Thanks to recent changes to the EU Trademark Directive and the EU Community Trademark Regulation, the trademark landscape is shifting. It is moving in a rights-holder-friendly direction, especially with regard to the seizure of counterfeit goods in transit. The new rules are set to be a game changer in respect of seizing goods in transit in Finland.

Transit country

Finland has traditionally been a transit country for goods en route from China to Russia. Goods are transported by sea freight from China to the big ports in northern mainland Europe, then loaded into smaller vessels that use the ports in Southern Finland. From there, the goods are unloaded into trucks and transported to Russia by road.

Unimpeded by national or EU legislation, Finnish Customs has been seizing infringing goods in transit to Russia for many years. This was possible because until the end of 2011, EU countries observed a 'manufacturing fiction' and treated goods in transit as though they were manufactured in the transit country.

Rules in flux

However, the legal grounds for border measures against goods in external transit through the European Union are now in a state of flux. The European Court of Justice (ECJ) issued a much-debated decision in the joined Nokia and Philips cases in 2011, in which it imposed a significant burden on rights holders seeking to seize goods in external transit through the European Union. After the decision, many EU countries reduced seizures dramatically or stopped seizing suspect goods altogether. Finnish Customs drastically reduced its seizures for goods in transit: which in 2011 transit goods amounted to 93% of all border measures resulting in a seizure of suspected infringing goods, this figure had fallen below 10% by 2015.

Changes

The situation has been intolerable for rights holders. After much political debate, Article 9(4) of the new Community Trademark Regulation now contains a welcome provision stating that the holder of a Community trademark (to be known as the EU trademark from March 22 2016) can seize goods in transit through an EU country, even if those goods are not targeted at EU consumers. This is good news for rights holders. However, the final text is a compromise and includes a proviso that the right to seize goods will be lost if the owner of the goods can prove that the rights holder cannot seize the goods in the country of destination. The burden of proof rests squarely on the infringer.

Exception

While the change in the rules on the seizure of goods in transit is welcome, there is a risk that the proviso on the goods possibly being infringing in the destination country will lead to difficult questions on how foreign laws will be applied in member state courts. However, in cases of obvious counterfeits, this should be rare.

Comment

The new rules on the seizure of goods in transit will prove to be important for Finland. For EU trademark holders, Finland will become an interesting hub for the effective seizure of counterfeit goods en route to Russia and the Baltic States. With the new Community Trademark Regulation provision on transit goods and the mandatory simplified destruction process introduced by the EU Customs Enforcement Regulation (608/2013), the seizure of infringing goods in Finland have never been easier or more effective.

For further information on this topic please contact Henrik af Ursin by telephone (+358 9 681700) or email (henrik.afursin@dittmar.fi). The Dittmar & Indrenius website can be accessed at www.dittmar.fi.

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