The EU Trademark Regulation (2015/2424/EU) (the "new Regulation") amending the Community Trademark Regulation (the "old Regulation") entered into force on 23 March 2016. Among other things, it brought about new rules concerning the transit of counterfeit trademark goods through the EU.
The Old Rules
The transit of goods was not specifically dealt with under the old Regulation. The latter contained only general provisions about the rights conferred by a Community Trademark, and what should be considered an infringement of a trademark. Section 9 para. 2 of the old Regulation listed infringement actions that could be prohibited by the trademark owner, including, for instance, affixing the sign to goods or to the packaging thereof, offering the goods, putting them on the market or stocking them for these purposes under that sign, among others. The transit of goods from countries outside the EU through the EU territory was not included in the list of infringement actions.
Based on Section 9 of the old Regulation, the Court of Justice of the European Union issued a few decisions according to which:
- the mere transit of products containing the trademark or a similar sign did not per se constitute a trademark infringement. An infringement would only exist if the party having requested the transit ("the shipper") took concrete actions to put the trademarked goods on the market, for instance, by selling or offering to sell the goods within the EU during transit (C-405/03, Class Unilever case);
- in the absence of a trademark infringement, the customs authorities would not be entitled to take action pursuant to the Regulation (EC) No. 1383/03 (now Regulation (EU) No. 608/2013) on the customs enforcement of IP rights (C-446/09 and C-495/09, Philips/Nokia cases),
- however, trademark owners were entitled to prevent the release for free circulation of trademarked goods into the EU without their authorization, even if the goods were not yet released for consumption, but instead were detained in a tax warehouse until the import duties were paid (C-379/14, Bacardi case).
The trademark owner was the one bearing the burden of proving the trademark infringement.
The New Regulation
Under the new Regulation, trademark owners are now expressly allowed to oppose the transit of goods bearing without authorization the EU trademark or a sign essentially similar, even if the goods are not released for free circulation or intended to be put on the European market. This new rule is codified in Section 9 para. 4 and also specifically addressed in Recital No. 16 of the new Regulation. Trademark owners may further contest other customs situations such as transhipment, warehousing, free zones, temporary storage, inward processing or temporary admission. Customs authorities are entitled to take the actions laid down in the Regulation (EC) No. 608/2013 on the customs enforcement of IP rights, such as detaining shipments suspected to infringe a EU trademark.
However, Section 9 para. 4 also establishes that such a right of the EU trademark owner shall cease to exist if, during the proceedings to determine whether the trademark has been infringed according to the Regulation No. 608/2013, the shipper provides evidence that the trademark is not protected in the country of final destination. According to Recital No. 17 of the new Regulation, this rule is intended to strike a balance between fighting counterfeiting and the need to protect the free trade of legitimate goods.
New Challenges for Trademark Owners?
At first glance, the new rules seem to strengthen the rights of trademark owners. However, the changes might also create difficulties, especially in cases in which the final destination of the goods is not declared in the customs declaration. In this case, in practice, the trademark owner will not know whether or not it is entitled to have the customs authority detain the shipment. If it decides to have the shipment seized and start infringement proceedings, it will run the risk that the shipper declares a country of destination in which the trademark is not protected. This might expose the trademark owner to the risk of liability towards the shipper.
Originally published May 13, 2016
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