Customs Circular No. 10/2011 dated 24/02/2011
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007
-instructions for implementation -reg.
Attention is invited to Board's Circular No 41/2007-Customs dated 29-10-2007 on
the above subject. In the said Circular, it was provided that the right holders
may furnish a General Bond without security to the Commissioner of Customs prior
to the grant of registration, undertaking to execute consignment specific Bonds
with the jurisdictional Commissioner of Customs at the port of interdiction
within three days from the date of interdiction of any allegedly infringing
goods. This arrangement was prescribed considering the fact that at the time of
registration but prior to importation, it may be difficult to ascertain and fix
the Bond amount corresponding to the value of suspected infringing goods that
are to be imported. Further, this would lock in right holders' money in the form
of security.
2. However, representations have been received from the trade requesting for a
centralized bond valid for all ports, as execution of bond at the port of
interdiction within three days of interdiction of allegedly infringing goods is
stated to be a cumbersome process. The opinion of Law Ministry on legal
implications of a single Bond across different customs locations was sought. The
Ministry of Law and Justice clarified as under:-
"The language of the Bond clearly indicates that the Bond is executed in favour
of President of India and the same is enforceable by any authorised Commissioner
(Customs). If the right holder is allowed to furnish one time Bond along with
security at the time of Registration and all the ports to have access to this
centralized account, there appears to be no legal objection for introduction of
the same as Bond to be executed is in favour of President of India and not in
favour of Commissioner (Customs)."
3. The issue has been considered in the Board. Currently, the right holders are
required to give a notice for registration in the manner detailed in the
Circular No. 41/2007-Customs dated 29.10.2007 to the Commissioner of Customs at
any one of the ports where allegedly infringing goods are likely to be imported.
The right holder can mention the details of other ports where he suspects that
allegedly infringing goods may be imported and where he desires to get
protection of his right. The right holders are required to furnish a General
Bond with or without security to the Commissioner of Customs [along with
indemnity bond] prior to the grant of registration, undertaking to execute
consignment specific Bond along with security, as may be prescribed by the
Commissioner of Customs at the port of interdiction within three days from the
date of interdiction of any allegedly infringing goods.
4. Considering the genuine difficulties expressed by the right holders and
keeping in view the opinion of the Law Ministry, it has been decided to
implement an on-line, system driven, centralized bond management module as part
of the existing Automated Recordation and Targeting System (ARTS). The main
objective of this system is to provide for a single centralized bond account
with security that can be used at all ports in India, so that the right holders
do not have to rush to different customs formations to execute consignment
specific bonds with securities in case of interdiction of allegedly infringing
consignments at the different Customs formations. The highlights of this module
are as below:
(i) The right holders will have the option to furnish either a general bond
before registration followed by a consignment specific bond at the port of
interdiction of allegedly infringing goods or a centralized bond at the port of
registration which will be valid at all ports in India. The general bond and the
consignment specific bond, which are off-line, will be in the formats prescribed
hitherto as per Annexure-A and Annexure-B to Circular No. 41/2007 -Customs dated
29th October 2007. Alternatively, as stated above, the right holders can furnish
a Centralized Bond (which will be a running bond) at the port of registration
for an amount sufficient in their judgment, to correspond to value of suspected
allegedly infringing goods, all over India, as per Annexure-I to this circular.
The existing right holders, who have registered their rights with customs
authorities (equipped with a valid UPRN and UTRN) can migrate to the centralized
bond management system by communicating their willingness and submitting the
centralized bond with Security in the prescribed format to the same Commissioner
of Customs, where the general bond was initially furnished. Otherwise, they will
continue to operate in the system of general bond and consignment specific
bonds.
(ii) The right holders exercising the option of a Centralised Bond will have to
necessarily furnish a security for an amount equivalent to 25% of the value of
the Centralized Bond with the customs formation, where the right holder is
registered.
(iii) Upon fulfillment of requirements by the right holders, the customs
formation, where the right holders are registered, will create an on-line
centralized bond account and security account. The system will generate a unique
Bond Registration Number (BRN) and the same will be e-mailed to the right holder
or his/her authorised representative, whose e-mail id is provided in the notice
given by the right holders. All future correspondence relating to bond
management shall be with reference to this BRN only. There will be a single BRN
for a right holder which may cover more than one Unique Permanent Registration
Number (UPRN). In other words, a centralized bond account can cover one or more
rights registered by a right holder with the Customs. However, to enable linking
of all UPRNs of a right holder, the applicant (whether the right holder or the
service-provider/ consultants / law firms) has to be the same in all the UPRNs
which are to be so linked. Thus, if the right-holder chooses two different law
firms to register his Trademarks with the Custom Authorities or registers one
trademark himself and other through a service provider, then both these UPRNs
cannot be linked through a single Bond as the applicants in the two UPRNs would
be different.
(iv) In case of interdiction of allegedly infringing goods, if the amount of
Centralised Bond and the security are not sufficient to cover the value of the
goods interdicted, then within three days of interdiction, the right holders
would be required to execute a supplementary bond (as per Annexure - II to this
circular) and furnish security for the corresponding amount. The supplementary
bond, along with security has to be executed invariably with the Commissioner of
Customs where the centralized bond has been executed. Commissioners of Customs
at other ports where the allegedly infringing goods are interdicted can not
accept the supplementary bonds.
(v) The ARTS has been so designed that while the creation of Centralized Bond
account, credit (top-up) of the amounts to the bond and the security and
cancellation thereof are operated only by the officers of the customs formation
where the Centralized Bond is executed, the debit of amounts and re-credit of
the amounts pertaining to those debits can be done only by officers at the ports
where the allegedly infringing goods are interdicted, The re credit shall be
done after verification of the fact that no legal proceedings and dues are
pending in relation to the debit.
(vi) While the right holders who choose to execute general bond have to execute
the consignment specific bond at the port of interdiction within 3 days of
interdiction of the consignment allegedly infringing the right of the right
holders in terms of Circular No 41/2007-Customs dated 29th October 2007, the
right holders who have opted for the Centralized bond and in whose case a BRN
has been generated, have to inform in writing the jurisdictional IPR Cell, where
the allegedly infringing goods have been interdicted, duly mentioning the BRN
along with the particulars of debits to be made in the bond and security
accounts so that the same can be verified and debited by the IPR cell. If the
right holder fails to submit such a letter, customs authorities will be under no
obligation to suspend the clearance of the allegedly infringing goods. It shall
be responsibility of the right Holders to ensure that that the Centralized Bond
and security account has sufficient balance. In case of inadequate balance, the
same can be supplemented by executing a supplementary bond with necessary
security at the Custom House where registration has taken place and the BRN has
been generated. To enable this, the right holders have been given an on-line
facility to view and check their balance using the BRN-
(vii) Irrespective of availment of either option i.e. execution of General Bond
and consignment specific Bond or Centralised Bond, the rights holders would be
required to furnish an indemnity bond in the format prescribed at Annexure-C to
the Circular No 41/2007 -Customs dated 29th October 2007.
5. In case of suspension of clearance of goods by Customs on its own initiative,
the right holder is required to give notice as laid down under rule 3 of the
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 and to
execute Bonds as specified in Rule 5 of the Rules. The right holder will now
have the option to execute a general bond or a centralized bond, as the case may
be, following the procedure detailed in the foregoing paragraphs.
6. The Deputy/Assistant Commissioner of Customs while intimating the right
holder about interdiction of any goods, will also intimate the value of the
goods to the right holder so as to enable him to work out the required bond
amount or supplementary bond amount, along with the security.
7. The IPR Cells will accept the requests for migration of existing IPR holders
to the new system. The IPR cells should properly monitor the work relating to
execution of bonds. Monitoring of the Bonds and securities including their
closure and expiry is the prime responsibility of the Commissioner with whom the
right is registered. The closure of bond will require checking and confirmation
of the fact that there are no debits in the centralized bond account pertaining
to any of the UPRNs by any other Custom House. All steps to renew the bank
guarantees, wherever executed, shall be initiated by the IPR Cells well within
time and at least 15 days before the expiry of the bank guarantee.
8. The Board's Circular 41/2007-Customs dated 29-10-2007 stands modified to the
above extent.
9. Wide publicity to this Circular may be given by way of issuance of public
notice and standing order. The Additional Director General, Risk Management
Division shall inform the actual date of commencement of this new system and
will issue separate set of instructions for smooth operation of the centralized
bond management module to the Commissioners of Customs.
10. Difficulties, if any, faced in the implementation of this circular, may be
immediately brought to the notice of the Board.
11. Please acknowledge receipt.
12. Hindi version follows.
F. No. 305/1/2008-FTT
Yours faithfully,
(P. S. Pruthi)
Commissioner (Customs)
ANNEXURE-I
(Centralized Bond with Provision for Security Deposit)
BOND EXECUTED IN PURSUANCE OF REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH
INDIAN CUSTOMS
[See Rule 5(a) of Intellectual Property Rights (Imported Goods) Enforcement
Rules, 2007]
[To be executed by the Right Holder(s)]
KNOW ALL MEN BY THESE PRESENTS THAT I/we
............................................................... residing at
hereinafter referred to as "Right Holder" (which expression shall include its
successors / heirs, executors, administrators and legal representatives) am/are
held and firmly bound unto the President of India hereinafter called the
"President" (which expression shall include his successors and his
representative Officers like Commissioner of Customs and his authorized
officers) in the sum of Rs ........ (Rupees------------only) to be paid to the
President for which payment well and truly to be made, I / we bind myself /
ourselves, my / our successors / heirs, executors, administrators and legal
representatives firmly by these presents.
Sealed with my / our seal(s) this ....................................... day of
-------------------------------.
20...................................................................................
WHEREAS
The Commissioner of Customs or his authorized Officer at ..................
(hereinafter called the "Proper Officer") has agreed to register the
intellectual property right (hereinafter abbreviated as "IPR") held by me/us and
to suspend clearance of goods suspected to be infringing the IPR held by me/us,
depending on the information furnished by me/us and on the basis of the
declarations made by the Importers in the course of importation, the Right
Holder hereby agrees to furnish such bond and security, hereinafter specified,
in terms of Rule 5 (a) of the Intellectual Property Rights (Imported Goods)
Enforcement Rules, 2007.
The Right Holder has deposited with the Proper Officer at ............
------------, the securities as mentioned in the Schedule hereunder written of
the face value of Rs
..................................................................................................
(Rupees ........... only) endorsed in favour
of.................................... as security for the due observance and
performance of the terms of conditions on the part of the Right Holder,
prescribed as per the ibid Rules.
NOW, IT IS HEREBY AGREED AND DECLARED that –
(i) The Right Holder shall keep the Customs abreast of validity of registration
obtained by him under the IPR laws namely The Copyright Act, 1957; The Trade
Marks Act, 1999; The Patents Act, 1970; The Designs Act, 2000 and The
Geographical Indications of Goods (Registration and Protection) Act, 1999;
expiry of the term of registration and renewal thereof, if any; cancellation;
grant of compulsory licence in accordance with the law etc.
(ii) The Right holder, having recognized limitations of international trade and
understood general functioning of Customs, shall share the trends and
information with Customs on an on-going basis, about suspected imports of
infringing goods violating the IPR laws, as may be required to interdict
consignments and to suspend the clearance.
(iii) The Right Holder undertakes to protect the importer, consignee and the
owner of the goods and the competent authorities against all liabilities that
are incidental and ancillary to the act of suspension of clearance of allegedly
infringing goods, in case it is established that the suspension is vexatious.
(iv) The Right Holder shall bear all the costs towards sampling, destruction,
demurrage and detention charges incurred till the time of destruction or
disposal of such infringing goods, upon being confirmed.
(v) The Right Holder shall join the proceedings as per the time lines prescribed
in terms of the ibid Rules, failing which, they agree, to not to object to the
release of the goods.
(vi) The President or the Proper Officer, without prejudice to any other mode of
recovery may, inter alia, adjust the security deposit / securities in part or
full towards the dues arising out of clause (iii) and (iv) supra.
(vii) In case the proceedings are not final, the right holder agrees to renew
the bank guarantee before 15 days of expiry of the bank guarantee, failing
which, the bank guarantee shall be encashed by the department.
The Schedule of Securities above referred to [Particulars of the amount
deposited, along with consignments, if any]
IN THE WITNESS WHEREOF the Right Holder has herein set and subscribed its hands
and seals the day, month and year first above written.
SIGNED AND DELIVERED by the Right Holder at.................
In the Presence of :-
1 ...........................
2 ............................
Xxxxxxxxxxxxxx
Accepted
For and on behalf of the President of India (Signature of the Proper Officer
with Official Stamp and Seal)
ANNEXURE - II
(Supplementary Bond with Provision for Security Deposit)
BOND EXECUTED IN PURSUANCE OF REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS WITH
INDIAN CUSTOMS
[See Rule 5(a) of Intellectual Property Rights (Imported Goods) Enforcement
Rules, 2007]
[To be executed by the Right Holder(s)]
KNOW ALL MEN BY THESE PRESENTS THAT the Proper Officer of Customs has been
pleased to accept on behalf of the President of India the Centralized bond
executed by us vide letter dated ------------.and assigned the Bond Registration
Number (BRN) ------------, in respect of the IPRs registered with the Custom
House and UPRNs ------------ and ------------ so generated against them,
And
Whereas the amount bound by myself / ourselves is inadequate to cover the
suspension of clearances of any suspect infringing future consignments and / or
any suspect consignment already interdicted by any customs formation in India,
I/we ------------. residing at ------------.hereinafter
referred to as "Right Holder" (which expression shall include its successors /
heirs, executors, administrators and legal representatives) am/are held and
firmly bound unto the President of India hereinafter called the "President"
(which expression shall include his successors and his representative Officers
like Commissioner of Customs and his authorized officers) in the sum of Rs
------------. (Rupees ------------. ------------.only), in addition to any
amount bound earlier, to be paid to the President for which payment well and
truly to be made, I / we bind myself / ourselves, my / our successors / heirs,
executors, administrators and legal representatives firmly by these presents.
Sealed with my / our seal(s) this ........................................ day
of
------------.20........................................................................................
WHEREAS
The Commissioner of Customs or his authorized Officer at------------.
(hereinafter called the "Proper Officer") has agreed to register the
intellectual property right (hereinafter abbreviated as "IPR") held by me/us and
to suspend clearance of goods suspected to be infringing the IPR held by me/us,
depending on the information furnished by me/us and on the basis of the
declarations made by the Importers in the course of importation, the Right
Holder hereby agrees to furnish such bond and security, hereinafter specified,
in terms of Rule 5 (a) of the Intellectual Property Rights (Imported Goods)
Enforcement Rules, 2007.
The Right Holder has deposited with the Proper Officer at ............... , the
additional securities as mentioned in the Schedule hereunder written of the face
value of Rs------------(Rupees------------.only) endorsed in favour
of------------.as security for the due observance and performance of the terms
of conditions on the part of the Right Holder, prescribed as per the ibid Rules.
NOW, IT IS HEREBY AGREED AND DECLARED that -
(i) The Right Holder shall keep the Customs abreast of validity of registration
obtained by him under the IPR laws namely The Copyright Act, 1957; The Trade
Marks Act, 1999; The Patents Act, 1970; The Designs Act, 2000 and The
Geographical Indications of Goods (Registration and Protection) Act, 1999;
expiry of the term of registration and renewal thereof, if any; cancellation;
grant of compulsory licence in accordance with the law etc.
(ii) The Right holder, having recognized limitations of international trade and
understood general functioning of Customs, shall share the trends and
information with Customs on an on-going basis, about suspected imports of
infringing goods violating the IPR laws, as may be required to interdict
consignments and to suspend the clearance.
(iii) The Right Holder undertakes to protect the importer, consignee and the
owner of the goods and the competent authorities against all liabilities that
are incidental and ancillary to the act of suspension of clearance of allegedly
infringing goods, in case it is established that the suspension is vexatious.
(iv) The Right Holder shall bear all the costs towards sampling, destruction,
demurrage and detention charges incurred till the time of destruction or
disposal of such infringing goods, upon being confirmed.
(v) The Right Holder shall join the proceedings as per the time lines prescribed
in terms of the ibid Rules, failing which, they agree, to not to object to the
release of the goods.
(vi) The President or the Proper Officer, without prejudice to any other mode of
recovery may, inter alia, adjust the security deposit / securities in part or
full towards the dues arising out of clause (iii) and (iv) supra.
(vii) In case the proceedings are not final, the right holder agrees to renew
the bank guarantee before 15 days of expiry of the bank guarantee, failing which
, the bank guarantee shall be encashed by the department.
The Schedule of Securities above referred to [Particulars of the amount
deposited, along with consignments, if any ]
IN THE WITNESS WHEREOF the Right Holder has herein set and subscribed its hands
and seals the day, month and year first above written.
SIGNED AND DELIVERED by the Right Holder at..................
In the Presence of :-
1..................
2..................
xxxxxxxxxxxxxx
Accepted
For and on behalf of the President of India (Signature of the Proper Officer
with Official Stamp and Seal)