New powers for NZ Customs in war on counterfeit products

Wednesday 8th February 2012

In New Zealand, counterfeiting continues to be a problem, with New Zealand Customs regularly intercepting shipments of counterfeit and pirated goods destined for the New Zealand market.  Under the Trade Marks Act 2002, it is a criminal offence to import or sell goods with falsely applied registered trade marks. A product is considered a counterfeit when a registered trade mark is applied to products without the permission of its owner. Under the Copyright Act 1994, pirated goods are goods made without the authority of the copyright owner.

Recent changes to the trade mark and copyright legislation, however, ramp up the government approach to counterfeit products.  These amendments create the role of “enforcement officers” within New Zealand Customs, who are given wide reaching powers which allow them to investigate instances of counterfeiting and pirating, and conduct search and seizure operations as part of their investigations. 

The amendments allow New Zealand Customs and the National Economic Unit of the Ministry of Economic Development the authority to investigate and prosecute the trade mark and copyright offences in addition to existing police powers.  Previous to the amendments, counterfeiting was not high on the police priority list for prosecutions, with only isolated cases reaching the courts.

Under the amendments, the enforcement officers are able to seize counterfeit goods without a warrant if they reasonably believe those goods are relevant to investigating offences under the Trade Marks or Copyright Act. The enforcement officers also have search and seizure powers, which allow them to seize goods without a warrant if those goods are in a public place such as a store and they have reasonable grounds to believe they are evidence of or relevant to investigating offices under that legislation.  Customs officers can ask for documents relating to the products and require persons to attend for questioning: refusal to comply is itself an offence.  They can also apply for search warrants to seize goods or documents in other circumstances.

Before the amendments, counterfeit goods imported into New Zealand could only be seized permanently by New Zealand Customs if the importer consented to forfeit them, or if the owner of the trade mark launched court proceedings against the importer. Predominantly the cost of court proceedings relating to individual shipments would far exceed the value of the products and New Zealand Customs had no option but to release the counterfeit goods to the importer.

It is anticipated that New Zealand Customs will most likely use the new powers to focus on major repeat offenders and importers of commercial quantities of counterfeit goods. Civil actions can still be brought by trade mark owners against those who infringe their rights  All intellectual property rights holders should institute and continue to maintain border protection notices with Customs as these allow Customs to intercept large numbers of counterfeit items on a regular basis.

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