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February 12, 2014

CJEU stops online purchases of counterfeit goods

IP right holders will be pleased about the Court of Justice of the European Union’s (CJEU) recent preliminary ruling on the online sales of counterfeit goods from websites in non-Member States to an individual residing in a Member State.

Background
The matter arose in January 2010 where a Danish resident Martin Blomqvist, through a Chinese web shop, purchased a watch described as a Rolex. The order was placed and paid for through the seller’s website and sent to Denmark by mail. The watch was seized by Danish customs and Rolex SA established that the watch was counterfeit. As Mr. Blomqvist refused to consent to the destruction of the watch claiming that his import of the watch for his own private use did not infringe the intellectual property rights of Rolex SA, Rolex SA initiated legal steps. On 8 November 2011 the Danish IP specialist court, the Maritime and Commercial Court, to the surprise of many, confirmed that - despite the single counterfeit watch had been purchased for private use - Danish Customs had legally suspended the watch in accordance with Customs Regulation (EC) no. 1383/2003 (today repealed by Customs Regulation (EU) no. 608/2013) and that the watch could thus be destroyed. Mr. Blomqvist appealed the judgment to the Danish Supreme Court (Højesteret). The Supreme Court held that as the watch had been purchased by an individual for private use, the import by the buyer did not constitute an infringement, and focus was therefore on whether the seller’s acts constituted an infringement. On the basis hereof the Danish Supreme Court found it necessary to refer preliminary questions to the CJEU in order to ascertain whether it constitutes; 

- “distribution to the public” of copyright-protected goods within the meaning of article 4 (1) of the EU Copyright Directive and

- “use in the course of trade” of a trade mark within the meaning of article 5 (1) and (3) of the EU Trade Mark Directive and article 9 (1) and (2) of the Trade Mark Regulation when goods are sold to an individual residing in the territory of a Member State through an online sales website  in a non-member country at the time when that goods enter the territory of that Member State, and further

- whether it is a condition that the goods prior to sale, must have been the subject of an offer for sale or advertising targeting consumers in the Member State where the goods are delivered.

CJEU answered the questions of the Danish Supreme Court as follows:

 “[The Customs Regulation (1383/2003)] must be interpreted as meaning that the holder of an intellectual property right over goods sold to a person residing in the territory of a member state through an online sales website in a non-member country enjoys the protection afforded to that holder by that regulation at the time when those goods enter the territory of that member state merely by virtue of the acquisition of those goods. It is not necessary, in addition, for the goods at issue to have been the subject, prior to the sale, of an offer for sale or advertising targeting consumers of that state.”

The full text of the CJEU decision can be found here

Comments
Although it remains to be seen how the Danish Supreme Court and courts in other Member States will apply, and also how counterfeiters will try to adjust, CJEU’s ruling is an important step in addressing the increasing online sales of counterfeit goods to consumers in the EU. With CJEU’s ruling right holders will be able to stop the import of online purchases of counterfeit goods from websites outside the EU irrespective that the goods have not been commercially advertised and targeted to consumers in the EU and irrespective that the purchase is for the private use of the buyer. In Denmark and other jurisdictions in the EU, it is legal to import counterfeit and pirated products for private use. Counterfeiters have taken advantage of this often leaving right holders frustrated when counterfeit goods must be released by the Customs. The CJEU ruling could, however, prove an important turning point in this respect as it extends enforcement possibilities to the benefit of IP right holders.   

For more information about the possible impacts of CJEU’s ruling and Zacco’s anti-counterfeit services in Denmark, Sweden, Norway and Germany, please respectively contact:

 

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