Take this example.
Suppose, Subject A sends goods (let’s presume generic pharma products) to Subject C. But Subject A can transport its goods VIA Subject B (transshipment/in-transit/en-route) only. But Subject B confiscate the goods sent buy Subject A on the complaint filed by the local companies under the jurisdiction of Subject B, on the grounds that, the goods In-Transit contains infringed products. Subject A contends, that the goods were lawfully produced in their vicinity under their local laws and no off-patent/trademarked products exists at the location of Subject A, and also, where the goods are being sent to i.e. at the destination of Subject C. Subject C confirms the same. But Subject B contends that as the same products being IP protected under the vicinity of Subject B, the goods in-transit can be confiscated.
Who is correct? Subject A, or, Subject B, or, Subject C, or, both Subject B and Subject C, or, alone Subject B?
Now, this happened in the year 2010, when the consignment from India to Latin America / Africa VIA EU was confiscated by EU on the similar grounds as explained by the Subject B above, that goods in transit carries infringed products. India filed complaint at WTO, for the seizure of generic drugs that was supposed to be used for Non-European countries, with the same arguments given by Subject A, of the generic drugs under transit are off-patents in the country of origin, and also at the destination. Wherein, as stated by Subject A above, India said, there was no inference of goods being diverted to the EU market, or even an attempt being made of that through any trade channel. Post this, EU after the complaint, amended its Border Regulations, wherein In-Transit goods won’t be seized, unless, there’s an act of diversion of such goods been made at the local markets! Then, EU came out with ACTA, which it failed to galvanize.But, what do the provisions’ say?
Note 1: The IP Rights Are Territorial, EXCEPT, in case of Copyrights!
Note 2: Confiscating In-Transit goods (Except in Case of Copyrights) wherein both the source and destination does not cover the IP protection of the confiscated goods, is against the free trade movement under WTO, that also invokes Note 1 above.
Note 3: That’s why Madrid / PCT / Hague route exists which the companies take to protect their IP all over the World to circumvent Note 1, and to enforce it territorially, except in case of Copyrights.
Further if you read Section 49 of the Patents Act, then, Patent rights are not infringed when used on the vessels etc. which are halted temporarily or accidentally in India. The same provision by and large is applicable in all the signatory countries of WTO. 😊
© Pranav Chaturvedi
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