In the Netherlands, the Anti-Piracy Regulation (APR) has also been applied to in transito goods. This means that goods merely transiting the Netherlands from one country outside the EU to another country outside the EU may also be detained by customs authorities.

This has proved to be controversial. Seizures of generic medicines in transito by Dutch customs set off a worldwide debate. A UK court recently declined this broad view on the scope of the APR, although it recognised that its conclusion was not satisfactory.

Following questions in November 2009 from the UK Court of Appeal and the Antwerp Court of First Instance, the European Court of Justice (ECJ) now will answer the question of whether or not (Dutch) customs are rightfully detaining goods in transito with the APR as legal basis. Prior to the ECJ’s judgment, Advocate General Cruz Villalón delivered his Opinion on 3 February 2011.

Legal background

Regulation (EC) 1383/2003 is the fourth Anti-Piracy Regulation (APR). Under the provisions of the regulation, national customs authorities have the right to detain or suspend the release of goods if the goods are suspected of infringing an IP right. Customs can take action based on an application by the right holder or ex officio.

Scope of the APR

The current APR covers almost all intellectual property (IP) rights, including patent, trademark and design rights as well as copyright. Furthermore, customs authorities can take action against all movements of goods, including import, export and trans-shipment. Two important exceptions however apply: goods moving within the EU and legitimate parallel imports are not covered by the APR.

APR: also for goods in transit?

In the Netherlands, the APR has also been applied to in transito goods on the basis of the "manufacturing fiction". This means that a court employs the fiction that in transito goods are produced in the Netherlands for the purpose of establishing IP infringement. In the current APR the manufacturing fiction can be derived from Recital 8, which states that national infringement proceedings "will be conducted with reference to the criteria used to establish whether goods produced in that Member State infringe intellectual property rights". In the previous APR (Regulation (EC) 3295/94) a similar rule could be found in Article 6(2)(b).

The opinion of AG Gruz Villalón

In the case from the UK Court of Appeal (Nokia/HMRC), UK customs authorities took the position that it would be unlawful to seize in transito goods in the absence of evidence that the goods might be diverted onto the EU market.

In his Opinion, AG Cruz Villalón held that customs may seize in transit goods in the EU if "there are sufficient grounds for suspecting" the goods are counterfeit and are to be put on the market in the EU, either in conformity with a customs procedure or by means of illicit diversion.

In the Belgium case (Philips/Lucheng Meijing), the Court of Antwerp asked whether Article 6(2)(b) of the previous APR entails that a court cannot take account of the in transito status and must apply the fiction that the goods were manufactured in the same member state, and consequently determine on the basis of that law whether the law of the same member state if such goods infringe the IP right in question.

The AG Cruz Villalón held that courts in EU member states should not ignore the in transito status of goods when ruling whether the goods infringe IP rights, thereby rejecting the manufacturing fiction. To this end, AG Cruz Villalón considered inter alia that the object of the APR is to prevent counterfeit and pirated goods from being placed on the EU market, not to prohibit their transit even before their destination is known.