REGISTRATION FORM WHAT IS “UNION”
Th e Round Table will be held Friday, 25 February 2011 at union is an association of practitioners in the fi eld of Intellectual Property, that is, of individu- German Patent and Trademark Offi ce als whose principal professional occupation is concerned Zweibrückenstraße 12, 80336 Munich, Germany with Patents, Trade Marks or Designs and related subjects Yes, register me for the Round Table: and who carry on their profession independently or as employees. union is a private, free, international associa- OF EUROPEAN PRA CTITIONERS IN INTELLECTUAL PROPERTY Name tion that is not dependent on any national or international EUROPÄISCHER BERA TER FÜR GEISTIGES EIGENTUM Surname authority: it approves its own members, in accordance with DES PRA TICIENS EUROPÉENS EN PROPRIÉTÉ INTELLECTUELLE its statutes, in total independence, and likewise decides on its Title own activities and its own budget. Offi ce/Company It aims on the one hand to work continuously on current developments in Intellectual Property in Europe, especially Street by making early submissions during the preparation of ZIP City proposed laws and treaties with the intention of infl uencing them; and on the other hand to devote itself to the improve- Country ment of professional and personal understanding between Tel. Fax European practitioners in the Intellectual Property fi eld in diff erent countries and diff erent branches of the profession. ROUND TABLE E-Mail Date Signature SECURING PATENT RIGHTS WHAT IS A “UNION ROUND TABLE” Fee: € 100 for union members and THROUGH CUSTOMS € 150 for non-members. A union Round Table off ers the opportunity for practitio- Payments must be made until February 11, 2011. ners to hear from authoritative speakers on topics of interest MEASURES Th e fee includes a buff et lunch and coff ee breaks. in the European IP fi eld, and just as importantly to interact Accommodation is not provided. with and infl uence them by feeding back their own practical Munich, February 25, 2011 experience. Th e integral Question and Answer sessions and Payment friendly discursive nature of the event, with the opportunity Bank transfer (free of charge for the recipient) to chat during breaks, lead to real exchange and development Jointly organized by the Patents Commission and the Litigation Commission of UNION Bank of views on both sides. COMMERZBANK AG | to “UNION” Participants tend to fi nd these practitioner-lead events a Account No.: 405593701 | Bank Code: 700 800 00 real and useful antidote to the more commercial seminars SWIFT-BIC: DRES DE FF 700 familiar to all. IBAN: DE 55 7008 0000 0405 5937 01 If you are not yet a member of union and would like to join this friendly, active and interesting organization please go Please send the completed form (and cheque, if any) to the to our website where you can join online. Membership also Secretariat of the Round Table c/o: entitles you to reduced prices for this, and other, union Nils T. F. Schmid events. BOEHMERT & BOEHMERT Pett enkoferstr. 20-22, 80336 München, Germany For more information: Tel.: +49-89-559680 | Fax: +49-89-347010 htt p://www.union-eu.com [email protected] www.kuplien.de | title image fotolia.de | Printed in Germany | Printed fotolia.de | title image www.kuplien.de Round Table Program, February 25, 2011
Program Securing Patent Rights Through Customs Measures
09:00 Registration 12:30 Lunch 09:30 Welcome word by UNION 14:00 Session C Customs enforcement and customs actions are a power- 09:40 Session A Chair: Alkisti-Irene Malamis, ful tool for European IP rights owners seeking to protect Malamis & Malamis (GR), and strengthen those rights, but very little has been Chair: Sabine Rojahn, union Patents Commission-President discussed so far about PATENT rights secured through Taylor Wessing (DE), Gertjan Kuipers, customs measures. union Litigation Commission-President De Brauw Blackstone Westbrock (NL) Corinna Ullrich, Jordi Güell, union’s 2011 Munich Round Table will discuss Deputy Head of EC Unit “Enforcement of Partner, Curell Suñol (ES) current developments and practice in respect of customs IP Rights” Elliot Papageorgiou, actions and customs enforcement of PATENT rights Klaus Hoffmeister, Executive, Rouse Shanghai (CN) & in Europe and the experience from Regulation (EC) German Customs, Head of the German Office for Partner, Rouse Legal (UK) 1383/2003 in different EU countries. Protection of Intellectual Property (Munich branch) Q&A. Q&A Conclusions union 10:50 Coffee Break 16:00 Closing of the Round Table Once again, ’s Munich Round Table will be an excellent opportunity to hear from the experts from the 11:10 Session B European Commission, national customs, industry and Chair: Sabine Rojahn private practice about the situation in Europe and to Bart de Geus, exchange views on this interesting and practical subject Senior Legal Counsel, Philips Intellectual with colleagues from all over Europe. We shall also hear Property & Standards (NL) about patent rights enforcement as practiced by Chinese Ari Laakkonen, Customs, a most important subject for all exporting Partner, Powell Gilbert LLP (UK) European IP rights owners. Q&A
A lawyer by training, Corinna started her career 1996 in a law firm in Munich, working mainly on cases related to company law. In 1997, she took up work with the German Federal Ministry of Justice where she worked in the unit for European law before being seconded to the legal department of the German Permanent Representation at Brussels in 1998. In 2000 she returned to the contract law unit of the Ministry.
End of 2000, she joined the European Commission where she started working on personnel policy questions and subsequently became assistant of the Director-General for Personnel and Administration. End of 2004, she joined the unit dealing with company law, corporate governance and financial crime in DG Internal Market and Services and in May 2010 she became Deputy Head of Unit in Unit mARKT.D.3 'Enforcement of intellectual property rights' where she mainly deals with issues related to the IPR Enforcement Directive (Directive 2004/48/EC) and the European Observatory on Counterfeiting and Piracy.
Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11. Office: SPA2, 06/097. Telephone: direct line (32-2) 2994856. Fax: (32-2) 2979512. http://ec.europa.eu/internal_market/ E-mail: [email protected] Current activities of the EU Commission in the field of IPR enforcement
Corinna Ullrich, Deputy Head of Unit MARKT.D.3 Enforcement of Intellectual Property Rights
1 Overview • Measures in the area of customs (DG TAXUD) – Review of the Customs Regulation (Reg. 1383/2003) – IT projects to improve information flow • European Observatory on Counterfeiting and Piracy • Report on the IPR Enforcement Directive –Subject – Main issues addressed in the Report • IPR Strategy • Next steps
2 Review of Regulation 1383/2003 • Public consultation 03-06/2010 • COM proposal planned for Spring 2011 • Issues to be dealt with: – Scope: patent infringements are covered but others are not (e.g. utility models) – Simplified procedure (no “presumed” (only explicit) agreement to destroy the goods) – Costs of storage and destruction – Balance of rights: e.g. right to be heard; treatment of confidential information; transit of medicines
3 IT projects to improve information flow • e-Customs initiative: Multi-annual project to interconnect all MS customs and companies' IT systems •COPIS: – Central EU database to implement Regulation 1383/2003 – Will store all companies' applications for customs action under Regulation 1383/2003
4 European Observatory on Counterfeiting and Piracy • Set up by COM Communication of Sept. 2009 (COM(2009)476) • Network of MS‘ authorities and private stakeholders in order to: – Improve collection and analysis of data – Foster exchange of public and private best practices – Enhance public awareness – Coordinate and design training for enforcement authorities (including customs) – Improve international cooperation
5 Report on the IPR Enforcement Directive • Directive 2004/48 (to be transposed by 26 April 2006): civil law measures against all IPR infringements • Report on application of the Directive (published 22 December 2010): – Commission Report containing conclusions on the analysis (COM(2010) 779 – Commission Staff Working Document with article-by- article analysis (SEC(2010)1589) • Based on reports of 25 MS and additional information received (last MS transposed the Directive only in June 2009)
6 Report on the IPR Enforcement Directive (2) • Main issues addressed: – Issues related to the Internet – Intermediaries and injunctions – Right of information – Damages – Others (scope, gathering and securing of evidence, corrective measures) • Public consultation until 31 March
7 IPR Strategy • Horizontal Commission Communication to set out forthcoming activities in the area of IPR • Covering copyright, trademarks, patents and enforcement • Patents: in particular unitary patent system (enhanced cooperation) and unified patent litigation system
8 Documents on-line and more information available on
http://ec.europa.eu/taxation_customs/customs/customs_controls/ counterfeit_piracy/index_en.htm http://ec.europa.eu/internal_market/iprenforcement/observatory/index_en.htm
http://ec.europa.eu/internal_market/iprenforcement/directives_en.htm
9 Klaus Hoffmeister Bundesfinanzdirektion Südost Zentralstelle Gewerblicher Rechtsschutz Sophienstr. 6 80333 München Telefon (089) 5995 - 2313
Personal Datas:
Born 10.05.1962 in Bad Reichenhall
Education
1982-1985 advanced technical college/subject finance, studying legislation of the European Community, Customs code, national administrative right, 1985 final examination (graduate Dipl.Finw.)
Practice
1985-1989 Manager Import at customs office München Ostbahnhof.
1989-1994 Oberfinanzdirektion München Dealing with legal affairs in border traffic, customs value, warehousing, Tax.
1995 Ministry of Finance transfered the task to create a central bureau of IPR under customs administration. Since 1995 manager of this bureau.
Professional experience education trainings for custom officers of other member states within the program customs 20xx (e.g. Sweden, Netherlands, Luxembourg, Poland, UK, Hungary, Lithuania) working for DG TAXUD in several international working groups concerning european legislation working as an expert in IPR affairs within different international programs like RIPP, Eurozoll. Customs 20xx, Phare, TAIEX national coordinator of working groups with candidate states within national programs nationaL expert for programs of the EPO or DPMA
Customs authorities moving within Intellectual Property Rights
Structure of Federal Customs Administration
Federal Ministry of Finance Federal Finance offices
1 „Federal Finance Office“
Federal Directorates
Directorate of operations
Directorate of monotoring operations and compliance
umer the cons risks for
health hazard
cheating of the consumer
risks of security
2 Customs Administration
Strategical valuable partner
Action by customs authorities
...control of crossborder consignments….
…„border control“ as possible tool regarding protection….
„border seizure“, what‘s up ?
3 Statistics
decisions by ZGR/year
1000 911 900 824 800 748 730 700 600 500 400 389 273 308 300 227 186 203 200 145 169 92 127 100 68 0 1995 1997 1999 2001 2003 2005 2007 2009
seizures
12000 10888 9622 10000 9164 8564 7752 8000 7217
6000
4000 3178 3427 3461 2427 2188 2000
0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Anzahl allgemein 2188 3178 2427 3427 3461 8564 7217 9164 7752 10888 9622
4 value
100010001000
500500500
0 00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Mio EUR 35,6 53,4 94,6 91,1 76,1 178 145,2 213 1175 426 436 364
Countries of origin 2009
Sonstige* 9% Schweiz Vietnam 1% 1% V.A.E. 2% Japan China 1% 28% Indien 6%
Hongkong 16%
Thailand USA 20% 11% Türkei 5%
*Kosovo, Singapur, Republik Moldau, Taiwan, Seychellen, Kanada, Russland, Südkorea, Pakistan, Afghanistan, Iran, Philippinen, Australien, Italien, Slowakei, Indonesien, Marokko, Ukraine, Serbien, Chile, Syrien
Kind of traffic/seizures 2009
4% 4% post 26% sea road air
66%
5 Kind of traffic/value 2009
post sea road air
15%
5% 77% 3%
Goods/seizures in % 2009
Persönliches Zubehör (z.B. Spielzeug, Spiele und Sonnenbrillen, Handtaschen, Sportgeräte Uhren, Schmuck) 2,95% 21,17% Arzneimittel CDs, DVDs, Kassetten 7,64% 2,07% Mobiltelefone 6,60% Tab akwaren 0,22% Schuhe 3,47% Körperpflegeprodukte 8,63%
Elektrische/Elektro nische Ausrüstung und Computerausrüstung 5,96%
Kleidung und Zubehör Sonstige (z.B. Maschinen, 35,73% Werkzeuge, Büro bedarf, Etiketten) 5 ,41%
IPRs/seizures
Gebr.muster UrhG Geschm.muster 6% 0% 8% Patent 9%
Marke 77%
6 Customs Measures
Action by CO
Regulation:
RE EC Nr. 1383/2003 of 02.08.2003 ; Implementing Regulation of EC-Commission Nr. 1891/2004 of 21.10.2004
National Regulations: z.B. § 142a PatG, § 146ff MarkenG, § 55 GeschmMG, § 111 b UrhG, § 40 a SortG, § 25 a GebrMG
Criminal Prosecution on base of an existing IPR : e.g. § 143 MarkenG,
European Regulation
1383/2003 - a powerful tool
7 Goods Covered by Border Measures
TRIPS (1994) Counterfeit and pirated goods
EC Reg. 1383/2003 Plant variety rights, nat. or Community EC Reg. 241/99 protected designation Patents + SPC of origin or geogr. EC Reg. 3295/94 counterfeit and indications, patents, counterfeit and pirated goods SPC counterfeit and EC Reg. 3842/86 pirated goods incl. design rights pirated goods design counterfeit goods incl. design rights rights
The Systems
CustomsCustoms intervention intervention
•• registered registered trademarks trademarks •• design design rights rights •• copyrights copyrights •• patents patents CouncilCouncil regulationregulation •• supplementary supplementary protectionprotection certificates certificates No.No. 1383/2003:1383/2003: •• Plant Plant variety variety rights rights •• Geographical Geographical indicationsindications
customscustoms procedures procedures
Measures (Art. 9)
SuspendingSuspending of of thethe release/detention release/detention (Art.(Art. 9)9)
SuspicionSuspicion that that goods goods infringeinfringe IPR IPR
Granted application SituationsSituations according according to to Granted application according to Art. 5 Art.Art. 1 1 (1) (1) according to Art. 5
8 Application for action by customs authorities -The Basic Principle -
Customs Department competent
> 1 MS form
Validity Right max. application holder 1 year
Proof information of IPR Declaration Art. 6
Community Right Application 5 (4)
Not usable for
> 1 MS •patent •copyright
Each Member State has a Central Customs Office for the application procedure; the application can be lodged at one of the Central Customs Offices of a Member State; you can use this procedure if you are requesting action in that Member State where you lodge the application and in another or several or all Member States; only one application procedure; with one application using the services of more Member States at the same time;
9 ZGR @nline - The German solution -
w Login ww . w ip w r. w z .ip www.ipr.zoll.de o r. ll. zo d ll. e de
www.ipr.zoll.de w ww ww .ip w r.zo .ip ll.de r.z oll .de .de oll r.z ip w. ww
Systemarchitektur – Antragstellung Internet Intranet
neu
FMS DB
Rechteinhaber Änderung
Änderung von Infor mati on
10 Taking action
The practical aspect
Art. 9 VO
Options offered by 4. Names by request Art. 9 (3) COM 3. Taking samples by request Art. 9 (3) or 2. inform rightholder Art. 9(2) 1. suspend the Simplified Court release/ procedure proceedings detain Art. 11 (1) Art. 13 (1) Art. 9 (1) Art. 10 (1)
2. inform declarant or holder of goods Art. 9 (2)
10/20 working days Art. 13 (1)
Releasing patent infringing goods against security ? A sophisticated procedure
11 The requirements
goods suspected of infringing design rights, patents, supplementary protection certificates or plant variety rights
the declarant, owner, importer, holder or consignee of the goods shall be able to obtain the release of the goods by providing a security
The requirements
the customs office has been notified that a procedure has been initiated within the period provided for in Article 13(1) to establish whether an intellectual property right has been infringed the authority empowered for this purpose (court) has not authorized precautionary measures before the expiry of the 10/max. 20 WT all customs formalities have been completed. Submission of a security
Fixing the amount
The security provided for in paragraph 1 must be sufficient to protect the interests of the right-holder.
The security will be fixed by customs administration but in open communication between customs administration, importer and rightholder.
12 Daily work
How to Find Fakes – Remarks to Risk Analysis
II
Support & Target
13 support & target
working System Every gearwheel ist part of the system Week or damaged parts bate or block the working process
support & target
the will the pressure the possibility
IIII
Co-operation Rightholder – Customs administration
14 Application for action by customs authorities
Legal start
Why having an application ?
rightowner possibility to protect his IPRs possibility to have a joint venture with customs administration (ca) monotoring of the market by ca
Customs administration Legal base for acting knowing about the problem
conclusion
Customs action and efforts as well as right owners effort interdepend directly
The more applications you get, the more effort you have
The more efforts you have, the more applications you get
15 IVIV
How to Find Fakes – Remarks to Risk Analysis
Simple solution ?
Find Fakes
Examine the goods
Find irregularities
Use risk analysis Check documents
Key questions
When do the goods Are the goods infringe come ? IPR ? Where do they come Where do they come from ? Physical check Which way do they come ? What are the goods declared ?
Profiles
16 Risk analysis - advantages
Risk analysis enables frontline-officers to select shipments separate suspicious shipments from legitimate trade leads customs officers to physical controls enables customs to carry out target-oriented controls
Risk Analysis
general risk indicators Individual risk indicators Risk analysis
Risk Analysis – Risk Indicators
general risk indicators indicators collected and arranged on basis of customs experience: statistics
former cases other prohibition areas (drugs, weapons etc.) specific traffic practice individual risk indicators indicators arranged on basis of information given by right holders
common information target-oriented information
17 Risk Analysis – General Risk Indicators
Where do fakes come from?
Which goods could Which irregularities be faked? show the documents?
Individual Risk Indicators
Where do originals/ fakes come from?
Which goods Which irregularities could be faked? show the documents?
Do you have target- oriented information?
3 step-by-step plan
18 possible and impossible
3 steps
3. Booth
2. Customs office at the fair
1. borderline
At the booth – possible but…
measures acc. to RE (EC) No 1383/2003 only possible, if Non-Community goods under customs surveillance measures by customs (customs house, mobile control group) customs office within customs clearence to or at the end of the fair mobile control groups, but
entry only with allowence of the fair management/company
allowence to control and to ask
19 At the booth – possible but…
Seizures acc. to national legislation is not possible, because the proceeding of import is still finished (reaching of the first point of destination/unloaded)
At the booth – possible but…
Launching a criminal proceeding by request of the rightholder Investigation because of the request or by order of the public prosecutor
Thank you for your attention
A presentation by Klaus Hoffmeister, manager of the central bureau of IPR, in Munich
20 CURRICULUM VITAE ______
BART DE GEUS Symon Pelgromstraat 14 5212 GJ Den Bosch The Netherlands + 31 6 12859310
[email protected] Personal information Date and place of birth: August 19, 1977, Groningen Marital status: Married Nationality: Dutch
Professional Experience 2007 - Philips Intellectual Property & Standards, Eindhoven Senior Legal Counsel / Attorney-at-Law
2005 - 2007 Philips Lighting B.V., Eindhoven, Legal Counsel / Attorney-at-Law 2002 - 2005 Pels Rijcken & Droogleever Fortuijn Law Offices, The Hague Trainee Attorney - Section Commercial and Corporate Law
2001 - 2002 European Commission, DG Competition, Brussels (Belgium) Trainee - Section Automotive (F-2) 2001 Pels Rijcken & Droogleever Fortuijn Law Offices, The Hague Para Legal - Section Commercial and Corporate Law
2001 Dutch Competition Authorities (NMa), The Hague Legal Trainee - Section Mergers Filings 2000 Pels Rijcken & Droogleever Fortuijn Law Offices, The Hague Legal trainee 2000 Halley Verzijl Blaauw & Navarro Law Offices, Philipsburg (St. Maarten, N.A.) Legal trainee 2000 Halley Blaauw & Navarro Law Offices, Willemstad (Curaçao, N.A.) Legal trainee 1997 Texaco Netherlands B.V., Rotterdam Legal trainee Memberships 2006 - Bar Association of the City of Den Bosch 2002 - 2006 Bar Association of the City of The Hague
Education 2006 - Philips Core Curriculum: - Financials for Non-Financial Managers - Managing Successful Projects - Focus on Influence 2005 - NOvA Professional Training for Attorneys-at-Law
2002 - 2005 NOvA Professional Training for Trainee Attorneys
1999 - 2000 Nijmegen Law School, Nijmegen Master Degree Business Law 1999 Université de Pau et des Pays de l’Adour, Pau (France) Erasmus Exchange program - Maitrîse 1995 - 2001 Tilburg University, Tilburg Bachelor and Master Degree European and International Law
1989 - 1995 Mencia de Mendoza Lyceum, Breda V.W.O. (pre-university education)
Publications “Amendments of Art. 81 EC Treaty: Legal certainty for companies”, Ars Aequi, nr. 11 2001 “Minutes of the Dutch Association for European Law jubilee assembly on October 20, 2000”, SEW (European and Economic Law Review) 2001
Languages English: high proficiency French: high proficiency German: proficient
Adjoined activities Musical education (clarinet) Sports (cycling, running, skiing, tennis, field hockey) Travelling Union Round Table Securing Patent Rights through Customs Measures
Bart de Geus Philips IP&S Munich, February 25, 2011
For information purposes only Intellectual Property & Standards 20090112 A well‐respected, blue‐chip company for over 100 years
Founded in 1891 Headquartered in Amsterdam, the Netherlands
Sales over EUR 26 billion (USD 33 billion) Over 30% in emerging economies
121,000 employees Sales and service outlets in 100 countries
Globally recognized brand (world top 50) Our brand value has doubled to $8.3bn since 2004
€1.6 billion investment in R&D, over 6% of sales 55,000 patent rights – 33,000 registered trademarks – 49,000 design rights
For information purposes only Intellectual Property & Standards 20090112 Philips defined: we are…
“…a global company of leading businesses creating value with meaningful innovations that improve peoples’ health and well‐being.”
Health and well‐being Meaningful innovations A commitment to healthy, fulfilled lives Improving people’s lives in our communities and societies Going beyond technology our world Introduced at the right time
For information purposes only Intellectual Property & Standards 20090112 Philips, an innovative company
Anton and Gerard Philips founded Philips in 1891
First Philips patent in October 1905
For information purposes only Intellectual Property & Standards 20090112 4 Philips, an innovative company Key innovations Key innovations Medical X-ray tube 1918 Incredible Sound 1994 The Neon Tube 1922 Bi-level pressure support 1995 Sodium street lamps 1931 DVD 1996 Audio cassette tape 1963 Senseo, curved water reservoir 1996 Plumbicon camera tube 1963 CD-R,CD-RW 1997 LOCOS IC processing 1966 High Definition TV 1998 CCD 1968 Flexible 3-head shaver 1998 VCR 1971 D-VHS 1999 Wafer stepper system 1976 Wearable electronics 1999 NiMH batteries 1976 Ambient Intelligence 2000 Audio CD 1983 Essent Technology 2000 GSM speech de-coder 1985 Flexible display 2001 Natural Motion 1992 Speech control 2001
For information purposes only Intellectual Property & Standards 20090112 5 Philips, an innovative company
Key innovations Key innovations Blu-ray Disc 2002 Living colors 2006 Luxeon LEDs 2002 Cosmopolis 2006 Senseo foam technique 2002 Time-of-Flight PET 2007 Fingerprinting/Watermarking 2003 Protocol Watch for Sepsis 2008 Ambi Light TV 2003 XenEco 2003 3D TV 2003 3D Ultrasound 2003 NFC 2004 Powercore® technology 2004 HeartStart Home Defibrillator 2004 Fluid Focus Lens 2004 Sonicare Spring System 2005
For information purposes only Intellectual Property & Standards 20090112 6 Philips Intellectual property & Standards (IP&S)
Established in 1924
IP Portfolio • 55,000 patents • 33,000 trademarks • 49,000 design rights • 3,900 domain names
For information purposes only Intellectual Property & Standards 20090112 7 Global presence ‐ 450 employees
Redhill Beijing Bothell Cleveland Eindhoven Seoul Aachen Burlington Tokyo
Briarcliff Shanghai
Taipei
Hong Kong San Jose Sao Paolo Mumbai Shenzhen
Mexico Jakarta Madrid Bangalore Buenos Aires Paris Singapore
For information purposes only Intellectual Property & Standards 20090112 8 Our IP&S Mission
A leading industrial IP organization that creates IP solutions to support growth, competitiveness and profitability of Philips’ Sectors
•Create a strong IP portfolio •Generate maximum value •Determine third party IP •Contribute to public/industry standards and regulations
For information purposes only Intellectual Property & Standards 20090112 9 Border Detention Program Trademarks
Designs
Patents
For information purposes only Intellectual Property & Standards 20090112 10 Facts and figures
For information purposes only Intellectual Property & Standards 20090112 11 Stakeholders
Account Managers Patent Attorneys Legal Department Business Support Management Market Intelligence Patent Defense Lab External Patent Attorneys Outside Counsel
For information purposes only Intellectual Property & Standards 20090112 12 Cooperation with Customs
For information purposes only Intellectual Property & Standards 20090112 Detailed Detention Process
1• Examine products of all manufacturers
2 Check license status Shipping documentation
No LSCD With LSCD Check on Website
Suspected Patent Infringement Valid
Website Check White list Contact Declarant Contact Philips
3 Follow up Suspected Licensed Released
For information purposes only Intellectual Property & Standards 20090112 14 Patent infringement?
For information purposes only Intellectual Property & Standards 20090112 15 How to detect
Step 1: Examination before or at arrival
For information purposes only Intellectual Property & Standards 20090112 16 How to detect Step 1: Examination before or at arrival
DVD R/RW discs Taiwan DVD players/ China recorders India Hong Kong China
DVD Video/ ROM discs Eastern Europe USA
For information purposes only Intellectual Property & Standards 20090112 17 How to detect
Step 2: Check if products are licensed or not licensed a.Black & White lists b.License Status Confirmation Document c. Information package to Customs d. Website: www.ip.philips.com
For information purposes only Intellectual Property & Standards 20090112 18 Follow‐up by Philips Step 3: Follow‐up
Testing samples
Analysis + report
Suspected Licensed
Additional Info (Art. 9)
Contact importer Contact manufacturer Contact trader
Unlicensed
Legal Actions (Civil/Criminal) (Art. 11) Within given timeframe Released
Destruction Judgment License Agreement
For information purposes only Intellectual Property & Standards 20090112 19 Measuring patent infringement
•On the spot
• Philips Patent Defense Lab
• Independent Institutes
2/28/2011
For information purposes only Intellectual Property & Standards 20090112 20 Measurement report
For information purposes only Intellectual Property & Standards 20090112 21 Recent experiences in France
Procedure:
•History
•Art. 9 data, pictures and serial numbers
•Saisie Contrefaçon, samples purchased and tested
For information purposes only Intellectual Property & Standards 20090112 Future of Border Detentions
• Uncertainty after Opinion of the Advocate General in the joined Philips and Nokia cases
• Decision of ECJ expected this summer
2/28/2011
For information purposes only Intellectual Property & Standards 20090112 23 24 2/28/2011 March 19th, 2004
First Chamber
N° C02/110HR
JMH
ON BEHALF OF THE QUEEN
SUPREME COURT OF THE NETHERLANDS
ORDER
In the case of:
KONINKLIJKE PHILIPS ELECTRONICS N.V., Incorporated in Eindhoven, PLAINTIFF in cassation, Counsel: W. Taekema,
v e r s u s
1. Company under foreign law POSTECH CORPORATION, incorporated in Taiwan, Republic of China, 2. Company under foreign law PRINCO CORPORATION, incorporated in Taiwan, Republic of China, 3. the company under foreign law PRINCO SWITZERLAND AG, incorporated in Zug, Switzerland,
DEFENDANTS in cassation,
Counsel: R.S. Meijer.
1. Proceedings on the merits
The Plaintiff in cassation - hereinafter referred to as Philips -, in its writ of October 2, 2000, has summoned the defendants in cassation – hereinafter referred to as Postech c.s. – and 7 other companies in summary procedures before the President of the Court of ‘s-Gravenhage and, as far as relevant in cassation and after lowering the claim (summary), has demanded that Postech c.s. be forbidden to violate the patent rights that are rightfully Philips’s, as well as that they be ordered (i) to indicate an address to the other defendants where the CD-Rs should be handed in, (ii) to make sure these CD-Rs are destroyed and (iii) to give Philips a written certificate from the destruction company showing that said destruction has actually taken place. Postech c.s. have fought these claims. In a judgment of January 11, 2001 the President assigned the provisions claimed against Postech c.s. in first instance. Postech c.s. appealed this judgment at the Court of Justice in ‘s-Gravenhage. They filed for a cancellation of the judgment and concluded the Dutch judge is incompetent to rule on the claims by Philips, or in any case that the claims must be denied. In its memorandum of reply, Philips modified and increased its claims and ordered to reinforce the aforementioned judgment and in an order, provisionally enforceable without guarantee: 1. to forbid Postech c.s., each individually, to import the CD-Rs that – in view of the rights of Philips - should be considered “goods violating an intellectual property right” as meant in art. 1 paragraph 2 sub a of the EC directive 241/1999, in any Member State of the European Community for which that is the case or to (re-) export such merchandise, to place them under a suspensive arrangement or to perform one or more of the relevant actions or to be involved in such; 2. to forbid Postech c.s., each individually, involvement with actions violating EO 0 265 984 or EO 0 325 330 or one of both patents in any country for which these patents (or the relevant patent) are valid; 3. to order Postech c.s., each individually, to pay a periodic penalty payment of f 25,000.- for each day on which the relevant appellant does not (fully) comply with the required prohibitions and/or orders; or - as per Philips’ choice - to a periodic penalty payment of f 1.000,- for each CD-R for which a violation of one or more of the given prohibitions or orders should have taken place; 4. to condemn Postech c.s. to pay the costs of the appeal procedures.
Postech c.s. have opposed this increase of the claims and has ordered a release of all garnishments against a periodic penalty payment.
In its order of October 25, 2001 the court cancelled the appealed judgment barring the judgment concerning the costs of the proceedings and as such, rendering justice:
1. by prohibiting Postech c.s., each individually, to violate the rights Philips derives from the European patent 0.397.238 in the Netherlands, against a periodic penalty payment of F 25.000,- for each day it is shown that Postech c.s. does not or not completely or not appropriately comply with the prohibition or - as per Philips’ choice - a periodic penalty payment of F 1.000,- for each CD-R for which the prohibition has been violated; 2. by denying any other or different claims; 3. by reinforcing the judgment concerning the payment of the process costs; 4. by declaring this order provisionally reinforceable and 5. by compensating the costs of the appeal procedures by allocating their own costs to each party.
The order of the Court is attached to this order.
2. Cassation procedures
Philips appealed this order in cassation. The cassation writ is attached to this order and is an integral part thereof.
Postech c.s. have concluded to deny the appeal.
Philips has had the case explained by its counsel en Postech c.s. have had the case explained on behalf of their counsel by L.M. Schreuders-Ebbekink, lawyer with the Supreme Court.
The conclusions of Advocate General L. Strikwerda aim at the cancellation of the appealed order of the Court of Justice at ‘s-Gravenhage and to refer the case to that Court of Justice for further treatment and decision.
3. Appraisal of the arguments
3.1 In cassation, the following can be assumed.
(i) Philips is proprietor of the following European patents: - n° 0.342.748, granted on February 2, 1994; - n° 0.327.172, granted on December 14, 1994; - n° 0.397.238 granted on November 22, 1995.
These patents concern information carriers in the form of compact disks on which the user can store information, also known as “recordable” CDs or CD-Rs.
(ii) Postech, Princo Taiwan and Princo Switzerland manufacture and commercialise CD-Rs. Postech and Princo Taiwan are incorporated in Taiwan, Princo Switzerland in Switzerland.
(iii) Philips finds that the CD-Rs of Postech c.s. violate its aforementioned patents and asked the Dutch customs authorities to immediately be notified of the declaration of such CD-Rs with a mention of the declarer and the beneficiary, based on the (EC) Directive n° 3295/94 of the Council of December 22 1994 that includes a number of measures concerning the importation within the Community as well as the exportation and re-exportation out of the Community of goods violating certain intellectual property rights, PbEG L 341/8, as amended by (EC) Directive n° 241/1999 of the Council of January 25 1999, PbEG L 27/1 (hereinafter: the EC Piracy Directive).
(iv) Such information was passed on by customs to Philips with respect to the content of some six shipments of CD-Rs, all coming from Postech or Princo Taiwan and shipped from Taiwan. The beneficiary was, amongst others, Princo Switzerland.
(v) Philips has proceeded to the garnishment of all of these aforementioned shipments.
3.2 Philips has summoned Postech c.s. in summary proceedings and claimed as described in 1. The President granted the requested provisions.
In an appeal, Postech c.s. requested the cancellation of the judgment and concluded that the Dutch judge was incompetent to rule on Philips’ claims and that the claims should be denied. In its memorandum of reply, Philips modified its claim and increased it as described in 1. After lowering its claims in a plea by withdrawing the requested violation prohibition with respect to the violation of the European patents 0.265.984 and 0.325.330, in appeal the court recognized the following claims by Philips:
a) to prohibit Postech c.s., each individually, to violate the rights Philips derives from the European patents 0.327.172, 0.397.238 and 0.342.748 for the countries for which these patents are granted, against payment of a periodic penalty payment; b) to condemn Postech c.s., each individually, against payment of a periodic penalty payment: - to report in writing to the holders of the seized CD-Rs the address where the relevant CD-Rs must be delivered, - to make sure that the relevant CD-Rs are destroyed within one week after submission; - to submit within 15 days thereafter a written certificate from the relevant destruction company showing that the destruction has actually taken place; c) to prohibit Postech c.s., each individually, against payment of a periodic penalty payment, to import CD-Rs that in view of the rights of Philips must be considered “goods in violation of an intellectual property right” as meant in article 1 paragraph 2 sub a of the EC Piracy Directive, in any member state or to (re-)export such goods or to place them under a suspensive arrangement or to place them in a free zone or a free warehouse or to execute any or more of the relevant actions or to be involved in these.
The Court has destroyed the appealed judgment except for the judgment concerning the costs of the proceedings and, while re-rendering justice and in summary prohibited Postech c.s., each individually, to violate the rights Philips can derive from European patent 0.397.238 in the Netherlands, against payment of a periodic penalty payment, and has denied the other or additional claims.
3.3 Parts I (with respect to the question whether the EC Piracy Directive includes competence rules), II (with respect to the question whether the Dutch judge is competent to take note of the claims against Princo Switzerland based on the (alternative) competence rule of art. 5, title and sub 3, EVEX) and III (with respect to the question whether the Dutch judge can derive competence from art. 6, title and sub 1, EVEX to take note of the claims against Princo Switzerland) are turned against the judgment of the court in rov. 4 and 5 (third and fourth paragraph) with respect to the question whether the Dutch judge is competent to take not of Philips’ claims.
Based on art. 126 paragraph 3 (former) Rv the Court has deemed itself competent to take not of Philips’ claims against Postech and Princo Taiwan and on the ground of art. 24 EVEX in relation to art. 126 paragraph 3 (former) Rv, the court has deemed itself competent to take note of Philips’ claims against Princo Switzerland (rov 5, 5th paragraph). Now the court has not declared itself incompetent in the dictum of the order to take not of any of Philips’ claims nor of any port of a claim of Philips, parts I, II and III cannot lead to cassation because of lack of importance. 3.4.1 In rov 5 (and others), the Court considers:
“The Court finds that the judge who bases his competence exclusively on article 24 EVEX/EEX Treaty (juncto article 126 paragraph 3 Rv) should not act orderingly outside of the Netherlands (see also judicial consideration 16 of the order of the Court of Justice EC of May 21 1980 C-125/79 with respect to Denilauler/Couchet Frères (NJ 1981, 184). Any cross- border violation prohibition shall hence be denied, also towards Postech and Princo, since restraint is in order in view of the summary proceedings against them.”
3.4.2 Part IV demonstrates, with respect to the claims against Princo Switzerland, that the Court could derive competence from article 2 EC Piracy Directive, art. 5, title and sub 3, EVEX and/or art. 6, title and sub 1, EVEX, implying that it has been incorrectly or at least insufficiently motivated in the judgment in rov 5 that the court must not act orderingly outside the Netherlands and hence a border-crossing violation prohibition must be denied. This point of view is based on an erroneous interpretation of the order, since the court has not deemed itself incompetent to take not of Philips’ claims against Princo Switzerland yet denies the claims aiming at a cross-border violation prohibition because of opportunity reasons. That is also demonstrated by the reference to rov. 16 of the order of the HvJEG of May 21 1980 (Denilauler/Couchet Frères), which says: “There is no doubt that the local judge or at least the judge of the treaty state in which the assets to which the required measures apply are located is most capable of judging the circumstances based on which the requested measures must be granted or denied or which conditions and modalities must be determined for the petitioner to guarantee the temporary and conservatory character of the allowed measures”, with which reference the court apparently intended to express that it is not capable in these summary proceedings to judge whether the circumstances outside of the Netherlands can justify the allocation of the requested cross-border measures against Princo Switzerland.
3.4.3. For the claims against Postech and Princo Taiwan, part IV opposes with a motivation complaint the judgment of the court that the cross-border violation prohibition against these companies must also be denied “since restraint is in order in view of these short proceedings against them”.
When treating this part, we must indicate that, if the Dutch judge is competent on grounds of a rule of (common) international competency law to take not of a claim with respect to the violation of an intellectual property right obtained under foreign law, he can, in principle and when ordered, prohibit actions abroad. That also applies to short proceedings, without regards to the grounds on which the Dutch judge has based his international competence (see rov. 4.2.4 of HR November 24, 1989, n° 13689, NJ 1992, 404 (hereinafter: Interlas order) and rov. 5 of HR February 21, 1992 n° 14454 NJ 1993, 164 (Barbie)).
Considered against this background, the judgment of the Court that in this case no cross- border violation prohibition can be granted against Postech and Princo Taiwan is insufficiently motivated.
As far as the court may have judged that in this case we have the exception as meant in the aforementioned Interlas order (“Unless the law, the nature of the obligation or a judicial action show differently, he who is obliged to give, do or not do something vis-à-vis someone else is ordered to do so by the judge upon request of the proprietor”), it is not clear without further motivation, quod non, on which grounds and why the court has ruled that in these summary proceedings the main rule must be discarded and restraint is in place.
As far as the court may have judged that this restraint is in order on the grounds of the order, as quoted by the court, of HvJEG of May 21, 1980 (Denilauler/Couchet Frères), the court has lost sight of the fact that the indication given in that order to practice restraint when taking cross-border temporary or conservatory measures does not apply to Postech and Princo Taiwan, since these companies are not established on the territory of a state that is party to the EEX Treaty or the EVEX, so the arrangements of the EEX treaty or the EVEX do not apply to these companies.
As far as the court may have judged that the indication of the aforementioned order of HvJEG must be considered equally applicable to cases outside the formal scope of the EEX treaty or EVEX, that judgment is incorrect. There is no ground to accept a restriction as meant in the HvJEG order in the Denulauler/Couchet Frères case for these cases.
3.5.1 In rov. 22, the court judges that the claim mentioned in 3.2 sub c) is not attributable.
Part V disputes this judgment as being incorrect and incomprehensible because the circumstance that the EC Piracy Directive does not give general rules with respect to the competence of the judge, does not mean that the court in this case is not competent to take note of the present claim. Because of a lack of factual grounds, this claim cannot lead to cassation since the court has deemed itself competent for all Philips’ claims, including the claim sub c).
3.5.2 As far as the part is aimed against rov. 5, third paragraph, final sentence but one, where the court considers with respect to the question whether the prohibition of art. 2 of the EC Piracy Directive is not aimed at the member states and requires further arrangement, it fails for lack of importance because this consideration by the court is superfluous.
3.5.3.1 In addition, the part is aimed against the part of rov. 5:
“For a violation of the prohibition included in article 2 of the Directive, as far as relevant here, it is required that the goods violate a patent in accordance with the legislation of the member state where the request for customs actions is filed (in casu Dutch legislation). Nor the State Patent Act of 1995 nor the State Patent Act (1910) determine that it is a violation of the rights of the patent holder when transit goods are re-exported.”
3.5.3.2 Art. 6 paragraph 2, title and sub B, of the EC Piracy Directive determines that the goods that are in the Netherlands “in a situation as meant in article 1 paragraph 1 sub a)” upon the assessment of the violation issue by way of fiction must be considered goods that have been manufactured in the Netherlands. The opinion of the court that the State Patent Act of 1995 nor the State Patent Act (1910) determine that the re-exportation of transit goods is a violation of the rights of the patent holder is hence not decisive for the violation issue. Decisive is whether, in the assumption that the goods have been manufactured in the Netherlands, the rights of the patent holder are violated. The complaint aimed against said judgment is hence effective.
3.6.1 In Rov. 22, third paragraph, the court has ordered that in view of the considerations made sub 4 and 5, it shall not impose a prohibition that is valid outside the Netherlands. “In addition, in view of the opposition by Postech c.s. Philips has not demonstrated that it has a Belgian respectively Swiss part of the European “238” patent in Belgium and/or Switzerland that complies with the requirements for registration in those countries or that is valid in law.”
3.6.2 As far as part VI says it is not clear which considerations in rov. 4 and 5 the court aims at in the quoted consideration, for lack of factual grounds it cannot lead to cassation because the court apparently aims at the conclusion of rov. 4 and 5, i.e. the judgment with respect to the restraint the court finds necessary during these summary proceedings when imposing a cross-border violation prohibition.
As far as this part builds on the previous part, it needs not to be discussed any further and shall be treated in the same way as these other parts.
3.6.3 Finally, the judgment complains that the judgment of the court in rov. 22 that in view of the opposition by Postech c.s. Philips did not demonstrate that it has a Belgian respectively Swiss part of the European “238” patent in Belgium and/or Switzerland that complies with the requirements for registration in these countries and that is legally valid is incorrect or at least insufficiently clear, is motivated.
The president has prohibited any further violation of the rights Philips derives from e.g. the European “238” patent for all countries in which the patent is valid, without making an exception for Belgium and Switzerland, the countries which are according to Philips part of the countries for which the patent is valid. The documents of the proceedings do not allow any other conclusion than that Postech c.s. did not oppose clearly enough the –implicit- judgment of the president that said patent is also valid for Belgium and Switzerland. The claim is hence successful since the court was bound by that judgment.
3.7.1 In rov. 22, fourth paragraph the court has judged that, in view of Philips’ interests in the allocation of its additional claims (mentioned in 3.2 sub b)) on the one hand and the interest of Postech c.s. in the denial of these far-stretching claims on the other hand, these claims shall be denied. “In addition, the court has taken into account that Postech c.s. have shown during the proceedings that they are prepared to deliver a guarantee for the damages of Philips and that Philips did not look into this at all.”
3.7.2 The CD-r’s which are the object of the proceedings are, now that the court has deemed it acceptable that one of Philips’ patent rights, the “238” patent, was endangered, “goods that violate an intellectual property right” as meant in art. 1 paragraph 2 sub a of the EC Piracy Directive. In view of art. 8 paragraph 1 of the directive and consideration 11 of its considerans, it is aimed at the destruction of such goods without any damages. In view of these facts, it is incomprehensible why the court has ruled, without any further motivation, that the interest of Postech c.s. in case of a denial of the claims of Philips is more important than Philips’ interests in an allocation thereof and that destruction is a too drastic measure. Part VII, complaining about this fact, is hence effective.
4. Decision
The Supreme Court of Justice: cancels the order of the Court of Justice in ‘s-Gravenhage of October 1, 2001; refers the procedures to that court for further treatment and decision; condemns Postech c.s. to the costs of the cassation procedures, up until this order estimated for the side of Philips at € 404,53 in advances and € 1.590,- in fees.
This order is given by Vice President P. Neleman as president and counsel A.M.J. van Buchem-Spapens, A. Hammerstein, P.C. Kop and F.B. Bakels and was rendered in public by counsel A. Hammerstein on March 19, 2004.
[Signatures]
For counterpart original, issued by me, Registrar of the Supreme Court of the Netherlands, on March 19 2004 for the plaintiff in cassation. [signed]
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OPINION OF ADVOCATE GENERAL CRUZ VILLALÓN delivered on 3 February 2011 (1)
Joined Cases C-446/09
Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd Far East Sourcing Ltd Röhlig Hong Kong Ltd and Röhlig Belgium NV
(Reference for a preliminary ruling from the Rechtbank van eerste aanleg te Antwerpen, Belgium)
Case C-495/09
Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs
(Reference for a preliminary ruling from the Court of Appeal of England and Wales, United Kingdom)
(Goods placed under the external transit procedure – Intellectual property rights – Regulation (EC) No 3295/94 and Regulation (EC) No 1383/2003 – Treatment of goods in transit as if they were goods produced in the territory of the Union (‘production fiction’) – Conditions governing action by the customs authorities in cases where goods in transit are counterfeit or pirated – Suspected infringement of an intellectual property right)
Table of contents
I – Introduction
II – Legal framework
A – Regulation No 3295/94
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B – Regulation No 1383/2003
III – The main proceedings and the questions referred for a preliminary ruling
A – Philips
B – Nokia
IV – The procedure before the Court of Justice
V – A preliminary matter: similarities and differences between Nokia and Philips
VI – Analysis of the question referred for a preliminary ruling in Philips
A – ‘The production fiction’ cannot be inferred from the wording of the provision relied on
B – The interpretation proposed by Philips goes beyond the objectives pursued by the customs regulation
C – In the final analysis, the earlier case-law does not support ‘the production fiction’
D – Conclusion
VII – Analysis of the question referred in Nokia
A – Preliminary considerations
B – Articles 1, 4 and 9 introduce a specific criterion to justify action: ‘suspected’ infringement
C – The customs authorities may not anticipate what the decision on the substance will be
D – Excessive evidential requirements could render nugatory the extent of the Regulation’s field of application
E – The regulation introduces the criterion of ‘suspicion’
VIII – Conclusion
A – To the question referred by the Rechtbank van eerste aanleg te Antwerpen (Case C-446/09)
B – To the question referred by the Court of Appeal of England and Wales (Case C-495/09)
I – Introduction
1. In the present joined cases, two national courts have each referred for a preliminary ruling a question concerning the interpretation of the European Union legislation governing action by customs authorities against possible infringements of intellectual property rights.
2. More specifically, both cases concern allegedly counterfeit or pirated goods which were in the customs situation of ‘external transit’, an aspect of the customs duty suspension arrangements which, in accordance with Article 91(1)(a) of the Community Customs Code, (2) allows ‘the movement from one point to another within the customs territory of the Community of ... non- Community goods, without such goods being subject to import duties and other charges or to commercial policy measures’. According to case-law, ‘external transit’ is based on a legal fiction, since the whole procedure unfolds as if the non-Community goods concerned had never entered the territory of a Member State. (3)
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3. In the first case, Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd and Others, C-446-09 (‘Philips’), the applicant in the main proceedings claims that, as part of the legal fiction that is the external transit situation, another legal fiction – the so-called ‘production fiction’ – applies, in accordance with which non-Community goods in transit are treated as though they had been manufactured in the Member State in which they are situated and are, accordingly, subject to the legislation on the protection of intellectual property in force in that Member State. This therefore circumvents the burden of proving that the goods concerned will be traded in the Union, a condition which is, in principle, unavoidable for the purposes of obtaining protection of all forms of intellectual property right.
4. In the second case, Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs, C-495/09 (‘Nokia’), the United Kingdom customs authorities refused Nokia’s application for seizure of some apparently counterfeit goods, arguing that their destination was Colombia and there was no evidence that they were going to be diverted onto the European Union market. The referring court asks the Court of Justice whether that is a matter which it is essential to establish in order to classify goods as ‘counterfeit’ for the purposes of the customs legislation and, in short, in order for the customs authorities to be able to detain those goods.
5. Thus, the present joined cases will enable the Court to determine whether or not the customs regulations have an effect on the substantive rules governing intellectual property in the context of goods in transit and also the action which customs authorities may take in relation to goods in transit, against a background of rather confused case-law.
II – Legal framework
6. The present references for a preliminary ruling concern the Community legislation governing action by customs authorities against possible infringements of intellectual property rights.
7. In particular, Philips concerns Council Regulation (EC) No 3295/94 of 22 December 1994 laying down measures concerning the entry into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights (‘the old Customs Regulation’ or ‘the Regulation of 1994’). (4) On the other hand, in Case C-446/09 Nokia, the legislation applicable is Council Regulation (EC) No 1383/2003 of 22 July 2003 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 (‘the new Customs Regulation’ or ‘the Regulation of 2003’), (5) which repealed and replaced the previous regulation.
8. Both regulations were adopted on the basis of Article 133 EC, (6) relating to the common commercial policy, paragraph 1 of which provides: ‘The common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies.’ (7)
9. Both the old and new customs regulations define their scope by referring to the different customs situations applicable to goods against which action may be taken and by defining, for those purposes, the concept of ‘goods infringing an intellectual property right’.
10. Both regulations provide for initial prior action by the customs authorities (Article 4 of both regulations), followed by an opportunity for the right-holder to lodge an application for action (Article 3 of the old regulation and Article 5 of the new regulation), acceptance of the application, the adoption of the appropriate measures and, as the case may be, the commencement of substantive proceedings before the competent authority.
A – Regulation No 3295/94 (8)
11. Article 1 defines the scope of the regulation:
‘1. This Regulation lays down:
(a) the conditions under which the customs authorities shall take action where goods suspected of being goods referred to in paragraph 2(a) are:
– entered for free circulation, export or re-export, in accordance with Article 61 of Council
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Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code,
– found in the course of checks on goods under customs supervision within the meaning of Article 37 of Council Regulation (EEC) No 2913/92, placed under a suspensive procedure within the meaning of Article 84(1)(a) of that Regulation, re-exported subject to notification or placed in a free zone or free warehouse within the meaning of Article 166 thereof;
and
(b) the measures which shall be taken by the competent authorities with regard to those goods where it has been established that they are indeed goods referred to in paragraph 2(a).
2. For the purposes of this Regulation:
(a) “goods infringing an intellectual property right” means
– “counterfeit goods”, namely:
– goods, including the packaging thereof, bearing without authorisation a trade mark which is identical to the trade mark validly registered in respect of the same type of goods, or which cannot be distinguished in its essential aspects from such trade mark, and which thereby infringes the rights of the holder of the trade mark in question under Community law or the law of the Member State where the application for action by the customs authorities is made,
...
– “pirated goods”, namely: goods which are or embody copies made without the consent of the holder of the copyright or neighbouring rights, or of the holder of a design right, whether registered under national law or not, or of a person duly authorised by the holder in the country of production, where the making of those copies infringes the right in question under Community law or the law of the Member State in which the application for action by the customs authorities is made.
…’
12. In accordance with Article 6:
‘1. Where a customs office to which the decision granting an application by the holder of a right has been forwarded pursuant to Article 5 is satisfied, after consulting the applicant where necessary, that goods placed in one of the situations referred to in Article 1(1)(a) correspond to the description of the goods referred to in Article 1(2)(a) contained in that decision, it shall suspend release of the goods or detain them.
...
2. The law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1)(a) shall apply as regards:
(a) referral to the authority competent to take a substantive decision and immediate notification of the customs service or office referred to in paragraph 1 of that referral, unless referral is effected by that service or office;
(b) reaching the decision to be taken by that authority. In the absence of Community rules in this regard, the criteria to be used in reaching that decision shall be the same as those used to determine whether goods produced in the Member State concerned infringe the rights of the holder ...’
B – Regulation No 1383/2003
13. Article 1 provides as follows:
‘1. This Regulation sets out the conditions for action by the customs authorities when goods are
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suspected of infringing an intellectual property right in the following situations:
(a) when they are entered for release for free circulation, export or re-export in accordance with Article 61 of Council Regulation (EEC) No 2913/92 of 22 October 1992 establishing the Community Customs Code;
(b) when they are found during checks on goods entering or leaving the Community customs territory in accordance with Articles 37 and 183 of Regulation (EEC) No 2913/92, placed under a suspensive procedure within the meaning of Article 84(l) (a) of that Regulation, in the process of being re-exported subject to notification under Article 182(2) of that Regulation or placed in a free zone or free warehouse within the meaning of Article 166 of that Regulation.
2. This Regulation also fixes the measures to be taken by the competent authorities when the goods referred to in paragraph 1 are found to infringe intellectual property rights.’
14. Article 2(1) defines ‘goods infringing an intellectual property right’ for the purposes of the regulation:
‘(a) “counterfeit goods”, namely
(i) goods, including packaging, bearing without authorisation a trade mark identical to the trade mark validly registered in respect of the same type of goods, or which cannot be distinguished in its essential aspects from such a trade mark, and which thereby infringes the trade mark-holder’s rights under Community law, as provided for by Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark or the law of the Member State in which the application for action by the customs authorities is made;
...
(b) “pirated goods” ...’
15. Article 9 governs the conditions for action by the customs authorities. Article 9(1) provides as follows: ‘Where a customs office to which the decision granting an application by the right-holder has been forwarded pursuant to Article 8 is satisfied, after consulting the applicant where necessary, that goods in one of the situations referred to in Article 1(1) are suspected of infringing an intellectual property right covered by that decision, it shall suspend release of the goods or detain them ...’
16. In accordance with Article 10, ‘[t]he law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1) shall apply when deciding whether an intellectual property right has been infringed under national law.’
III – The main proceedings and the questions referred for a preliminary ruling
A – Philips
17. On 7 November 2002, the Antwerpse Opsporingsinspectie van de Administratie der Douane en Accijnzen (Antwerp investigations inspectorate of the Belgian Customs and Excise Administration) detained a consignment of shavers from Shanghai. The goods were suspected of infringing the intellectual property rights of Koninklijke Philips Electronics NV (‘Philips’), in particular the international design registrations for shavers which were registered in respect of (inter alia) Benelux with the World Intellectual Property Organization (WIPO) under numbers DM-034.562, on 9 June 1995, and DM-045.971, on 29 July 1998, together with the copyright in the external appearance of the shavers.
18. On 12 November 2002 the applicant lodged a general application for action with the Centrale Administratie der Douane en Accijnzen te Brussel (Central Administration of Customs and Excise, Brussels). That application was accepted on 13 November 2002.
19. The customs authorities then sent Philips a photograph of the ‘Golden Shaver’ and informed it that the following companies were involved in the manufacture of or trade in the detained shavers: Lucheng Meijing Industrial Company Ltd, a Chinese manufacturer of shavers; Far East
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Sourcing Ltd, established in Hong Kong, the shipper of the goods; Röhlig Hong Kong Ltd, the forwarding agent for the goods in Hong Kong, acting on the instructions of the declarant or consignee of the goods; Röhlig Belgium NV, the forwarding agent for the goods in Belgium, acting on the instructions of the declarant or consignee of the goods.
20. In the customs declaration issued by the representative [of] Röhlig Belgium NV, drawn up in Antwerp on 29 January 2003, the goods were declared under the temporary import arrangements without stating the country of destination. Before, when the goods arrived in Antwerp, a summary declaration was made in respect of the goods in accordance with Article 49 of the Community Customs Code.
21. On 11 December 2002, Philips brought an action before the Rechtbank van eerste aanleg te Anwerpen (Court of First Instance, Antwerp) seeking a ruling that its intellectual property rights had been infringed. The applicant claimed that, in accordance with Article 6(2)(b) of Regulation No 3295/94, the Rechtbank should use as its starting point the fiction that the shavers seized had been manufactured in Belgium and should then apply Belgian law for the purposes of establishing the infringement.
22. Before ruling on the merits of the case, the Rechtbank referred the following question to the Court of Justice for a preliminary ruling:
‘Does Article 6(2)(b) of Council Regulation (EC) No 3295/94 of 22 December 1994 (the old Customs Regulation) constitute a uniform rule of Community law which must be taken into account by the court of the Member State which, in accordance with Article 7 of the Regulation, has been approached by the holder of an intellectual-property right, and does that rule imply that, in making its decision, the court may not take into account the temporary storage status/transit status and must apply the fiction that the goods were manufactured in that same Member State, and must then decide, by applying the law of that Member State, whether those goods infringe the intellectual- property right in question?’
B – Nokia
23. In July 2008, Her Majesty’s Commissioners of Revenue and Customs (the United Kingdom customs authorities; ‘HMRC’) stopped and inspected at Heathrow Airport a consignment of goods which had come from Hong Kong and was destined for Colombia, comprising approximately 400 mobile telephones, batteries, manuals, boxes and hands-free kits, each of which bore the trade mark ‘Nokia’.
24. On 30 July 2008, HMRC sent Nokia Corporation (‘Nokia’) a letter accompanied by samples of those goods. After inspecting the samples, Nokia notified HMRC that the goods were counterfeit and asked whether HMRC intended to detain them.
25. On 6 August 2008, HMRC responded stating that, having received legal advice, it was uncertain how goods could be ‘counterfeit’ within the meaning of Article 2(1)(a)(i) of Regulation No 1383/2003 in the absence of any evidence that they might be diverted onto the European Union market. HMRC therefore concluded that, in the absence of such evidence, it was not lawful to deprive the owner of its goods.
26. On 20 August 2008, Nokia issued an application against HMRC, asking for the names and addresses of the consignor and the consignee together with any other relevant documents relating to the consignment in the possession of HMRC. Even though such documents were sent to it, Nokia did not succeed in identifying the consignor or the consignee of the goods, and concluded that they had both taken steps to hide their identity.
27. After a further formal letter to HMRC, Nokia commenced legal proceedings on 31 October 2008.
28. In a judgment of 29 July 2009, Kitchin J, sitting in the Chancery Division of the High Court of England and Wales, held that the Regulation did not entitle or require customs authorities to detain or seize counterfeit goods in transit where there was no evidence that the goods would be diverted onto the market in Member States because such goods were not ‘counterfeit goods’ under Article 2 (1)(a)(i) of Regulation No 1383/2003.
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29. An appeal was lodged against the decision of Kitchin J. before the Court of Appeal of England and Wales (‘the Court of Appeal’), which, in the light of the Philips case and of the divergent views adopted by different courts of the Member States, and given the need for a systematic and uniform interpretation of the regulation, referred the following question to the Court of Justice for a preliminary ruling:
‘Are non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and in transit from a non-Member State to another non-Member State capable of constituting “counterfeit goods” within the meaning of Article 2(l)(a) of Regulation (EC) No 1383/2003 if there is no evidence to suggest that those goods will be put on the market in the EC, either in conformity with a customs procedure or by means of an illicit diversion?’
IV – The procedure before the Court of Justice
30. The order for reference in Philips was received at the Registry of the Court of Justice on 17 November 2009. The order for reference in Nokia was received at the Registry on 2 December 2009.
31. Written observations were lodged, in Philips, by the applicant (Philips), Far East Sourcing, the Belgian, United Kingdom and Italian Governments, and the Commission, and, in Nokia, by the applicant (Nokia), the International Trademark Association, the United Kingdom, Portuguese, Polish, Czech, Finnish and Italian Governments, and the Commission.
32. At the hearings, held on 18 November 2010, oral argument was presented, in Philips, by the applicant, Far East Sourcing, the Belgian, Czech and United Kingdom Governments, and the Commission, and, in Nokia, by the applicant, the International Trademark Association, the United Kingdom, Czech, French, Polish and Finnish Governments, and the Commission.
33. By order of 11 January 2011, the two cases were joined for the purposes of the Opinion and the judgment.
V – A preliminary matter: similarities and differences between Nokia and Philips
34. Regardless of all the similarities between the present joined cases, it is essential at the outset to identify the main difference between them so that the specific nature of each case is clear.
35. In the first place, it must be noted that the legal framework is different, as a result of the developments which have taken place in European Union customs legislation. Thus, in Philips, the facts are governed by the old Regulation No 3295/94, whereas, in Nokia, the new Regulation No 1383/2003 is applicable. Moreover, the questions refer to non-identical articles of those two provisions.
36. In the second place, the cases differ in terms of the type of intellectual property right at issue: copyright and registered designs in Philips, (9) and the rights to a trade mark in Nokia. (10)
37. However, the most important difference between the two cases is to be found in the subject- matter of the proceedings in which each question has been referred to the Court for a preliminary ruling. In both cases, the facts concern the detention by the customs authorities of goods in transit, but while the main proceedings in Nokia, the second case before the Court, turn on the lawfulness of the actions of the United Kingdom customs authorities, which suspended detention of the goods on the grounds that there was no ‘actual’ or ‘real’ infringement of the trade mark claimed, the first case, Philips, reached the Court at a later and qualitatively different stage, in which, following action by the Belgian customs authorities in relation to goods in transit, the holder of the intellectual property right allegedly infringed applied to the court for a ruling that such an infringement had indeed occurred together with the appropriate consequences.
38. That clarification is all the more fitting because a number of the observations lodged in the present cases display a certain amount of confusion between those two aspects of the protection of intellectual property rights. For this reason, I believe it necessary, in the context of these preliminary remarks, to draw attention to the three successive steps which, in accordance with the regulations concerned, the authorities of a Member State may take when there has possibly been an infringement of an intellectual property right in respect of goods in transit.
39. The first, ‘preparatory’, stage begins when, in the light of ‘sufficient grounds for suspecting’
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an infringement of intellectual property rights, the customs authorities adopt ‘prior measures’ consisting of suspending the release of the goods or detaining them, in both cases for a period of three working days. (11)
40. The second stage starts when, on application by the holder of the right which has allegedly been infringed, (12) and where those suspicions persist, the customs authorities confirm that they have suspended release of the goods or detained them. (13) This is still an administrative, interim stage but it represents rather more ‘stable’ action than the previous stage.
41. As from this moment, in the third and final stage, the following situations may arise: (a) the owner of the goods seized relinquishes them, in which case they may be destroyed under customs control; (14) (b) within 10 days of notification of the action in the second stage, the holder of the intellectual property right allegedly infringed applies to the ‘competent authority’ (normally a court) for a determination in substantive proceedings that such an infringement has occurred; (15) or (c) the right-holder does not take action within that 10-day period (that is to say, if neither (a) nor (b) takes place), in which case release of the goods is granted, or their detention is ended. (16)
42. In short, and to put it as succinctly as possible, in Nokia the referring court asks the Court of Justice whether, for the purposes of detaining the goods in what I have described as the ‘second stage’, the customs authorities must have some proof that those goods are to be traded on the European Union market in one way or another, whereas, in Philips, the referring court asks whether that consideration is essential in order for a ruling to be made, during any substantive proceedings which may take place at the end of the ‘third stage’, on whether or not an intellectual property right has been infringed.
43. It is important to bear in mind that essential difference when providing the national courts with a helpful reply. The different characteristics of the two cases make it advisable to reply separately to the questions referred in number order, even though that reverses the chronological order of the two methods of protection against counterfeit or pirated goods.
VI – Analysis of the question referred for a preliminary ruling in Philips
44. The Rechtbank van eerste aanleg te Anwerpen (‘the Rechtbank’) asks the Court about the procedure for verifying whether there has been an infringement of intellectual property rights when the goods concerned were seized while in transit.
45. As I have reiterated, quite apart from the conduct of the customs authorities concerned, what is at issue in this first case is the determination, in this case by a court, that there has been a real and actual infringement of intellectual property rights, with all the consequences to which that gives rise. (17)
46. More specifically, the Rechtbank asks whether it follows from Article 6(2)(b) of Regulation No 3295/94 that that assessment must be made without taking into account the customs situation of the goods and, more particularly, by applying the fiction, which it is claimed underlies that article, that the goods concerned were manufactured in the Member State in which they are situated. (18)
47. The referring court thus expressly enquires about the compatibility with European Union law of what is becoming known as ‘the production fiction’, the most important consequence of which is the possibility of holding that non-Community goods in transit have infringed an intellectual property right in the same way as if they were goods which had been unlawfully manufactured in the Member State in which they are in transit, regardless of whether or not those goods are destined for the European Union market. (19)
48. Reliance on this legal fiction, which is at the heart of the question, makes it possible, above all, to disregard the condition of ‘use in the course of trade’ which is laid down in Article 9 of Regulation No 40/94, Article 5 of Directive 89/104 and Article 12 of Directive 98/71 as a requirement for establishing the infringement of a Community trade mark, a national trade mark or design rights, respectively.
49. The specific purpose of intellectual property rights is to grant the holder of a trade mark or a design the exclusive right to use that trade mark or design and to prohibit third parties from using it in the course of trade. In that way, the substantive law establishes a link between the protection of intellectual property rights and the existence of trade in the goods or services concerned.
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50. Before going on to address that proposed interpretation of Article 6(2)(b), it is appropriate to point out how the Court has had occasion to clarify that transit does not, in itself, involve any marketing of the goods in question and does not, therefore, infringe the specific subject-matter of the trade mark. (20)
51. In those circumstances, in order to find that goods in transit infringe an intellectual property right, it is essential to establish that they are to be traded in the territory where that right is protected. The application of the so-called ‘production fiction’ would mean that the Customs Regulations had increased the protection of those rights vis-à-vis the provisions of substantive law referred to above, by permitting protection dissociated from actual ‘trading’ or ‘use in the course of trade’ in the territory of the Member State concerned.
52. In the light of the foregoing, it is difficult to argue, as Philips does in its written observations, that this ‘production fiction’ is not a new criterion for defining an infringement of intellectual property rights and that it does not alter the substantive law governing those rights. (21)
53. In my opinion, as we will see below, the interpretation based on the ‘production fiction’ may not be inferred from the wording of the articles invoked in support of it, goes beyond the objectives of the Customs Regulation and conflicts with the existing case-law in that regard.
A – ‘The production fiction’ cannot be inferred from the wording of the provision relied on
54. In the first place, I believe that the so-called ‘production fiction’ can hardly be constructed from the wording of Article 6(2)(b) of Regulation No 3295/94, which it may be useful to repeat here: ‘The law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1)(a) shall apply as regards: … (b) reaching the decision to be taken by that authority. In the absence of Community rules in this regard, the criteria to be used in reaching that decision shall be the same as those used to determine whether goods produced in the Member State concerned infringe the rights of the holder. Reasons shall be given for decisions adopted by the competent authority.’
55. First of all, the fact that, in accordance with that provision, ‘the competent authority’, when adopting its decision on the substance of the matter, must use the same criteria as those used to determine whether the goods produced in the Member State concerned infringe the rights of the holder does not in any way mean that non-Community goods in transit must be treated for all purposes as though they were goods unlawfully produced in the State in question.
56. On the contrary, careful reading of the text shows, as suggested by the United Kingdom and the Commission, that by that wording the European Union legislature intended, ‘in the absence of Community rules in this regard,’ to lay down subsidiarily a rule of conflict of laws making it possible to establish which substantive rule the competent authority (in this case, the Belgian court) must apply in order to rule on the merits of the case and therefore to assess whether or not there is an infringement of intellectual property. That clarification is indispensable (as the Commission has emphasised, there are 27 different national legislative schemes that may be applied in the circumstances of the case) and constitutes a natural application of the principle of territoriality governing those rights. (22)
57. Furthermore, it is only in that way that formulation of the subsidiary nature of the provision (‘in the absence of Community rules in this regard’) makes any sense. If it were to be accepted that Article 6 introduced the so-called ‘production fiction’, would it be necessary to exclude its application to, for example, Community trade marks governed by Regulation No 40/94, thus affording them a degree of protection lower than that given to other intellectual property rights?
58. That conclusion is borne out by Article 10 of the new Regulation No 1383/2003, which to a large extent repeats the content of Article 6(2)(b) of Regulation No 3295/94. Article 10, set out in clearer terms, provides that ‘the law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1) shall apply when deciding whether an intellectual property right has been infringed under national law.’ That provision of the new regulation has therefore abandoned the expression referring to ‘production’ and assumed more clearly the nature of a rule of conflict of laws. (23)
B – The interpretation proposed by Philips goes beyond the objectives pursued by the customs regulation
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59. In the second place, it appears clear that application of ‘the production fiction’ to goods of this kind would entail the possibility of prohibiting their merely being placed under a suspensive procedure (temporary storage or transit) regardless of their intended destination, a consequence clearly going beyond the objectives of the European Union’s customs legislation.
60. In accordance with Recital 2 in the preamble to Regulation No 3295/94, the purpose of the provisions laid down therein is that ‘[counterfeit and pirated goods] should as far as possible be prevented from being placed on the market and measures should be adopted to that end to deal effectively with this unlawful activity without impeding to [sic] freedom of legitimate trade’, inasmuch as the marketing of such goods ‘causes considerable injury to law-abiding manufacturers and traders and to holders of the copyright or neighbouring rights and misleads consumers.’ (24)
61. Recital No 2 reflects, therefore, the Community legislature’s wish to render the content of the customs rules compatible with the ordinary rules for the protection of intellectual property rights based, as we have seen, on ‘use in the course of trade’.
62. In point of fact, the object is to prevent counterfeit and pirated goods from being placed on the European Union market, not to prohibit their transit even before their destination is known. To afford such a right to the holder of the allegedly infringed right would be an impediment to the freedom of legitimate trade which the regulation states it seeks to preserve at all events, and would extend the usual content of intellectual property rights.
63. Admittedly, the content of Recital No 3 in the preamble to the regulation of 1994 must not be ignored (‘in so far as counterfeit or pirated goods and similar products are imported from third countries, it is important to prohibit their release for free circulation in the Community or their entry for a suspensive procedure’). (25) Nevertheless, Recital 3, in particular the last part, cannot be understood without Recital 2, reproduced above. If it is read in conjunction with Recital 2, it clearly refers to the prohibition which may be imposed by the competent authority if in the end it establishes the existence of an infringement of an intellectual property right, after finding that the goods are in fact to be marketed in the European Union. Only so may the existence of a procedure for action by the customs authorities be understood, which, as indicated in that third recital, is intended ‘to ensure that such a prohibition can be properly enforced’.
64. Philips and the Belgian and Italian Governments have argued that ‘the production fiction’ is essential in order to ensure the application of the Regulation of 1994 (and of the new regulation of 2003) to goods in external transit, included in Article 1; in short, in order that the customs authorities may take action in cases such as this. However, as I have already noted, argument of that kind is the result of confusing the conditions necessary for action by the customs authorities with the stricter conditions to be satisfied if a competent authority is to make a definitive finding of infringement of intellectual property.
65. Furthermore, it is to be borne in mind that protection of intellectual property rights is based on the principle of territoriality. By virtue of that principle, holders may prohibit the unauthorised use of their right only in those States in which it enjoys protection. (26) Given that transit does not amount to ‘use in the course of trade’, resort to the production fiction would constitute a significant exception to this principle of territoriality which, from this point of view also, would go beyond the objectives of the customs regulation. (27)
C – In the final analysis, the earlier case-law does not support ‘the production fiction’
66. The answer I propose to give to the question in Philips is to be completed by paying special attention to the more recent case-law on the subject, frequently invoked by one party or another, depending on their various interests. By anticipating to some extent the conclusion of this section, I consider that the so-called ‘production fiction’ is not compatible with more recent decisions in this field, represented in essence by Class International (28) and Case C-281/05 Montex Holdings. (29)
67. In 2005, in Class International, the Court of Justice declared that Directive 89/104 and Regulation 40/94 must be interpreted as meaning that a trade mark proprietor may not oppose the mere entry into the Community, under the external transit procedure or the customs warehousing procedure, of original goods bearing that mark which had not previously been put on the market in the Community by that proprietor or with his consent. In such situations, it is for the trade mark proprietor to prove the facts which would give grounds for exercising the right of prohibition, by proving either release for free circulation of the non-Community goods bearing his mark or an offering or sale of the goods which necessarily entails their being put on the market in the
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Community.
68. This reply meshed consistently with Rioglass and Transremar, in which it was held that mere transit of goods did not mean that they were placed on the market for the purpose of obtaining the protection given by the substantive rules on trade marks.
69. A year later, it was held in Montex that Article 5(1) and (3) of Directive 89/104 must be interpreted as meaning that the proprietor of a trade mark may prohibit the transit through a Member State in which that mark is protected of goods bearing the trade mark and placed under the external transit procedure, whose destination is another Member State where the mark is not so protected, if those goods ‘are subject to the act of a third party while they are placed under the external transit procedure which necessarily entails their being put on the market in that Member State of transit.’
70. To sum up, in both judgments it is unequivocally found that ‘use in the course of trade’ constitutes an essential requirement for the activating of protection of intellectual property rights, in terms leaving no place for the argument of ‘the production fiction’. It is true that those are judgments given in interpretation of the substantive rules governing trade marks (Directive 89/104 and Regulation No 40/94) which do not concern the regulations concerning customs action. It is, however, to be borne in mind that the provisions of those regulations whose interpretation is at issue here fall, exceptionally, within the scope ratione materiae of those rights.
71. In this regard, mention must be made of paragraph 40 of Montex, in which it is expressly stated that ‘none of the provisions of Regulation No 3295/94 introduces a new criterion for the purposes of ascertaining the existence of an infringement of trade mark law or to determine whether there is a use of the mark liable to be prohibited because it infringes that law’. In the light of that clarification in the case-law, there is no place in the customs regulation for ‘the production fiction’ relied upon which, as I have said, involves redefinition of intellectual property rights.
72. Nevertheless, there is earlier case-law referring specifically to the customs regulations, whose strained relations with Class International and Montex cannot at root be denied, which has been heavily relied on by those who, in the present case, have supported ‘the production fiction’ proposition. These are, in particular, Polo/Lauren, (30) in 2000, and Rolex in 2004. (31)
73. In point of fact, in both Polo/Lauren and Rolex the Court of Justice declared that the customs regulation of 1994 was applicable to non-Community goods in transit to a non-member country, without particular reference to any need to prove that they were destined for the Community market. In those terms, the differences plainly apparent between the two sets of judgments explain why they have often been criticised for being contradictory. (32)
74. In the first place, it must in this regard be stated that the Court of Justice has been alive to that strain, and has for that reason taken care to make clear that Class International and Montex are not challenged by the earlier case-law. (33)
75. In the second place, account must be taken of the fact that the focus of attention of the two earlier judgments had shifted toward questions like the validity of the customs regulation and its legal basis (in Polo/Lauren) and whether there existed a criminal lex previa (in Rolex), analysis of the question whether the destination of the goods was within the European Union remaining relatively secondary.
76. Finally, it is to be stressed that Polo/Lauren attaches great importance to the danger of counterfeit goods being fraudulently brought on to the European Union market, deducing therefrom that that transit may ‘have a direct effect on the internal market’. (34)
77. Regardless of all those circumstances, however, it must be acknowledged that there is a certain inconsistency between the two groups of judgments. In so far as it is sought to attach some relevance to this strain, I consider that it is the two later judgments (Class International and Montex) that most accurately reflect this Court’s position.
78. In any case, and in my opinion, the confusion generated by in the interpretation of this series of judgments is largely due to the fact that the Court of Justice has, till now, adapted its answers to the legal rule invoked in each reference for a preliminary ruling, without necessarily taking into consideration the subject-matter of the case out of which it arose.
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79. The challenge in the cases now before the Court of Justice is to make clear in what circumstances each of those provisions is to be applied, and to define the conditions necessary for crossing the threshold beyond which action by the customs authorities, on the one hand, and a finding (usually judicial) of infringement of a right, on the other, are justified. (35)
D – Conclusion
80. Having regard to the foregoing, I propose replying to the question referred by the Rechtbank that Article 6(2)(b) of Regulation No 3295/94 is not to be interpreted as meaning that the authority (in this case judicial) of the Member State called on, in accordance with Article 7 of that regulation, by the holder of an intellectual property right, may take no account of the status of temporary entry or of transit of the goods in question, or, therefore, as meaning that that authority may apply the fiction that those goods were produced in that same Member State for the purpose of ruling, in accordance with the law of that State, whether or not they infringe the intellectual property right at issue.
VII – Analysis of the question referred in Nokia
A – Preliminary considerations
81. As has been pointed out, in Nokia, unlike the case we have just examined, the Court of Appeal formulates its question in proceedings challenging the lawfulness of a decision of the UK customs authorities rejecting Nokia’s application for detention of certain goods in transit.
82. In formal terms, the reference for a preliminary ruling is framed as a question of interpretation of the term ‘counterfeit goods’ contained in Article 2(1)(a) of Regulation No 1383/2003: ‘goods, including packaging, bearing without authorisation a trademark identical to the trademark validly registered in respect of the same type of goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the trademark-holder’s rights under Community law, as provided for by Council Regulation (EC) No 40/94 … or the law of the Member State in which the application for action by the customs authorities is made’.
83. In those terms, it is for the Court of Justice to determine whether that provision creates an autonomous definition of counterfeit goods, unconnected to the substantive legislation on action by customs authorities.
84. It seems to me that the reference in the provision in question to the substantive rules on trade marks, although introduced by the expression ‘thereby’, (36) is unconditional and that, in consequence, the theory of ‘autonomous definition’, put forward by certain parties, cannot prosper. So, if there is to be a ‘counterfeit trade mark’ for the purpose of Regulation No 1383/2003, it has to be proved that the goods concerned were destined for the market of the European Union. If not, the goods in transit do not satisfy the condition of ‘use in the course of trade’ laid down in both Regulation No 40/94 and the national laws on trade marks.
85. As we have seen with the previous case, that requirement is indispensable when it has to be settled – judicially or otherwise – whether there has been an infringement of the right to the trade mark in the case in the main proceedings. The instant case concerns the question whether that proof is also necessary in the preparatory stage of action by the customs authorities.
86. That is the criterion relied on, on the basis of Article 2 of Regulation No 1383/2003, by the British authorities to refuse to take action in respect of goods in transit, on the grounds that there was no good evidence that the goods were destined for the European Union market.
87. Nevertheless, if it is a question of clarifying what ‘counterfeit goods’ are for the purposes of the Regulation or, which comes to the same thing, what conditions must be met in order for the customs authorities to be able to take action, it would seem evident that Article 2 of Regulation No 1383/2003, which is the focus of the question referred, cannot be analysed in isolation.
88. On the contrary, I believe that particular account must be taken of Article 1 of that regulation, which defines its scope, and of Articles 4 and 9, which specify the conditions for action by the customs authorities. As we shall see below, all those provisions use the terms ‘suspected’, ‘suspecting’ or ‘suspicions’ as a criterion for that action. (37)
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89. Moreover, an extensive and isolated interpretation of Article 2, used as the sole reference provision for determining whether the customs authorities may take action, would hardly be reconcilable with the objectives of the regulation or with the powers that the latter confers on those authorities, or indeed with the case-law in this field. (38)
B – Articles 1, 4 and 9 introduce a specific criterion to justify action: ‘suspected’ infringement
90. Unlike Article 2, which simply defines what is meant ‘for the purposes of this regulation’ by goods infringing an intellectual property right, Articles 1, 4 and 9 make express reference to the possibility of action by the customs authorities when they ‘suspect’ that the goods in question, whatever their customs situation, infringe or may infringe an intellectual property right.
91. As indicated above, Regulation No 1383/2003 (and Regulation No 3295/94 before it) clearly distinguishes the stage of action by the customs authorities from the stage of the material finding of infringement. The former is typically administrative and preventative, whereas the latter is usually judicial and in every case involves a decision on the substance of the case, generally definitive.
92. However, in the same way as the regulation attributes the decision in each of those stages to different authorities, it also makes the decision subject to different conditions, stricter in the case of the decision on the substance, for it alone can lead to the prohibition of the use of the trade mark in question in the course of trade in the European Union. (39) In contrast, the measures to be adopted by the customs authorities are provisional and preventative, and it is therefore logical that the threshold beyond which it is permissible to take that action should be fixed at a lesser degree of requirement.
93. Only thus is it explicable that Article 5(5) of Regulation No 1383/2003, which regulates exhaustively the content of the application for action by the customs authorities, merely requires that application to contain ‘all the information needed to enable the goods in question to be readily recognised by the customs authorities’ and, in particular, ‘any specific information the right-holder may have concerning the type or pattern of fraud’. (40)
94. At the same time, that provision requires from the applicant ‘proof that the applicant holds the right for the goods in question’, and requires it to make a declaration accepting liability towards the persons involved if the procedure for action should be discontinued owing to an act or omission of the holder or if the goods in question should subsequently be found not to infringe an intellectual property right (Article 6(1)). The ‘location … of … intended destination’ of the goods, like other information such as ‘the scheduled arrival or departure date of the goods’, for example, need be given in the application only ‘[b]y way of indication and where known’ [to the right-holder].
95. The point is, therefore, to identify the place where the suspect goods are to be found and to ensure that the application is serious to a certain degree, and not, of course, to make a finding that the right claimed has been infringed. If the legislature had wished to require, at this early stage, convincing evidence of infringement of the right (even if it were only potential), it would have done so expressly.
C – The customs authorities may not anticipate what the decision on the substance will be
96. Furthermore, it is clear that it is not for the customs authorities to decide definitively whether or not any intellectual property rights have been infringed. If it were to be inferred from Article 2 that the regulation demanded the same level of proof of infringement for detention of the goods under customs control as for their definitive withdrawal from commercial channels or their destruction, the customs authorities’ decision would in a certain manner anticipate the outcome of the procedure on the substance, which will perhaps take place later and may be decided by another authority.
97. In short, preventive control may not be made conditional upon a conclusive finding of infringement of an intellectual property right. Being a preventive measure, it is provisional in nature (no more than 10 days) and it is natural that it should be adopted on the basis of provisional information and ‘suspicions’. (41)
D – Excessive evidential requirements could render nugatory the extent of the Regulation’s field of application
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98. Requirements of that kind concerning evidence could, in practice, prevent any preventive action in respect of goods in external transit, even though those are expressly included in the ambit of the regulation of 2003.
99. The changes in the customs legislation offer the clearest evidence of the importance attached by the legislature to covering all customs situations in which counterfeit or pirated goods may be found. (42) So, Article 1 of Regulation No 1383/2003 includes within its ambit both goods entered for release for free circulation, export or re-export and those found entering or leaving the customs territory of the European Union, in the process of being re-exported subject to notification, placed in a free zone or free warehouse or placed under a suspensive procedure. In accordance with Article 84(1)(a) of the Community Customs Code, that suspensive procedure includes, inter alia, external transit, customs warehousing and temporary importation.
100. Customs arrangements of this kind can be used fraudulently as devices for the entry of goods intended to be illegally marketed in the European Union, inasmuch as nothing obliges the consignee, at the outset, to declare their destination or even to reveal his identity.
101. Given the difficulties raised by situations of that kind so far as concerns evidence, if suspicions of unlawfulness were not enough to set in motion preventive action by the customs authorities, then the breadth with which Article 1 of the regulation of 2003 defines its ambit would be pointless, and would increase the danger of abuse of suspensive procedures in order to avoid the goods being seized.
E – The regulation introduces the criterion of ‘suspicion’
102. Having regard to all the foregoing, I consider that the definition of ‘counterfeit goods’ in Article 2(1)(a) of the regulation of 2003 is designed to assist the application of the other provisions of that regulation and must be interpreted so as to enable their proper application.
103. As may be gathered from its title, the regulation governs both ‘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’.
104. As regards the latter, it will be necessary to find that the goods are ‘counterfeit’ or ‘pirated’ within the meaning of Article 2. For that purpose, as I have already had occasion to conclude in respect of Philips, recourse must be had to the criteria laid down in the substantive legislation on trade marks and other intellectual property rights. The reference to the latter made in Article 2 must therefore be understood to that effect.
105. On the other hand, for customs authorities to be able to seize certain goods, the existence of ‘suspicion’ is enough to satisfy the requirements of Article 2, including those laid down in the substantive legislation to which that article refers. The regulation demands nothing more; nor does the case-law.
106. Now the problem is that the meaning of ‘suspicion’ in this context is inherently bound up with the facts. It is beyond doubt that ‘suspicion’ must not be taken to mean irrefutable findings, but that criterion must be prevented from leading to total discretion for the customs authorities in their action. (43)
107. For that reason, I consider that, for the customs authorities to be able lawfully to seize goods in transit subject to their control, they must at the very least have ‘the beginnings of proof’, that is to say, some evidence that those goods may in fact infringe an intellectual property right.
108. In the specific case of goods in transit, the most difficult thing to prove at this stage is, of course, the destination of the goods.
109. To that end, in the assessing of those ‘suspicions’ particular account must be taken of the danger of fraudulent entry of goods into the European Union. Despite all the precautions entailed by the system of Community vigilance, that danger exists, inasmuch as it is not to be forgotten that, even if the external transit procedure itself is founded on a legal fiction, the goods are physically to be found in the territory of the European Union.
110. So, by virtue of that fiction, goods included in the external transit procedure are not subject to
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import duties or to other measures of commercial policy, just as though they had not entered the territory of the European Union. However, as is clearly stated in Polo/Lauren, that transit ‘is not completely devoid of effect on the internal market’. (44) In short, it is a question of determining whether that danger is so great as to make it possible to classify certain goods as ‘suspected’ of infringing an intellectual property right.
111. In those terms and without any claim to exhaustiveness, circumstances such as the excessive duration of the transit, the kind and number of means of transport used, the greater or lesser difficulty of identifying the consignor of the goods or the lack of information on their physical destination or consignee, could, in particular cases, lend substance to a well founded suspicion that goods appearing in themselves to be ‘counterfeit’ or ‘pirated’ are to be placed on the market of the European Union.
112. To sum up, I propose replying to the Court of Appeal of England and Wales that non- Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and in transit from one non-member country to another non-member country may be seized by those customs authorities provided that there are sufficient grounds for suspecting that they are counterfeit goods and, in particular, that they are to be put on the market in the European Union, either in conformity with a customs procedure or by means of an illicit diversion.
VIII – Conclusion
113. I therefore conclude that the Court should reply as follows:
A – To the question referred by the Rechtbank van eerste aanleg te Antwerpen (Case C-446/09)
Article 6(2)(b) of Council Regulation (EC) No 3295/94 of 22 December 1994 laying down measures concerning the entry into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights is not to be interpreted as meaning that the judicial authority of the Member State called on, in accordance with Article 7 of that regulation, by the holder of an intellectual property right, may take no account of the status of temporary entry or of transit of the goods in question, or, therefore, as meaning that that authority may apply the fiction that those goods were produced in that same Member State for the purpose of ruling, in accordance with the law of that State, whether or not they infringe the intellectual property right at issue
B – To the question referred by the Court of Appeal of England and Wales (Case C-495/09)
Non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and are in transit from one non-member country to another non-member country may be seized by the customs authorities provided that there are sufficient grounds for suspecting that they are counterfeit goods and, in particular, that they are to be put on the market in the European Union, either in conformity with a customs procedure or by means of an illicit diversion.
1 – Original language: Spanish.
2 – Established by Council Regulation (EEC) No 2913/92 of 12 October 1992 (OJ 1992 L 302, p. 1).
3 – Case C-383/98 Polo/Lauren [2000] ECR I-2519, paragraph 34.
4 – OJ 1994 L 341, p. 8. Amended by Council Regulation (EC) No 241/1999 of 25 January 1999 (OJ 1999 L 27 p. 1).
5 – OJ 2003 L 196 p. 7.
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6 – Prior to the Treaty of Amsterdam, Article 113 of the EC Treaty. The 1994 Regulation refers to that numbering while the 2003 Regulation cites Article 133 EC.
7 – The new Article 207 TFEU, which essentially reproduces the wording of this provision, refers specifically to ‘the commercial aspects of intellectual property’.
8 – As amended by Regulation No 241/99.
9 – Governed by Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs (OJ 1998 L 289, p. 28) and the applicable transposing legislation.
10 – Governed by Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) and the national legislation on trade marks which was harmonised by First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1).
11 – Article 4 of Regulation No 3295/94 and Article 4 of Regulation No 1383/2003.
12 – This application for action is governed by Article 3 of Regulation No 3295/94 and Articles 5 and 6 of Regulation No 1383/2003.
13 – Article 6(1) of Regulation No 3295/94 and Article 9 of Regulation No 1383/2003.
14 – Article 11(1) of Regulation No 1383/2003. The 1994 Regulation does not provide for this ‘simplified’ procedure.
15 – Articles 6(2) and 7(1) of Regulation No 3295/94 and Article 13(1) of Regulation No 1383/2003. If, in those substantive proceedings, it is found that there has been an infringement, the goods may be subject to the ‘definitive’ measures provided for in Article 8 of Regulation No 3295/94 and Articles 16 and 17 of Regulation No 1383/2003: prohibition of entry into the Community customs territory, prohibition of release for free circulation, prohibition of export, etc., in addition to the destruction of the goods or disposal of them outside commercial channels without compensation and depriving the persons concerned of any economic gains from the transaction.
16 – Article 7(1) of Regulation No 3295/94 and Article 13(1) of Regulation No 1383/2003.
17 – Inter alia, destruction of the goods concerned or disposal of them outside commercial channels without compensation of any sort (Article 8(1) of Regulation No 3295/94 and Article 17 of Regulation No 1383/2003).
18 – As we have seen, in addition to the foregoing, the question referred by the Rechtbank begins by asking whether the article concerned is a ‘uniform rule of Community law’. Framed in those terms, the question barely warrants a response other than that the regulation is, as such, a compulsory provision in all its elements and that it has direct effect throughout the Union.
19 – This ‘production fiction’ appears to have been applied for the first time in a patent
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case by the Hoge Raad der Nederlanden in its judgment of 19 March 2004 (LJN AO 0903, Philips v Postec and Princo), and it was subsequently adopted by the president of the Rechtbank Den Haag in a decision of 18 July 2008 and by the Rechtbank van eerste aanleg te Anwerpen itself in a judgment of 9 October 2008. A number of academic writers appear to have accepted the fiction, such as Eijsvogels, F., ‘Some remarks on Montex Holdings Ltd./Diesel Spa’, Boek9.nl, 24 November 2006, http://www.boek9.nl/default.aspX?id=2968 and Puts, A. ‘Goods in transit’, 194 Trademark World, 22-23 (February 2007).
20 – Case C-115/02 Rioglass and Transremar [2003] ECR I-12705, paragraph 27. Unlike the present cases, that judgment concerned goods which had been lawfully manufactured in one Member State, were in transit through another Member State and were destined for a third Member State, from which it followed that the dispute centred on whether or not it was possible to rely on the free movement of goods against action by the customs authorities. In spite of that fundamental difference, the considerations set out in that judgment concerning the nature of Community goods in transit are fully applicable to a situation where non-Community goods are in transit. As Advocate General Jacobs stated in his Opinion in Case C-405/03 Class International [2005] ECR I-8735 (to which I will return shortly), ‘it may be thought that if the Court took that view with regard to goods in free circulation in the Community it would apply a fortiori to non-Community goods in respect of which import formalities have not been completed’ (point 32).
21 – If the Community legislature had wished to redefine these substantive rules governing intellectual property rights in the Customs Regulations, by granting holders of such rights powers which go beyond the ones laid down in the substantive law referred to, it would have relied on Articles 100 A EC or 235 of the EC Treaty (Articles 95 EC and 308 EC in the later numbering of the Treaty of Amsterdam; now Articles 114 TFEU and 352 TFEU), concerning the functioning of the internal market and the usual legal basis for substantive provisions on intellectual property rights.
22 – To this effect, see Case C-3/91 Exportur [1992] ECR I-5529), paragraph 12; and Case C-9/93 IHT Internationale Heiztechnik and Danzinger [1994] ECR I-2789), paragraph 22.
23 – In the new regulation, the only reference to the criterion of production is in recital No 8. None the less, the final part of that recital clearly partakes of the nature of a conflict of laws text: ‘This Regulation does not affect the Member States’ provisions on the competence of the courts or judicial procedures.’ In my opinion, while those two passages appear in the same recital, that is because they have the same object: to make clear the rules applicable to the procedure in respect of infringement of an intellectual property right. What is more, it seems improbable that a rule of such import should have to be deduced from a recital. In support of this, see van Hezewijk, J. K., ‘Montex and Rolex – Irreconciliable differences? A call for a better definition of counterfeit goods’, International review of intellectual property and competition law, Vol. 39 (2008), No 7, p. 779.
24 – Emphasis added. To that effect, see recital No 2 in the preamble to Regulation No 1383/2003.
25 – Emphasis added.
26 – IHT Internationale Heiztechnik and Danzinger, paragraph 22. See also my Opinion in
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Case C-96/09 P Anheuser-Busch, delivered on 14 September 2010, point 106 et seq.
27 – Philips has cited the Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee on a Customs response to latest trends in counterfeiting and piracy of 11 October 2005 [COM(2005) 479 final, p. 8, Annex III.1], which states that ‘EU Customs legislation in this area is now reckoned to be among the strongest in the world … With controls on all movements of goods, especially during transhipment, customs protect not only the EU but also other parts of the world and in particular the least developed countries which are often targeted by fraudsters’. None the less, the fact is that neither case-law nor the legislation now in force makes it possible to infer that strictly European protection may be extended to non-member countries by extending the measures adopted at the border. To this effect, see Große Ruse-Khan, H. and Jaeger, T., ‘Policing patents worldwide? EC border measures against transiting generic drugs under EC and WTO intellectual property regimes’, International review of intellectual property and competition law, Vol. 40 (2009), No 5, p. 502-538.
28 – Cited above.
29 – Case C-281/05 Montex Holdings [2006] ECR I-10881, ‘Montex’.
30 – Cited above.
31 – Case C-60/02 Criminal proceedings against X [2004] ECR I-651, ‘Rolex’.
32 – Vrins, O. and Schneider, M., ‘Trademark use in transit: EU-phony or cacophony?’, Journal of IP Law and Practice, 2005, vol. 1, No 1, pp. 45 and 46.
33 – In that respect, see, in particular, Montex, paragraphs 35 to 40, and points 38 to 45 of the Opinion of Advocate General Poiares Maduro of 4 July 2006 in that case, in which the problem is set out in greater detail and, if possible, greater clarity. There is no specific mention of the matter in Class International, probably because the customs regulation (Article 1(4) of Regulation No 3295/94, and Article 3 of Regulation No 1383/2003) simply was not applicable, for the case dealt with parallel imports of original goods. None the less, the Opinion of Advocate General Jacobs in that case does in fact refer to Polo/Lauren, making it clear that the latter judgment was delivered in a different context (point 34).
34 – Paragraph 34 of Polo/Lauren.
35 – As I shall explain in my analysis of Nokia, it seems to me plain that it cannot be the same threshold, and that preventive action by the customs authorities can be based on the mere beginnings of evidence, more or less well founded, but it is not necessary to demonstrate that the goods are to be marketed in the European Union, for that would already assume an almost definitive finding of infringement, which is required only in cases such as the instant case (Philips).
36 – ‘Por tanto’, in the Spanish version; ‘de ce fait’, in the French; ‘og som derved’, in the Danish; ‘und damit’, in the German; ‘e che pertanto’, in the Italian; ‘die zodoende’, in the Dutch; ‘por ese motivo’, in the Portuguese; ‘ja joka siten’, in the Finnish; ‘och som därigenom’, in the Swedish.
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37 – ‘Sufficient grounds for suspecting’, in Article 4; ‘where a customs office … is satisfied … that goods … are suspected’, in Article 9.
38 – However, in order to attain the objectives of the regulation of 2003, it is unnecessary to have recourse, as suggested by the International Trademark Association, to ‘the production fiction’, which earlier I had occasion to analyse with regard to Case C-446/09 and which seems to me to be indefensible in this context too. In point of fact, the only provision of Regulation No 1383/2003 that could serve as a basis for that fiction is Article 10, a rule of conflict of laws which, moreover, as may be deduced from the title of Chapter III, is applicable to the decision on the substance and not to the conditions governing action by the customs authorities that are at issue in the instant case.
39 – To this effect, Vrins and Schneider stress that the object of Article 1(1) of the regulation of 2003 is not to be confused with that of Article 16 of the same regulation: ‘whilst the former sets out the conditions for action by the customs authorities where goods are suspected of infringing an intellectual property right, the latter provides that, once goods have been found to infringe such a right, subsequent to a customs intervention according to Article 9 and at the end of the proceedings referred to in Article 13, they may not be cleared by customs, or placed onto the market or simply into circulation’ (Vrins, O. and Schneider, M., Enforcement of intellectual property rights through border measures. Law and practice in the EU, Oxford University Press, 2006, p. 73).
40 – Emphasis added.
41 – Just as at this stage irrefutable evidence of the destination of the goods may not be demanded, so the customs authorities need not, it seems, in this regard, determine whether other conditions have been satisfied, conditions laid down by the substantive legislation in order for protection of the right to be set in action, which call at times for factual and legal analysis of some complexity. We may think, for example, of the assessment of ‘the likelihood of confusion’, which appears in the substantive laws on trade marks, but not in Article 2 of Regulation No 1383/2003, probably in order to relieve the customs authorities of the burden of work that would be involved in making that assessment at that stage. With regard to how the definition of counterfeit goods in the customs legislation differs from that in the substantive law on trade marks, see Hezewijk, J. K., op. cit. p. 785 et seq.; and Vrins, O. and Schneider, M., op. cit., p. 97.
42 – In this connection, see Lois Bastida, F., ‘El Reglamento (CE) nº 1383/2003, de lucha contra la piratería en materia de propiedad intelectual’, Actas de derecho industrial y derecho de autor, T. XXIV (2003), p. 1228.
43 – On occasion the customs legislation itself adds precision to that reference to suspicion: for example, Article 4 of the regulation of 2003 refers to ‘sufficient grounds for suspecting’, and Article 4 of the regulation of 1994 refers to a situation in which ‘it appears evident to the customs office that goods are counterfeit or pirated’. Both provisions relate to the first action by customs authorities, before the application of the right-holder.
44 – Paragraph 34. For that reason, Advocate General Ruiz-Jarabo Colomer said that ‘there is no need to extend this fiction any further than necessary’ (Opinion in Polo/Lauren, point 21). To my mind, however, that fact cannot lead to substituting
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for the fiction a total assimilation of goods in transit to goods released for free circulation or produced in the European Union.
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Ari Laakkonen, a Partner at IP boutique Powell Gilbert, is a UK-based litigation lawyer specializing in electronics patent litigation and IT disputes as well as advising on general IP matters including trade marks, designs and copyright and providing general strategic advice. He has extensive experience of standards-related disputes, especially in relation to multi-jurisdictional patent litigation, in several different sectors including mobile telephony and other consumer electronics areas. He has a broad range of experience as both in-house and outside counsel, having been Director, IPR Legal, at Nokia where his responsibilities included managing Nokia’s IP litigation in Europe including multi-jurisdictional disputes. Ari is a Council member of AIPPI, UK and has published widely on all aspects of IP law. He is also a Member of AIPLA, the British Computer Society and is a Chartered Engineer.
UK Border Measures
Ari Laakkonen Powell Gilbert LLP
25 February 2011 Topics
. Border measures regime in the UK . Current issues - Goods ‘in transit’ - AG’s opinion in Nokia v HMRC, Philips v Lucheng . Statistics on use of border measures . Updated/reformed laws? UK Border Control Measures
Governed by: . Council Regulation (EC) No 1383/2003 and its predecessor regulation, 3295/94 . National implementing regulations Where EC Regulation does not apply: . s89 Trade Marks Act 1994 . s111 Copyright, Designs and Patents Act 1988 notably, grey market goods UK Border Control Measures
Customs authorities have the right to seize or detain goods suspected of infringing IP rights: . trade marks . patents . copyright and related rights . design rights . plant variety rights . designations of origin / geographical indications Procedure for seizure
. Holders of IP rights can seek the assistance of customs authorities by notifying the relevant authority of its rights. . When customs have identified potentially infringing goods, they may: - seize the goods; - notify both the right-holder and the holder of the goods; - provide information about the shipment to enable the right-holder to determine whether the goods are infringing goods and enable it to take action; - offer an opportunity to inspect the goods and/or take samples. Some seizure statistics
. In 2009: EU customs took action in 43,500 cases concerning 118 million articles . Of these, 2117 cases (approx 5%) occurred in the UK . Trade marks ~ 90%; patents ~ 5% . Formerly, great majority of seizures were for luxury goods; now, more likely to be everyday goods such as shampoos and appliances Nokia v HMRC
. Goods bearing Nokia trade marks – c.400 mobile phone handsets, batteries, manuals, hands-free kits . Goods travelling from Hong Kong to Columbia, stopped by customs at Heathrow . Customs sent samples to Nokia; confirmed as counterfeit and Nokia requested detention Nokia v HMRC
. To be infringing goods, have to infringe Nokia’s trade marks in the UK (Art 2 of the Regulation) . To infringe in the UK, the goods also had to be put on the UK market . There was no evidence that the goods might have been diverted to the UK market Nokia v HMRC
. So: - Even if the goods were “fake”, customs arguably had no power to seize them; - Nokia was unable to take any other action (consignor and consignee had hidden identity); - Nokia were unable to provide evidence that the goods would be diverted to the EU market and that the mark would be used in the course of trade in the UK. Nokia v HMRC
. Nokia applied for judicial review of the decision not to seize the consignments and of customs’ policy. . Main substantive issues was whether the interpretation of “counterfeit goods” in the EC Regulation was correct and whether it encompassed goods in transit with no prospect of goods being released on to the UK market. Nokia v HMRC
. Nokia argued that: - Customs had adopted an unduly restrictive interpretation of the Regulation; arguing it was clearly intended to include goods in transit; - this had been confirmed by ECJ in Polo/Lauren; Rolex; - that the court should adopt a “manufacturing fiction” as adopted by the Dutch courts. Nokia v HMRC
. “Manufacturing fiction”: - Recital 8 of the Regulation, whereby national infringement proceedings are conducted “with reference to establish whether goods produced in that Member State infringe IP rights”; - Assumes the goods in question have been manufactured and released in the member state where the goods are held; - Sisvel v Sosecal [2008] (District Court of the Hague) manufacturing fiction applied to a consignment of allegedly patent-infringing goods being transshipped from China to Brazil. Nokia v HMRC – 1st instance
. Kitchin J conducted a close analysis of ECJ case law and relevant legal provisions, deriving a number of principles: - Trade mark infringement required the goods to be placed on the market (as in L’Oreal SA v eBay International AG [2009]). - Goods in transit did not, without anything more, constitute marketing the goods; - However, different if goods are subject to act of a third party which necessarily entailed their being put on the market (the “Montex” exception); - Mere “risk” that the goods might be diverted onto the market was not enough to say that they have been or will be put on the market; - The Counterfeit Goods Regulation had not introduced a new criterion for ascertaining infringement – no manufacturing fiction. Nokia v HMRC – 2nd instance
. On appeal: Kitchin’s judgment persuasive, but question referred to the ECJ: - Are non-community goods bearing a CTM which are subject to customs supervision in a Member State and in transit from a non-Member State capable of constituting “counterfeit goods” within the meaning of Article 2(1)(a) of Reg 1383/2003 EC if there is no evidence to suggest that those goods will be put on the market in the EC, either in conformity with a customs procedure or by means of an illicit diversion? Nokia v HMRC – AG’s view
. AG’s view (3 Feb 2011): - Non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and are in transit from one non-member country to another non-member country may be seized by the customs authorities provided that there are sufficient grounds for suspecting that they are counterfeit goods and, in particular, that the are to be put on the market in the European Union, either in conformity with a customs procedure or by means of an illicit diversion. Philips v Lucheng (C-446/09)
. Consignment of counterfeit shavers in Belgium . In transit from China (final destination, unknown). . Court of Antwerp to consider whether Philips’ IP rights infringed (designs and ©); . Seized in November 2002 – regulation 3295/94 applied. Philips v Lucheng
. Article 6.2(b) of Regulation 3295/94
The law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1 (1)(a) shall apply as regards: (a) referral to the authority competent to take a substantive decision (…); (b) reaching the decision to be taken by that authority. In the absence of Community rules in this regard, the criteria to be used in reaching that decision shall be the same as those used to determine whether goods produced in the Member State concerned infringe the rights of the holder. Reasons shall be given for decisions adopted by the competent authority.
. Similar wording in Recital 8 of current Regulation Philips v Lucheng
. Philips position: Court must apply legal fiction – i.e. that shavers seized were manufactured in Belgium . Then Belgian law should be applied to establish the infringement . Defendant’s position: Claimant must prove that the transit goods will effectively be sold illegally (Montex) Philips v Lucheng
. Belgian Court decided to refer the following question to the ECJ (decision of 4 November 2009):
Does Article 6(2)(b) of Council Regulation (EC) No 3295/94 of 22 December 1994 [the old Regulation] constitute a uniform rule of Community law which must be taken into account by the court of the Member State which in accordance with Article 7 of the Regulation, has been approached by the holder of an intellectual- property right, and does that rule imply that, in making its decision, the court may not take into account the temporary storage status/ transit status and must apply the fiction that the good were manufactured in that same Member State, and must then decide, by applying the law of that Member State, whether those goods infringe the IP right in question. Philips v Lucheng – AG’s view
. AG’s decision of 3 Feb 2011: Article 6(2)(b) of Council Regulation (EC) No 3295/94 of 22 December 1994 laying down measures concerning the entry into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights is not to be interpreted as meaning that the judicial authority of the Member State called on, in accordance with Article 7 of that regulation, by the holder of an intellectual property right, may take no account of the status of temporary entry or of transit of the goods in question, or, therefore, as meaning that that authority may apply the fiction that those goods were produced in that same Member State for the purpose of ruling, in accordance with the law of that State, whether or not they infringe the intellectual property right at issue. Infringement
. In Nokia v HMRC, trade mark infringement in the UK was relevant . Similarly, in Philips v Lucheng, copyright and design right infringement in Belgium were relevant . Diversion onto local market relevant because that was a necessary element of infringement . “use in the course of trade” Patent infringement
. Patent infringement under the laws of the member state required under Article 2(1)(c)(i) . Member state law may not require marketing, mere keeping or importing may be enough UK patent infringement
. Patent infringement is national law, but under UK national law, national law on infringement should give effect to Article 29 of the CPC - Smith Kline & French v Harbottle [1980] 1 CMLR 277 . Therefore “keeping” and “importing”, should match “importing” and “stocking” UK patent infringement
. Section 60(1) Patents Act 1977: - “… makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise” . Article 29 CPC: - “… making, offering, putting on the market, or using a product …, or importing or stocking the product for these purposes” UK patent infringement
. Importing for the purpose of exporting could, however, infringe in the UK: - Smithkline Corp v DDSA [1978] FSR 109 . Subject to further refinements, especially in light of Community legislation some 30 years later, this could mean that importing and/or keeping for the purposes of export might justify a border seizure even absent any evidence to divert Border seizures: the future
. Delicate interests to be balanced . Need to: - achieve a workable process - balance conflicting interests - achieve harmonization across Member States . A key change may be to harmonize meaning of infringement, since evidence of diversion usually challenging to obtain Thank you!
[email protected] Securing Patent Rights Through Customs Measures
The Netherlands: APR and in transito goods; the manufacturing fiction
Munich, 25 February 2011 Gertjan Kuipers Dutch Customs
• very active in pursuit of infringing goods
• also act on patent rights (unlike some other countries)
• Uniquely in Europe: fully equiped mobile laboratory for the investigation of bulk chemical products (i.e. particularly useful in pharmaceutical patent cases)
• service minded: happy to discuss possibilites for action with right- holders
UNION Roundtable Münich 25 February 2011 1 Splits
Anti-Piracy Regulation
Freedom of transit safeguarding IP rights
UNION Roundtable Münich 25 February 2011 2 Scope of Anti-Piracy Regulation
• APR covers:
– allmost all IP rights – all movement of goods (import, export and transhipment)
• APR does not cover:
– goods moving within the EU – legitimate parallel imports
• in transito goods?
UNION Roundtable Münich 25 February 2011 3 Dutch Practice
• In the Netherlands the APR has also been applied to in transito goods
• Manufacturing fiction explicitly accepted in:
Supreme Court - Philips v. Princo (2004)
‘Decisive is whether, in the assumption that the goods have been manufactured in the Netherlands, the rights of the patent holder are violated’
• This reasoning consistently followed by lower Dutch courts
→ District Court The Hague – Philips v. Furness (2005) → District Court The Hague – BenQ v. Sisvel (2006)
UNION Roundtable Münich 25 February 2011 4 After the Montex-decision
• ECJ (case C-405/03) Montex v. Diesel, finding 40:
‘the Counterfeit Goods Regulation does not introduce a new criterion for the purpose of ascertaining the existence of an infringement of trade mark law or to determine whether there is a use of the mark liable to be prohibited’
• The end of the standard manufacturing fiction practice in the Netherlands?
UNION Roundtable Münich 25 February 2011 5 Sosecal v. Sisvel - 1
• District Court The Hague (2008)
¾ reaffirmation of the consistent Dutch jurisprudence on manufacturing fiction
– seizure by Dutch Customs of 6000 MP4 players
– from China in transit to Sosecal in Brazil.
UNION Roundtable Münich 25 February 2011 6 Sosecal v. Sisvel - 2
• summary proceedings by Sosecal seeking release of the consignment based in particular on the Montex-decision
• District Court of the Hague:
‘ … there is no reason to … deviate from a doctrine deriving form established case-law on the basis of an interpretation founded on a judgment which was…. passed on a different ground and which would imply far-reaching consequences where the intended and practical functioning of the APR is concerned.’
UNION Roundtable Münich 25 February 2011 7 Criticism on the Dutch practice
• Justice Kitchin in Nokia v. HMCRC (2009), in particular point 73-76.
‘Yet if the manufacturing fiction applies, goods lawfully made in one territory and intended for lawful use in another but transhipped through a Member State in which that mark is registered in the name of a third party would be subject to seizure. It seems to me most unlikely that the Counterfeit Goods Regulation was ever intended to produce such a result.’
• Montex-exception: the position is different if the goods in the transit procedure are subject to the act of a third party which necessarily entails their being put on the market
UNION Roundtable Münich 25 February 2011 8 Criticism on the Dutch practice
• Seizures of generic medicines in transito in 2009 set off a worldwide debate
• Violation of Doha declaration on public health
• September 2009: Joint Statement European Commission and pharmaceutical companies
• May 2010: Complaints from India and Brazil lodged with the WTO – restriction of access to medicines in developing countries
UNION Roundtable Münich 25 February 2011 9 Cybergun v. Wargaim
• District Court of The Hague (January 2010)
• external transit through Schiphol-airport of two consignments of replica UZI pistols and weapons bearing the ‘Kalashnikov’ and ‘AK74’ trade marks en route from Taiwan to Russia.
• core of the dispute: are the goods in transit to be considered as ‘goods suspected of infringing an intellectual property right’ pursuant to Article 1 and 10 APR
• District Court of the Hague: yes, but…
UNION Roundtable Münich 25 February 2011 10 Cybergun v. Wargaim
• earlier case law of Dutch courts relying on the ‘manufacturing fiction’ presumably still valid
• Rejection of claim for release of the goods filed by the owner (Wargaim)
• District Court stayed the proceedings having regard to references to the ECJ for a preliminary ruling made by the UK and Belgian courts.
UNION Roundtable Münich 25 February 2011 11 It is up the European Court of Justice
• Nokia v. HMRC (case C-495/09)
• Philips v. Lucheng (case C-446/09)
UNION Roundtable Münich 25 February 2011 12 ECJ preliminary questions
• Philips v. Lucheng: “Does Article 6(2)(b) of Regulation (EC) No 3295/94 of 22 December 1994 (the old Customs Regulation) constitute a uniform rule of Community law which must be taken into account by the court of the Member State which, in accordance with Article 7 of the Regulation, has been approached by the holder of an intellectual- property right, and does that rule imply that, in making its decision, the court may not take into account the temporary storage status/transit status and must apply the fiction that the goods were manufactured in that same Member State, and must then decide, by applying the law of that Member State, whether those goods infringe the intellectual-property right in question?”
UNION Roundtable Münich 25 February 2011 13 ECJ preliminary questions
• Nokia v. HMRC: “Are non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and in transit from a non-Member State another non-Member State capable of constituting "counterfeit goods" within the meaning of Article 2(1)(a) of Regulation 1383/2003/EC of there is no evidence to suggest that those goods will be put on the market in the EC, either in conformity with a customs procedure or by means of an illicit diversion."
• Question of the British seems to be more relevant: based on the current text of th APR.
UNION Roundtable Münich 25 February 2011 14 Nokia v HMRC
• Very broadly, in oral submission Nokia’s position that the question should be answered positively was supported by INTA, France, Finland and Poland (and Portugal and Italy in written submissions). The UK, the Commission and the Czech Republic took the position that the answer is ‘no’.
UNION Roundtable Münich 25 February 2011 15 Opinion AG Cruz Villalón 3 February 2010
• joined cases
• opinions are non-binding (although the Court accepts them around 80% of the time)
UNION Roundtable Münich 25 February 2011 16 Opinion AG Cruz Villalón 3 February 2010
• Philips v. Lucheng
• manufacturing fiction:
– may not be inferred from the wording of Article 6(2)b of APR (i.e. rule of conflict of laws) – goes beyond the objectives of the (old) APR (i.e. prevention of counterfeit and pirated goods from being placed on the European market – conflicts with existing case-law (f.i. Montex)
UNION Roundtable Münich 25 February 2011 17 Opinion AG Cruz Villalón 3 February 2010
• Nokia v. HMRC
• Non-Community goods bearing a Community trademark which are subject to customs supervision in a Member State and are in transit from one non-member country to another non-member country may be seized by the customs authorities provided that there are sufficient grounds for suspecting – that they are counterfeit goods, and in particular – that they are to be put on the market in the European Union (either in conformity wiht a customs procedure or by means of an illicit diversion
• What are sufficient grounds for suspecting?
• Danger of ‘easy transit’ destinations
UNION Roundtable Münich 25 February 2011 18 So, end of the Dutch practice?
• Time (and the ECJ) will tell
UNION Roundtable Münich 25 February 2011 19 Thank you for your attention
• Questions, comments, remarks?
Gertjan Kuipers [email protected] +31 20 577 1042
UNION Roundtable Münich 25 February 2011 20
Jordi Güell Lawyer and IP Attorney Partner at CURELL SUNOL
Jordi was born in Barcelona on 21 May 1970. After graduating in law in 1994, he was a trainee lawyer at Golds Solicitors (Glasgow, UK) and at American Express. He later worked at Barcelona-based Law firm Baiget Robert until he joined IP firm CURELL SUÑOL in 1996, where he is currently a Partner.
Degree in Law (University of Barcelona) - 1994 Post-degree in Competition Law - 1996 Chartered Spanish Patent and Trade Mark Attorney - 1998 European Trade Mark and Design Attorney - 2000 Official Translator of English appointed by Spanish Ministry of Foreign Affairs - 2001
Member of the Lawyer's Barcelona Bar Association Member of the Spanish Institute of Chartered Industrial Property Agents (COAPI). Member of AGESORPI (Spanish Association of Patent and Trade Mark Attorneys authorised before International Organisations). Member of ECTA, AIPPI and INTA, where he has given presentations and participated in various committees continuously since 2001.
Jordi is a Member of the INTA Anti Counterfeiting European Union Sub-Committee and of the ECTA Anti Counterfeiting Committee.
Jordi is a lecturer in the Post-degree course in IP Law at the Lawyer's Bar Association of Barcelona and also teaches continuing education courses to the Police of Barcelona.
Securing Patent Rights Through Customs Measures
Jordi Güell Lawyer, Patent & Trademark Attorney
UNION, Munich, 25 February 2011 Spain
• Largest Chinese industrial zone in Europe (Fuenlabrada, Madrid, 40,000 m2). Other “hot” areas are Badalona, Elche. • China is the main source country for infringing articles detained at customs (64% in 2009, increased from 54% in 2008) Spain
Three of largest ports in Europe (Algeciras, Barcelona, Valencia).
75% products detained transported by sea Spain
• One of the six Member States within the top 10 in number of cases and articles seized (together with Germany, Italy, France, The Netherlands and the UK) • EU Member State close to Africa (Canary Islands) Statistics Europe 2009 (European Commission) Variety of Patents put under Customs Surveillance Abstract of EP 0432813 (A1) Device for storing dish-type containers such as plates, dishes or serving trays containing a product, with a vertical column (1) which has a base support (2) at the bottom side, the column (1) being triangular or rectangular in cross-section and provided at each side with supporting elements (8, 9) placed at equal intervals above one another. Each supporting element (8, 9) comprises two pin-shaped projections (11, 11') lying in line with each other in the horizontal direction, and a third pin-shaped projection (15) which is longer than the other two projections (11, 11') and lies centrally between the other two projections (11, 11') at a certain distance from the line connecting the other two projections to each other. The distance from the bottom projection (15) to the connecting line between the two upper projections (11, 11') is adjustable.; The base support (2) for the column (1) comprises a flat bottom plate provided with wheels (3), which plate is provided with one or more fixing elements (23, 24) for detachable accommodation of the column. Seizure & destruction Spanish Customs
• Very active in fight against counterfeiting • Most seizures refer to trademarks (95%) • Limited resources and knowledge • Increasing seizures of patent rights Application for Customs Action (EC Reg. 1383/2003) in Spain
• Power of Attorney (Notary + Apostille) • New renewal system: application is only granted until the date in which any of the rights included expires (patent annuities) • Detailed description of the rights to be put under surveillance Simplified Procedure (Art. 11 EC Reg. 1383/2003)
Major problems faced by patent owners in Spain
• Confirmation of the “counterfeit” character of the goods seized.- photographs insufficient • Extensions of time (Madrid, Barcelona - 5 days only) • Notification to the importer/declarant Problems resulting from art. 14 EC Reg. 1383/2003
“In the case of goods suspected of infringing design rights, patents, supplementary protection certificates or plant variety rights, the declarant, owner, importer, holder or consignee of the goods shall be able to obtain the release of the goods or an end to their detention on provision of a security (...) The security provided for in paragraph 1 must be sufficient to protect the interests of the right- holder”
• Not uniform criteria to establish fee • Established by patent holder (reasonable) • Price of a license (obtained from client’s web) • Punitive license (at discretion of patent-holder) • Value of the merchandise Possible legal actions to follow
Criminal action Civil action
• Easy to draft • Expensive, time consuming • More threatening • Less threatening • May be dismissed • Legal procedure with more guarantees • Less adequate for damage claim • Better to obtain compensation • May require civil action Criminal action.- Controversy (i)
• Art. 262 Spanish Law on Criminal Procedure
“The authorities that due to their profession or position become aware that a crime has been committed have the obligation to communicate it to the Public Prosecutor, competent Court or Police” Criminal action.- Controversy (ii)
Corpus delicti .- Art 14 EC Reg. 1383/2003
If a criminal action is filed, the goods infringing the patent cannot be released unless with Court authorisation.
Useful to avoid release of the goods applying Art. 14 Storage and destruction costs
Decision of the Appeal Court of Valencia 29.03.2010 Litigation between shipping company and right holder concerning storage and destruction costs
“according to EC Reg. 1383/2003, the right holder must bear the costs of storage and destruction” Need to amend EC Regulation 1383/2003
- Simplified procedure - Small consignments - Goods in transit - Storage and destructions costs -Uniformity Thank you [email protected]
Elliot Papageorgiou Partner
Professional Experience Elliot is a Solicitor (England & Wales), an Attorney-at-Law (NY), and a Barrister & Solicitor (Victoria). He advises international companies on contentious and non-contentious IP issues, with a special focus on enforcement and litigation in China. Elliot has managed a range of trade mark, copyright and patent litigation cases in China, where his briefs include acting for the international music industry, as well as leading European fast-moving consumer goods, personal care, automotive, high technology and industrial companies and IP holders.
Elliot manages Rouse’s German Client Team globally. His team specialises in giving tailored advice to continental European clients, taking into account cultural differences between clients originating from German language countries, and the IP environment in the countries where Rouse advises.
Elliot has been practicing intellectual property law since 1995, qualifying with leading Australian firm Clayton Utz. He has worked with Rouse since 1999 and is a Partner in its associated English law firm Rouse Legal. Elliot holds Bachelor degrees in Commerce and Economics from Murdoch University, (Western Australia), and read Law at Monash University in Melbourne, before reading for the B.C.L. at St Catherine’s College, University of Oxford. He is currently researching his Doctorate at the University of Bern’s World Trade Institute.
Elliot was awarded the ILO Client Choice Award in 2010 by the International Law Office, and voted a “Leading Lawyer – China IP” in the Asialaw Survey in 2008 and 2009. Both of these award categories were nominated and voted on by clients. Elliot is ranked in the World Trade Mark Review list of “1000 Leading TM Practitioners 2011”, as well as Intellectual Asset Management’s (IAM) list of “Patent Litigation Top 250 Practitioners 2011”.
Professional Qualifications BCL, (St. Catherine's College) Oxford University, United Kingdom LLB(Hons), Monash University, Australia BEc, Murdoch University, Australia BCom, Murdoch University, Australia Admitted to the Roll of Solicitors in England & Wales Attorney-at-Law, New York, US
Languages other than English
German, Serbian, Croatian and Hungarian
Contact Details Direct Line Email +86 21 3251 9966 [email protected]
“Escaping over the Wall…”
Export of counterfeits from China & the Role of Customs
Elliot Papageorgiou
24 December 2011, Munich
© Rouse 2011 1 OutlineOutline
1.China Customs figures 2. Customs seizure in practice 3. Routes of “escape” from China … 4. Do Customs and Patents mix?
© Rouse 2011 2 CustomsCustoms –– by by thethe numbersnumbers ……
• 13,695 Customs Recordals in force in China (as at Feb. 2011) • 65% of all goods detained by European Customs originated in China • 90% of cases involved TM rights • 5% of cases involved Patents • 62% of all goods seized by US Customs originated in China
© Rouse 2011 3 CustomsCustoms –– by by thethe numbersnumbers ……
Recordal – Type of Rights Trade Marks Copyright "Patents"
4526
8592 577
© Rouse 2011 4 CustomsCustoms –– seizures seizures byby RightRight -- 2009 2009
276,651,530 300,000,000
250,000,000
200,000,000
150,000,000 Quantity
100,000,000
50,000,000 131,747 3,237,699 37,824 0
trademark copyright patent Olympic symbol
© Rouse 2011 5 CustomsCustoms –– seizures seizures byby GoodsGoods -- 2009 2009 Goods Quantity Percentage Value (RMB) Percentage cigarettes 181,346,116 1.80% 31,237,651 6.90% others 46,761,330 0.40% 25,807,920 5.70% other light industrial products 15,918,160 0.10% 1,959,904 0.40% cosmetics, personal care 10,996,937 0.20% 10,757,195 2.40% hardware machinery products 8,712,423 3.90% 30,503,080 6.70% clothing 4,986,126 5.70% 44,083,239 9.80% pharmaceutical 3,344,790 0.60% 8,555,921 1.90% other mechanical and electrical products 1,747,306 0.10% 42,909,738 9.50% automotive 1,580,608 0.10% 2,893,802 0.60% communication device 1,469,595 0.50% 57,628,798 12.70% shoes 1,184,250 0.03% 7,894,969 1.80% suitcase and leathers 418,746 0.60% 21,765,950 4.80% watches 319,770 3.10% 10,226,569 2.30%
Toys and games 313,311 0.01% 4,101,115 0.90% hats 282,262 0.05% 793,251 0.04% food and beverage 212,533 0.07% 199,920 0.04% medical device 198,744 1.20% 48,379,124 10.70% sporting goods 130,893 0.10% 846,142 0.20% storage media 95,735 64.80% 57,874,722 0.20% jewelry 39,165 16.70% 43,915,285 9.70%
© Rouse 2011 6 CustomsCustoms –– seizures seizures byby DestinationDestination -- 2009 2009
Batch Quantity Value (RMB) Destination
USA 41,912 8,251,686 55,543,794
UK 6,892 949,989 32,236,418
Japan 6,001 293,097 8,144,584
France 2,871 288,013 4,520,620
Germany 740 9,014,740 7,306,721
Canada 665 83,177 717,426
Australia 653 667,203 1,534,971
Hong Kong 653 37,537,706 20,390,942
Macao 561 32,107 2,186,861
Brazil 513 948,218 33,478,043
© Rouse 2011 7 OutlineOutline
1. China Customs figures 2.Customs seizure in practice 3. Routes of “escape” from China … 4. Do Customs and Patents mix?
© Rouse 2011 8 CustomsCustoms inin AdministrativeAdministrative systemsystem ……
National People’s Congress Investigation, Prosecution and Litigation Hierarchies
Supreme Peoples State Council Supreme People’s Procuratorate Administration Court (prosecution)
National SAIC STSB SIPO CGA NCA Ministry of Public Security
- Patent Filing - Consumer -Patent Recordal - Copyright High Province Protection - Patent Infringement -TM Recordal Registration Court - Product Quality / Enforcement - Customs seizure - Recordals - Counterfeit - Infringement / Enforcement Intermediate PSB People’s Court City TMO - TM Filing - TM Infringement / Enforcement few Courts below city level accredited to hear IPR County cases
Fair Trade Bureau Criminal Civil (via Courts)
Unfair Competition SAIC: State Administration of Industry and Commerce STSB: State Technical Supervision Bureau SIPO: State Intellectual Property Office Business Licenses CGA: Customs General Administration NCA: National Copyright Administration TMO: Trademark Office Advertising Rules PSB: Public Security Bureau
© Rouse 2011 9 StepsSteps && MaterialsMaterials forfor CustomsCustoms recordalrecordal
1) Application first made online; 2) Then a printed application form is submitted; 3) Copy of Chinese registration certificate for the right concerned – trade marks, patents (official excerpt from the register) or copyright (with photographs of the works) must be submitted. 4) In event of existence of a licence, (i) a copy of any licence agreement or (ii) if no written licence exists submit document setting out details of license, scope, term etc. 5) Images of the IPR Holder’s relevant goods and their packaging. 6) Black list & White list, but note: can be risky either way!
© Rouse 2011 10 StepsSteps && MaterialsMaterials forfor CustomsCustoms recordalrecordal
7) Evidence relating to any known importer / exporter of infringing goods (where available) or legal documents related to any ruling of infringement by the People’s Court / IPR Administrative Authority. 8) Power of Attorney required where the applicant is based outside mainland China (which process must be facilitated through use of a local agent); 9) A copy of the bank slip showing the transfer/payment of the official registration fee of RMB 800. 10)Documents submitted in a foreign language must be accompanied by a Chinese translation.
© Rouse 2011 11 Steps & Materials for Customs MaterialsSteps recordal Customs for & Steps & Materials for Customs MaterialsSteps recordal Customs for &
© Rouse 2011 12 CustomsCustoms –– points points toto notenote …… • Recordal is valid for 10 years for “Patents” and may be renewed provided the relevant IP rights remain in force. • Recordal for Trade Marks is up to 10 years – determined by the period remaining until renewal due. • Registrant “required” to report to Customs if their right expires or is cancelled, but no legal recourse if they fail to do so. • China Customs actively and intensively filters EXPORTS as well as imports! • Within 3 working days as of the date of notification, IPR holders must: • Verify seized goods • Deliver petition • Pay required bond • IPR holders who consistently fail to respond within 3 days, are unlikely to be notified again in the future of any suspected shipments.
© Rouse 2011 13 CustomsCustoms –– points points toto notenote ……
• Customs training probably even more important than in other jurisdictions • Infringing goods seized by local port customs are almost all exports and mainly discovered by customs’ random spot checks. • Bond payable: Declared Value of seized Goods Required Bond Payment Less than RMB 20,000 100% RMB 20K - 200K 50% Over RMB 200K RMB200k • Penalties imposed by Customs: in practice no more than 30% of value of goods … but potential for Customs to transfer cases to PSB … • Customs investigation will in most cases not uncover the identity of the manufacturing source or consignee – there is no “right” to such information as rights-holder is not a “party” to the Customs seizure.
© Rouse 2011 14 OutlineOutline
1. China Customs figures 2. Customs seizure in practice 3.Routes of “escape” from China … 4. Do Customs and Patents “mix” well?
© Rouse 2011 15 1.1. GeographicGeographic locationlocation
SHANGHAI Ningbo
Wenzhou
Xiamen u ho gz Shantou an Gu Shenzhen
© Rouse 2011 16 RoutesRoutes ofof “escape”“escape”
Common Routes for Automotive & industrial products • Sea-routes – Orders in Yiwu, shipment via Ningbo & Shenzhen – Minor ports along rivers often used for trans- shipment to major ports like Shanghai and Ningbo: • One major international transfer point still Shanghai, followed by Ningbo • Goods often not “re-inspected” when arriving at Shanghai or Ningbo customs. – Shipment to South-East Asia mainly from Guangzhou – organised by overseas Chinese
© Rouse 2011 17 RoutesRoutes ofof “escape”“escape”
Common Routes for Automotive & industrial products • Sea-routes (continued) – Transhipment via: • Dubai & Emirates - organised by Arabs and Iranian traders, and to a lesser extent from overseas Chinese • Turkey • Greece • Southern Italy • South Africa is a key transhipment location for North America, with products being repackaged there. Some fakes go from there north into Africa. • Ethiopia, Mombasa and Nigeria – serves most of Africa • Philippines to South and Latin America
© Rouse 2011 18 RoutesRoutes ofof “escape”“escape”
Common Routes for Automotive & industrial products • Land-routes – Land routes such as Vietnam border & Urumqi increasing in significance, due to higher IP interception at east-coast shipping ports • Western China across central Asia, being transported by Turkish and Iranian trucking companies • Vietnam border … – Special Economic Zone (SEZ) inaugurated in 2005 near Cambodian and Vietnamese border, aimed at attracting more investment in the country
© Rouse 2011 19 RoutesRoutes ofof “escape”“escape”
© Rouse 2011 20 RoutesRoutes ofof “escape”“escape”
© Rouse 2011 21 RoutesRoutes ofof “escape”“escape”
Common Routes for Automotive & industrial products – Urumqi … • 16 Class A “ports”, where foreign transport vehicles can deliver goods directly and trade may be conducted with any country: 2 airports. • Further 11 Class B “ports”, where both US dollars and RMB can be used to conduct transactions. • No. 1. port: China-Kazakhstan Korgas International Border Cooperation Center (a.k.a. Horgos Port) in Xinjiang. • Turkish & Iranian trucking lines carry much of counterfeits (due to their relatively low cultural emphasis/observance of IP), and gang/clique nature of trucking industry.
© Rouse 2011 22 OutlineOutline
1. China Customs figures 2. Customs seizure in practice 3. Routes of “escape” from China … 4.Do Customs and Patents “mix” well?
© Rouse 2011 23 CustomsCustoms programmesprogrammes forfor patentspatents inin CHina…?CHina…? • There are very few “successful” Customs detention programmes for patents in China. • Government reported figures aggregate registered designs and utility models into the heading “patents” • China Customs reluctant to do Patent cases: • Customs has huge volume of trade mark cases • Requires a more complex determination of “infringement” • Greater risk of exporter resisting decision to seize. • Insufficient training by rights-holders and follow-up after training of Customs • Insufficient support of & liaising with Customs on location Exceptions: • ‘Core Patents’ – if you can instruct Customs: “If a DVD-player / specialty-lamp is being shipped, then unless consignor/consignee on “White list” SEIZE!” • Targeted-Tracked seizures – shipment being tracked from manufacturer through to export.
© Rouse 2011 24 Thank you.
Elliot Papageorgiou
Rouse Shanghai – Beijing - Guangzhou tel. +86 1391 661 4644 @:[email protected]
© Rouse 2011 25 Thank you.
Elliot Papageorgiou
Rouse Shanghai – Beijing - Guangzhou tel. +86 1391 661 4644 @:[email protected]
© Rouse 2011 26