IPR enforcement rules tested by SIM card seizure

The recent import and consequent seizure of dual SIM card phones has brought these rules to the fore yet again. Dual SIM card mobile phone technology has been patented in India by an individual inventor who enforced his IPRs by getting the imported phones impounded at the airport.

The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 were brought into force by the central government in exercise of the powers conferred under sub-section (1) of section 156 of the Customs Act, 1962 – read with clauses (n) and (u) of sub-section (2) of section 11 of said Act. Such legislation is applicable with respect to the enforcement of IPRs in imported goods.

The Rules elucidate an attempt to define the key role that the customs officials play in the protection and implementation of IPRs, with active participation from IPR holders. A Notice in writing by the IPR holder is mandated at the port of import of goods infringing the IPRs. This requests the suspension of clearance of goods that are suspected to be infringing IPRs.

The Notice must be registered by the commissioner for a minimum period of one year. This is subject to the execution of a bond and an undertaking to protect the importer, consignee and owner of the goods and the competent authorities against all liabilities. They must also bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be.

The IPR holder must execute a bond indemnifying the customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods. The Rules impose a prohibition on the import of following:

1) Goods having applied thereto a false trade mark as specified in Section 102 of the Trade Marks Act, 1999;

2) Goods having applied thereto a false trade description within the meaning of clause (i) of sub-section (1) of section 2 of the Trade Marks Act, 1999, otherwise than in relation to any of the matters specified in sub-clauses (ii) and (iii) of clause (za) of that sub-section;

3) Goods made or produced beyond the limits of India and intended for sale, and having applied thereto a design in which copyright exists under the Designs Act, 2000, in respect of the class to which the goods belong or any fraudulent or obvious imitation of such design except when the application of such design has been made with the licence or written consent of the registered proprietor of the design;

4) The product made or produced beyond the limits of India and intended for sale for which a patent is in force under the Patents Act, 1970, except in cases where the consent from the patentee in India has been obtained provided that such prohibition is not applicable to the cases where such importation is allowed under the Patents Act, 1970;

5) The product obtained directly by the process made or produced beyond the limits of India and intended for sale, where a patent for such process is in force under the Patents Act 1970, except in cases where the consent from the patentee in India has been obtained provided that such prohibition is not applicable to the case where such importation is allowed under the Patents Act, 1970;

6) Goods having applied thereto a false geographical indication within the meaning of section 38 of Geographical Indications of Goods (Registration and Protection) Act, 1999; and

7) Goods that are prohibited to be imported by issuance of an order issued by Registrar of Copyrights under section 53 of the Copyright Act, 1957.

The recent case of dual SIM card mobile phones being imported to India clearly falls under the rules governing patented products in India. The seizure of the goods puts some large corporations and manufacturers in an uncomfortable position, hence they are moving towards the Indian Courts. A writ petition stands pending at the High Court of Delhi challenging the constitutionality of these rules. The result of this petition will help define the enforcement strategies that will be adopted to protect IPRs in the days to come.