Customs
Loses Power to Interdict Patent Violating Goods at the Border
By Notification Nos. 56-Customs (NT) and
57-Customs (NT) dated 22 June 2018 the Customs has lost its power to interdict
patent infringing goods at the time of Customs clearance.
In the previous dispensation, a patent
registered with the customs, was automatically enforced at the border by an
alarm triggered by the EDI computer which raised a flag from the inward
manifest when goods registered patents entered a port.
The patent infringing goods import was
prohibited under Sec. 11 of Customs Act, 1962 which offence could result in
confiscation of the goods and their destruction.
Thus many multinationals gained patent
protection at the border itself without going to a Court of Law to decide
infringement. This provision in the border rules was deliberately inserted in the
2007 law by certain vested interests in the customs who wanted a source of
income from legal practice of patent law after their retirement. They went
beyond the TRIPs Agreement at WTO which allowed waiver of patent enforcement at
the border to Developing Countries.
(The fact of Indian Border Rules on
patent enforcement in going beyond WTO TRIPS was first pointed out by the Academy
of Business Studies in 2007. It has taken 11 years for the government to amend
the rules and bring with the special treatment offered to developing countries
by WTO).
Many Indian manufacturers harassed by
the customs on account of registered patents will get a relief. The imposters
in India who registered false patents in order to blackmail importers will also
lose ground. The Ramkumar case of 2007 comes to our
mind. The worthy from “inventor” from Madurai registered a false patent for
dual sim mobile phones of suitcase size. He demanded and secured, some 60 crore
rupees from reputed importer like Samsung as licence
fee to import dual sim phones. Finally, the law caught up on him, the IP
Appellate Border overturned his patent and the customs allowed free import of
dual six phones without Ramkumar’s NOC (No Objection
Certificate).
The amended Border Rules do not mean
that India will not give protection to patents. A regular Court of Law as well
as the IPR Appellate Board (IPAB) may be moved to secure injunction to stop
infringement at the point of sale.
In the two notifications reference to
Patent Act 1970 have been omitted. In the registration as well as enforcement
system. Other IPRs like copyright, designs and trade mark will however continue
to get protection at the border.
Past cases will, however, be adjudicated
at the customs border for the old law.
[Notification
No. 56/2018- Customs (N.T.) dated 22 June 2018]
G.S.R.
581 (E).- In exercise of the powers conferred by sub-section ( I) of section
156 of the Customs Act, 1962 (52 of 1962), read with clauses (n) and (u) of
sub-section (2) of sect ion 11 of the said Act, the Central Government, being
satisfied that it is necessary in the public interest so to do, hereby makes
the following rules to amend the Intellectual Property Rights (Imported Goods)
Enforcement Rules, 2007, notified by the Government of India in the Ministry of
Finance (Department of Revenue), Notification
No. 47/2007-CUSTOMS (N.T.), dated the 8th May, 2007, published in the
Gazette of India, Extraordinary, Part II, Section 3, Sub-sect ion (i), vide number G.S.R. 331 (E), dated the 8th May, 2007,
except as respects things done or omitted to be done before such amendment,
namely:-
I (i) These rules may be called the
Intellectual Property Rights (Imported Good s) Enforcement Amendment Rules,
2018.
(ii) They shall
come into force on the date of their publication in the Official Gazette.
2. I n the said
rules, -
(A) in rule 2, -
(i) in clause (b), the words and figures
"patent as defined in the Patents
Act, 1970," shall be omitted;
(ii) in clause (c), the words and figures "the Patents Act, 1970," shall be omitted;
(B) in rule 5, after
condition (b), the following conditions shall be inserted, namely:-
"(c) the right
holder or his authorised representative shall inform
the Commissioner of Customs at the time of giving notice about any amendment,
cancellation, suspension, or revocation of the Intellectual Property Right by
the authorities under the Intellectual Property Laws or any Court of Law or
Appellate Board, subsequent to its registration with the authorities under the
Intellectual Property Law and in case of any such amendment, cancellation,
suspension or revocation of the Intellectual Property Right during the validity
of the notice registered under rule 4, the same shall be brought to the notice
of the Commissioner of Customs by the right holder within a period of one month
of the date of communication of any such amendment, cancellation, suspension or
revocation of the Intellectual Property Right to the right holder or any person
authorised by him in this regard;
(d) in the event of any amendment, cancellation, suspension or
revocation of the Intellectual Property Right by the authorities under the
Intellectual Property Law or by any Court of Law or Appellate Board, the
Commissioner of Customs may accordingly amend, suspend or cancel the notice and
the corresponding protection."
[F.
No. 394/04/2018-Cus(AS)]
[Notification No. 57/2018- Customs
(N.T.) dated 22 June 2018]
G.S.R.
582 (E).- In exercise of the powers conferred by section 11 of the Customs Act,
1962 (52 of 1962), the Central Government, being satisfied that it is necessary
in the public interest so to do, hereby makes the following amendments in the notification
of the Government of India in the Ministry of Finance (Department of Revenue) No.
51 /2010-CUSTOMS (N.T.) dated the 30'" June, 2010 published in the Gazette
of India, Extraordinary , Part II , Section 3, Sub-section (i),
vide number G.S.R. 568(E), dated the 30'" June, 2010, except as respects things
done or omitted to be done before such amendment, namely:-
1. In the said notification,
(i) Clauses (iv) and
(v) shall be omitted;
(ii) in the Explanation, the words, figures and brackets "the Patents Act, 1970 (39 of 1970),"
shall be omitted;
2. This notification shall
come into force on the date of its publication in the Official Gazette.
[F.No.394/04/2018-Cus(AS)]