The Court held that counterfeit goods purchased by an EU consumer from a seller based in a country outside the EU could be seized and destroyed by Customs. No wonder brand owners are rejoicing - but the ruling has potentially far-reaching implications.
Background
Mr Blomqvist in Denmark ordered a watch, described as a Rolex, through the English language website of a Chinese on line shop. The seller sent the watch to Mr Blomqvist from Hong Kong by post but it was intercepted by Danish customs. When Rolex confirmed that the watch was counterfeit Mr Blomqvist, objected to the destruction of the watch.
The Danish Court recognised that the Customs Regulation (then EC/1383/2003, since replaced by EU/608/2013 containing similar relevant provisions) required an IP right to have been infringed for Customs’ powers of detention and destruction to be invoked. But the importation by Mr Blomqvist was for his personal use and not in the course of trade as required by the Trade Mark Directive.
On referral to the CJEU, the Court held that the mere acquisition of the goods by Mr Blomqvist was sufficient to afford the IP right holder the protection of the Customs Regulation.
The judgment
The judgment refers back to the CJEU's decision in Nokia/Philips (Joined Cases C-446/09 and C-495/09) where the Court refused to countenance the interception of counterfeit goods in transit because there was no evidence that the goods would be diverted onto the EU market and therefore no threatened act of infringement by importation. However, the Court in Rolex established a different act of infringement.
Acquiring goods is not a restricted act under Article 5 of the Trade Marks Directive, and the acquisition by Mr Blomqvist was not in the course of trade anyway. The Court specifically held that it was not necessary for there to have been an earlier act of infringement by the seller such as the goods having been offered for sale or advertised to consumers in the EU.
Instead, it held that the acquisition of goods by a consumer in the EU is sufficient to turn a sale by a non-EU seller, through a website outside the EU, into a sale within the EU. This sale constitutes use of the trade mark by the non-EU seller, in the course of trade, within the EU and renders the goods in question infringing when they arrive at the EU border. The judgment therefore sweeps aside established principles that a sale takes place when title to the goods passes to the purchaser (in this case, presumably, when the goods were put in the post in Hong Kong).
The judgment is also important because it means that the parallel import of genuine goods into the EU by a private purchaser, not in the course of trade, must now be actionable (although not subject to intervention under the Customs Regulation) since the acquisition by the EU purchaser will render the goods infringing.
Nevertheless, the surprising terms of the judgment raise some doubt as to whether an act of infringement is in fact necessary to invoke Customs' powers to intercept and destroy counterfeit goods. This heightens the need for new provisions in the EU trade mark law reform package confirming that counterfeit goods in transit may be prohibited (expressly reversing the consequences of the CJEU decision in Nokia).
Ian Lowe is a consultant with Nabarro in London and chair of the MARQUES Anti-Counterfeiting and Parallel Trade Team.
Issue 038
As part of the wider review of the EU trade mark legislation, the European Parliament has voted in favour of the amendments jointly tabled by MEPs Marielle Gallo and Bernhard Rapkay on provisions regarding counterfeit goods in transit.
The latest MARQUES Coexistence Agreement Workshop was hosted by law firm MeyerLustenbergerLachenal in Zurich on 5th February.
The judgment of the CJEU in Martin Blomqvist v Rolex (Case C-98/13 February 2014) is a stunning victory for brand owners – in more than one sense, as Ian Lowe explains.
OHIM has provided further updates on the difficulties that users have experienced with its new website since the report in last month’s issue of HouseMARQUES.
Update your calendar with all the MARQUES events planned for the coming year.
Posts on the Lush v Amazon case, the representation of a yellow curved line and the Gautzsch design case were among those featured on the MARQUES blogs this month.
