Judgment issued by the European Court of Justice dated December 1st 2011. References for a preliminary ruling in joined Cases C 446/09 and C 495/09. Requirements for customs warehousing of goods from non-member States which are imitations or copies of goods protected in the European Union by Intellectual Property Rights.

The judgement under discussion solved two applications for a preliminary ruling concerning the interpretation of Council Regulation (EC) no. 3295/64, in which it is established the measures concerning the entrance into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights. These applications were submitted within the framework of the litigation process between Philips (C-446/09) and Nokia (C-495/09) vs. Lucheng which is the manufacturer, Far East Sourcing, the carrier, and Röhlig, the forwarding agent, in regards to the entrance into the customs territory of the European Union of goods in transit supposedly infringing designs and trademarks of Philips and Nokia.

Both cases involve goods that were in transit, but in the Phillips case the Belgium custom authorities retained the goods on the basis of the fiction that goods such as those under discussion, that are being held in a customs warehouse in the territory of the Kingdom of Belgium and retained there by the Belgium customs authorities, are deemed to have been manufactured in that Member State, all accordingly with Article 6(2)(b) of Regulation No 3295/94. In contrast, in the case of Nokia, the British authorities did not retain the goods, alleging that these should not be retained in cases where there is no evidence that the goods would be diverted onto the European Union market.

In these circumstances two references for a preliminary ruling were raised in order to resolve both issues. The Court resolved that the Regulation (EC) no. 3295/94 must be interpreted as meaning that goods coming from a non-member State which are imitations of goods protected in the European Union cannot be classified as ‘counterfeit goods’ or ‘pirated goods’ within the meaning of those regulations merely on the basis of the fact that they are brought into the customs territory of the European Union under a suspensive procedure.

However the Court clarified that those goods may be classified as ‘counterfeit goods’ or ‘pirated goods’ in those cases where it is proven that they are intended to be put on sale in the European Union. In this sense, it is understood that they are intended to be put on sale in the European Union when it turns that the goods have been sold to a customer in the European Union or offered for sale or advertised to consumers in the European Union, or in those cases in which there are documents or correspondence concerning that the goods might be diverted to European Union consumers.

Additionally the Court ruled that the relevant authority to take a substantive decision must suspend the release or detain those goods as soon as there are indications which might lead to suspect that such infringement is in place. The aim of this decision is that the authority may examine properly the existence of such proof and the other elements involving an infringement of the intellectual property right.

Amongst those indications, the Court considers that it may include the fact that the destination of the good is not declared despite the regime under suspension applied requests such declaration, the lack of precise or reliable information as to the identity or address of the goods’ manufacturer or consignor of the goods, a lack of cooperation with the customs authorities or the evidence of documents or correspondence concerning the goods in question suggesting that there is liable to be a diversion of those goods to European Union consumers.