As has been previously noted in the "Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact" report of the Organisation for Economic Co-operation and Development & European Union Intellectual Property Office, counterfeiting hits almost ½ trillion euros a year. This can be traced from fashion and medicine to the fruits market and entails damage to the business reputation, lost sales and litigation costs among others.
Criminal systems see the rising significance of Intellectual Property rights (IPR) as an opportunity to free-ride on others' resources and contaminate trade channels with counterfeits. This is considered a primary financial danger that undermines innovation and hampers monetary development.
Counterfeiting & Infringement
Counterfeiting occurs when a manufacturer produces unauthorised goods so that they closely resemble the brand-name goods. This can also apply to services that are presented or advertised with the primary purpose of deceiving consumers into thinking that they come from the same undertaking.
Trademark counterfeiting is considered an infringement. However, not all infringements qualify as counterfeiting. A counterfeit trademark includes marks that are largely identical to the real mark. Infringements include marks that are similar but not identical to the genuine mark. A similar mark is more likely to qualify as an infringement than as counterfeiting.
When it comes to counterfeiting, most consumers will not, in the majority of times, question in detail the goods they are buying to identify counterfeits. This leaves them vulnerable to purchasing counterfeit goods at a price that does not reflect their actual value.
Under current Cyprus and EU law, counterfeit goods include "goods which are the subject of an act infringing a trade mark in the Member State where they are found and bear without authorisation a sign which is identical to the trade mark validly registered in respect of the same type of goods, or which cannot be distinguished in its essential aspects from such a trade mark". This definition does not apply to goods of a non-commercial nature contained in travellers' personal luggage or to goods originating from inside the EU.
Anti-counterfeiting measures in Cyprus
The Department of Customs & Excise, due to its physical presence at the entrances and exits of the Republic and its exclusive right to carry out checks on goods, plays a leading role in combating offences against IPR.
Under Cyprus law, the customs authorities can seize counterfeit goods. This can happen either following an application by an IPR-holder or by the Department's own volition.
In order to prevent the importation of counterfeit goods originating from outside the EU into the Cyprus market, the IPR-holder may apply to the Department of Customs & Excise to check suspected counterfeit goods entering into the market, in particular when there is a prima facie suspicion that the goods are counterfeit, pirated or otherwise infringe IPR. If the goods are found to be counterfeit and the owner of the goods does not consent to their destruction, the IPR-holder has 10 days to file an action in Court. The IPR-holder may also request the extension of time if it is necessary.
The customs authorities can, of their own volition, initiate random checks of goods sold in the market. If goods are found that are suspected of infringing IPR, they can be removed provided the IPR-holder provides relevant information relating to the alleged IPR infringement.
Furthermore, the deadlines for consenting to the destruction of any counterfeit goods should be considered by both the owner of the counterfeit goods as well as the IPR-holder. Where either party fails to confirm to the customs authorities within the relevant deadline, their agreement or opposition to the destruction of the goods, the customs authorities have the power to order such destruction.
IPR-holders should consider the following measures with their competent legal representative in order to detect possible infringements:
- Register your rights with Customs
- Review the Trademark Gazette published by the Cyprus IPO
- Conduct regular online investigations
As a side note, IPR-holders should try to implement new ways to ensure the expedited detection of counterfeits via technological advances such as Blockchain, as suggested by the Anti-Counterfeiting Blockathon Forum of the EUIPO Observatory and their Blockchain Use Case published on March 2019.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.