ECJ decision 'extends brand owners' right to seize goods' 06 Feb 14
The decision of the Court of Justice of the European Union (ECJ) in Blomqvist v Rolex SA (Case C-98/13), issued this morning, could significantly enhance the rights of trademark owners to seize goods. However, its true impact will only become apparent when national courts apply the theory to the facts.
In the underlying case, Rolex SA v Blomqvist (Case V 29/10, November 8 2011), the Danish Maritime and Commercial Court had held that the import of a single fake Rolex watch bought by a private citizen (Mr Blomqvist), for his own use, on a Chinese online store implied a violation of Rolex SA's trademark rights. The court had also upheld Rolex's claims that the fake watch had been legally confiscated by Danish Customs and that it should be destroyed without compensation.
Blomqvist lodged an appeal to the Danish Supreme Court, where the case was heard on September 5 2012 (Blomqvist v Rolex SA (361/2011)). Although the court initially announced that it had set down the case for judgment, on September 18 2012 the court decided to refer questions to the ECJ for a preliminary ruling.
In essence, the Supreme Court sought to ascertain whether, under the Customs Regulation (1383/2003), in order for the holder of an IP right over goods sold to a person residing in the territory of a member state through an online sales website in a non-member country to enjoy the protection afforded by the regulation at the time when those goods enter the territory of that member state, that sale must be considered, in that member state, as a form of distribution to the public or as constituting use in the course of trade. The court also sought to clarify whether, prior to the sale, the goods must have been the subject of an offer for sale or advertising targeting consumers in the same state. Today, the ECJ ruled as follows:
“[The Customs Regulation (1383/2003)] must be interpreted as meaning that the holder of an intellectual property right over goods sold to a person residing in the territory of a member state through an online sales website in a non-member country enjoys the protection afforded to that holder by that regulation at the time when those goods enter the territory of that member state merely by virtue of the acquisition of those goods. It is not necessary, in addition, for the goods at issue to have been the subject, prior to the sale, of an offer for sale or advertising targeting consumers of that state.”
There has been a long-standing debate as to the extent to which brand owners can enforce their IP rights in a member state in respect of goods which are the subject of online cross-border sales. Reacting to today’s decision, Jeremy Dickerson, partner at Burges Salmon LLP, and Hannah Braye, a member of Burges Salmon's IP disputes team, told WTR: “The general principle previously applied across member states is that infringing items bought for personal use cannot be seized by Customs at the point of entry into the country. Instead, for goods to be confiscated, they must be intended for use in the course of trade (for trademark infringement) or for distribution to the public (in the case of copyright infringement). This is the case in Denmark, where the issues in dispute in this case arise, and also in other countries in the European Union. In most jurisdictions, a brand owner would therefore not have an action against an individual for the online purchase of infringing goods, such as a single Rolex watch, for personal use.”
However, the decision of the ECJ in Blomqvist potentially enhances significantly the rights of brand owners to take action against an individual at the point of entry of infringing goods into a member state. Dickerson and Braye expand: “The ECJ ruled that seizure was permitted merely by virtue of the acquisition of the goods through an online sales website. It was not necessary for the goods to have been the subject of an offer for sale or advertising targeting consumers in the state where seizure occurred. This theoretically extends brand owners’ rights to enforce in respect of goods being imported for personal use.”
While the ruling could enhance the rights of trademark owners to seize goods, it is not automatically good news for brand owners, with Dickerson and Braye adding a word of caution: “Whilst the ECJ's judgment may potentially be useful for brand owners going forward, the ECJ can supply legal theory only. It remains to be seen how the Supreme Court of Denmark, and local courts in other member states, will apply this theory to the facts in each particular case, including that of Mr Blomqvist.”
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