What To Do If Someone Is Copying And Importing Your Product

You’ve been supplying the market with a quality product for many years. Sometimes you even commission individually tailored items to meet specific customer needs. All your products initially involve sketches and deciding on a design. Your products are also marketed with your distinct insignia…

You’re in a store one day and you notice a product that is practically identical to your own. It even carries your insignia. Upon further investigation you discover that this product was imported and made out of cheap foreign materials.

What are your intellectual property rights, considering you’ve had the design of this particular item registered and it has also been patent protected?

Manufacturers in Australia are owners of intellectual property (IP) rights. This means they have certain exclusive rights relating to their products. They include exclusive rights to the drawings of products (copyright), exclusive right to the physical shape of products (design), exclusive use of logos in trade (trade mark) and the exclusive right to manufacture products (patent).

In the event of an infringement, a manufacturer has six years from the time of the infringement to exercise their IP rights. Failing to take action within this time will mean loss of those rights under the limitation statutes.

When an infringement has occurred there are practical advantages for an owner of IP rights to ensure that infringement action is brought quickly. These may include the benefit of surprise, the fact that evidence might be easier to prepare, and the fact that documents and witnesses may be more readily available. However, IP Australia recommends that owners of IP rights weigh up the following factors before commencing infringement proceedings:

 

  • The actual value of the IP rights that a manufacturer is about to take steps to protect.
  • The costs involved in protecting or defending those IP rights.
  • The financial and administrative impact that the infringement proceedings will have on business and personnel.
  • The extent to which, if at all, the infringing party has the financial resources to defend the action or to pay damages and costs [1].Although it is not strictly a legal requirement, it is usual practice for an owner of IP rights to issue a letter of demand to a person suspected of infringing their IP rights.An infringer will frequently cease activity once a letter of demand is received, which usually results in legal proceedings not being issued. Always consult a lawyer first. IP rights owners will obviously want the infringer to stop trading and in many cases the proceedings may in fact be brought against a financially sound importer or distributor with deep pockets rather than the seller of the goods.

 

The court has the power to order the seller of the imported product to provide information about possible infringers to IP rights owner and to grant an interim injunction on the selling of infringing products. This would allow the owner of IP rights to search the infringer’s premises and seize any relevant products.

Customs initiative

Owners of IP rights can also summon the help of Customs to prevent infringing goods from being imported into Australia. This provision is primarily designed to temporarily stop the importation and distribution of goods that were manufactured overseas – without the approval of the IP owner – while the IP owner seeks an order from the Court to permanently prevent infringing products from being imported.

The IP rights owner must lodge a notification with Customs that sets out their IP rights. Customs officers will then seize any goods infringing either the copyright or the trademark covered by the notification. The IP rights owner then has ten days to take court action against the importer before the products are released.

The manufacturers who will be in the best position to take legal action will have protected their rights through IP Australia by registering their trademarks and designs, as well as having sought product patents.

If you are in any doubt about what you need to do to protect your rights or to explain the litigation process and how it will affect you, please contact Tony Oakley. Tony Oakley is an Accredited Business Law Specialist with over 35 years experience in corporate practice. He has completed the World Intellectual Property Organisation course for Mediation in Intellectual Property Disputes and also on International Patent Protection. Call (03) 9550 4600 or email tony.oakley@nullhocw.com.au for more information. Agents are located in all states.

Disclaimer

This information is provided as a guide only. Advice should be sought on your circumstances.

[1] Source: IP Toolbox – using IP in your business.