AN EFFECTIVE WEAPON IN THE BATTLE AGAINST COUNTERFEITS – NEW OPTIONS IN THE TRANSIT OF GOODS
The most recent issue of the German periodical “Zoll aktuell” (issue no. 4/2016, page 15) reports on a typical case of counterfeit goods in transit under the heading “Mega seizure at Frankfurt Airport”:
“Our colleagues at Frankfurt Airport seized tons of counterfeit goods valued at approx. Euro 24.9 million, ranging from sports to electronic articles and luxury articles made by 137 different brand manufacturers. […] All of the seven shipments weighing 15.5 tons in total originated from China and were addressed to recipients in Russia and Ukraine. The colleagues could detain the counterfeit goods due to a new EU regulation: Since March 2016 it has been admissible to detain shipments in transit if the goods are suspected of infringing EU trade marks and the right holders concerned are entitled to prevent the placing of the goods on the market of the country of final destination.”
According to the previous case-law of the Court of Justice of the European Union, the mere transit of goods does not constitute a trade mark infringement in the EU as long as the goods are not placed on the EU market. Until recently, without further indications the customs authorities could neither take enforcement measures against such goods in transit on the basis of national laws nor could they do so on the basis of the Anti-Piracy Regulation (EU No 608/2013). Customs authorities and trade mark owners could take action in exceptional cases only where there were certain indications that the goods were placed on the EU market (cf. CJEU, judgement of December 1, 2011, C-446/09 and C-495-09, para. 61 – Philips/Nokia).
So on what kind of “EU regulation” did the Frankfurt customs authorities base their detention of the goods in transit on their way from China to Russia/Ukraine?
It is Article 9 (4) of the new EU Trade Mark Regulation. This regulation entered into force in March 2016. In simple terms, it classifies goods in transit originating from third countries as pirated goods if the goods bear a trade mark which is identical or essentially identical with an EU trade mark. Unlike before the customs authorities no longer need to suspect that the goods infringe a trade mark. Rather, the declarant or the holder of the goods must set forth and prove in specific proceedings that no right has been infringed in the country of final destination (in this case: Russia and Ukraine).
This allocation of the burden of proof, involving costs and practical difficulties, shows that the legislator really provided for an effective weapon in the battle against counterfeit products. We discussed in our lectures held at the event „Preventing brand and product piracy at trade fairs” on September 27, 2016 at the Düsseldorf Chamber of Industry and Commerce that this provision may also be useful as a preventive measure in the war against counterfeit products at trade fairs.
However, it is evident which disadvantages this provision may have for reputable businesses and their goods in transit in individual cases. In addition, the new provision raises many legal issues which must be clarified by national courts and ultimately by the CJEU. For the time being, only the texts of the EU Trade Mark Regulation and the Guidelines of the European Commission of 5 July 2016 are available.
- Brand and product piracy must be combatted resolutely and effectively. Counterfeits (just think of health and safety) are harmful to humans and detrimental to the economy. The current figures on counterfeits speak for themselves and show their relevance and impact: The number of counterfeit goods seized by EU authorities continued to rise in 2015 (European Commission, September 2016). Up to 5 percent of the goods imported into the EU are counterfeits (OECD, Mapping the Economic Impact, April 2016). The sales lost by legitimate manufacturers and wholesalers of medicines in the EU amount to approx. € 10.2 billion each year (EUIPO, September 2016). The numerous preventive measures which enterprises should take against counterfeits comprise applications for border seizure pursuant to the Anti-Piracy Regulation and the use of the relatively new Enforcement Database of the European Union Intellectual Property Office.
- Once the goods are brought into the EU it is important to prepare measures to be taken at trade fairs (where the products are often presented for the first time), amongst others, to be able to take action against counterfeiters by quick and effective quick response legal teams.
- You can rely on our expertise in your battle against counterfeiters. Our international network allows us to offer legal advice to enterprises and entrepreneurs in cross-border matters.