Software

Background

Software enables the entire networked economy to work. Stimulated by strong demand for cloud-based software and productivity solutions, sales across all segments of the industry from application solutions to development tools to system infrastructure software have reached double-digit growth levels.

Customs and international trade issues

The customs valuationĀ treatment of imported computer software is regarded as a contentious topic by many Customs authorities around the world. In general, the customs regulations provide that certain software (or ‘intellectual property’) carried by media such as floppy disk, tape or CD can be imported duty-free. Duty is paid only on the value of the carrier medium which in many, but not all, cases has a nil duty rate thus eradicating customs duty completely. However, advances in modern technology have given rise to anomalies in the customs valuation of computer software, and liability for duty can differ according to the type of carrier media and the way in which the software is shipped. The main issues which are attracting the attention of Customs are:

  • software pre-loaded on hard disks;
  • software on CD-ROMs and DVDs;
  • business software containing some sound or vision;
  • games and entertainment software on computer disks, cartridges, DVDs and CD-ROMs;
  • pre-loaded ‘view only’ software for promoting new packages;
  • functional software;
  • multi-user software; and
  • communications software.

The industry faces a constant battle against counterfeiters and pirates who plague the software market. Software vendors must decide how they can adequately protect their intellectual property in a foreign country by using the provisions of the Berne Convention, the Universal Copyright Convention; the Buenos Aires Convention; and the WTO TRIPS Agreement.

Solutions to help you succeed

We can assist clients in easing the transition from domestic to international licensor by identifying some of the customs challenges the licensor will face in entering a foreign market.

Customs treatment of imported software: We can establish the appropriate and most cost-effective customs valuation treatment for imported software – imported on a carrier media, and/or supplied electronically over the web.

International Copyright Protection: Under the WTO TRIPS Agreement trademark owners of rights, under certain circumstances, can ask Customs to intervene when suspect goods are under customs control. The goods can be held for a limited time while the owners of the intellectual property right or trade mark can take the question to the national courts under national law to seek redress. We can assist clients by advising on the process to be followed and completing and lodging applications to intercept counterfeit and pirated products. Furthermore, using consistency and probability controls we can help Customs to perform their checks (on your behalf) in a more efficient manner, thereby improving the chances of a seizure. Because TRIPS has a global foundation, we can provide a joined-up global approach in both the exporting and importing countries.

Please note that we always welcome the opportunity to work with intellectual property lawyers.