ECJ clarifies scope of Customs Regulation

In Blomqvist v Rolex SA (Case C-98/13, February 6 2014), the Court of Justice of the European Union (ECJ) has considered a request for a preliminary ruling by the Danish Supreme Court (Højesteret) concerning the interpretation of the Customs Regulation (1383/2003).

The request was made in proceedings brought by Rolex against Mr Blomqvist concerning the seizure and destruction of a counterfeit watch that Blomqvist had bought through a Chinese online sales website. The order was placed and paid for through the English website of the seller, and the seller sent the watch from Hong Kong by ordinary mail.

The parcel was inspected by the customs authorities on arrival in Denmark. The authorities suspended the customs clearance of the watch, suspecting that it was a counterfeit version of the original Rolex watch and that there had been a breach of copyright over the model concerned, and informed Blomqvist and Rolex about the decision.

Having established that the watch was in fact counterfeit, Rolex then requested the continued suspension of customs clearance and asked Blomqvist to consent to the destruction of the watch by the customs authorities. Blomqvist refused to consent to the destruction of the watch, contending that he had purchased it legally.

Rolex then brought an action before the Danish Maritime and Commercial Court (Sø- og Handelsretten) seeking an order that Blomqvist should allow the suspension of the release and the destruction of the watch without compensation. The court ruled in favour of Rolex.

Blomqvist appealed the judgment to the Danish Supreme Court. The court raised the question of whether an IP right had actually been infringed, as required for the implementation of the customs regulation, given that:

1. there must be a breach of an IP right protected in Denmark; and 
2. the alleged breach must take place in a member state.

Since Blomqvist had bought his watch for personal use and did not breach Danish legislation, the relevant question was whether the seller infringed Danish legislation (ie, the copyright directive, the trademark directive and/or the trademark regulation). Against this background, the court decided to stay the proceedings and to refer questions to the ECJ for a preliminary ruling.

In essence, the Danish Supreme Court sought clarification as to whether:

1. counterfeit goods purchased from a non-EU website could be seized and destroyed by Customs in the light of the Customs Regulation requiring an infringement of an IP right within the member state concerned - that is, whether such purchase is considered as a form of distribution to the public or as constituting use in the course of trade; and
2. the goods, prior to the sale, must have been subject of an offer for sale or advertising targeting consumers in the same member state.

On February 6 2014 the ECJ ruled that distribution to the public must be considered proven where a contract of sale and dispatch has been concluded. The ECJ stated that Rolex would have been entitled to claim infringement of its rights if counterfeit watches had been offered for sale by a trader established in a member state. However, Rolex’s rights could also be infringed – even before the goods arrived in the territory covered by that protection – if it was proven that the goods were intended to be put on sale in the European Union, such proof being provided, among other things, where the goods had been sold to a customer in the European Union or offered for sale or advertised to consumers in the European Union.

Consequently, the regulation must be interpreted as meaning that 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 enjoys the protection afforded to that holder by the Customs Regulation at the time when those goods entered the territory of that member state, merely by virtue of the acquisition of those goods.

Further, the ECJ stated that it was not necessary for the goods at issue to have been the subject, prior to the sale, of an offer for sale or advertising targeting consumers within the relevant member state.

In Denmark, the general principle is that infringing goods bought for personal use cannot be seized and destroyed by the Danish customs authorities. The ECJ’s ruling makes it clear that the seizure of counterfeit goods pursuant to the Customs Regulation is permitted merely by virtue of the acquisition of the goods through an online sales website in a non-member country even if the website is not directed at consumers within the European Union and if the goods are imported for personal use.

Nina Ringen, Rønne & Lundgren, Copenhagen