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<font size="-1">praised be the lord! extra-territorial application
of EU law is /not/ allowed with respect to counterfeits, says ECJ.
they just keep handing us a good future this week.</font><br>
<br>
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<th nowrap="nowrap" valign="BASELINE" align="RIGHT">Subject: </th>
<td>[The IPKat] When is a fake not a fake? When it's not on
sale in Europe ...</td>
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<th nowrap="nowrap" valign="BASELINE" align="RIGHT">Date: </th>
<td>Thu, 01 Dec 2011 11:40:23 +0000</td>
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<th nowrap="nowrap" valign="BASELINE" align="RIGHT">From: </th>
<td>Jeremy <a class="moz-txt-link-rfc2396E" href="mailto:jjip@btinternet.com"><jjip@btinternet.com></a></td>
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<td><a class="moz-txt-link-abbreviated" href="mailto:jjip@btinternet.com">jjip@btinternet.com</a></td>
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<th nowrap="nowrap" valign="BASELINE" align="RIGHT">To: </th>
<td><a class="moz-txt-link-abbreviated" href="mailto:ipkat_readers@googlegroups.com">ipkat_readers@googlegroups.com</a></td>
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<td style="text-align: center;"><a moz-do-not-send="true"
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height="258" width="320" border="0"></a></td>
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<td class="tr-caption" style="text-align: center;"><i>"How can
they do this to me ...!"</i></td>
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<b>This morning the Court of Justice gave its ruling </b>in Joined
Cases C 446/09 <i>Koninklijke Philips Electronics NV v Lucheng
Meijing Industrial Company Ltd, Far East Sourcing Ltd, Röhlig Hong
Kong Ltd, Röhlig Belgium NV and Nokia Corporation</i> and and C
495/09 <i>Nokia Corporation v Her Majesty’s Commissioners of
Revenue and Customs, International Trademark Association
intervening. </i>These are a couple of extremely controversial
references from, respectively, the Rechtbank van eerste aanleg te
Antwerpen and from the Court of Appeal (England and Wales). The<a
moz-do-not-send="true"
href="http://curia.europa.eu/juris/liste.jsf?num=C-446/09&language=en#">
<b>Advocate General's Opinion</b></a> (noted<b> </b><a
moz-do-not-send="true"
href="http://ipkitten.blogspot.com/2011/02/faking-it-or-beyond-suspicion.html"><b>here</b>
</a>by the IPKat) was given as long ago as 3 February, which means
that the Court of Justice has been agonising over what to do for
nearly twice as long as it usually does. Those poor judges must
really have had their serenity shattered, says Merpel.<br>
<br>
Today's ruling is 8,500 words in length and will take a bit of
digesting. Merpel kindly suggested that the IPKat begin reading from
the start while she begins reading from the end, so they can meet in
the middle. While that's not as silly an idea as it seems, since the
basic law and facts are at the beginning and the ruling is at the
end, the Kats agreed that the best point from which to start was the
excellent Curia media release, which states as follows:<br>
<blockquote>"<b>The Court specifies the conditions under which goods
coming from non-member </b><b>States that are imitations or
copies of goods protected in the EU by intellectual </b><b>property
rights may be detained by the customs authorities of the Member
States </b></blockquote>
<blockquote><i>Where those goods are in customs warehousing or in
transit in the EU, they can be classified as </i><i>‘counterfeit’
or ‘pirated’ goods if it is proven that they are intended to be
put on sale in the EU </i></blockquote>
<blockquote>These two cases concern the interpretation of the EU
rules on the conduct of customs authorities faced with possible
infringements of intellectual property rights by goods coming from
non-member States that are placed in external transit or customs
warehousing on the customs territory of the EU<b><span
class="Apple-style-span" style="color: red;"> [From a
technical legal perspective this is true. But IP owners aren't
concerned about the conduct of customs authorities -- they're
concerned about the conduct of people who are shifting fakes
and counterfeits around, under their very noses].</span></b>
Those suspensive procedures enable non-Community goods to avoid
being subject to import duties and other taxes or to commercial
policy measures. </blockquote>
<blockquote><i>The facts in Case C-446/09</i><br>
In 2002, the Belgian customs authorities inspected a cargo – which
lacked a stated destination and was warehoused in the port of
Antwerp (Belgium) – of electric shavers from Shanghai
(China) resembling designs of shavers developed by Philips. Those
designs are protected by registrations granting exclusive
intellectual property rights to Philips in a number of States,
including Belgium. Suspecting that the goods were ‘pirated goods’,
the Belgian customs authorities detained them. </blockquote>
<blockquote>Philips brought an action against Lucheng Ltd, Far East
Sourcing Ltd and Röhlig Hong Kong Ltd, which were involved in the
manufacture, marketing and transport of those shavers .... Philips
seeks in particular a ruling that those undertakings infringed its
exclusive right over those designs. Philips also seeks an order
that those undertakings pay it damages and that the detained goods
be destroyed. </blockquote>
<blockquote><i>The facts in Case C-495/09 </i><br>
In July 2008, the customs authorities of the United Kingdom (HM
Revenue & Customs, ‘HMRC’) inspected a consignment of goods –
mobile telephones and mobile telephone accessories – at London
Heathrow Airport (United Kingdom) which had come from Hong Kong
(China) and was destined for Colombia. Those goods bore a sign
identical to a Nokia trade mark. Suspecting that the goods were
fake, HMRC sent samples to Nokia, which confirmed that the goods
were indeed fake and asked HMRC to detain the consignment. </blockquote>
<blockquote>That request was refused by HMRC on the ground that
goods in transit from one non-member State to another cannot be
regarded as ‘counterfeit goods’ for the purposes of European Union
law and therefore cannot be detained. Nokia challenged that
refusal of detention before the courts of the United Kingdom. </blockquote>
<blockquote>[The referring courts] ask the Court of Justice whether
goods coming from a non-member State which are in transit or
stored in a customs warehouse in the European Union, can be
classified as ‘counterfeit goods’ or ‘pirated goods’ for the
purposes of European Union law merely on the basis of the fact
that they are brought into the customs territory of the
European Union, without being marketed or sold there. </blockquote>
<blockquote>In its judgment delivered today, the Court first
examines the conditions for temporary detention of goods placed
under a suspensive procedure. It reiterates that goods from
non-member States placed under a suspensive customs procedure
cannot, merely by the fact of being so placed, infringe
intellectual property rights applicable in the European Union.
However, those rights may be infringed where, during their
placement under a suspensive procedure in the customs territory of
the European Union, or even before their arrival in that
territory, goods coming from non-member States are the subject of
a commercial act directed at European Union consumers, such as a
sale, offer for sale or advertising <b><span
class="Apple-style-span" style="color: red;">[The IPKat didn't
think that the advertising or offering for sale of infringing
goods that were not yet on EU territory was an issue in this
case]. </span></b></blockquote>
<blockquote>In addition to the existence of such a commercial act,
other circumstances can also lead to temporary detention by the
customs authorities of the Member States. Thus, a customs
authority which has established the presence in warehousing or in
transit of goods which are an imitation or a copy of a product
protected in the European Union by an intellectual property right
can legitimately act when there are indications before it that one
or more of the operators involved in the manufacture, consignment
or distribution of the goods, while not having yet begun to direct
the goods towards European Union consumers, are about to do so or
are disguising their commercial intentions. </blockquote>
<blockquote>Such indications may include the fact that the
destination of the goods is not declared whereas the suspensive
procedure requested requires such a declaration, the lack of
precise or reliable information as to the identity or address of
the manufacturer or consignor of the goods, a lack of cooperation
with the customs authorities or the discovery 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. Such suspicion must, in all instances, be based on the
circumstances of each particular case<b><span
class="Apple-style-span" style="color: red;"> [While the need
for each suspensive detention to be considered on its own
merits is obviously important when determining whether customs
authorities have acted unlawfully, it is helpful for IP owners
and customs authorities alike to receive clear guidance in
terms of broad principle as to whether a suspensive detention
is appropriate or not, if they are to make decisions and carry
them out under what can be severe pressure of time and without
necessarily having all the information they need in their
possession and in a form and language which they can
conveniently understand]. </span></b></blockquote>
<blockquote>Secondly, the Court specifies the material which the
competent authorities must have before them in order to ascertain
that goods already detained infringe European Union intellectual
property rights. Thus, the Court considers that goods in respect
of which it is not proven, after substantive examination, that
they are intended to be put on sale in the European Union cannot
be classified as ‘counterfeit goods’ and ‘pirated goods’ <b><span
class="Apple-style-span" style="color: red;">[So if it is
clear that the fake goods are 100% destined for a non-EU
jurisdiction like Colombia, they're not counterfeit or pirate
at all. How fortunate for the consumers in the destination
market! And how miserable for the IP rights owners, who may
find their prospects of exporting to those markets destroyed,
along with their credibility and their goodwill]</span></b>.</blockquote>
<blockquote>Certain evidence enables such an infringement to be
proved, including, in particular, the existence of a sale of goods
to a customer in the European Union, of an offer for sale or
advertising addressed to consumers in the European Union, or of
documents or correspondence concerning the goods in question
showing that diversion of those goods to European Union consumers
is envisaged. </blockquote>
<blockquote>Finally, the Court states that, in the absence of proof
of infringement of an intellectual property right, goods placed
under a suspensive procedure in the European Union can, as
appropriate, be seized in other situations covered by the European
Union Customs Code, such as where the goods in question pose a
risk to health and safety <b><span class="Apple-style-span"
style="color: red;">[What a crumb of comfort ...]</span></b>".</blockquote>
The full wording of the active part of today's ruling reads like
this:<br>
<blockquote>"Council Regulation ...3295/94 ..., as amended by
Council Regulation ... 241/1999 ... concerning customs action
against goods suspected of infringing certain intellectual
property rights and the measures to be taken against goods found
to have infringed such rights must be interpreted as meaning
that: </blockquote>
<blockquote>– goods coming from a non-member State which are
imitations of goods protected in the European Union by a trade
mark right or copies of goods protected in the European Union by
copyright, a related right or a design 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; </blockquote>
<blockquote>– those goods may, on the other hand, infringe the right
in question and therefore be classified as ‘counterfeit goods’ or
‘pirated goods’ where it is proven that they are intended to be
put on sale in the European Union, such proof being provided,
inter alia, where 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 where it is apparent from
documents or correspondence concerning the goods that their
diversion to European Union consumers is envisaged; </blockquote>
<blockquote>– in order that the authority competent to take a
substantive decision may profitably examine whether such proof and
the other elements constituting an infringement of the
intellectual property right relied upon exist, the customs
authority to which an application for action is made must, as soon
as there are indications before it giving grounds for suspecting
that such an infringement exists, suspend the release of or detain
those goods; and </blockquote>
<blockquote>– those indications may include, inter alia, the fact
that the destination of the goods is not declared whereas the
suspensive procedure requested requires such a declaration, the
lack of precise or reliable information as to the identity or
address of the manufacturer or consignor of the goods, a lack of
cooperation with the customs authorities or the discovery 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".</blockquote>
Readers may gain the impression that the IPKat is not entirely happy
with this ruling. He can't blame the court since it is required to
interpret and apply the law before it. He very much hopes that the
proposed reforms of the EU's suspensive detention laws, discussed at
length in an <b><a moz-do-not-send="true"
href="http://jiplp.oxfordjournals.org/content/early/2011/10/03/jiplp.jpr140.full.pdf+html">excellent
article by Olivier Vrins </a></b>(Altius) in the November 2011
issue of the <i>Journal of Intellectual Property Law and Practice </i>(<b><a
moz-do-not-send="true" href="http://jiplp.oxfordjournals.org/">JIPLP</a></b>),
"The European Commission's proposal for a regulation concerning
Customs enforcement of IP rights", will correct the deficiencies of
policy and functionality which so adversely affect the current
system.<br>
<br>
The full text is promised <a moz-do-not-send="true"
href="http://curia.europa.eu/juris/liste.jsf?language=en&num=C-446/09"><b>here</b></a>,
but at the time of posting this piece only the Advocate General's
Opinion was available on the Curia's smart, new and totally
unfamiliar InfoCuria website. In the meantime you can read it in
full, in English, <b><a moz-do-not-send="true"
href="https://sites.google.com/site/ipkatreaders/judgments/C-446-09C-49509arr%C3%AAtEN.docx?attredirects=0&d=1">here</a></b>.
<br>
<br>
--<br>
Posted By Jeremy to <a moz-do-not-send="true"
href="http://ipkitten.blogspot.com/2011/12/when-is-fake-not-fake-when-its-not-on.html">The
IPKat</a> on 12/01/2011 11:40:00 AM -- <br>
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