IT-Silkroad

[Trade and Intellectual Property Protection System]

■ Outline

The Customs Act in Japan, which has reflected the Agreement on Trade-Related Aspects of Intellectual Property Rights(TRIPS) since 1995, designated the goods which infringe on intellectual property rights, and specified very detailed regulations to protect intellectual property rights.(RIPS)

Setting aside the determination whether intellectual property rights are infringed or not, the intellectual property right protection system by the Customs Act works as quite effective prevention means despite the difficulty of finding infringing goods, because import clearance is a rite of passage in international trade.

Such protection system is applied to not only Japan, but all signatories to WTO. Accordingly, RIP holders, etc. need to utilize on such system by the Customs Act, and any person who deals with the goods which have risk to infringe on RIPs shall pay attention to the system.

Hereinafter, from among the areas of intellectual property rights, etc. the areas relating to importation to importation, prescribed by the Customs Act, will be outlined.

■ Legal Base and the Scope

☉ Legal base

The Customs Act(Article 69- 2) specifies articles which infringe upon intellectual property rights, along with drugs, child pornography, etc. as the one of designated goods with prohibitions on export and import.

☉ Applicable scope

ㅇ Articles which infringe upon intellectual property rights

Articles which infringe upon patent right, utility models right, industrial designs right, trademarks right, copyrights, neighboring rights, or breeder‘s rights, Layout-Design Exploitation Right(applied for import only), etc.

ㅇ Articles which may be mistaken for someone else's goods and may cause confusion as such

Goods which may cause misunderstanding or confusion of ordinary people because the relevant goods are similar with someone else's goods in labels, shapes, etc.(Behaviors prescribed in Article 2, Paragraph 1, Subparagraph 1~3 of Unfair Competition Prevention Act)

■ Application for Suspension

Application for Suspension is the procedure that IPR holders request Customs to initiate Identification Procedures in the case Customs detects goods suspected of infringing their IPR in imports or exports.

Layout-design rights are exempt from the procedure,　however “Information Recordation” can be made at Customs for suspension.

■ Conditions for Approval

To submit an Application for Suspension at Headquarters of regional Customs, a right holder has to fulfill following basic conditions. Otherwise, Customs will not approve it because the application for suspension may do enormous harms on others. If all the conditions are fully satisfied, the application is approved with a validity period of not more than two years

1) Ownership of the right has to be proved

Right holders and certain registered exclusive licensees are qualified for lodging an application. Applications may be filed by their proxies such as lawyers or patent attorneys, with “Power of Attorney” issued by right holders, etc.

2) The IPR has to be valid

Applications cannot be lodged until the registration of IPR has been completed with the Japan Patent Office or other responsible government agencies. In the case of patent registration pending, such applicant may not be qualified for application. In the case of unfair competition, the applicant has to submit “The Written Opinion of the Minister of Economy, Trade and Industry” to Customs.

3) The IPR has been infringed or is likely to be infringed

“Infringed” or “likely to be infringed” covers importation or exportation as well as future possibility of importation or exportation.

4) Evidence has to be provided to satisfy Customs that there is Prima Facie an infringement of the IPR

The evidence provided has to satisfy Customs that there is a likely infringement of the IPR. Adequate evidence such as infringing goods, their product catalogue, or photos may be submitted.

5) Information concerning the goods has to be provided to enable Customs to identify infringing goods

Sufficient information has to be submitted to Customs for product identification in Customs inspection.

■ The Procedure of Application for Suspension

1. Applications for suspension shall be lodged with any one of regional Customs Headquarters. Following documents are requested to be submitted to an IPR section of Customs Headquarters which you select.

ㅇ An application form

ㅇ A transcript of the IPR Registry and the IPR Bulletin

ㅇ Prima facie evidence of the infringement of your IPR, samples, pictures, etc.

ㅇ Documents providing the basis for calculation of a security against possible damages caused by a release of suspended goods

ㅇ Power of attorney(In case the application is lodged by a proxy)

ㅇ Other Data, etc. to prove applied matters

2. The director of Customs who accepted the application, where the relevant importer may have risk for being lost, may request such applicant to deposit considerable money for guaranteeing such damage(approximately 20% of import declared amount).

■ Identification Procedures for Application for Suspension

1. Initiation of Identification Procedures

When Customs detects suspected goods in the course of physical inspection on imports of general cargoes (sea and air) or postal items, Identification Procedures are initiated( the case subject to Investigation Procedures for Offences shall not go through such identification procedures.)

2. Notification of initiation letter

When suspected goods are detected, Customs notifies both importers and right holders of the initiation of Identification Procedures by providing them respectively with relevant information such as names and addresses of parties concerned.

3. Submission of related documents, review, etc.

ㅇ Both right holders and importers are provided with equal opportunities to submit their opinions and evidence to Customs within 10 working days (3 working days for perishable items) from the day following the date of the “Notification of Initiation” letter.

ㅇ In the cases based on approved applications for suspension, each party may inspect goods under Identification Procedures.

ㅇ Applicants may conduct “Sample Examination” (ex, dismantlement, analysis), on the condition that all the requirements for approval for “Sample Examination” are satisfied. Customs, if necessary, may request applicants to provide deposits to guarantee the damage of importers.

ㅇ Importers may take a measure of “Voluntary Disposal” (ex, destruction, abandonment, reshipment, obtaining consent from the right holder, removal of infringing parts.). In the case of either consent from right holders or removal of infringing parts, Customs makes a decision of no infringement. In the other cases, Customs discontinues Identification Procedures.

4. The proceeding of identification procedures and notification of the result

ㅇ Opinions and evidence from one party are disclosed to the other party for submitting additional opinions, etc. Based on opinions and evidence from both parties, Customs makes a decision as to whether the suspected goods are infringing IPRs or not (decisions are expected to be made within one month).

ㅇ To notify the result of the Identification Procedure, “Notification of Decision” letter is sent to both right holders and importers. If it is decided that the goods are not infringing IPRs, an import permit is granted.

If it is decided that the goods are infringing IPRs and no measures of voluntary disposal have been taken during the period for protest (for two months), Customs may confiscate and destroy the infringing goods.

■ Other References

ㅇ Application for suspension system is highly useful, and very effective to protect intellectual property rights in Japan.

ㅇ Meanwhile, this system needs to be utilized carefully considering that it may inflict immense harms on importers with good will. Importers are required to check whether their handling items are subject to goods infringing RIPs. You can find the information by accessing to the homepage of Customs or Customs Intellectual Property Information Center(CIPIC).

ㅇ The goods which are decided to infringe IPRs are almost impossible to be returned to original exporters(Export approval of Customs, consent of right holder, approval of related agencies, etc. are required to return, or there aren't any ways to return especially for goods infringing patent rights and trademark rights.).

ㅇ Customs usually inspects even the items which aren't applied for suspension by rights holders but, such goods are a little bit difficult to be inspected effectively. If Customs detects any goods suspected of infringing the IPRs, it may take measures to suspend importation and proceed with identification procedures as ex-officio.