Counterfeit goods in transit under the new EU trademark laws by Bartosz Krakowiak (Member of the Standing Committee on Trademarks)
The new EU Trademark Directive and the Regulation amending the EU Trademark Regulation (so far known as the CTM Regulation) were published, respectively, on 23 and 24 December 2015. While most of the provisions of the amended EU Trademark Regulation will enter into force on 23 March 2016, the new Directive requires implementation by the Member States into their national laws, which must be completed within 3 years (or 7 years for the provisions related to the administrative cancellation proceedings).
So far, following the famous Court of Justice ruling in the Nokia/Philips case (C-446/09 and C-495/09), counterfeit goods in transit have been actionable only where it was proven that they had been intended to be put on sale in the EU or in the Member State concerned (e.g. the goods had been sold to a customer in the EU or offered for sale or advertised to consumers in the EU, or where it was apparent from documents or correspondence concerning the goods that their diversion to EU consumers had been envisaged). Interestingly, such approach (modified with a proposal to shift the burden of proof on the owner or holder of goods) was reflected in the AIPPI Resolution Q230 adopted during the Seoul Congress in 2012. However, the AIPPI Resolution clearly provided that it sets only “a minimum standard” of protection.
With a purpose to strengthen trademark protection and combat counterfeiting more effectively, the new laws entitled trademark proprietors to prevent all third parties from bringing goods, in the course of trade, into the EU (the Regulation) or into the Member State where the trademark is registered (the Directive), without being released for free circulation there, where such goods, including the packaging thereof, come from third countries and bear without authorization a trademark which is identical or essentially identical with the trademark registered in respect of such goods (the exact definition corresponds with the definition of “counterfeit trademark goods” in the TRIPS Agreement). To this effect, it should be permissible for trademark proprietors to prevent the entry of counterfeit goods and their placement in all customs situations, including, in particular transit, transshipment, warehousing, free zones, temporary storage, inward processing or temporary admission, also when such goods are not intended to be placed on the market of the EU or the Member State concerned.
However, in order to reconcile the need to ensure the effective enforcement of trademark rights with the necessity to avoid hampering the free flow of trade in legitimate goods, in line with the EU and Member States’ obligations under the WTO framework (concerning in particular freedom of transit), at a later stage of the legislative process the EU lawmakers added a kind of safeguard clause which defines a situation where the above entitlement of trademark proprietors cannot be effectively exercised. It will be the case if, during the proceedings which may follow a customs detention, initiated in accordance with the EU Customs Enforcement Regulation before the judicial or other authority competent to take a substantive decision on a trademark infringement, the declarant or the holder of the goods is able to prove that the trademark proprietor is not entitled to prohibit the placing of the detained goods on the market in the country of final destination (due to his parallel trademark rights or other exclusive rights enforceable in that country).
The above change in the approach to the controversial issue of counterfeit goods in transit, despite some doubts as to its practical application, must be assessed positively. It should allow to efficiently protect interests of brand owners and help to fight dangerous phenomenon of counterfeiting in a manner which does not disrupt legitimate international trade.