Trademark owners not liable for storage costs

In a judgment dated June 21 2011, the Provincial Court of Appeal of Valencia has considered the application in Spain of the EU Customs Regulation (1383/2003), thereby setting a precedent which could be of interest to other countries.

The court expressly refused the shipping company’s request that the trademark owner be charged for the costs of storing merchandise detained following an intervention by Customs. The decision represents a radical change compared to earlier decisions by the Provincial Courts of Appeal of Valencia and Madrid which, surprisingly, had ordered the trademark owners to pay those costs.

In the present case, the court explained the importance of this U-turn:

"The question is certainly important from both a legal and an economic standpoint, not only in this case because of the amount involved, but also in future cases in which, inexplicably, the storage of the counterfeit products is prolonged unnecessarily, giving rise to equally unnecessary expenses."

The decision stems from an appeal by French company SEB SA against a judgment handed down by Valencia Examining Magistrates’ Court Number 9. The French company had been ordered to pay almost €30,000 - that is, the amount that the shipping company claimed for the storage of three containers of goods bearing imitations of SEB's MOULINEX marks, which had been detained in transit between Morocco and China by Valencia's Maritime Customs.

After making an exhaustive analysis of the Customs Regulation, the Valencia Provincial Court of Appeal held that the regulation:

"is particularly meant for the customs authorities of the member states for the sole purpose of providing them with a single procedure for intervening in a matter as delicate as the infringement of intellectual or industrial property rights".

However, the court stressed that under no circumstances was the procedure meant for the courts of justice of the EU member states. Additionally, it reminded the examining magistrate of his obligation to collect and safeguard the effects and instruments of the offence. It went on to say that:

"the issue of the storage costs of the objects of the offence... does not fall within the scope of interim measures, which is what the regulation provides for, but, rather, within the scope of a strict application of Articles 334 and 338 of the Law on Criminal Procedure (ie, the detention of the effects of an offence)."

The court then added that "these expenses cannot be charged to the account of the victim of the offence by applying a Community regulation meant for another issue and repealing all the state legislation not affected by Community regulations", because "this would be tantamount to establishing a system of liability foreign to our criminal law".

The decision puts an end to the discrimination that trademark owners have suffered with regard to storage costs. It also reinstates the unitary treatment of expenses incurred following the seizure and storage of evidence, regardless of whether the matter involves products bearing counterfeit trademarks or any other products seized within the framework of criminal proceedings (eg, drugs and firearms).

Juan J Caselles Fornés, Elzaburu, Madrid

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