Centralised Single Bond Backed by 25% Security for All India
Protection of IPR Introduced
[CBEC Circular No.
10 dated 24th February 2011]
Subject:
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 -instructions
for implementation.
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.
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)