Brexit – Counterfeits and EU exhaustion of rights

This article was written on 11 September 2019. The content was relevant at the time of writing, but may have since changed. For our latest Brexit updates, please access our Brexit Hub.

THE UKIPO’s IP Crime Group has just issued its 2018/9 report and counterfeit activity is on the increase. Criminal trade in counterfeits increased to $509 billion in 2019; approximately 3.3% of world trade.

The UK’s exit from the EU is set to impact the ways in which counterfeits and counterfeiters are monitored, investigated and prosecuted. Both the UK and the EU remain committed to maintaining their partnership in guarding against criminality; the UK is valued in law enforcement cooperation. With the uncertainty of Brexit there is currently no apparent custom-made agreement. A key issue is enforcement and intelligence sharing, with there being little legal infrastructure to allow non-member states to gain access to some of the EU’s systems.
 
For parallel imports, if the UK leaves the EU without a deal, the UK government has confirmed that the UK will continue to recognise the EEA regional exhaustion regime from exit day, to provide continuity in the immediate term for businesses and consumers. There will be no change for the parallel importation of goods into the UK, but there is presently no reciprocal arrangement from the EU on the resale of goods from the UK to the EEA. This could cause importers to seek alternative sources of products, leading to an increase in grey market goods. It could also give rise to increased counterfeit activity as sellers struggle to meet demand.
 
UK based not-for-profit organisation Anti-Counterfeiting Group (ACG) is working with its partner associations in Europe and further afield to ensure EU-UK enforcement cooperation is a recognised priority.

Here are a few ways in which you can ensure your brand continues to be protected against counterfeiting after Brexit:

1. Ensure all IP is protected nationally throughout the EU (or in your relevant territories) and not only at the EUIPO.
    

2. File new Applications for Action (AFA) with customs authorities. Any existing EU AFAs filed in the UK will no longer extend to the EU, and vice versa. These applications will assist local customs authorities to seize suspect goods as they enter the country. Provide regular updates to customs on unique markings and any changes made to these.
    

3. Educate national customs officials with training to ensure they are aware of your brand and your counterfeiting challenges and that they will report to you any suspicious goods.
    

4. Consider increased unique identifiers on your products such as serial numbers, markings and increased secure packaging.
    

5. Use only reputable and trusted distributors or sell direct to consumers where possible.
    

6. Register brands with retail platforms’ rights owners’ programmes in all relevant territories. Two of the major programmes are Ebay’s Verified Rights Owner (VeRO) programme and Amazon’s Brand Registry. The platforms will take interim action whilst the brand owner investigates the suspected counterfeits. Check the requirements for each country as individual national programmes may require separate registration.
    

7. Seek assistance from law enforcement agencies such as PIPCU (Police IP Crime Unit) if suspected counterfeit goods are discovered. Additional assistance can be obtained from the ACG and its network of bodies.
    

8. Monitor national domains and report any suspect domains to Nominet, police or other enforcement agencies who can investigate and have websites taken down.
    

If you have any concerns or queries, please contact Rachel Harrison or your usual Kilburn & Strode advisor.