EU Court stuns brand owners over fakes as watchdog issues Christmas warning
Brand owners’ hopes for tighter EU controls on fake goods have been dashed at Europe’s Court of Justice (CJ). in a final ruling on Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs (HMRC), the CJ stated that customs authorities are unable to seize counterfeits discovered within the EU if they are destined for sale elsewhere.in the case, originally heard at the UK High Court, Nokia sued HMRC for failing to block a shipment of 400 imitation-Nokia handsets found at Heathrow Airport in 2008. As part of the outcome, the High Court referred to the CJ the specific question of whether fakes in transit through the EU were liable for seizure by European border agencies. Brand owners had hoped for an affirmative answer that would enable EU customs authorities to cut supply lines of fakes shipped to foreign markets.However, as NewLegal Review reported in February, an initial Opinion by the CJ’s Advocate General indicated that such an answer was not forthcoming. in the judgment on 1 December, the key arguments of that Opinion were observed. the CJ ruled that the goods in question, while infringing under EU laws, may nonetheless comply with the intellectual property (IP) systems of the countries they have been sent by, or are destined for.in addition, the CJ said it was practically impossible to ascertain that such goods would not be fraudulently diverted for sale in the EU. on the strength of any such suspicions, stated the ruling, ‘all goods in external transit or customs warehousing could be detained without the slightest concrete indication of an irregularity. such a situation would give rise to a risk that the actions of Member States’ customs authorities would be random and excessive.’Marks & Clerk Associate Dafydd Bevan commented: ‘This ruling is a blow to brand owners in the fight against counterfeiters. Customs officials have effectively been given the go-ahead to turn a blind eye to even obviously fake goods passing right under their noses, if they are destined for non-EU states. Counterfeiters often abuse legitimate customs procedures to allow transit of goods through the EU between non-EU states in order to bypass customs checks and illicitly introduce fake goods to the EU market. this ruling makes it difficult for brand owners and customs to put a stop to this practice.’Hard on the heels of the CJ’s judgment, the UK Border Agency issued a warning over the spike in counterfeit sales predicted to occur over Christmas. Illustrating the scale of UK seizures already made in 2011, the agency said that at just the single location of Coventry International Postal Hub (a major UK delivery point for overseas mail), 13,000 items with a total value of £14.5m had been impounded. Turning to goods that are likely to be popular over Christmas, it added that in October over £50,000 worth of fake Disney, hello Kitty and Thomas the Tank Engine products were seized at Dover ferry port.Grant Miller, spokesman for the Border Agency’s Heathrow-based international trade division, said: ‘We are uncovering all sorts of fake goods, from beauty products to children’s toys, and we’re warning people to be particularly wary of buying cheap items online or from unofficial traders. It’s easy to be tricked into thinking you’re getting a bargain, but in the run-up to Christmas our message is that if something appears too good to be true, it probably is.’