ECJ rules on customs authorities' power to decide on infringement of IP rights

In Sintax Trading OÜ v Maksu- ja Tolliamet (Case C-583/12, April 9 2014), following a request for a preliminary ruling by the Estonian Supreme Court, the Court of Justice of the European Union (ECJ) has ruled that the customs authorities may initiate and conduct proceedings to determine whether an IP right has been infringed, provided that the relevant decisions taken by those authorities may be subject to appeal ensuring that the rights derived by individuals from EU law and, in particular, from the Customs Regulation (1383/2003), are safeguarded.

In most EU countries, the customs authorities limit their role to suspending the release of suspicious goods, and it is up to the rights holder to take further steps. However, the Estonian Tax and Customs Office does not stop there. Under Article 74 of the Estonian Customs Law, it is a misdemeanour to import forbidden goods from non-EU countries. The Tax and Customs Office considers that goods infringing IP rights fall within the meaning of ‘forbidden goods’. Therefore, after receiving a statement from the rights holder confirming that the goods in question are counterfeit, the Tax and Customs Office usually decides to initiate proceedings to decide whether the goods infringe IP rights.

Acerra OÜ is the owner of an Estonian registered industrial design for a bottle. Syntax Trading OÜ imported into Estonia almost identical bottles of mouthwash supplied by a Ukrainian company. The Tax and Customs Office seized the goods and Acerra confirmed that the bottles infringed its design rights. Once the 10-day time limit set forth in Article 13(1) of the Customs Regulation had passed, Sintax requested (twice) the release of the goods. The Tax and Customs Office did not release the goods, nor did it take a decision.  

Syntax brought a complaint against the Tax and Customs Office before the Administrative Court, which ordered the release of the goods based on procedural irregularities. That judgment was upheld by the Court of Appeal on the ground that Article 10 of the regulation does not authorise the customs authorities to decide whether there has been infringement of an IP right. The case reached the Supreme Court, which stayed the proceedings and referred questions to the ECJ for a preliminary a ruling. The questions may be summarised as follows:

1. Can a customs department be the competent authority to decide whether an IP right has been infringed under Article 13(1) of the regulation?
2. Does the regulation prevent the customs authorities from initiating, of their own motion, proceedings to determine whether there has been infringement of an IP right under national law?

The ECJ found that the regulation does not preclude the EU member states from nominating a customs department to be the competent authority to decide whether there has been infringement of an IP right in Article 13(1) proceedings; nor does it preclude the customs authorities from taking action for the purposes of the regulation, in the absence of any initiative by the holder of the IP right.

Now that the ECJ has made it clear that there are no restrictions stemming from the regulation in this respect, it will be up to the Estonian Supreme Court to decide whether the provisions of the Estonian Customs Law grant such rights to the Tax and Customs Department and whether such rights are in line with the principles of procedural autonomy, the right to be heard and judicial review.

Ingrid Matsina and Mikas Miniotas, AAA Legal Services, Tallinn