Background
Trade in counterfeit and pirated goods
7. International trade in counterfeit and pirated goods has grown significantly over recent years. The World Customs Organisation estimates that this trade accounts for between five and seven percent of all world trade. This issue is receiving increasing attention, with governments around the world considering new measures to tackle the issue.1
8. New Zealand's border interceptions of counterfeit and pirated goods contribute to a global partnership aimed at reducing this trade. The quantity of counterfeit and pirated goods intercepted by Customs at the border has continued to increase. In 2005/06 some 260,000 items were detained by Customs, a forty percent increase on the previous year.
9. Almost all counterfeit and pirated goods in New Zealand come from overseas rather than being locally manufactured.2 Although various New Zealand government agencies have powers to tackle problems associated with counterfeit and pirated goods after they have been imported, it is undesirable to rely entirely on post-border measures.
Current New Zealand legislation and prosecution activity
10. Customs' current activities to reduce trade in counterfeit and pirated goods are based on measures prescribed in the Trade Marks Act 2002 and the Copyright Act 1994. This legislation is consistent with the internationally recognised Agreement on Trade-related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods. Under the Trade Marks and Copyright Acts, Customs' activities are predicated on rights owners lodging a notice requesting the detention of goods that appear to infringe their rights. Although rights owners can take civil prosecutions against importers of detained goods that appear to infringe their notice, they rarely do this. Appendix 1 outlines the basic steps in this protection process.
11. Although Customs charges rights owners for some of its trade mark and copyright border activities, some costs associated with this activity are met by the Crown. While it would be possible to charge more costs back to rights owners, this would probably be seen as discouraging rights owners from lodging notices and therefore counter to the global partnership in reducing trade in counterfeit and pirated goods. These broader issues are due to be considered as part of a wider strategic review of trade mark and copyright enforcement.
12. The Police has the power to prosecute against the full range of trade mark and copyright criminal offences under the Trade Marks and Copyright Acts. However it rarely gets involved in such prosecutions. This is because it does not see this as high priority. The Police rarely receives complaints about the importation of counterfeit or pirated goods.
13. Under the Medicines Act 1981 the Ministry of Health can prosecute against counterfeit pharmaceuticals. The Commerce Commission can take prosecutions in cases where counterfeit goods breach the Fair Trading Act 1986.
14. Customs already has an ability to take prosecutions against a number of other types of imports, such as objectionable material and offensive weapons. Although it does not currently take prosecutions related to imported counterfeit or pirated goods, in many other countries Customs agencies have this power. For example Customs agencies in Japan, China (including Hong Kong) and Australia can take prosecutions against the importation of counterfeit and pirated goods.
Recently approved enforcement measures
15. On 28 August 2006 Cabinet agreed in principle that the NEU would be responsible for enforcing the criminal offence provisions of the Copyright Act 1994 and Trade Marks Act 2002 [CAB Min (06) 32/12].
16. On 6 December 2006 Cabinet agreed to amend the Trade Marks and Copyright Acts to enable the NEU to:
- share information and co-ordinate with other government agencies, such as Customs and the Police, to identify offenders who manufacture, import or sell counterfeit or pirated goods;
- apply for, be granted and execute search warrants to seize evidence;
- undertake searches of any place (other than a private residence) without a warrant in special circumstances set out in EDC (06) 161; and
- seize goods, during a search conducted without a warrant, where the enforcement officer has reasonable grounds to believe that the goods breach, or are evidence of a breach of, criminal offences under the Trade Marks or the Copyright Act, and to use the seized goods as evidence in criminal prosecutions [EDC Min (06) 22/16 and CAB Min (06) 46/6].
17. In considering the NEU's specific enforcement powers, the Committee was made aware that Customs was reviewing its existing trade mark and copyright border protection measures, and that Customs and MED would work together in developing any new initiatives that came from this review [EDC (06) 161].
18. It is intended that the Trade Marks (International Treaties and Enforcement) Amendment Bill, which is likely to be introduced and passed in 2007, will provide NEU with its new enforcement powers.3 Customs and MED are working on legislative provisions that will allow the two agencies to cooperate in the prosecution of offenders, such as the sharing of Customs information with NEU about importers and imported goods. It is intended that these provisions will be backed-up with a Memorandum of Understanding.
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