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.
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.