Keyboard with one key coloured pink and labelled "All rights reserved" - Intellectual property lawyers

Counterfeit goods bought online by consumers can be seized

The Court of Justice of the European Union (CJEU) has held that counterfeit goods which have been ordered online, and for private use, from outside the EU infringe EU law and therefore can be seized by Customs.

The CJEU decided that if a website outside the EU makes a sale to a consumer in the EU and those goods infringe a copyright or trade mark within the EU, then this is sufficient for the goods in question to be detained under Customs Regulation 1383/2003 which allowed goods to be seized by Customs on the suspicion that goods infringed the intellectual property rights of the relevant rights holder (this regulation was replaced on 1 January 2014 by Customs Regulation 608/2013).

In the case of Martin Blomqvist v Rolex SA, Manufacture des Montres Rolex SA (Case C-98/13) a fake Rolex branded watch was purchased in January 2010 by a Danish individual, Martin Blomqvist, from a website based in China via the English language version of the website.  The fake watch was sent to Mr Blomqvist from Hong Kong by post.  The package containing the watch was held by Danish Customs under Customs Regulation 1383/2003 on suspicion that the watch was a counterfeit version of a genuine Rolex watch and that there was as a result a breach of copyright.  Both Rolex and Mr Blomqvist were informed of this action and Rolex issued proceedings in the Danish courts for an order that the item be permanently seized and subsequently destroyed by Danish Customs.  Mr Blomqvist appealed the decision on the basis that the item had been purchased for his personal use and not in the course of trade and accordingly that it did not breach the law regarding copyright and trade marks in Denmark.  The Danish court then referred the question of whether this importation amounted to an infringement to the CJEU.

Despite the website being based outside the EU in a jurisdiction where Rolex did not have the same protection for its rights as in Denmark, the CJEU held that these rights may be infringed where the goods coming from outside of the EU are subject to a commercial act directed at consumers in the territory (such as a sale, offer for sale or advertising) even before their arrival into the Member State.  It is worthwhile remembering that goods held by Customs are deemed to have not arrived into a Member State until they have passed through Customs.

Accordingly, it has now been decided that goods which are imitations or copies of goods protected in the EU under trade mark or copyright law that come from outside the EU can be classified as counterfeit or pirated goods where it has been proven that they are intended to be put on sale in the EU.  A brand holder only needs to be able to show that the goods have either been offered for sale or sold to a consumer in the EU in order for the goods to be infringing.

The Advocate General held that “distribution to the public must be considered proven where a contract of sale and dispatch has been concluded”.  He also determined that Regulation 1383/2003 must be interpreted as meaning that “the holder of an intellectual property right over goods sold to a person residing in the Member State through an online sales website in a non-member country enjoys the protection afforded to that holder by that regulation at the time when those goods enter the territory of that Member State merely by virtue of the acquisition of those goods”.

Roy Crozier commenting on the decision said “This confirmation is of great assistance to rights holders who find that they are being targeted by websites based outside of the EU which sell infringing goods into the EU marketplace and reflects the approach the UK Customs have been taking for many years.  This should greatly assist brands in not only getting further goods seized at Customs but also in attempting to get such websites removed from Google search results.  Although this decision was made under the old Customs Regulation 1383/2003 it will no doubt follow that the same protection will be afforded under the new Customs Regulation 608/2013.  In concert with the new procedure for small consignments this may mean that there will be a significant increase in the number of single item packages and small consignments being seized.  It is therefore essential that brand holders update their Customs Applications with as much information as possible regarding known counterfeit websites and known infringers and sellers outside the EU as this will assist Customs in seizing items from those infringers which are destined for the EU marketplace, even if the goods are claimed to be for personal use.

The IP Group at Clarke Willmott assist a number of well-known brands in drafting and finalising Customs Applications and assisting with subsequent seizures.