We recently explored counterfeiting and copycatting, so it is natural that our next article focuses on one of the many ways to help prevent counterfeits and, potentially, copycats – by making an Application for Action (AFA).
What is an AFA?
Goods entering and leaving the UK are regularly checked by customs for possible counterfeits and/or infringements. An AFA is an official form that requests that suspected counterfeit/infringing goods be detained so that the authenticity of the goods can be examined.
An AFA is based on Intellectual Property Rights (IPRs) including, but not limited to:
- Trade marks
- Trade names
- Design rights
Should use or validity of the IPR in relation to the products covered by the AFA change, the AFA should be updated to reflect this. It can be specific or general and is valid for one year, after which it can be renewed for a further year.
Please note that customs remain unable to take action in respect of parallel imports - goods initially placed on the EEA market with consent of the IPR holder, subsequently resold or distributed in the UK without the IPR holders consent – due to the principle of exhaustion of rights. This principle is currently being considered in detail in the UK and so this position may change in future.
What is the territorial scope of an AFA?
Prior to 31 December 2020, the UK was a part of the EU wide customs enforcement system as governed by EU border legislation. Therefore, an EU AFA covered all 28 member states of the EU, including the UK.
However, the UK is now precluded from this system, which continues for the remaining 27 member states, and was required to implement new legislation and procedures to continue an equivalent customs enforcement system. This is governed by the Customs (Enforcement of Intellectual Property Rights) (Amendment) (EU Exit) Regulations 2019.
In this regard, post 1 January 2021:
- a pre-existing EU AFA filed via the national customs office of the 27 member states is valid throughout the EU only and no longer has effect in the UK;
- a new EU AFA filed via the national customs office of the 27 member states will be enforceable throughout the EU only;
- a pre-existing EU AFA filed via the UK HMRC is valid in the UK only and no longer has effect throughout the EU; and
- a new UK AFA filed via the HMRC will be enforceable in the UK only.
The key point here is that to continue customs protection throughout the UK and EU, you now require two separate AFAs.
For the purposes of this article, we will focus on the UK system.
Who can file an AFA and how?
An AFA can be filed by the IPR holder itself or its representative. If the AFA is filed by the representative, they will need a suitable power of attorney. Also, the IPR holder, and its representative if relevant, will need to hold an Economic Operators Registration and Identification (EORI) number
In the UK, an AFA is now filed via the HMRC portal, which is accessed using a Government Gateway ID and password.
It is worth noting that all UK AFAs, including those which were previously EU AFAs but converted to a UK only AFA due to Brexit, will need to be renewed via this online portal, rather than the previous paper forms.
What information is needed for an AFA?
It is advisable to include as much information about the IPR in an AFA as possible so as to allow customs to distinguish between infringing and genuine goods. In this regard, you should provide:
- details of the IPR
- proof of ownership of the IPR, for example registration and/or renewal certificates
- a sufficiently detailed description of the goods, including images
- specific technical data on the authentic goods, for example its markings, bar codes etc
- technical differences, if known, between the genuine goods and suspected infringing goods
- places of manufacture and distribution
- importation routes of genuine goods
- details of authorised entities to import and distribute genuine goods
- information regarding any previous infringements
- specify whether this is to cover (1) Great Britain and Northern Ireland, (2) Great Britain only or (3) Northern Ireland only
How does the AFA work?
If goods are detailed under an AFA, IPR holders generally have 10 working days to give consent to the destruction of the goods. This timeline may be extended by a further 10 working days in certain circumstances. If the goods are perishable, the period of detention is reduced to 3 working days.
Customs will typically provide samples of the infringing products, which can assist businesses develop intelligence in identifying infringing goods and can assisting with forming anti-counterfeiting policies internally.
The owner of the goods will be notified of the seizure and will have 10 working days to consent or object to the destruction of the goods. Unless the owner explicitly objects, the goods will be destroyed if requested by the IPR holder. Failure to reply is considered implied consent. If the owner objects, the IPR holder would need to bring court proceedings to confirm that there has been an infringement and obtain destruction of the goods.
Customs can automatically destroy small shipments weighing less than 2kg or comprised of three units or fewer, provided that the owner of the goods does not object and the relevant section is ticked on the AFA, without the IPR holders instructions. This reduces time and cost spent in reviewing small seizures and replying to customs.
Why do I need an AFA?
It is a simple and effective tool to identify counterfeit / infringing goods, removing them from the market and gathering useful intelligence to assist with anti-counterfeiting.
Although it is possible for customs to seize goods for which there is no AFA, in such situations the process for ensuring destruction of the goods is generally more complicated and expensive.
In cases where there is no AFA, customs has only 1 working day to identify a likely IPR holder, otherwise the goods are released to the owner. If a potential IPR holder is identified, and they wish to have the goods destroyed, they have 4 working days to submit an AFA to cover the particular seizure. If an AFA is not submitted in time, customs are required to release the goods. If a potential IPR holder is not identified, the goods are released and you would not be made aware of the potential infringement.
An AFA provides a higher level of certainty that infringing goods will be identified, seized and reported to you. Without an AFA, infringing goods may slip through.