Keeping Out Counterfeit And Pirated Goods In The Association of Southeast Asian Nations (“ASEAN”)
(Written by: Ho Jiahui)
A. Introduction
According to the World Integrated Trade Solution[1] powered by the Word Bank Organisation, the annual worldwide exports of goods between 2013 and 2018 hovered between US$ 17.6 and 21 trillion. During the same period, the annual worldwide imports of goods hovered between US$ 15.7 and 19 trillion.
However, a report[2] published in 2019 by the Organisation for Economic Co-operation and Development has revealed that the trade in counterfeit and pirated goods (hereinafter referred to as “infringing goods”) continues to grow steadily even though worldwide exports and imports of goods have stagnated. In 2013, the value of imported infringing goods seized by customs worldwide was at US$ 461 billion, which amounted to 2.5% of the worldwide imports that year. This value increased to US$ 509 billion in 2016 and stood at 3.24% of the worldwide imports that year. Below is a diagram from the report showing the top 10 industries most hit by the trade of infringing goods in 2016:
To prevent exports and imports of infringing goods, Intellectual Property Rights (“IPR”) holders rely on customs worldwide for this purpose. This reliance on customs becomes particularly important for IPR holders who are trying to expand their markets and gain a foothold in developing countries.
B. The ASEAN
For most IPR holders, the Association of Southeast Asian Nations (“ASEAN”) is often selected as the next destination for expansion after China and India due to political stability, cultural diversity and favourable demographics. Like the European Union, the ASEAN is a regional bloc consisting of 10 developing nations, listed below, with a combined population of 650 million: –
· Brunei | · Indonesia | · Malaysia | · Philippines | · Thailand |
· Cambodia | · Laos | · Myanmar | · Singapore | · Vietnam |
The ASEAN is now the world’s 5th largest economy with a combined Gross Domestic Product (“GDP”) of US$ 2.8 trillion in 2018[3]. In 2019, the ASEAN’s combined exports and imports of goods were US$ 1.42 trillion and US$ 1.39 trillion respectively[4]. The ASEAN’s economy is projected to become the world’s 4th largest economy by 2050, with an annual combined GDP growth rate of over 5.5% each year[5].
Since the ASEAN consists of 10 member nations, the process of engaging the customs in each nation to prevent any exports and imports of infringing goods differs greatly.
C. Border enforcement of IPR in the ASEAN
The table below provides a summary on the differences in engaging the customs of each member nation of the ASEAN to prevent exports and imports of infringing goods: –
No. | Nation | Things to note |
1 | Brunei |
· Only applicable to copyright and registered trade marks. · No official Intellectual Property (“IP”) recordal system at the customs. o Must file written notice, with supporting information, to the customs to activate enforcement. o In addition, must provide security or indemnity. o Each written notice may be valid up to 5 years. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must initiate an infringement action within 10 working days (which is extendable for a further 10 working days) from the date of notification. · Customs may also conduct ex-officio seizure. |
2 | Cambodia |
· Only applicable to copyright and registered trade marks. · No official IP recordal system at the customs. o Must file written petition, with specific information on suspected importation of infringing goods, at the customs to activate enforcement. o In addition, must provide security in the form of a money deposit or a guarantee issued by a bank. A letter of undertaking to bear all related costs must also be provided. o Each written notice is only valid for 60 days. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must initiate an infringement action within 10 working days (which is extendable for a further 10 working days) from the date of notification. · Customs may also conduct ex-officio seizure. |
3 | Indonesia |
· For copyrights and registered trade marks, official IP recordal system is available at the customs. o A recordal is valid for one year and renewable every year thereafter. o Upon notification by the customs on the seizure of suspected infringing goods, the IPR holder must provide confirmation to the customs, within two days after notification, that a request for suspension order will be made to the Commercial Court. The IPR holder must then file such request at the Commercial Court within four days after giving the confirmation. § Security in the form of bank guarantee or guarantee issued by an insurance company must be provided when filing the request at the Commercial Court. o Once the Commercial Court issues a suspension order, the IPR holder must forward the order to the customs within one day after the order is issued. The seized goods will then be detained for 10 days (which is extendable for a further 10 days by applying to the Commercial Court with provision of additional security) and the relevant parties will be notified to attend an examination of the detained goods. The IPR holder may then consider the next course of action during this period. · For IPR holders who have not recorded its copyrights or registered trade marks with the customs and for IPR holders of patents and registered designs, they may file a request for suspension order at the Commercial Court if they are aware of any suspected importation of infringing goods. o Security in the form of bank guarantee or guarantee issued by an insurance company must be provided when filing the request at the Commercial Court. o Once the Commercial Court issues a suspension order, the IPR holder must forward the order to the customs within one day after the order is issued. The seized goods will then be detained for 10 days (which is extendable for a further 10 days by applying to the Commercial Court with provision of additional security) and the relevant parties will be notified to attend an examination of the detained goods. The IPR holder may then consider the next course of action during this period. · Customs may also conduct ex-officio seizure. |
4 | Laos | · Only applicable to copyrights and registered trade marks.
· No official IP recordal system at the customs. o Must file a written application, with specific information on suspected importation of infringing goods, at the customs to activate enforcement. § In emergency cases when filing a written application is not possible, the IPR holder may make a verbal request to the customs. o In addition, must provide security in the form of a money deposit or a guarantee issued by a bank. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must initiate an infringement action within 10 working days (which is extendable for a further 10 working days) from the date of notification. § If the infringing goods are seized at several locations, additional security in the form of a money deposit or a guarantee issued by a bank must be furnished within two working days after notification. · Customs may also conduct ex-officio seizure. |
5 | Malaysia | · Only applicable to copyrights and registered trade marks.
· No official IP recordal system at the customs. · For copyrights: – o Must give written notice, with specific information on suspected importation of infringing goods, to the customs to activate enforcement. o In addition, must provide security in the form of a money deposit or a guarantee issued by a bank. o Each written notice is only valid for a specific time period. · For registered trade marks: – o Must give written notice, with specific information on suspected importation of infringing goods, to the trade mark registry which will in turn inform the customs to activate enforcement. o In addition, must provide security in the form of a money deposit or a guarantee issued by a bank. o Each written notice is only valid for 60 days. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must initiate an infringement action within a time period stipulated by the trade mark registrar (which is extendable for a further time period) from the date of notification. · Customs may also conduct ex-officio seizure. |
6 | Myanmar |
· Only applicable to copyrights and registered trade marks. · For registered trade marks: – o Official IP recordal system is available at the customs. o If the IPR holder has not recorded its IPR with the customs, the IPR holder may give written notice, with specific information on suspected importation of infringing goods, to the customs to activate enforcement. § In addition, may need to provide security in the form of a money deposit or a guarantee issued by a bank. · For copyright: – o No official IP recordal system at the customs. o Must give written notice, with specific information on suspected importation of infringing goods, to the customs to activate enforcement. o In addition, may need to provide security in the form of a money deposit or a guarantee issued by a bank. · Customs may also conduct ex-officio seizure. |
7 | Philippines | · Applicable to copyrights, patents, registered designs and registered trade marks.
· Official IP recordal system is available at the customs. o A recordal is valid for two years and renewable every two years thereafter. · If an IPR holder has not recorded its IPR with the customs, the IPR holder may request the customs to issue an alert or hold order against any suspected importation of infringing goods. o This can be initiated by giving a written notice, with specific information on suspected importation of infringing goods, to the customs. o Upon notification by the customs on the seizure of suspected infringing goods, the IPR holder must accompany the customs officers to examine the goods within 24 hours. o If there is prima facie basis that infringement is present upon examination of seized goods, the customs will detain the goods and notify the relevant party of the detained goods. Otherwise, the goods will be released. · Customs may also conduct ex-officio seizure. |
8 | Singapore | · Only applicable to copyrights and registered trade marks.
· No official IP recordal system at the customs. o Must give written notice, with specific information on suspected importation of infringing goods, to the customs to activate enforcement. o In addition, must provide security in the form of a money deposit or a guarantee issued by a bank. A letter of undertaking to bear all related costs must also be provided. o Each written notice is only valid for 60 days. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must initiate infringement action within 10 working days (which is extendable for a further 10 working days) from the date of notification. · Customs may also conduct ex-officio seizure. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must give written notice within 48 hours on whether the goods are to remain in detention. |
9 | Thailand | · Only applicable to copyrights and registered trade marks.
· Official IP recordal is only available for registered trade marks at the customs. o The recordal, which is accessible by the customs, must be filed at the Department of Intellectual Property. o Upon notification by the customs on the seizure of suspected infringing goods, the IPR holder must give confirmation within 24 hours on whether the goods are infringing goods. · For registered trade mark owners who have not filed a recordal at the Department of Intellectual Property and for copyright owners, they may file a petition at the customs to request for the seizure of suspected infringing goods if they have specific information on the importation of such goods. o Upon notification by the customs on the seizure of suspected infringing goods, the IPR holder must give confirmation within 24 hours on whether the goods are infringing goods. · Customs may also conduct ex-officio seizure. o Upon notification by the customs on the seizure of infringing goods, the IPR holder must give confirmation within 24 hours on whether the goods are infringing goods. |
10 | Vietnam | · Applicable to copyrights, patents, registered designs and registered trade marks.
· Official IP recordal system is available at the customs. o A recordal is valid for two years and may be renewed for a further two-year term. Thereafter, a new recordal must be filed. o Upon notification by the customs on the seizure of suspected infringing goods, the IPR holder may submit a request within 10 working days (which is extendable for a further 10 working days) from the date of notification to temporarily suspend customs clearance over such goods. § Security in the form of a money deposit or a guarantee issued by a bank must be provided when filing such request. o Once customs clearance over the goods is suspended, the relevant parties will be notified. During this period, the IPR holder may request to examine the goods and consider the next course of action during this period. · If an IPR holder is aware of suspected importation of infringing goods but has not recorded its IPR with the customs, the IPR holder cannot file a request at the customs to temporarily suspend customs clearance over the suspected goods. o Thus, filing a recordal at the customs is a pre-condition to request for temporary suspension of customs clearance over any suspected importation of infringing goods. · Customs may also conduct ex-officio seizure. |
To improve the effectiveness of border enforcement, IPR holders should also consider organising training sessions for customs officers to identify infringing goods. Through such training, customs officers will possess relevant information which will enable them to easily and timely identify any suspected infringing goods. Further, such training will provide an avenue for IPR holders to establish strong relationships with customs officers and ensure that the officers know who to contact when they encounter any suspected infringing goods. However, the opportunity to conduct training for customs officers may not be available in some member nations of the ASEAN.
D. Closing
Border enforcement of IPR is the first line of defence against any importation of infringing goods into a market and it is also the last line of defence against any exportation of infringing goods to other neighbouring markets. Thus, border enforcement is an important tool which all IPR holders should learn to rely on and utilise effectively. Otherwise, an uncontrolled importation and exportation of infringing goods will heavily diminish the economic returns which IPR holders may reap from their IP assets in existing markets, while crippling the potential of IPR holders to expand into new markets.
If you have any questions or would like more information on border enforcement of IPR in the ASEAN, please contact our Mr. Ho Jiahui ().
[1] World Integrated Trade Solution Website <https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/2018/Summary> (accessed 29 July 2020)
[2] “Trade In Fake Goods Is Now 3.3% of World Trade And Rising”, Organisation for Economic Co-operation and Development (18 March 2019)
<https://www.oecd.org/newsroom/trade-in-fake-goods-is-now-33-of-world-trade-and-rising.htm> (accessed 29 July 2020)
[3] “What is ASEAN: ASEAN’s Economy”, US-ASEAN Business Council, Inc (22 July 2019)
<https://www.usasean.org/why-asean/asean-economy> (accessed 30 July 2020)
[4] ASEANStatsDataPortal <https://data.aseanstats.org/trade-annually> (accessed 30 July 2020)
[5] “What is ASEAN: Growth Projections”, US-ASEAN Business Council, Inc (22 July 2019) <https://www.usasean.org/why-asean/growth> (accessed 30 July 2020)