Customs Detention of Infringing Goods at the Border Started on March 24, 2014

To enhance patent protection, Taiwan Legislative Yuan gave its green light to the partial amendment to Taiwan Patent Act regarding border protection measures in January 2014 and the amended Patent Act has been enforced since March 24, 2014.  Meanwhile, the relevant and supporting provisions of the Regulations Governing Detention of Suspected Patent-Infringing Articles by Customs issued by the Ministry of Economic Affairs and the Ministry of Finance have been also enforced since that date.  All customs under the Customs Administration, the Ministry of Finance also begin to handle request of detention on the same date.  Under the new mechanism, a patent holder may request with the customs to detain suspected infringing goods by furnishing a deposit or security when he/she has a suspicion of infringement upon his/her patent right.  However, owner of the detained goods may also provide a deposit in an amount twice as much as that paid by the patent holder to have the detention repealed. 

According to the TIPO, the customs had been acting upon a court judgment to conduct detention of suspected infringing goods.  Now, with the new provisions being enacted, a patent holder is given the opportunity to have the release of suspected infringing goods suspended by the customs at the border by providing a cash deposit or security of any kind.  Also, under the old procedural requirements, a patent holder would unsuccessfully had suspected goods withheld because the customs would not withhold release of suspected infringing goods until the patent holder provides the customs with relevant information in regard to the exact time, destination, transportation vehicle of the suspected goods, which is the concrete information usually inaccessible to a patent holder.  With the enforcement of the new mechanism from March 24, 2014, a patent holder will be able to first file with the customs a request for detention of imported goods that are suspected of infringing his/her patent right, as long as he/she can present the information that enables the customs to identify the suspected goods to be detained, and subsequently initiate court proceedings to secure his/her patent right. 

Here are the main points of the added provisions of the amended Patent Act and the Regulations Governing Detention of Suspected Patent-Infringing Articles by Customs: 

1.  An individual/entity that files a detention request shall present the facts of infringement by submitting an infringement analysis report and providing sufficient information that enables the customs to identify the suspected infringing goods, such as, name of the importer, business administration number thereof, import declaration number, and name, type or specification of the suspected goods, possible importing date, or transportation vehicle.  Most important of all, the customs’ detention is preconditioned on the said individual/entity’s provision of a cash deposit or security equivalent to the duty-paid price of the potentially infringing goods as assessed by the customs and also the individual/entity’s initiation of an action of infringement with the court within 12 days upon receipt of customs’ notice after his/her filing of the detention request.  The individual/entity’s failure to do the foregoing will cause the customs to repeal the granted detention request. 

2.  On the other hand, the owner of the detained goods may also provide a counter security in an amount equivalent to two times the duty-paid price of the imported goods, and then the customs will release the withheld goods after taking a representative sample therefrom. 

3.  Before carrying out the requested detention, the customs may seek assistance from the said detention requester.  After detention being carried out, the said detention requester can request with the customs for examining the detained goods.  In addition, the individual/entity that files the detention request should be liable for demurrage charge, warehouse charge, charge for handling services caused by the request where the court clears the alleged infringement by a final and binding judgment. 

Reference:  General Description of Regulations Governing Detention of Suspected Patent-Infringing Articles by Customs

Due to the addition of four provisions into Taiwan Patent Act regarding border protection measures (Article 97-1 to 97-4) promulgated in January 2014, the Ministry of Economic Affairs and the Ministry of Finance are authorized to formulate relevant supporting procedures and measures with respect to the request for detention, repeal of detention, examination of detained goods, procedures of payment, provision, and return of security bond or assurance, required documents and other procedures.  Therefore, the main points of the “Regulations Governing Detention of Suspected Patent-Infringing Goods by the Customs” are listed as follows. 

1.  Detention requester should provide the required information/document(s) (Article 2);
2.  Detention requester should furnish security or any other kind of equivalent assurance (Article 3);
3.  Customs may ask for detention requester’s assistance before carrying out the detention (Article 4);
4.  Customs shall carry out the detention and notify the detention requester and the owner of the detained goods in writing (Article 5);
5.  Detention requester and the owner of the detained goods may request with the Customs for examining the detained goods by complying with the required procedures (Article 6);
6.  Detention requester should initiate an action within the designated time period (Article 7);
7.  Owner of the detained goods may provide a counter security for having the detention repealed (Article 8).  Based on a judgment that clears alleged infringement, a request may be filed for repealing the detention by providing the required document(s) or proof (Article 9);
8.  Based on the request filed by the owner of the detained goods who has furnished a counter-security to have the detention repealed, Customs should follow the procedures under applicable regulations governing customs clearance of imported articles to repeal the detention after taking a representative sample from the detained goods (Article 10);
9.  Detention requester or the owner of detained goods should submit the required document(s) to request for return of the security or assurance (Article 11).
(March 2014)
/CCS