In a latest development in the Indian intellectual property rights arena, a patentee holding a patent in India for phones with a plurality of SIM cards allocated to different communication networks, as per a news report, has asked the Indian Custom authorities to stop shipment of these phones till he was paid a royalty for every hand set brought in the country. Dual-SIM handsets have two SIM slots and can work on both CDMA and GSM networks. The news report further tells that in pursuance of the application of the patentee, the officials throughout the country have been directed to stop clearing the shipments of dual-SIM phones.

Custom Recordal to prevent piracy and counterfeiting emanates from the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 by the Central Government in exercise of the powers conferred by sub-section (1) of section 156 of the Customs Act, 1962 read with clauses (n) and (u) of sub-section (2) of section 11 of the said Act.

Under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, the role of the Customs is defined in implementation of intellectual property rights but with the proactive participation of the IP right holders. A ‘Notice’ by the right holder in writing is mandated at the port of import of goods infringing intellectual property rights, requesting suspension of clearance of goods suspected to be infringing intellectual property rights. The Notice is registered by the Commissioner for a minimum period of one year subject to execution of a bond and an undertaking to protect the importer, consignee and the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be. The right holder also executes an indemnity bond indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods.

The proactive participation of the right holders effectually distills into undertaking every financial stakes and providing any information or assistance including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right. The right holder also has to join the proceedings without delay once goods suspected to be infringing intellectual property has been suspended. On account of delay of more than ten working days in joining of proceedings, from the date of suspension of clearance, there is a provision leading towards release of goods provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with.

The Customs Non-Tariff Notifications on the above information, from the Government of India, Ministry of Finance and Department of Revenue, is an opportunity for IP right holders to actively participate in enforcing procedures and thus protect their own rights.