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Transcript of 1 Counterfeit & Substandard ICT Devices ITU Headquarters Geneva, 17 November 2014 The Fight Against...
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Counterfeit & Substandard ICT DevicesITU Headquarters
Geneva, 17 November 2014
The Fight Against Counterfeiting and Piracy:
The Contribution of the WTO's TRIPS Agreement
Roger Kampf
WTO Secretariat
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Economic Relevance (1):Mobile Cellular Subscriptions
(% of population)*
*Source: World Bank World Development Indicators
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Economic Relevance (2):Active Trademarks in Selected Sectors*
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Trademark Applications Since 1995* Status: Active
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Active TMs by Selected Origin*
*Source: WIPO Global Brand Database (viewed on 11.11.2014)
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Enforcement under TRIPS
• TRIPS = first international treaty with detailed section on enforcement
• Objective = make available (→ private rights) effective tools to guarantee application of substantive rules, including:– Expeditious remedies to prevent infringements
– Remedies constituting a deterrent to further infringements
• Application of basic principles:– Minimum level of protection, but not harmonisation
at multilateral level– Freedom to determine appropriate method of
implementation– Non-discrimination rules– WTO dispute settlement
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All Types of IPR Infringements• General obligations characterized by search for a
balanced regime:
• Prompt and effective provisional measures must be available
Right Holders Users
Effective enforcement Procedures not to become barriers to legitimate trade
Remedies: injunctions, damages, other
Built-in safeguards against abuse of procedures, including
indemnification of defendantRight of information
All Stakeholders: Principles of Due Process
Fair and equitable procedures
Decisions on the merits of a case
Opportunity for review by a judicial authority
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Counterfeiting and Piracy:Additional Obligations
Border Measures Criminal procedures
Conditions/safeguards•adequate evidence•detailed description of the goods•security or equivalent assurance•indemnification
Conditions:(i)wilful act(ii)of trademark counterfeiting or copyright piracy(iii)on a commercial scale
Procedures•notice of suspension•10 working days to initiate proceedings•right of inspection and information
Remedies:•destruction•disposal of infringing goods outside channels of commerce
Remedies:•imprisonment and/or •monetary fines sufficient to provide a deterrent
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Counterfeit: Definition / Scope
• Counterfeit TM:– slavish copying of
TM– deliberately gives
impression of being genuine product
– fraud usually involved since confusion between genuine product and copy is intended
• Ordinary TM infringement:– infringer’s mark is
sufficiently close to registered mark
– leads to likelihood of confusion
Art.51 Fn. 14(a):•defines « counterfeit trademark goods »•Establishes clear link with trademarks•Distinct from other forms of TM infringements
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Members’ Legislation and Practice• From a narrow to a broader meaning ?• Some Members laws and practice link term to
other IPR categories in addition to trademarks– EU Communication (IP/C/W/471):
• « counterfeiting of medicines has also undergone considerable mutations (…), commercial shipments are being discovered to contain hundreds of kilos of products infringing patent rights, whereas a while back they would have infringed trademark rights. »
• « confining the scope of customs intervention to trademark or copyright goods is no longer appropriate, (...). Fraud rings (...) now prefer to counterfeit patents, geographical indications or plant varieties (...). »
• Consequence of « loose usage » of terminology:– EU Commission Report on Customs Activities on
Counterfeit and Piracy 2007: Switzerland as main source of counterfeit medicines ?
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Selected Optional Provisions
• Border measures with respect to:– IPRs other than counterfeit trademark
and pirated copyright goods– exports and goods in transit– parallel imports– de minimis imports– ex officio action
• Criminal procedures with respect to:– IPRs other than counterfeit trademark
and pirated copyright goods
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How to Handle Goods In Transit (1):The EU Example
• Nokia Corporation v HM Commissioners of Revenue & Customs, High Court, England and Wales, 27 July 2009:– Customs detained suspect telephones/accessories
• Bearing Nokia trademark• Shipped from Hong Kong, China to Colombia• Nokia confirmed that telephones were fake
– Justice Kitchin:• No threat of goods being released on the Union market• Hence, not to be treated as counterfeit goods • But recognition that result is not satisfactory: “I can only hope it
provokes a review of the adequacy of the measures available to combat the international trade in fake goods by preventing their transhipment through Member States.”
– Appeal by Nokia:• Question referred to CJEU for preliminary ruling• Reason: divergent interpretation of EU Customs Regulation in
other EU member States (Sisvel v Sosecal, Court of The Hague, 18 July 2008 and Philips v Far East Sourcing Limited, Antwerp Court of First Instance, 4 November 2009)
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How to Handle Goods In Transit (2):The EU Example
• EU Customs Regulation 1383/2003:– Extended to goods in transit– Commission Communication 2005: controls, including
during transhipment protect not only the EU but also other parts of the world and, in particular, LDCs
• CJEU Decision (joined cases C-446/09 and C-495/09, Philips/Nokia, Dec.2011)
• Commission Guidelines (Feb. 2012)• Regulation 608/2013:
– Recital (11): substantial likelihood of diversion of medicines onto EU market to be taken into account
– Nothing is said about handling of other products• Trademark reform: right holders to be entitled to
take action against infringing goods, regardless of release for free circulation
• Remember: coverage of goods in transit optional under TRIPS
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Ad hoc discussions in TRIPS Council• Communications EU, US, CH, Japan (2005-07):
– Called for information exchange, awareness raising, examination of TRIPS compliance and best practices
– Suggested focus on border measures, based on right holders’ involvement, Customs coordination
• Communication US (2012):– Set out initiatives to secure supply chains– Reported on infringing mobile phones as representing
one-third of seized consumer electronic goods in 2011• Communication Japan (2012):
– Reported on trends in Customs seizures and action taken to enhance Customs officers’ expertise
– Mobile phones / accessories represented 2% of the total number of cases of suspension by Customs
– Number of cases almost doubled in six years (563 cases in 2011, as compared to 289 cases in 2007)
• In-transit generic medicines (2009-10)• FTAs/RTAs/ACTA
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Enforcement Provisions in RTAs
• Survey of 245 RTAs with IP provisions notified to the WTO as of Feb.2014
• Provisions on border measures covered by:– 100% of RTAs between developed countries– 62% of RTAs between developed-developing countries
• Source: Valdés/McCann, IP Provisions in RTAs, WTO Staff Working Paper (June 2014)
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Useful Sources of Information at WTO• Review of TRIPS implementing legislation• Checklist of Issues on Enforcement:
– Responses submitted by 104 Members– But: not regularly updated by all Members
• Use of Article 63.3 to gather information• Notification of contact points (Article 69):
– Exchange of information on trade in infringing goods– Promotion of cooperation between customs authorities
with regard to counterfeit trademark / pirated copyright goods
– Objective: elimination of international trade in goods infringing IPRs
• TPR reports - example of Chinese Taipei (2014):– Cell phones among main imported commodities
infringing trademarks – general trend = decreasing– Counterfeit mobile phones also lead export
commodities infringing trademarks – general trend = increasing
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Dispute Settlement Cases (1)
• China - Measures affecting the Protection and Enforcement of IPRs (WT/DS362):– Customs measures:
• Goods destined for exportation: application of remedies in Art.59 not mandatory
• Imports:– auctioning/donation of infringing goods not prohibited
(Art.59, 46 first sentence)
– note US reference to counterfeit mobile phone batteries and related risk of donating defective or dangerous goods
– but sale of goods after simple removal of trademark inconsistent with Art.59, 46 fourth sentence TRIPS
– Criminal procedures and sanctions (Art.61):• Criminalization of all copyright / trademark
infringements not required
• Meaning of “commercial scale”
• Thresholds not endorsed, but lack of evidence
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Dispute Settlement Cases (2)• EU and member State – seizure of generic drugs
in transit: consultations requested by India (WT/DS408/1) and Brazil (WT/DS/409/1)
• Measure at issue:– EU Customs Regulation 1383/2003 and other EU / Dutch
legislative provisions, as well as Dutch Court decisions
• Requests refer, among others, to:– GATT: Art. V (freedom of transit), Art. X:3
– TRIPS:• Art. 28 in conjunction with Art.2 and Art.4bis Paris
Convention, para.6(i) of August 2003 Decision (limits to patent rights conferred)
• Art.41, 42 (barriers to legitimate trade)
• TRIPS interpretation and implementation in light of Art.7 and 8, Doha Declaration on TRIPS and Public Health, as well as International Covenant on Economic, Social and Cultural Rights
• Both cases pending
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Beyond TRIPS: TBT Committee• 2011 Measure - conformity assessment
procedures for mobile phones in Viet Nam:– Import only through three international seaports
– Additional Customs documentation with consulate approval in exporting countries
• Concerns raised in TBT Committee (June 2011- June 2012):– US et alia: measures create new requirements, such
as submission of quality control certificate; designation of specific ports of entry; selection of products?; non-discriminatory application?; etc.
– Viet Nam: measures aim at preventing smuggling and import of counterfeit mobile phones, protecting consumers’ safety and health; cosmetics, alcohol and mobile phones among largest group of imported counterfeit products
• TPR report (2013): – Measure abrogated with effect from 1 January 2013
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• TRIPS Agreement can contribute– To fighting counterfeit ICT equipment– Not to combating substandard ICT equipment
• Need for a sector-specific debate on counterfeit ICT equipment in TRIPS Council?
• And if so, what are the lessons to learn from earlier discussions, in particular regarding counterfeit health technologies:
– Potential health impact of counterfeit products
– Link between affordability and marketing of counterfeit products
The Way Forward (1)
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• Need to ensure:
– Concise use of terminology:
→ substandard ≠ contraband ≠ counterfeit
– Coherence at all levels
– Adequate capacity building and awareness raising: to begin with collaboration among relevant IGOs
• Is there a need to:– Cover other types of IPR infringements?
– Address the «secondary» impact of counterfeit and substandard ICT equipment, e.g. where used to trace other counterfeit products (medicines)?
– Gather additional facts and empirical data?
The Way Forward (2)