Customs Service Ups Its Game against Counterfeit Products - International Law Office

Under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, WTO member countries should restrict the import and export of goods infringing IP rights (eg, counterfeit products that violate the rights of trademark owners). However, the import, export and distribution of such infringing goods in Korea is continuously increasing. As evidenced by the records held by the US and Japanese customs authorities for 2001, Korea was one of the top three countries for producing counterfeit goods.

However, due to the concerted efforts made by the Korea Customs Service (KCS) in recent years, Korea became the most successful country for IP rights protection at the 2006 conference of the World Customs Organization. In February 2006, in order to conduct raids effectively, the KCS set up special raid teams with the deputy commissioner as director of 144 teams, comprising 298 professional staff. In raids carried out in April 2006, the KCS increased its success rate in seizing counterfeit goods nearly threefold, with 458 raids; by the end of May 2006 its rate had increased nearly eightfold to a value of W726 billion.

The Korean trademark protection system for exported and imported goods is based on the Customs Act and the Act on the Investigation of Unfair International Trade Practices and Remedy against Injury to Industry. The former provides a system to delay the customs clearance of goods infringing trademarks, while the latter sets out penalties for those who infringe trademarks.

Article 4 of the Act on the Investigation of Unfair International Trade Practices and Remedy against Injury to Industry designates an act to import or export goods infringing a trademark or to sell or manufacture such goods in Korea as an unfair trade practice and prohibits such acts. Any person may request the Korean Trade Commission (KTC) to investigate an unfair trade practice within one year of the date on which such an alleged act is performed, and the KTC may order any corrective measures after conducting an investigation. Those who are involved in the unfair trade practice should comply with the corrective measures; if they violate these corrective measures they shall be punished by imprisonment of up to three years or a fine of up to W30 million. A request for investigation and the filing of supporting documents with the KTC may be handled by any person who has suffered damages due to the infringement of a trademark.

Article 235 of the Customs Act prescribes that the import and export of goods infringing a trademark registered under the Trademarks Act is prohibited. In order to enforce this regulation, the following system is in operation. A trademark owner must register its trademark with the KCS and, if any goods suspected of infringing such a registered trademark are declared to the KCS for import or export, the KCS shall immediately notify the trademark owner of the alleged infringement and the trademark owner may request the KCS to withhold the customs clearance of such goods. In 2002 the KCS minimized the opportunities to import or export infringing goods by developing and operating a computer system to verify trademarks. This trademark protection procedure may be applied directly by the trademark owner or its counsel, or by customs agents based on a power of attorney.

For further information on this topic please contact Hyung Jin Kim or Min Ho Shin at Woo Yun Kang Jeong & Han by telephone (+82 2528 5200) or by fax (+82 2528 5228) or by email (kimhj@wooyun.co.kr or mhshin@wooyun.co.kr).