notification of detention in writing, that, in its conviction, the suspected goods infringe the IP right, and indicates its agreement to their destruction.
The declarant or the holder of the goods agrees in writing to customs, also within 10 working days, to the destruction of the goods. Where the declarant or the holder of the goods has not confirmed its agreement to the destruction of the goods, nor notified its opposition thereto, to the customs authorities within those deadlines, the customs authorities may deem the declarant or the holder of the goods to have confirmed its agreement to the destruction of those goods. Accordingly, this agreement is presumed if the holder or owner of the goods has not explicitly objected to the destruction within the indicated 10-day period.
Once the right holder informs the authorities that the detained goods infringe the patent, and provides an agreement, the goods will be destroyed. In the case of clear counterfeits, the holder of the goods will commonly not object. This leads to destruction of the goods without any further legal review.
Destruction proceedings are unavailable if the goods’ owner, holder or declarant objects to the destruction in a timely manner. In that event, the right holder must initiate court proceedings within 10 working days from the receipt of the notification of detention. This deadline can be extended further by 10 working days in appropriate cases, i.e., upon the duly justified request by the right holder. The Regulation, in particular Article 23, does not provide for a definition of the term “proceedings, to determine whether an intellectual property right has been infringed”, but it is commonly understood that it is sufficient to file a regular lawsuit with one of the competent patent infringement courts. The requirement also is fulfilled by means of a request for a preliminary injunction, which may constitute a precautionary measure according to Article 24 EC (2) (b) of the Regulation, and would have the additional effect of rendering a request of the importer to release the detained products, which might be later filed, unsuccessful .
If the right holder has initiated court proceedings and thus fulfilled the requirements of Article 23 of the Regulation, and absent action on the part of the declarant, owner, importer, holder or consignee, the goods will remain with the customs authorities. But the Regulation provides for relief to obtain an early release of the detained goods. The early release can be requested by the declarant or holder of the goods. The customs authorities then typically release the detained goods on provision of a guarantee, which shall be sufficient to protect the interests of the right holder. The amount of the guarantee shall basically be equal to the amount the importer of the goods would have to pay as damages for the infringement of the detained goods. The right holder’s indications will be taken into account when determining the amount of the guarantee. However, if no agreement between right holder and importer can be reached on a reasonable amount, the customs authorities will determine it. According to Article 24(2)(b) of the Regulation, the customs authorities will not release the detained products if the “authority empowered for this purpose has authorized precautionary measures.” That is, customs would not release the detained goods even on the provision of a sufficient guarantee by the importer if the right holder can provide an executable court decision ordering the impounding of the detained goods. Accordingly, the maintenance of the detention requires not only that court proceedings have been initiated by the right holder, but also that a court reviews the situation and renders an executable decision.
The specific procedure for small consignments of counterfeit and pirated goods has been introduced in order to minimise the administrative burden and costs. It simplifies the standard proceedings and responds to the growing amount of infringing goods ordered through the internet and sent by postal services. The procedure allows for such goods to be destroyed without the explicit agreement of the applicant in each case.
The procedure based on the German national rules is comparable to European rules but not completely the same. Even under German law the absence of an objection and appropriate subsequent action may lead to the destruction of the detained products. Where no opposition to the detention is made by the importer, at the latest within two weeks of service of the notification of the detention, the customs authorities shall order confiscation of the detained products, which consequently results in the destruction of the detained products (§142a(3) of the Patent Act).
If the importer objects to the detention, the customs authorities inform the right holder and if the right holder intends to proceed, it must submit an executable court decision ordering the impounding of the detained goods. This is different from the European customs action proceedings, where it is sufficient to simply prove that regular proceedings on the merits have been initiated. The detention triggered by a German customs action requires not only that court proceedings have been initiated, but also that a court reviews the situation and renders an executable court decision. As this decision must be provided within a short time frame, namely within two weeks, the right holder must initiate preliminary injunction proceedings to achieve this goal. Where the right holder can show that a court decision has been requested, but has not yet been received, the seizure shall be maintained for a further two weeks at most.