The Court of Justice of the European Union (CJEU) has today ruled that customs officials cannot seize suspected counterfeit goods in transit through the EU to and from countries outside the EU, unless it is suspected that the goods are intended to be placed on the market in the EU.
Owners of infringed trademarks must prove that the fake goods in question are intended for the EU market, regardless of their declared destination, in order to prevent them from being released.
Under the new rules, customs officials can only seize fake goods in transit if there are ‘indications’ that the goods will enter the EU, such as a ‘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’. However, to prevent the goods’ release, brand owners will need to meet a higher threshold and prove that the goods are destined for the EU market.
Dafydd Bevan, associate at Marks & Clerk Solicitors, said: “Although expected, 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 reflects the current state of EU law but makes it difficult for brand owners and customs to put a stop to this practice. 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.
“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.
“Constrained as it is by the current state of EU law on the matter, today’s ruling provides little assistance in combating counterfeiting in the global marketplace. If the position is to be improved, EU legislators will need to come up with proposals for changes in the law itself.”