New law to combat counterfeiting

Counterfeiting continues to be a problem in New Zealand, with the NZ Customs regularly intercepting shipments of counterfeit and pirated goods destined for the local market.

Under the Trade Marks Act 2002, it is a criminal offence to import or sell goods with falsely applied registered trademarks.

A product is considered a counterfeit when a registered trademark is applied to it 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 trademark and copyright legislation however ramp up the government approach to counterfeit products.

These amendments create the role of ‘enforcement officers’ within NZ Customs, which has wide-reaching powers allowing officials to investigate instances of counterfeiting and pirating, and conduct search and seizure operations as part of their investigations.

Special powers

The amendments allow New Zealand Customs and the National Economic Unit of the Economic Development ministry the authority to investigate and prosecute the trademark and copyright offences in addition to existing police powers.

Prior to the amendments, counterfeiting was not high on the police priority list for prosecutions, with only isolated cases reaching the courts.

Under the amendments, enforcement officers are able to seize counterfeit goods without a warrant, if they reasonably believe that 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 the concerned people to attend questioning; refusal to comply is in 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 NZ Customs if the importer consented to forfeit them, or if the owner of the trademark 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 hence, NZ Customs had no option but to release the counterfeit goods to the importer.

Repeat offenders

It is anticipated that NZ Customs will 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 trademark 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.

Rosemary Wallis and Amy Kingston are with Baldwins Intellectual Property, respectively as Partner and Solicitor.

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