Counterfeiting

ARGENTINA

Border measures - meeting of the World Customs Organization - Argentine situation

On September 14, 2006 the 24 th meeting of the WCO's Intellectual Property Rights Strategic Group was held in the offices of the World Customs Organization (WCO), in Brussels. The meeting was jointly chaired by Christophe Zimmerman (WCO) and James Kennedy (Procter & Gamble). Forty customs representatives from different countries attended the meeting as well as other forty representatives of private companies and eight guests - among which I was included - invited as observers.

To summarize the discussions at the meeting, although the number of detentions and the destruction of goods in breach of intellectual and industrial property rights in various countries is significant, reports as to the number of counterfeit goods that enter and are then distributed within various nations show the situation to remain very serious, with consequential damage to bona fide consumers, industrial entrepreneurs and merchants, the loss of jobs and revenues and even the generation of resources used to fund international terrorism.

Pursuant to section 46 of Law No 25,986, passed on December 29, 2004, Argentina probably has the highest level of legislative protection as regards cross border actions. This law prohibits the import or export of goods when a simple check demonstrates that they infringe the intellectual and industrial property rights of others granted by the national laws.

Section 46 clearly exceeds the requirements of the ADPIC/TRIPS treaty (Law No 24,425). Section 51 of the treaty provides for the implementation of mandatory cross border actions entitling the holders of trademarks or copyrights to request the administrative or competent judicial authorities to suspend clearance of goods if they reasonably suspect that such goods are infringing.

In fact, such section 51 provides that "the Members may authorize right holders to file claims in respect also of goods otherwise in breach of intellectual property rights" (such as patents, utility models and industrial models and designs), as well as implementing similar procedures for customs authorities to suspend clearance of infringing goods intended for export .

However, while section 46 in fine provides that the provisions thereof "shall comply with the conditions and procedures established by the pertinent regulations", the current situation as regards measures at the Argentine border is still undefined and uncertain since such regulation has not yet been passed.

Some time ago we said that the best action that could be taken to prevent the import of counterfeit goods in breach of trademarks, was to implement an information system allowing the holders of such trademarks to be informed of the infringing goods intended to be imported before such goods entered the market, so as to prevent such breach instead of trying to track the goods after they entered the country.

To such end, a draft decree was prepared aimed at the creation of a Voluntary Customs Registry of Trademarks, originally called RIVODEMA and later REMA. Under this decree, those who registered their trademarks with Customs would automatically receive an e-mail informing them of any imports of products bearing their trademark or a similar trademark so as to enable them to contact the importer and verify compliance with the applicable regulations. If the products were found to be non-compliant, the registered holders would be able to file an action in a federal court for the detention of the goods pending verification thereof by the trademark holder.

Under the federal courts case law, the proposed information system did not prevent the parallel import of genuine products, but bound the importers thereof to provide information as to the products they intended to import so that the holder of the registered trademark could be informed before completion of the import. This is similar to the right of trademark holder to demand full explanations from third parties concerning the origin of goods bearing their trademark (section 39 of Law No 22,362).

The proposed information system did not affect or restrict the powers of the Customs Administration to act ex officio which are now made mandatory by section 46 in the cases specified therein.

Possibly based on the foregoing, the Customs Administration prepared a draft decree aimed at regulating section 46 and establishing that, initially, imports would be controlled in respect of trademarks and copyrights. These controls would later be extended to the other intellectual and industrial property rights and to exports. A watching and notification system is also established to allow registered rights holders to take timely measures to prevent the entrance of infringing goods.

On October 12, 2006, the Customs General Director, Dr Ricardo Echegaray, instructed the Argentine Customs authority to implement section 46 "to avoid it becoming dead wording" (see AFIP Nota Externa No 53/2006, Law No 25,986 - Procedimiento operativo y de control; Official Gazette 31.010 of October 12, 2006).

Currently, the application for approval of the draft decree prepared by Customs bears number 9238/2005, having been filed under number 0259096/2005 with the Under-Secretariat of Industry and subject to analysis for several months. It is expected that, after the necessary amendments, it will be submitted to the Ministry of Economy and then to the President for implementation.

In turn, the Trademark Fraud Division of the National Customs Administration is collecting all available information which will facilitate the easier identification of trademark infringing goods. This is undoubtedly advisable and may have positive effects but only after the arrival of the suspicious goods, their detection, detention and provision of information to the trademark holder by Customs.

On the other hand, the implementation of the above mentioned automatic information system, at virtually no cost to the State, would allow timely action by the right holders who are, by their nature, those most interested and in a better position to determine whether the goods are infringing - even before they arrive. To sum up, they would have the possibility of cooperating effectively with the authorities to prevent the entrance into Argentina of counterfeit goods bearing false trademarks and thus to mitigate this serious problem that affects us all.

Miguel B O'Farrell
Marval, O'Farrell & Mairal