Court confirms that goods cleared through Customs become EU goods

In Beauté Prestige International SA v Scan Everest SMBA, the Maritime and Commercial Court has confirmed that, when non-Community goods are cleared through Customs, they become EU goods.

Beauté Prestige International SA (BPI) is the owner of, or representative of, several well-known trademarks within the beauty sector. Among these are EU registrations for the trademark JEAN PAUL GAULTIER.

BPI had an agreement with its Turkish distributor that clearly outlined that the distributor was entitled to sell BPI's products only in local markets in Turkey. The distributor went bankrupt and, in 2012, the bankruptcy estate sold 942 bottles of Jean Paul Gaultier Fleur du Male eau de cologne to a Turkish trading company, which resold the goods to the defendant - Scan Everest in Denmark.

The goods were transported to Denmark and, in March 2013, Danish Customs detained the bottles on suspicion that they were counterfeit. In April 2013 BPI initiated search order proceedings. During the proceedings, the court seized the bottles. Following this, BPI initiated legal proceedings before the Maritime and Commercial Court, claiming that the bottles should be destroyed and that it should receive compensation.

The defendant claimed that the bottles were merely in transit, as they had been resold to a country outside of the European Union, and that they should not have been cleared through Customs.

The Maritime and Commercial Court ascertained that the goods were genuine and that, as they had arrived from Turkey, they had not been brought into the EU trade market with the consent of the trademark owner. The court further ascertained that the defendant had two choices in relation to customs clearance when the goods arrived in Denmark:

• assignment under the external shipment procedure or customs warehouse procedure; or
• clearance through Customs in Denmark, following the procedure for transfer into free circulation.

In line with the decision of the Court of Justice of the European Union in Class International BC v Colgate Palmolive Company (Case C-405/03, Premise 38), the court found that, when the goods were cleared through Customs, they became EU goods and, consequently, were considered to have entered into free trade in the European Union.

Following Premise 71 in the same decision, Article 5(3c) of the First Trademarks Directive (89/104/EEC) - which is identical to Section 4(3) of the Trademarks Act - should be interpreted as providing that, where infringing goods are brought into free circulation in the European Union, this constitutes a violation of the trademark owner’s rights. Scan Everest's customs clearance was therefore deemed to be an import within the sense of the Trademarks Act and the First Trademarks Directive. The court thus found in favour of the plaintiff.

Furthermore, the defendant was ordered to pay Dkr10,000 as compensation and Dkr35,531 as costs. The court also ordered that the goods be handed over to the plaintiff for destruction.

Mads Marstrand-Jørgensen, MAQS Law Firm, Copenhagen