A trademark owner can ask customs to monitor imports and exports of goods bearing its brand. To do so, the goods and the intellectual property object are entered in the customs register. One of the conditions for entry is insurance of the rights holder's liability towards those who may be harmed by a wrongful detention of goods.

What TROIS is

TROIS is the customs register of intellectual property objects maintained by the Federal Customs Service of Russia (FCS). It may include copyright and related rights, trademarks, service marks and appellations of origin of goods. Besides the national register, there is a unified customs register of intellectual property of the member states of the Eurasian Economic Union (EAEU); the requirements for entry into it are set by the EAEU Customs Code.

If an object is in the register and customs detects goods showing signs of infringement, it suspends their release and notifies the rights holder and the declarant. The rights holder then has time to go to court or to law enforcement.

Why insurance is needed

Suspending release is a serious measure. A shipment may sit in a temporary storage warehouse, a delivery may be disrupted, and storage costs and penalties under supply contracts may follow. If it turns out there was no infringement, the declarant, owner or recipient of the goods is entitled to claim compensation for the harm from the rights holder.

That is why the law requires the applicant to undertake to compensate such harm and to secure that undertaking. A liability insurance contract serves as that security: if a claim is justified, the insurance company pays compensation up to the sum insured.

Parties to the contract

  • Policyholder — the rights holder (a Russian or foreign company) or a person representing its interests.
  • Insured risk — liability for property damage caused to declarants, owners and recipients of goods and other persons in connection with the suspension of release.
  • Beneficiaries — the persons who suffered the harm.
  • Territory — the Russian Federation, or the territory of the Eurasian Economic Union for the unified register.

Documents submitted to the FCS

Together with the application for entry into the register, the rights holder submits:

  • documents confirming the rights to the intellectual property object (trademark certificate, licence agreement, etc.);
  • a description of the goods and their distinctive features that allow customs to identify counterfeits;
  • information on the persons authorised to import genuine products;
  • a written undertaking to compensate property damage;
  • the liability insurance contract.

The list of documents and the forms should be checked against the FCS regulations in force on the date of filing.

Main policy terms

Term

Objects are entered in the register for up to two years, with the option to extend. The insurance contract must be in force for the whole period the object is listed, so when the register entry is extended, the policy is extended too.

Sum insured

The law sets a minimum sum insured. The specific amount differs for the national register and the unified EAEU register — check it against the current version of Federal Law No. 289-FZ "On Customs Regulation in the Russian Federation" and the EAEU Customs Code. For large import flows it makes sense to choose a sum above the minimum: a single detained shipment may cost more.

Deductible and exclusions

Usually not covered are intentional harm, knowingly false information provided to customs, and fines and sanctions. A deductible lowers the price but increases the share of the loss the rights holder pays itself.

What drives the price

  • the number of objects and product groups being listed;
  • the volume of genuine imports and the number of official importers;
  • the history of release suspensions and claims;
  • the sum insured, term and deductible.

Practical tips

  1. Prepare an accurate description of the goods and a list of authorised importers — this reduces the risk of wrongful detentions and claims.
  2. Align the dates: the insurance contract, the trademark protection term and the register entry term.
  3. Decide in advance who will respond promptly to customs about suspended shipments: delays increase downtime and the parties' losses.

A rights holder's liability policy is a type of general liability insurance. If you import products yourself, cargo insurance will also be useful. Other solutions for companies are in the business insurance section. To get offers from insurers, submit a request to Polis Re specialists.