Border & Customs Regulations
Section IV of Part III of the TRIPS Agreement impose certain obligations to WTO Member States relating to border measures that may require custom authorities interventions in cases of importation of infringing goods. However, as the rest of Part III it also allows considerable flexibility to WTO Members States in implementing its obligations.
Article 51 of the TRIPS Agreement establishes that the basic obligation is to provide for the possible “suspension of release by customs” of imported “counterfeit trademark or pirated copyright goods.” This “may” be extended to “other infringements of intellectual property rights.”
Article 51 - Suspension of Release by Customs Authorities
"Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. Members may enable such an application to be made in respect of goods which involve other infringements of intellectual property rights, provided that the requirements of this Section are met. Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories.
In footnote 13, the TRIPS notes that: “It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit.”
Footnote 13 thus deals with cases involving parallel trade (the international exhaustion of intellectual property rights), as well as “goods in transit,” a provision that allows, for example, MSF to store Indian generic drugs in Europe for distribution in Africa or Latin America.
The TRIPS obligations on countries are fairly general, and allow for lots of exceptions, beyond those referred to in fn. 13.
The study of nationals implementations show that some allow the importation of infringing goods.
For example, in the United States implementation of article 51 obligations, customs authorizes cannot stop the imports of infringing goods “by or for” the government, and they have a general exemption for cases where stopping imports would adversely impact “public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers.”
For More information: Section 1337 on Unfair Practices in International Trade (19 U.S.C. 1337) (also copied below)
The Broadcom v Qualcomm dispute at the US International Trade Commission (ITC) is an interesting example on how administrative agencies can limit the remedies available for IP infringement.
In 2007 the ITC decided to ban the importation to the US of infringing chips in the Broadcom v Qualcomm dispute, but allowed the infringing chips to be imported if included in Qualcom 3G cellphones models that were being used up until June 7, 2007.
For more information:
2007 June 10. James Love. “ITC allows some infringing Qualcomm chips to be imported, bans others ”
2007 June 9. “Patent Bending ”. WSJ.com
2007 June 7. “ITC Announces Remedy in Broadcom/Qualcomm Investigation ”. News Release 07-062, ITC
TITLE 19 CHAPTER 4 SUBTITLE II
Part II—United States International Trade Commission
§ 1337. Unfair practices in import trade
(a) Unlawful activities; covered industries; definitions
(1) Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section:
(B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that—
(i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or
(ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.
(C) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that infringe a valid and enforceable United States trademark registered under the Trademark Act of 1946 [15 U.S.C. 1051 et seq.].
(D) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of a semiconductor chip product in a manner that constitutes infringement of a mask work registered under chapter 9 of title 17.
(E) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consigner, of an article that constitutes infringement of the exclusive rights in a design protected under chapter 13 of title 17.
(2) Subparagraphs (B), (C), (D), and (E) of paragraph (1) apply only if an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established.
(3) For purposes of paragraph (2), an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned—
(A) significant investment in plant and equipment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including engineering, research and development, or licensing.
(4) For the purposes of this section, the phrase “owner, importer, or consignee” includes any agent of the owner, importer, or consignee.
(d) Exclusion of articles from entry
(1) If the Commission determines, as a result of an investigation under this section, that there is a violation of this section, it shall direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States, unless, after considering the effect of such exclusion upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers, it finds that such articles should not be excluded from entry. The Commission shall notify the Secretary of the Treasury of its action under this subsection directing such exclusion from entry, and upon receipt of such notice, the Secretary shall, through the proper officers, refuse such entry.
(l) Importation by or for United States
Any exclusion from entry or order under subsection (d), (e), (f), (g), or (i) of this section, in cases based on a proceeding involving a patent, copyright, mask work, or design under subsection (a)(1) of this section, shall not apply to any articles imported by and for the use of the United States, or imported for, and to be used for, the United States with the authorization or consent of the Government. Whenever any article would have been excluded from entry or would not have been entered pursuant to the provisions of such subsections but for the operation of this subsection, an owner of the patent, copyright, mask work, or design adversely affected shall be entitled to reasonable and entire compensation in an action before the United States Court of Federal Claims pursuant to the procedures of section 1498 of title 28.