EU fake goods ruling ‘is a blow to brand owners’

A controversial new ruling means that customs officials cannot now seize suspected counterfeit goods in transit through the EU to and from countries outside the EU unless they believe they are intended to be sold in the EU.

EU fake goods ruling 'is a blow to brand owners'

The Court of Justice of the European Union has judged that goods in transit cannot “be classified as ‘counterfeit goods’ or ‘pirated goods’ merely on the basis…that they are brought into the customs territory of the European Union under a suspensive procedure”.

In order to prevent the release of fake merchandise from customs, owners of infringed trademarks will now have to prove that the merchandise is intended for the EU market, regardless of its declared destination.

Customs officials can only seize fake goods in transit if there are “indications” that the goods will enter the EU. Such indications include “the lack of precise or reliable information as to the identity or address of the manufacturer” or “the discovery of documents or correspondence concerning the goods in question suggesting that there is liable to be a diversion of those goods to European Union consumers”.

The judgment is in response to cases involving Philips and Nokia in the Belgian and UK courts.

Commenting on the case, Dafydd Bevan, associate at intellectual property specialist Marks & Clerk Solicitors, described the ruling as “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’re 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. Counterfeiting networks have become so adept at covering their tracks that it will often be virtually impossible for brand owners to prove that fake goods in transit will finish up in the EU.”

He added: “Counterfeiters put consumers at risk by trading unsafe, unregulated products, and a lot of their earnings fund organised crime. The trade in counterfeits costs businesses millions of pounds and is becoming more and more difficult to fight.”

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