Europe Moving Toward "Section-337-Style" Import Exclusion Regime

On July 22, 2003, the European Union ("EU") adopted council regulations on customs action against goods suspected of infringing intellectual property.

Council Regulation (EC) No 1383/2003 will replace the existing customs regime under Regulation Nos. 3295/94 and 241/1999 when it comes into force in July 2004. Like Section 337 of the U.S. Tariff Act of 1930, the European regulation sets out the conditions for action by the customs authorities when goods are suspected of infringing an intellectual property right and fixes the measures to be taken by authorities when goods are found to infringe. In Europe, those rights include patents, supplementary protection certificates, national plant varieties, protected designations of origin, protected geographical designations, and moulds or matrices which are specifically designed for the manufacture of infringing goods.

While most U.S. import exclusion investigations for rights other than trademarks and copyrights are resolved by the U.S. International Trade Commission in about 12-18 months, European Member States will have to decide rights holders' applications for action against infringing goods within 30 days. However, in exchange for such speedy resolution, European applicants will have to agree accept liability to indemnify the importer in the event that 1) an exclusion procedure is discontinued due to an act or omission by the right-holder, or 2) the goods in question are subsequently found not to infringe. Infringement determinations will be made under the national law of Member State where the goods are entered or found.

Unlike U.S. law, which provides only for exclusion and/or and cease and desist orders, goods found to infringe in Europe will not be allowed entry into the Community customs territory, release for circulation or removal from the Community customs territory, export, or re-export. Allegedly infringing importers in Europe may also obtain release of their goods upon provision of a security that is sufficient to protect the interests of the right-holder. In contrast, U.S. rights-holders may be required to post a bond as a prerequisite to obtaining preliminary relief during the investigation, while infringing importers in the U.S. may be required to post a bond if they wish to continue their importation during the 60-day Presidential review period following a final decision of the Commission.

More information about how European rights holders can protect themselves from counterfeiting and piracy is available here.

More information about how stop unfair import practices in the U.S. is available here, or by contacting the author, Bill Heinze (BillHeinze@tkhr.com) at Thomas, Kayden, Horstemeyer and Risley in Atlanta, Georgia USA.