The Spanish criminal courts have recently debated the question of who should bear the storage and destruction costs for goods infringing certain IP rights which are the object of a judicial procedure and which were retained by Customs under EU Regulation 1383/2003.

The debate started following the request of several shipping companies, in criminal proceedings opened as a result of complaints filed by infringed IP rights holders, that the criminal courts order the rights holders to pay these costs.


The most recent ruling was issued in November 2010 by Section 2 of the Valencia Court of Appeal and contradicted both a previous decision by the same section of the Valencia court (March 2010) and a decision of the Madrid Court of Appeal (October 2010), both of which ordered that the destruction costs be paid by the rights holder (neither court referred to storage costs). Both courts accepted that in the event of a condemnatory judgment finally being issued, these costs could be claimed from the guilty party.

In their respective rulings, the Valencia and Madrid courts considered that Article 11 of EU Regulation 1383/2003 (which establishes the simplified procedure) and the Spanish transposition Order EHA/2434/2006 (which implements this simplified procedure in Spain) were applicable. Thus, the courts concluded that the destruction costs must be borne by the holders of the infringed IP rights.

These provisions are applicable only – as the name of both laws reflects ("customs action against goods suspected of infringing certain IP rights and the measures to be taken") – within the administrative phase before the opening of a judicial procedure, but not necessarily during the judicial phase opened, for example, by the filing of a complaint before the competent criminal court by the holder of the infringed IP right.

The administrative phase regulated by these laws begins with Customs stopping ex officio goods which may infringe IP rights from entering Spain. Once the release of such goods has been suspended, Customs informs the rights holder, giving it 10 working days in which to inspect the goods and to determine whether the products infringe its IP rights.

Once the retained products have been confirmed as infringing, Customs provides the rights holder with details of the importer to the effect that, within the same 10-day term, either:

  • an agreement is reached between the parties which enables Customs to abandon such goods for destruction (under the simplified procedure set down in Article 11); or
  • the rights holder files the judicial actions set out in the national laws of each member state against the importer of the infringing goods.

It is the simplified procedure, which is administrative rather than judicial, which envisages that the holder of the infringed IP right should bear the destruction costs.

In contrast, the simplified procedure cannot be applied if the rights holder must later bring legal action to prevent the goods from entering the country because it was impossible to apply the simplified procedure as the importer would not agree to the destruction of the goods.

Once the corresponding actions have been filed before the competent court, the merchandise becomes legal effects and the court is the only body with the power to dispose of them (not the parties by mutual agreement). At this point, the administrative simplified procedure is no longer applicable.

Another argument, made by both appeal courts in these rulings, lies in considering the destruction of infringing products to be of benefit to the holder.

The destruction of products which infringe certain IP rights is not, as is the case with other products which have been illegally traded, of benefit, but rather a legal consequence derived from the illegal nature of the products in question. It is not within the power of the judicial authority, nor is it of benefit to an individual, to order the destruction of such goods, given that IP rights infringement is a crime of a public nature.

Through its November 2010 decision it appears that Section 2 of the Valencia Court of Appeal wanted to rectify this situation. It has established that the administrative provisions (particularly Order EHA/2343/2006) are applicable only in those cases for which their application is foreseen and which are only "cases in which Customs must intervene in the specific situations established by the order". Consequently, they cannot be applied in the judicial procedure initiated by filing a complaint once Customs has intervened.

Despite this, also in November 2010, Section 3 of the Valencia Court of Appeal issued a ruling resolving that both the destruction and storage costs of infringing goods must be borne by the rights holder. The opinion of other Spanish appeal courts on these issues is awaited.


The holder of an infringed IP right has the status of an injured party in the criminal proceedings opened as a result of its complaint. It is the victim of a crime against its intellectual property, and it is unacceptable to expect victims of a crime to pay the storage and destruction costs of the goods which infringe their IP rights. This would make them the doubly injured party.

In addition, the exception established in the rulings that "in the case that a condemnatory judgment is finally issued, these costs could be claimed from the guilty party" is an unacceptable solution for the rights holder, because in reality it is sometimes impossible to locate or identify the importer of the counterfeit products, thus preventing a condemnatory judgment from being issued.

For further information on this topic please contact Jordi Camó at Grau & Angulo by telephone (+34 91 353 36 77), fax (+34 91 350 26 64) or email ([email protected]).