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Question Q208 National Group: German Group Title: Border Measures and other means of Customs Intervention against Infringers Contributors: Klaus Haft, Franz Hacker, Gunnar Baumgärtel Katja Grabienski, Klaus Grabinski, Clemens-August Heusch,

Björn Joachim, Martin Kefferpütz, Thomas Kühnen, Anja Lunze

Date: March 4th, 2009 I. Analysis of current law and case law

1. Do the laws of your country provide for border measures? If so, what is the legal basis?

Yes, border measures of customs authorities against property right-infringing goods are

provided for in Germany, both on the basis of European Community Law as well as on

the basis of the national law.

Under Community law, the intervention of customs authorities - concerning all property

rights - is governed by Council Regulation (EC) No. 1383/2003 concerning customs

action against goods suspected of infringing certain intellectual property rights and the

measures to be taken against goods found to have infringed such rights1 effective since

July 1, 2004 (hereinafter referred to as 1383 Regulation)2. Provisions for its

implementation are laid down in Council Regulation (EC) No. 1891/20043, as amended

by Council Regulation (EC) No. 1172/20074. Additional national implementation

provisions can be found - in a decentralized manner - in the individual laws concerning

the protection of intellectual property rights, e.g. Sec. 142b German Patent Act [PatG],

Sec. 150 Trademark Law [MarkenG], Sec. 111c Copyright Act [UrhG], Sec. 57a Design

Act [GeschmMG] and Sec. 40b Plant Varieties Protection Law [SortG].

On the national level, border measures against property right-infringing goods are

provided - also in a decentralized manner - in the various laws concerning the protection

1 OJ No. L 196 dated August 2, 2003, p. 7. 2 The provisions that applied prior to that were the Regulation (EEC) No. 3842/86 (OJ No. L 357 dated

December 18, 1986, p. 1), and the Regulation (EC) No. 3295/94 (OJ No. L 431 dated December 30, 1994, p. 8) as amended by Regulation (EC) No. 241/1999 (OJ No. L 27 dated February 2, 1999, p. 1).

3 OJ No. L 328 dated October 30, 2004, p. 16. 4 OJ No. L 261 dated October 6, 2007, p. 12.

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of intellectual property rights, such as in Sec. 142a PatG for patents, in Sec. 25a Utility

Model Act [GebrMG] for utility models, in Secs. 146-149, 151 MarkenG for trademarks,

other marks and geographic information, in Sec. 111b UrhG for copyrights, in Secs. 55-

57 GeschmMG for designs and in Sec. 40a SortG for plant varieties.

As is made explicit in each of the above-mentioned national provisions, the Community

law provisions in their area of application take precedence over the national provisions. In

order to define this precedence more closely, one must acknowledge the following three

premises:

a) The European Union with its currently 27 member states forms a customs union with

common external customs borders to third states (Art. 23 I EC Treaty [hereinafter

referred to as EC]. The joint border regime is laid down in Regulation (EEC) No.

2913/92 establishing the Community Customs Code (hereinafter: Community

Customs Code). Beside that, the internal borders between member states continue to

be in place, however, without any customs duties being levied. Border controls do

generally not take place, either.

b) The common external customs border is not controlled by a Community customs

authority, but by the national customs authorities (for Germany see Sec. 1 I of the

Customs Administration Law - ZollVG). The same applies to the internal borders, to

the extent that controls are still being carried out (for Germany see Sec. 1 II, III

ZollVG).

c) The property rights to be protected can be either national property rights or

Community property rights with Community-wide applicability. Such Community

property rights currently include the Community Trademark5, the Community Design6

and Community Plant Variety Rights7. These are supplemented by protection on a

Community level for geographical indications and designations of origin for

agricultural products and foodstuffs8, for wines9 and spirit drinks10.

5 Based on Regulation (EC) No. 40/94, OJ No. L 11 dated January 14, 1994 as amended from time to

time. 6 Based on Regulation (EC) No. 6/2002, OJ No. L 3 dated January 5, 2002 p. 1. 7 Based on Regulation (EC) No. 2100/94, OJ No. L 227 dated January 9, 1994, p. 1. 8 Based on Regulation (EC) No. 510/2006, OJ No. L 93 dated March 31, 2006, p. 12. 9 Based on Art. 33 ff. of the Regulation (EC) No. 479/2008, OJ No. L 148 dated June 6, 2008, p. 1. 10 Based on Art. 15 ff. of the Regulation (EC) No. 110/2008, OJ No. L 39 dated February 13, 2008, p.

16.

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Concerning action of the customs authorities, this action is mainly governed by the 1383

Regulation. This applies irrespective of whether the goods in question infringe a

Community property right or a nationally or internationally registered property right.

According to Art. 1 I of the 1383 Regulation, customs action may be considered in

particular in the following situations:

- when goods are entered for release for free circulation, export or re-export in

accordance with Art. 61 of the Community Customs Code;

- when goods are placed under a so-called suspensive procedure within the meaning

of Art. 84 I (a) of the Community Customs Code (e.g. external transit procedure,

bonded warehouse, temporary use);

- when goods are placed in a free zone or free warehouse within the meaning of Art.

166 of the Community Customs Code.

A particular situation is that of property rights with Community-wide scope, because these

can potentially be infringed along the entire external EU border, i.e. in several member

states. If the property right owner wishes to proceed against this infringement not only in

one, but in several or all member states, then Art. 5 IV of the 1383 Regulation provides

for a procedure by which customs action of the authorities in several or all member states

can be applied for with a single application in one member state.

The national protective provisions therefore only apply in the following cases:

a) when mere national action is required and the European law leaves room for it. This

is the case with respect to certain types of national property rights (e.g. utility models,

trademark rights which are not registered, see Question 3), and generally with

respect to combating illegal parallel imports (see Question 4).

b) to the extent that controls take place in internal trade.

2. Do the laws of your country provide for other measures of customs intervention against

infringers? If so, which ones and what is the legal basis?

Yes. Not even the conditions for action by the customs authorities according to Art. 1 I of

the 1383 Regulation listed in the answer to Question 1 are limited to actions at the

external EU borders in the narrower sense. For example, the term 'suspense procedure'

according to Art. 84 I a of the Community Customs Code also comprises the external

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transit procedure and the temporary use. The external transit procedure e.g. relates to

goods which are not to be imported into the territory of the EU, but which are merely

transported through the Community territory under customs seal, but also to goods which

are transported from an external border to an internal customs office. To this extent, it is

generally possible to also seize goods in transit11 (however, concerning the question of

infringement in this case see Question 9 below). The suspense procedure for temporary

use includes e.g. goods destined to be exhibited and offered at trade fairs. In this respect,

a customs seizure of property right-infringing goods before or at trade fairs and

exhibitions is possible under certain conditions12 and is of considerable practical

relevance.

On a national basis, the customs administration has additionally set up so-called Traffic

Routes Control Units ["Kontrolleinheiten Verkehrswege"]. These are able to seize

property right-infringing goods, preferably close to the borders, but also in the remaining

territory of the Federal Republic of Germany on the basis of Secs. 1 III, 10 ZollVG.

3. Are border measures and other measures of customs intervention against [infringers]

(collectively referred to as "border measures") only available for pirated copyright and

counterfeit trademark goods, or also for goods infringing other IP rights? If so, for which

types of IP rights are border measures available?

Are border measures in particular available for goods infringing patents, plant variety

rights, common law marks, unregistered design rights or geographic indications?

Originally, the Community Law only provided for action against trademark infringing

goods.13 However, subsequently the scope of these provisions has been gradually

extended. According to Art. 2 I of the 1383 Regulation as amended, border action can be

taken in the event of infringements of the following intellectual property rights:

- registered trademarks (national registered marks, international registrations of the

WIPO14 with a scope extending to the European Union or Germany, Community

trademarks); this comprises not only goods bearing a trademark without

authorisation, but also packagings bearing the infringing mark, presented separately,

and trademark symbols such as logos, labels, stickers, brochures etc.;

- copyrights and related property rights;

11 ECJ GRUR Int. 2000, 748, 750 (No. 26, 27) – Polo/Lauren/Dwidua; GRUR 2004, 501 – Straffreie

Rolex-Plagiate; see also ECJ GRUR 2007, 146, 148 (No. 35 ff.) - Montex v. Diesel. 12 On this aspect see Rinnert/Witte GRUR 2009, 29, 35. 13 Art. 1 II Regulation (EEC) No. 3842/86. 14 WIPO=World Intellectual Property Organization.

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- registered national and Community design rights; wherein design rights with deferred

publication may also form the basis of customs action, provided that the registration

documents including pictures are submitted to the central customs authorities;

- patents and supplementary protection certificates according to Regulations (EC) No.

1768/92 (medicinal products) and No. 1610/96 (plant protection products);

- national and Community plant variety rights;

- geographical indications protected under national law;

- designations of origin and geographical indications for agricultural products and

foodstuffs protected on the Community level according to the Regulation (EC) No.

510/2006 which has replaced the Regulation (EEC) No. 2081/92 still mentioned in

Art. 2 I of the 1383 Regulation;

- geographical indications for wine protected on the Community level according to the

Regulation (EC) No. 479/2008 which has replaced the Regulation (EEC) No.

1493/1999 still mentioned in Art. 2 I of the 1383 Regulation;

- geographical indications for spirit drinks protected on the Community level according

to the Regulation (EC) No. 110/2008 which has replaced the Regulation (EEC) No.

1576/89 still mentioned in Art. 2 I of the 1383 Regulation;

According to national law, customs action may also be considered in the case of

- utility models (Sec. 25a GebrMG);

- unregistered marks protected according to German law by virtue of their secondary

meaning or notoriety (Sec. 146 in conjunction with Sec. 4 No. 2 and No. 3 MarkenG);

- business names, i.e. company names and work titles (Sec. 146 in conjunction with

Sec. 5 MarkenG);

- Semiconductor property rights (Sec. 9 II Semiconductor Protection Act [HalbLSchG]

in conjunction with Sec. 25a GebrMG).

Is actual registration of the IP rights required or is an application to register sufficient?

An intervention of the customs authorities requires that the property right in question

actually exists; to the extent that a registration is required for this, a mere application to

register and/or a use is not sufficient.

Does unfair competition, passing off or the like, give rise to border measures?

No.

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4. Are border measures available for parallel imported goods?

According to Art. 3 I Para. 1 of the 1383 Regulation, unauthorized parallel imports are

exempt from the scope of the 1383 Regulation. However, according to the view held by

the Supreme Tax Court15, and shared by the Federal Government16, yet partly criticized

in the literature17, it is possible to proceed according to the national law which additionally

applies, e.g. Secs. 146 ff. MarkenG in the area of trademarks.

The same applies with respect to original goods to the further sale of which the property

right owner objects for justified reasons, in particular because the goods were modified or

deteriorated after being placed into circulation18, and with respect to goods which were

manufactured by a licensee in violation of a special limitation of the license right.19

Are border measures available for goods contained in a travellers' private luggage?

According to Art. 3 II of the 1383 Regulation, goods in a travellers' personal baggage are

not subject to border measures unless the amount of goods exceeds the limits set for the

grant of a customs exemption, and unless there is evidence suggesting that the goods

are part of commercial traffic. The limit for distinguishing commercial and personal traffic

is generally a value of 430 Euros (for travellers by air or sea) or 300 Euros (for other

travellers) or 175 Euros (for travellers below 15 years of age, irrespective of the means of

transport)20. These allowances do not apply to goods sent by post.

Are there any other goods excluded by your border measures legislation?

No.

15 BFH GRUR Int. 2000, 780 - Jockey; also Fezer, Markenrecht, 3rd edition, Sec. 146 at 5;

Ströbele/Hacker, Markengesetz, 8th edition Sec. 146 at 8; Ingerl/Rohnke, Markengesetz, 2nd edition Sec. 146 at 3; von Schultz/Eble, Markengesetz, 2nd edition, Sec. 146 at 15.

16 See reasons for the draft bill relating to the improvement of the enforcement of intellectual property rights, BT-Drs. 16/5048, p. 34.

17 Knaak GRUR Int. 2000, 782; Heim WRP 2005, 167, 169; Beußel GRUR 2000, 188, 190; Gamerith, FS Koppensteiner, p. 365, 378 f.

18 For trademarks see Art. 7 II Trademark Directive/Sec. 24 II MarkenG and also Beußel GRUR 2000, 188, 190.

19 See Art. 3 I Para. 2 of the 1383 Regulation and for trademarks Art. 8 II of the Trademark Directive/Sec. 30 II MarkenG, and also Ströbele/Hacker, ibid., (fn. 14) Sec. 146 at 8.

20 Federal Ministry of Finance, "Der Zoll - Produktpiraterie im Visier" to be downloaded from www.zoll.de.

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5. Who is entitled to file an application for customs action?

According to Art. 5 I in conjunction with Art. 2 II of the 1383 Regulation, any holder of

the IP rights mentioned in no. 3 paragraph 1 above is entitled to file an application for

customs action, as well as "any other person authorised to use any of the intellectual

property rights mentioned", in particular licensees or their respective representatives.

The same applies with respect to the IP rights to be treated under national law

mentioned in no. 3 paragraph 2 above.

Is there a centralised system for managing multiple applications for customs action

through a single contact point?

In the Federal Republic of Germany it is the Central Authority for Intellectual Property

Law ["Zentralstelle Gewerblicher Rechtsschutz"] of the Federal Board of Finance

South-East ["Bundesfinanzdirektion Südost"] headquartered in Munich who is in charge

of all applications for customs action on account of the infringement of IP rights. For

Community trademarks, Community designs and Community plant variety rights, action

of the customs authorities of other member states can also be applied for through the

German Central Authority (Art. 5 IV of the 1383 Regulation).

What are the conditions for border measures? In particular, what level of evidence for

alleged infringement and other information is required by customs authorities regarding

the application for customs action?

a) According to Art. 5 V of the 1383 Regulation, an application for customs action must

be filed, containing all necessary information to enable the goods in question to be

readily recognised by the customs authorities, in particular an exact and detailed

description of the goods and information on the type of assumed infringement. This

minimum information can be supplemented by further information such as trade

channels and means of transport used, the technical differences between the original

goods and the counterfeited goods etc.. Additionally, the customs authorities have the

right to request additional information pursuant to Art. 5 VI of the 1383 Regulation that

is specific to the property right in question.

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b) The applicant has to submit a declaration accepting liability (according to the 1383

Regulation) or an absolute and unlimited security (in the case of national border

measures), see below.

c) According to Art. 9 I of the 1383 Regulation, following the above-mentioned

application, the customs office will take action - in particular by detaining the goods in

question - if there is a suspicion that these infringe an intellectual property right (i.e. one

of the property rights referred to in no. 3 paragraph 1 above). The sufficient but

necessary precondition for this is the "overwhelming likelihood of a property right

infringement"21.

In order for the customs authorities to become active on the basis of national

provisions, i.e. in the situations indicated in no. 3 paragraph 2 above, an "obvious

property right infringement" is required. A property right infringement as such is obvious

only if it is not subject to any reasonable doubt on the basis of conclusive and credible

information given by the applicant and on the basis of all other circumstances of fact

recognizable to the customs authority22.

In practice, however, the question as to whether there is any suspicion or whether an

infringement is obvious is regularly decided on the basis of the identification of

suspected products by the property right holder. A legal assessment by the customs

authority as to whether an infringement is actually present, does not and cannot take

place for practical reasons.

In contrast to this, the Düsseldorf Regional Court ruled that the customs authority has

an obligation of its own to assess a suspected property right infringement23. Seeing that

this assessment is limited to checking the presence of certain identification criteria

given by the property right holder, the assessment imposed on the customs authority

should at least comprise a verification of the supplied criteria for the objective

plausibility of a property right infringement.

To which extent are customs authorities willing to receive training by the right holder?

Apart from the information mentioned above which has to be given in the application for

customs action, the customs authorities, when taking action, may also consider

21 Benkard/Rogge/Grabinski, PatG, 10th edition, München 2006, Sec. 142a, at 20. 22 Benkard/Rogge/Grabinski, PatG, 10th edition, München 2006, Sec. 142a, at 4. 23 InstGE 9, 130, 137 - Druckbogenstabilisierer.

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information that they have received from the right holder/applicant during a hearing, see

Art. 9 I of the 1383 Regulation. In practice, the German customs authorities are very

open to training, in particular concerning the distinguishing marks of trademark and

design infringements. In any event, it is expedient and customary to provide information

material in electronic form for the customs intranet. Protective letters of those

potentially affected by customs action, i.e. of the potential infringers setting forth non-

infringement arguments from the point of view of the potentially affected party, are not

provided for, especially since - as stated above - a legal assessment as to whether an

infringement is actually present does not take place.

Do customs authorities generally require the provision of a security to protect the

owner, holder or importer of the allegedly infringing goods? If so, will such security

depend on the type of IP rights?

According to Art. 6 I of the 1383 Regulation, applications for action of a customs

authority shall be accompanied by a declaration of the right holder/applicant accepting

liability towards the persons affected by the customs actions in the event that a

procedure initiated by the customs authorities upon application of the right

holder/applicant is discontinued owing to an act or omission by the right

holder/applicant, or in the event that the goods in question are subsequently found not

to infringe an intellectual property right.

Furthermore, the right holder/applicant has to agree to bear all costs incurred under

customs control of the goods affected by the application. A security is not required; nor

is there an examination of financial standing.

According to national law, a security has to be provided in the form of an absolute bank

security (see Sec. 146 MarkenG, Sec. 111 b UrhG, Sec. 55 GeschmMG, Sec. 142 a

PatG, Sec. 25 a GebrMG, Sec. 9 HalblSchG, Sec. 40 a SortSchG).

May the customs authorities take ex officio measures? If so, what is the practical

relevance of ex officio action in your country?

According to Art. 4 I of the 1383 Regulation, the customs authorities may, if they "have

sufficient grounds for suspecting that goods infringe an IP right", suspend the release of

the goods or detain them for a period of up to three working days from the moment of

receipt of the notification by the right holder, in order to enable him to submit an

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application for customs action. The ex officio measures of the customs authorizes

provided for are thus limited to a short-time suspension of release, or detention of

suspected goods, in order to enable the affected right holder to file an application for

customs action. Further measures will only be taken if the right holder submits a

corresponding application within the three-days period mentioned above.

This option is indeed being made use of in practice, in particular in trademark and

copyright matters. Yet it does not dispense the right holder from generally enforcing his

rights by filing an application as described above.

Are customs authorities liable in case of wrongful ex officio detention?

This problem is of no particular relevance because the customs authorities in the

Federal Republic of Germany do not become active in the ex officio seizure of

suspected goods, but merely detain them for a very short period in order to give the

right holder the possibility to file an application for customs action. Therefore, a

comprehensive action of the customs authorities which may inflict substantial damage

to the owner/holder of the goods in question will only ever take place upon application

by the right holder who will then be liable.

6) Are customs authorities properly equipped to identify goods infringing patents, plant

variety rights, common law marks, unregistered design rights, geographic indications or

the likes?

Concerning the detention of products identified by the right holder as being suspicious,

the equipment of the German customs authorities leaves nothing to be desired - in

particular thanks to the intranet set up specifically for this purpose.

Concerning the assessment of a product and the legal ascertainment of a property right

infringement, an assessment as such does not take place and would hardly be feasible

in view of the large number of possibly infringed property rights and the large number of

customs offices and officers working there. Consequently, there is no equipment for this

purpose.

In the field of patent law, this occasionally gives rise to the impression that border

measures are mainly used in order to increase the readiness of the affected importers

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to make a compromise prior to the conclusion of civil law proceedings relating to the

question of infringement. This situation is sometimes seen as dissatisfactory.

A restrictive practice concerning the ascertainment of suspicions or obviousness could

be remedial here. For example, in the event of several similar imports, one could rely

on how a competent specialized court has assessed the case when the first import took

place. If the infringement is sufficiently clear to warrant the issuance of a preliminary

injunction - ex parte or upon hearing the opponent - then upon issuance of such a

preliminary injunction, border measures in the event of subsequent imports also appear

to be appropriate. However, should the facts of the case be so complex that

proceedings on the merits are required, it is not understandable why further border

measures should be appropriate before at least the first instance of such proceedings

has not been concluded.

In this context it should be avoided though - at least de lege lata - that border measures

associated with patents become exceptions that will hardly ever take place, contrary to

the intention of the 1393/2003 Regulation. This is true in particular because, owing to

the possibility of release against security, the encroachment is generally less severe

than in the case of injunctive relief. Therefore, the standard to be applied with respect

to the reliability of the suspicion could also be made dependent on which actual

encroachment a detention of the goods will probably entail for the presumable infringer

(e.g. is it likely that the goods are trade fair goods, and will their detention put the

presumable infringer's trade fair attendance at risk? Is the Christmas business at

risk?)24.

De lege ferenda, however, one should consider leaving the establishment of a

suspected property right infringement to the specialized courts, by applying for an

interlocutory judicial remedy. Here, it appears to be useful to be guided by Sec. 142a

(4) PatG:

(4) If the authorized party opposes the seizure, the customs authorities shall inform the applicant thereof without delay. The applicant shall be required to declare to the customs authorities, without delay, whether he maintains the application under subsection (1) in respect of the seized product.

1. If the applicant withdraws his application, the customs authorities shall lift the seizure without delay.

24 ref. to this aspect also Lunze, Grenzbeschlagnahme - ein zu scharfes Schwert?, in: Götting/Lunze, Überprotektion durch Geistiges Eigentum?, p. 167 ff.

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2. If the applicant maintains his application and submits an enforceable court decision ordering the impoundage of the seized product or a restraint on disposal, the customs authorities shall take the necessary measures.

However, like in inspection proceedings, the standard to be applied in this assessment

could differ from that in injunctive proceedings in that a sufficient likelihood of

infringement is sufficient in order to enable border measures to be taken. Conversely,

the specialized court could take into account protective letters, as is the practice

otherwise, and allow the alleged infringer opposing the accusation of infringement to

adequately defend himself. If the alleged infringer is then successful in such

proceedings in the first instance, further border measures between the same two

parties concerning similar products should be suspended.

Such a modified practice would not place an undue burden on the property right holder,

either. This would only be the case if the presumed infringer were to elude the due

process of law by making full use of all procedural options (such as impeding service

abroad by moving and renaming the company). Yet such behaviour as such could

already be seen as giving rise to a suspicion so that even such extreme cases could be

reasonably solved.

7) Is only the right-holder or also the owner, holder or importer of the allegedly infringing

goods notified once the customs authorities detain goods? How can the alleged

infringer obtain information about the status of border measures and what information is

provided by customs authorities to the alleged infringer?

First of all, the right holder is notified by the customs office concerned of a contact to be

named in the application. Depending on how difficult it is to identify the suspected

goods, the suspension of release/detention of the goods is either ordered directly and

the corresponding notification is sent out, or the information required for identification is

sent by fax for review. If in the latter case the right holder confirms the identification of

suspected goods, the release of the goods will also be suspended, or the goods will be

detained in accordance with Art. 9 I of the 1383 Regulation. The declarant or owner of

the detained goods will be notified thereof without delay pursuant to Art. 38 Customs

Code Regulation [ZollkodexVO], if possible by fax. If the right holder made an

application according to Art. 9 III of the 1383 Regulation, he and at least one other

affected party will be notified of the amount of goods, their value, country of origin, right

holder and type of property right. Since the contact information of the competent

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customs officer will also be given, it is usually possible without any problems to clarify

or inquire about further details, to the extent permitted by Art. 9 III of the 1383

Regulation.

8) What happens after notification? Briefly describe the procedure following notification. Is

the inspection of the allegedly infringing goods following notification usually carried out

by the right holder or by an expert?

As already mentioned, the inspection of the presumably property right-infringing goods

is a more informal process in practice in which only the right holder is involved. Upon

application of the right holder, the customs authorities may also provide him with

samples or specimen for further analysis.

Does your border measures legislation provide for a simplified procedure allowing the

destruction of the goods without there being any need to determine whether IP rights

have been infringed? If so, in which cases? Are samples of the goods preserved for

evidence purposes?

Since September 1, 2008, the procedure for the simplified destruction of goods

provided for in Art. 11 of the 1383 Regulation is also carried out in Germany. Apart from

a corresponding application by the right holder and the submission of a counterfeit

report, this requires the consent of the declarant, owner or holder of the goods in

question. First of all, a written consent is expected. However, this consent is deemed to

have been given unless an objection against the destruction is made within ten (for

perishable goods: three) working days. For submission as evidence in possible court

proceedings, samples and specimen are kept for the duration of one year.

If proceedings must be issued to determine whether the goods infringe IP rights, are

both civil and criminal proceedings available to determine infringement? What are the

advantages and disadvantages of the respective proceedings?

As stated above, the question as to whether a border measure (suspension of release)

is carried out is decided without waiting for the outcome of another proceeding. If,

however, a border measure is taken and the affected party opposes the simplified

destruction procedure, the right holder has to initiate proceedings for establishing the

property right infringement within a period of ten working days upon the suspension of

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release which can be extended to a maximum of twenty working days, and in the event

of perishable goods of a maximum of three working days.

The German customs authorities require the initiation of civil law proceedings.25 The

additional advantage of civil law proceedings is that a specialized court will deal with

the infringement issue.

According to European law it is sufficient that some kind of proceedings has been

initiated within 10 or 20 (or 3, respectively) working days (Art. 13 of the 1383

Regulation). In contrast to that, according to national law, an enforceable court decision

must be submitted within two or maximum four weeks (e.g. Sec. 142a IV PatG, Sec.

147 MarkenG). Hence proceedings on the merits must be conducted according to

Community law, while the national law relies on interlocutory relief.

What is the impact of a nullity action seeking to invalidate IP rights on the application

for customs action?

Since the customs authorities do not carry out an objective assessment, a nullity suit

against e.g. a patent is irrelevant at least as long as it has not been decided in the first

instance that the property right is not valid. But even after such a decision in the first

instance, border measures are generally possible, as long as the decision has not

become final.

May customs authorities release goods suspected of infringing IP rights on provision of

a security by the owner, holder or importer of such goods? If so, will such release

depend on the type of IP rights?

Yes, this possibility is provided according to Art. 14 of the 1383 Regulation for goods

which are suspected of infringing designs, patents, supplementary protection

certificates or plant variety rights. The procedure is the following:

After both sides have been notified of the suspension of release, after an opposition

against the simplified destruction has been filed, and proceedings for clarifying the

infringement issue have been duly initiated, the declarant, owner or holder of the goods

may apply to the customs office in question for the handing over of the goods according

to Art. 14 of the 1383 Regulation against provision of a security. With this application he

25 See circular letter of the Bundesfinanzdirektion Südost dated August 20, 2008.

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may propose an adequate amount of security. Usually, the right holder will be heard on

this matter in writing. The customs office which has suspended the release will not

decide on the security to be provided until it has consulted with the Central Customs

Authority for Intellectual Property Law [Zentralstelle Gewerblicher Rechtsschutz], in

order to ensure a uniform practice. At least ten, typically twenty working days, or -

depending on the behaviour of the parties involved an in particular the property right

holder -, even more working days lapse between the suspension of release and the

determination of the amount of security. This also applies if the goods in dispute are

detained several times during protracted civil proceedings: the amount of security will

be decided again in each individual case.

None of the available legal remedies must be pending against the suspension of

release, such as an opposition or a objection, if goods are supposed to be released

against provision of a security. In practice, therefore, an assessment of the lawfulness

of the border measure in opposition proceedings does not take place for the simple

reason that the goods in question will not be released for the duration of such

proceedings, and the interest of the parties concerned in the fastest possible release

regularly predominates.

Yet the right holder has the possibility to request the sequestration of the goods

released or not further detained after provision of a security pursuant to Art. 14 I of the

1383 Regulation with the specialized courts in order to secure his right to destruction by

means of interlocutory relief.

9) If goods are found to infringe IP rights, may a right holder oppose

- exportation of infringing goods from your country;

- infringing goods in transit;

- placement of infringing goods in a free trade zone or free trade warehouse?

Export is generally subject to border measures (Art. 1 of the 1383 Regulation) as well

as civil law measures. In this context, export is still subsumed under the constituent

element of "placing in circulation"26, to the extent that it is not considered an

independent constituent element of infringement, such as in trademark law (see Sec.

14 III No. 4 MarkenG). According to Art. 1 I b of the 1383 Regulation, the customs

authorities may generally also take action if goods are in transit or placed in a free trade

zone. The question as to whether in this case goods may be detained at the border

26 See e.g. Schulte/Kühnen, PatG, 8th edition, Sec. 9 no. 62 with further references.

16

solely depends on whether according to the substantive law regulations of the member

state in question such an act alone already leads to an infringement, or if an

infringement is to be expected. According to the more recent case law27 the mere

transit or placement in a free trade zone alone do not constitute a property right

infringement. Yet seizure at the border remains possible even in these cases if there

are serious concerns based on other specific circumstances that the goods will

nonetheless be placed on the market, and if this would lead to an infringement in the

member state in question28. Such circumstances have to be demonstrated and proved

by the right holder.

10) If goods are found to infringe IP rights, do the judicial or customs authorities of your

country generally order the destruction of the goods or do they have the authority to

dispose of the goods outside commercial channels (e.g. to charity)?

As stated in no. 8 above, it is possible to make use of the simplified procedure of

destroying the goods in question.

Furthermore, as discussed in no. 8 above, in civil law proceedings on the merits aimed

at establishing that the goods in question infringe IP rights of the applicant/right holder,

the destruction of the goods in question may also be requested, provided the property

right has been infringed.

This corresponds to the provision in Art. 17 I a of the 1383 Regulation, according to

which measures have to be adopted which are necessary to allow goods found to

infringe an IP right to be destroyed without compensation and at no cost to the

exchequer, or to be removed from the sales channels in such a way as to preclude

injury to the right holder.

According to this provision of the 1383 Regulation, other measures than the destruction

of the goods in question are generally conceivable. Yet according to German law, the

only alternative to the simplified destruction procedure according to Art. 11 of the 1383

Regulation is the enforceable claim for the destruction of the goods in question

according to the special provisions applying to different IP rights in the event of a

property right infringement. Since the Enforcement Directive 2004/48/EC has been

27 See e.g. EJC GRUR 2007, 146 - Montex v. Diesel; BGH WRP 2007, 1184 - Durchfuhr von

Originalware; BGH WRP 2007, 1185 - Diesel II. 28 See BGH WRP 2007, 1184 [no 14] - Durchfuhr von Originalware; BGH WRP 2007, 1185 [Rn 19]

Diesel II.

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implemented, as of September 1, 2008 the right holder can also request the removal of

the infringing goods from the sales channels instead of requesting their destruction

(e.g. Sec. 142a III PatG, Sec. 18 II MarkenG); a use of the goods e.g. for charitable

purposes would also be conceivable, yet only ever upon the right holder's request in

civil proceedings.

May the competent authorities also order the infringer to give the names of his

accomplices, upstream or downstream in the channels of production and distribution?

According to Art. 9 of the 1383 Regulation, in order to determine whether an intellectual

property right has been infringed pursuant to the law of the member state in question,

the competent customs office informs the right holder (taking into account the

protection of personal data and business and trade secrets), to the extent known, of the

name and address of the recipient and the sender, the declarant or owner of the goods

and the origin of the goods which are suspected of infringing an IP right. However, the

customs authorities have no authority to order the infringer to give this information.

Pursuant to Art. 12 of the 1383 Regulation the applicant/right holder may only use this

information for establishing the property right infringement, if necessary in court

proceedings, and for carrying out the simplified procedure for the destruction of the

goods in question. Any other use of this information may lead to civil law liability of the

applicant/right holder.

Apart from that, according to German law the applicant/right holder may request

information about the origin and sales channels of the property right-infringing goods in

court proceedings directed at establishing the presence of a property right infringement.

11) May judicial or customs authorities order the applicant to pay the owner, holder or

importer of goods appropriate compensation for any injury caused by wrongful

detention? What is considered appropriate compensation and does it include attorney

fees or other expenses?

Art. 6 I of the 1383 Regulation provides that an applicant/right holder has to submit a

declaration accepting liability towards persons affected by customs measures in the

event that a procedure initiated by the customs authorities upon application of the right

holder/applicant is discontinued owing to an act or omission by the right

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holder/applicant, or in the event that the goods in question do not infringe an intellectual

property right.

Art. 19 III of the 1383 Regulation furthermore stipulates that any civil law liability of the

applicant/right holder shall be governed by the law of the member state of the

European Union in which the goods in question were placed when the customs

authorities took action.

According to German law, an unjustified detention and possible destruction of goods

triggers a claim to compensation for the damage that the authorized party has

sustained which is independent of the question of negligence (e.g. Sec. 142a V PatG,

Sec. 149 MarkenG). The same applies to actions according to the 1383 Regulation

(e.g. Sec. 142b VIII PatG, Sec. 150 VIII MarkenG). In the case of negligence, damages

claims according to general civil law may additionally arise.

More specifically, under German law such an encroachment obliges the offender to re-

establish the situation that would be in place if the encroachment had not taken place. If

this is not possible, monetary damages have to be paid. These may principally include

attorneys' fees and other expenses of the persons affected by the customs action which

were caused by the measures taken by the customs authorities. Relevant case law

specifically for the case of customs action has not yet been published.

II) Proposals for adoption of uniform rules

1) Do you think that the adoption of uniform rules and best practice of customs authorities

in the area of border measures and better coordination between countries and at an

international level are desirable to improve enforcement?

Such measures appear to be indispensable in particular in the field of cross-border

product piracy in order to achieve effective protection of industrial property rights. At the

same time, however, rules (best practice) should be created which effectively prevent

the misuse of such measures for the purposes of competition.

2) What should the scope of border measures be? Do you think that border measures

should be available also for goods infringing IP rights for which your national law

currently does not provide border measures? If so, which IP rights? Should unfair

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competition give rise to border measures? Which goods should be excluded by border

measures legislation?

The scope of border measures described above which is mainly achieved by the

European Community Law in Germany appears to be sufficient, especially since the

border measures are available for all relevant IP rights, i.e. trademarks, copyrights,

designs, patents and utility models as well as business names, geographical indications

and plant variety rights. We do not see any need for creating border measures for other

goods, or for basing them on unfair competition. The latter would probably hardly be

practicable in a proper way. An exclusion of certain goods should not take place, either.

3) What rules should apply in relation to the lodging and processing of applications for

customs action? Should there be a centralised system for managing multiple

applications for customs action through a single contact point? Should there be uniform

rules on the provision of information by the applicant?

The practice described above of processing applications for customs action, currently

established in Germany mainly on the basis of the Community Law appears to be

pertinent, see above Sec. II, no. 5) to 8). To the extent that free trade zones or cross-

border economic areas exist, centralised systems for managing such applications

should be created. In addition to that, it appears to be worth considering to create a

central contact point, e.g. in the WIPO, which facilitates the processing of such

applications on an international level and which in particular creates uniform standards

for the provision of information by the applicant.

What should the required level of evidence for alleged infringement be?

An infringement should at least be probable on the basis of verifiable facts. Especially

in complex cases - such as patent infringements - this verification should be performed

by specialized courts. For this purpose it may be useful to create suitable summary

proceedings. The arguments of the alleged infringer should be accessible for

consideration at least in the form of protective letters. We refer to the discussion of the

current legal situation in response to Question I.6 above in this respect.

Should there be uniform rules on the provision of information by the customs

authorities?

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This seems appropriate.

4) What rules should apply in relation to the procedure following notification? Should

there be a simplified procedure allowing the destruction of the goods without there

being any need to determine whether IP rights have been infringed? Should there be

uniform rules on the examination of the goods by the right holder, security and

compensation in the case of wrongful detention of goods and disposal of infringing

goods?

Above all, the possibility of release against security, e.g. in the field of patent disputes,

seems to be important. This should be independent of further questions and should be

able to be generally carried out quickly, i.e. also within few hours or days, depending on

the situation.

A simplified procedure for destruction is useful in particular in the field of traditional

product piracy in trademark and design cases. Uniform rules do not seem to be

necessary so much for the right holder examining the goods, but for a proper

assessment of these examination results by the customs authorities or specialized

courts.

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Summary

The proposals of the group are guided by the current practice in Germany which is

mainly based on European Community Law. On this basis, and in particular in the case

of parallel imports, on the basis of the national law, the German customs authorities

have developed effective protection above all in the field of trademark and design

infringements, which should also form the basis for a possible international

harmonization. However, there are some reservations against the application of this

practice to patents and plant variety rights, as has been done for some years.

Therefore, in the context of a harmonization, one should make sure that, deviating from

the current German practice, at least when the respective importer opposes the border

measure, specialized courts will be applied to for assessing the grounds for suspicion

underlying the "border measure", and that irrespective thereof, affected goods could be

released immediately against provision of a security.

Résumé

Les propositions du groupe allemand s'orientent à la pratique allemande qui est dans la

plupart des cas basées sur le droit communautaire. Sur cette base et en outre aussi en

cas d'importations parallèles sur la base du droit national, les autorités douanières

allemandes ont développé une protection efficace surtout sur le plan de la contrefaçon

de marques et dessins. Cette pratique allemand peut servir comme base pour une

harmonisation internationale. Toutefois, il y a des doutes par rapport à l'application de

cette pratique aux brevets d'invention et aux droits à la protection nationale des

obtentions végétales selon le droit interne comme s'est fait depuis quelques ans. A cet

égard il devrait être fait attention dans le cadre d'une harmonisation - en différence de

la pratique allemande actuelle - que les tribunaux spécialisés en matière du droit de la

propriété intellectuelle examinent s'il y avait de soupçon suffisant pour l'intervention des

autorités douanières au moins en cas d'opposition de l'importateur. Indépendamment

d'une telle procédure légale - au moins en cas d'opposition de l'importateur - il devrait

aussi être possible que l'importateur puisse immédiatement obtenir la mainlevée ou la

levée de la retenue des marchandises moyennant le dépôt d'une garantie.

Zusammenfassung

Die Vorschläge der Gruppe orientieren sich an der bestehenden deutschen Praxis,

welche überwiegend auf europäisches Gemeinschaftsrecht gestützt wird. Die

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deutschen Zollbehörden haben auf dieser Grundlage und daneben insbesondere bei

Paralallimporten auf der Grundlage nationalen Rechtes einen effizienten Schutz vor

allem im Bereich von Marken- und Geschmacksmusterverletzungen entwickelt,

welcher auch einer möglichen internationalen Harmonisierung zugrunde gelegt werden

sollte. Allerdings bestehen hinsichtlich der seit einigen Jahren gegebenen Übertragung

dieser Praxis auf Patente und Sortenschutzrechte Bedenken. Insofern sollte im

Rahmen einer Harmonisierung abweichend von der derzeitigen deutschen Praxis

sichergestellt werden, dass zumindest im Falle des Widerspruchs des jeweiligen

Importeurs gegen die Grenzmaßnahme Spezialgerichte mit der Prüfung des der

„Grenzmaßnahme“ zugrundeliegenden Verdachtsmomentes befasst werden und dass

unabhängig hiervon betroffene Waren unverzüglich gegen Sicherheitsleistung

freigegeben werden können.