As many of you may remember, the CJEU found in December 2018, in the case C-572/17 Riksåklagaren v. Mr Syed, that warehouse storage of copyright protected works without the rightsholder’s consent could constitute an infringement of the rightsholder’s exclusive right to distribute the works to the public by sale. In Sweden, the main proceedings in the criminal case against Mr Syed continued thereafter and on 28 May 2019 the Supreme Court of Justice of Sweden delivered its judgment and found Mr Syed guilty of copyright infringement through the storage of 599 pieces of clothing.
For those who do not remember the case, a short re-cap. Mr Syed had a shop in the Old Town of Stockholm in which he offered and sold clothing and accessories with copyright protected motifs and trademarks of famous rock bands and football clubs. The goods were offered for sale in the shop and stored in two warehouses: one adjacent to the shop and one located in the suburbs of Stockholm (Bandhagen). After being prosecuted for both copyright infringement and trademark infringement Mr Syed acknowledged that he had, in the course of his business, imported a large proportion of the goods from UK, offered the goods for sale in his shop and stored them for this commercial purpose. Mr Syed had also stated during examination that the shop was regularly supplied with goods from both warehouses.
In first instance, Mr Syed was found liable for trademark infringement (1 900 goods) and copyright infringement (1 000 goods). The copyright infringement related to the offering of sale of copyright protected goods in the shop and the storage of copies of the same identical goods. However, goods that had only been found in the warehouses and not in the shop was not considered offered for sale or even as an attempt to commit a copyright infringement. The first instance did not find the distance to the warehouses relevant in its decision. In the second instance, the Swedish Patent and Market Court of Appeal, held that storage of copyright protected goods, despite the commercial purpose, could not be considered an offer for sale and consequently not an infringement in the exclusive right to distribution to the public. The goods stored in the warehouse, despite the fact that goods with the same copyright protected motif had been offered for sale in the shop, could thus not be included in the infringing act of Mr Syed. Therefore 599 pieces of clothing could not be included in the copyright infringement committed by Mr Syed.
The question that was put forward the Supreme Court of Justices in Sweden, following the appeal of the Stockholm District Court’s judgment, related to the fact that the Swedish Copyright Act (1960:729) does not include any provision that concerns specifically storage (as opposed to the Swedish Trademark Act which includes this measure) and hence whether the 599 pieces of clothing – clothes stored in the warehouse and clothes with the same copyright protected motifs found in the shop – could be considered offered for sale.
In its judgement the Supreme Court of Justice, with reference to the CJEU judgment in C-572/17, establishes that art. 4.1 of the Directive 2001/29/EC should be interpreted to include storage if 1) the stored goods are copies of identical goods actually offered for sale and 2) it can be established that the stored goods actually was intended for sale in the territory of the Member State in which the motifs are copyright protected. After having considered the evidence presented in the case and the specific circumstances; the goods had been procured by Mr Syed from the UK or had been taken over from the previous owner of the shop, the goods were solely owned by Mr Syed, the goods in the warehouses corresponded to such goods offered for sale by Mr Syed in the shop and that the shop, with a certain regularity, had been replenished with goods from the warehouses; the Supreme Court of Justice found that Mr Syed had committed an intentional copyright infringement in relation to the goods procured from UK and a gross negligent copyright infringement in relation to the goods taken over from the previous owner.
The conclusion in the present case is not surprising. However, two reflections could be made based on the judgment. Firstly, the Supreme Court of Justice uses the word corresponding (Sw. motsvarande) and not identical which could suggest that minor differences in the copyright protected motifs on the goods offered in the store and the goods stored in the warehouse would not exclude the stored goods from the infringing act. Secondly, in the Supreme Court of Justice’s overall assessment of the intention to sell particular importance was given to the continuous replenishment of goods from the warehouse to the shop, and notably not the distance between the warehouse and the shop. It is hence clear that the distance as such cannot be decisive in excluding an intention to sell.
For now, the view on storage of copyright protected goods in Sweden is quite clear. If the stored goods have equivalents (identical or corresponding) that have been offered for sale by the infringer and the shop is regularly replenished from the warehouse, the storage itself will be considered a consummated infringement. If the stored goods do not have equivalents that have been offered for sale by the infringer, the warehousing will fall outside the exclusive right of the rightsholder since the mere storage of the goods cannot be considered an offer for sale or targeted advertisement of the copyright protected work. Consequently, the storage as such could not even be considered an attempt to copyright infringement.
As a final remark, the above case law makes it clear that rightsholder’s should be attentive to the distinction between “goods stored and offered” and “goods stored but not yet offered”, as it could be decisive in determining when to act against the infringer. It should also be noted that if the rightsholder gains information about the sole act of storage of infringing copyright protected goods the rightsholder will not typically be able to act against the infringer in order to prohibit the infringer from releasing the goods on the market. However, other grounds may of course be explored by the rightsholder, for example if there is evidence to support that the infringer has reproduced the copyright protected work the subsequent storage might be considered included in that act. The rightsholder should also consider if there are other rights (inter alia trademarks) that could be invoked in order to receive an injunction for the storage as such.