On February 3, 2011, the Advocate General of the EU Court of Justice delivered his opinion on two cases which were referred to the Court by national courts and which both concerned allegedly infringing goods in a customs situation of “external transit”, that is the transport through the European Union of non-EU goods.

The first case related to shavers originating from China which had been detained by the Belgian customs as being apparently infringing over two international design registrations belonging to Koninklijke Philips Electronics NV (‘Philips’) and designating, among other countries, Benelux, and over the copyright in the external appearance of the shavers. The country of destination of the goods was not known.

In the lawsuit on the merits that followed, Philips requested the court to apply the so-called production fiction, according to which non-EU goods in transit should be considered as having been manufactured in the country where they are located, and therefore to judge the infringement issue under the Belgian law provisions. The court referred the matter to the Court of Justice for a preliminary ruling.

In his opinion on this point, the Advocate General concluded against such interpretation on the basis, inter alia, of the fact 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. 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… would go beyond the objectives of the customs regulation”.

The second case instead related to mobile phones and other articles coming from Hong Kong and destined to Colombia, all goods bearing the trademark “Nokia”.The application for the seizure of the goods filed by Nokia Corporation was refused by the British customs on the ground that the destination of the goods was Colombia and there was no proof that they would have been diverted to the EU market.

In the lawsuit brought by Nokia against the British customs, the judge referred the following question to the Court of Justice ‘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” if there is no evidence to suggest that those goods will be put on the market in the EC?’

The opinion of the Advocate General on this aspect is that such goods “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, even though there is no evidence of their destination”.

In reaching such conclusion the Advocate General noted that the customs authorities are not required to decide definitively whether any IP right has been infringed, which is instead the task of judicial authorities. The action of the customs authorities is of a preemptive and provisional nature, and necessarily must be based on provisional information, given that excessive evidential requirements could render its procedures useless. In this connection the Advocate General noted that the existence of suspicion is sufficient to satisfy the legal requirements and 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”. Since for the goods in transit one of the most difficult things to determine is their destination, in the assessment of the suspicion particular consideration should be given to the danger of fraudulent entry of the goods in the European Community. In this respect, aspects 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 the opinion of the Advocate General “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”.

Now we must wait to see whether the Court of Justice will agree to this opinion, thus providing some enlightenment on the facts which could justify the legitimate suspicion of entry on the EU market of goods in transit.

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