Global Intellectual Property
CJEU confirms that fake goods bought online from a website based outside of the EU infringe IP rights once they enter the EU territory, without need to consider whether the website targeted the EU territory.
The Court of Justice of the European Union (CJEU) has issued its decision in Case C-98/13 Blomqvist v Rolex, in which it has confirmed that the sale of goods which are imitations of goods protected by copyright or trade marks under EU law, to an EU resident from a website based outside the EU, infringe EU laws at the time they enter the EU territory merely by virtue of their acquisition, and therefore are subject to action by customs authorities as "counterfeit" or "pirated" goods. It is not necessary in addition for the goods, prior to their sale, to have been subject to an offer for sale or advertising targeting the Member State in question.
The facts of the case were as follows: Mr. Blomqvist, a Danish resident, had bought a watch described as a Rolex from a Chinese online shop, which was then shipped to Denmark from Hong Kong. The watch was seized by Danish customs authorities and confirmed by Rolex as being counterfeit/pirated. Mr Blomqvist appealed against the destruction of the watch. The Danish Supreme Court referred a number of questions to the CJEU concerning the interpretation of the Information Society Directive (Directive 2001/29), the Trade Marks Directive (Directive 2008/95), the Community Trade Mark Regulation (Regulation 207/2009), and the (previous) Customs Regulation 1383/2003, effectively asking whether it constituted a "distribution to the public" (in relation to copyright) or "use in the course of trade" (in relation to trade marks) if counterfeit/pirated goods were sold to a private purchaser with an address in the EU via a website based outside of the EU, and dispatched to the private purchaser at that address, or whether prior to the sale, the goods must have been advertised or offered to sale to, or shown on a website targeting, consumers in the Member State where the goods are delivered, and whether Customs Authorities are entitled to act in relation to such goods.
In short, did the goods sold to a EU resident consumer from a non-EU based website constitute infringing goods under the Information Society Directive, Trade Marks Directive and/or Community Trade Mark Regulation, and thereby constitute "counterfeit" or "pirated" goods under the terms of the Customs Regulation, enabling action by EU Customs Authorities?
In its reasoning, the CJEU again confirmed that the mere fact that a website is accessible from an EU territory is not a sufficient basis for concluding that offers for sale displayed on that site are targeted at consumers in that territory (as it had previously confirmed in L'Oréal v eBay, Case C-324/09). However, IP rights protected under EU law may be infringed where, even before their arrival in the territory, goods coming from non-Member States are the subject of a commercial act directed at consumers in that territory, such as a sale, offer for sale or advertising (as confirmed in the joined cases C-446/09 and
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2 Intellectual Property Client Alert February 2014
495/09 Philips/Nokia). The facts of the present case were ultimately distinguished from both the L'Oréal and Philips/Nokia cases, as the goods were not merely on offer over a website or held within the EU customs territory under a suspensive procedure: the goods had been sold and dispatched to a customer in the EU. Consequently, the mere fact that the sale was made from a website based outside the EU cannot deprive the IP rightsholder of the protection afforded by the Customs Regulation without it being necessary to verify whether the goods were in addition, prior to the sale, the subject of an offer for sale or advertising targeting EU consumers.
This decision concerned the interpretation of the previous Customs Regulation 1383/2003 which, as of 1 January 2014, has been repealed and replaced by new Customs Regulation 608/2013, but should apply by analogy to the provisions of the new Regulation. Given the prevalence of fake goods originating from outside the EU, and notably China, this confirmation that customs authorities can take action to seize and destroy non-EU fake goods is a welcome one for rightsholders. This decision reflects the zero tolerance approach to counterfeits that many brand owners are now taking, especially with the expansion of the "simplified procedure" process to all EU Member States under the new customs regulation. The result of this will be however that there customs will continue to detain small consignments of products – it therefore pays for brand owners to adopt a standardised approach to tackling counterfeit seizures that come into the EU.