Czech Republic: Protection against Counterfeiting – Who Can Really Help?

→ Jiří Hrádek

The issue of counterfeiting has become more important with the increase of piracy and the import of goods from emerging markets suspected of breaching intellectual property rights. In the Czech Republic, how a person endangered by counterfeit products can tackle the situation depends on whether the counterfeit products include intellectual property rights.

If intel­lec­tu­al prop­er­ty is includ­ed and the coun­ter­feit­ed goods are import­ed, the sit­u­a­tion should be resolved under Act No. ¹⁹¹⁄₁₉₉₉ Coll. on mea­sures relat­ed to the import, export and re-export of goods infring­ing some intel­lec­tu­al prop­er­ty rights (the Coun­ter­feit­ing Act). If the goods come from “local” pro­duc­tion, the action against the coun­ter­feit­ers is gov­erned by Act No. ⁶³⁴⁄₁₉₉₂ Coll., on Pro­tec­tion of Con­sumers (the Act on Pro­tec­tion of Con­sumers).

If intel­lec­tu­al prop­er­ty is not includ­ed, the action against the coun­ter­feit­ers is gov­erned sole­ly by the Act on Pro­tec­tion of Con­sumers. This law lists sev­er­al author­i­ties respon­si­ble for the super­vi­sion of con­sumer pro­tec­tion. The Czech Trade Inspec­tion is the most vital among them with regard to coun­ter­feit prod­ucts.

Intel­lec­tu­al prop­er­ty includes trade­marks, indus­tri­al designs, pat­terns, patents and copy­right.

Defence against counterfeit products including intellectual property

If the coun­ter­feit prod­uct con­tains an intel­lec­tu­al prop­er­ty right, the own­er of the right may invoke the pro­tec­tion of the Cus­tom Admin­is­tra­tion of the Czech Repub­lic. The cus­toms author­i­ties may inter­vene against goods sus­pect­ed of infring­ing intel­lec­tu­al prop­er­ty rights and allow the own­ers of the affect­ed rights to pro­tect them.

The Czech Cus­toms Admin­is­tra­tion is active­ly engaged in the fight against coun­ter­feit­ing and pira­cy, using their pow­ers based on nation­al and Euro­pean leg­is­la­tion.

In par­tic­u­lar for cross-bor­der issues, the rel­e­vant cus­toms body noti­fies the own­er of an IP right that it has detained goods sus­pect­ed of infring­ing the owner’s intel­lec­tu­al prop­er­ty. The cus­toms admin­is­tra­tion gives the own­er infor­ma­tion about the own­er, recip­i­ent or dis­patch­er of the detained goods and the own­er of the IP right agrees to the destruc­tion of such goods.

IP right own­ers need not wait for cus­toms to inter­vene, but may pro­ceed in a more effec­tive and pre­ven­tive way. The Coun­ter­feit­ing Act allows the IP right own­er to request the cus­toms author­i­ties, before or after goods are detained, to adopt mea­sures against goods that are sus­pect­ed of infring­ing the owner’s IP rights. If the request is approved, cus­toms will send instruc­tions to all cus­toms bod­ies in the Czech Repub­lic on tak­ing mea­sures to pro­tect the owner’s rights.

In local issues (ie, when goods are dis­cov­ered at local shops, mar­kets, etc.), the cus­toms author­i­ties may, under the Act on Pro­tec­tion of Con­sumers, seize goods dur­ing each inspec­tion in the Czech Repub­lic. This is done based on noti­fi­ca­tions of the IP right hold­er or ex offi­cio.

Defence against products not including intellectual property

Unlike in the case of breach of IP rights, if the goods do not con­tain such rights, the defence against coun­ter­feit goods can hap­pen only with the help of the Czech Trade Inspec­tion based on the pow­ers stip­u­lat­ed in the Act on Pro­tec­tion of Con­sumers.

The key pro­vi­sion of the Act on Pro­tec­tion of Con­sumers is the pro­hi­bi­tion of the use of mis­lead­ing com­mer­cial prac­tices. Mis­lead­ing com­mer­cial prac­tice is defined by the EU Direc­tive and by the Act on Pro­tec­tion of Con­sumers as any mar­ket­ing of a prod­uct that cre­ates con­fu­sion with any prod­ucts, trade­marks, trade names or oth­er dis­tin­guish­ing marks of a com­peti­tor. This is always the case with coun­ter­feit prod­ucts.

The Czech Trade Inspec­tion active­ly seeks out activ­i­ties of entre­pre­neurs who breach con­sumers rights. The mar­ket check is car­ried out either ex offi­cio by the Inspec­tion or based on an ini­tia­tive by the own­er sub­mit­ted to the Inspec­tion.

The only neg­a­tive fact is that once a sub­mis­sion is filed, the claimant must pro­vide secu­ri­ty for the pur­pos­es of the Inspection’s activ­i­ty. The secu­ri­ty is returned if the sus­pi­cion turns out to be jus­ti­fied, and any right hold­er who wish­es to effec­tive­ly pro­tect his inter­ests is glad to pay.

Conclusion

Pro­duc­ers who may be sub­ject to coun­ter­feit­ing should use all options to defend their rights. To pro­tect against coun­ter­feit­ing pira­cy in cross-bor­der cas­es, pro­duc­ers may file a request with cus­toms author­i­ties to inform them about goods that may be placed on the local mar­ket.

As soon as the coun­ter­feit goods are iden­ti­fied on the local mar­ket, the Czech Act on Pro­tec­tion of Con­sumers sets out detailed rules for the inspec­tion of goods and grants pow­ers to the Czech Trade Inspec­tion and cus­toms author­i­ties.

The cus­toms author­i­ties are the most suit­able bod­ies to pro­tect against coun­ter­feit-proof IP rights. When no IP rights can be iden­ti­fied, how­ev­er, the Czech Trade Inspec­tion can help uncov­er mis­lead­ing com­mer­cial prac­tices, such as the mar­ket­ing of goods that cre­ate con­fu­sion with a competitor’s prod­uct.

IP right owners need not wait for customs to intervene, but may proceed in a more effective and preventive way.