Paris Convention does not prohibit seizure of goods in transit

In HD Lee Company Inc v UAB Mita (Case 3K-3-1060), the Supreme Court of Lithuania has ruled that the provisions of Article 9 of the Paris Convention for the Protection of Industrial Property, which deal with the seizure of goods in transit, are optional in nature and do not prohibit customs authorities from seizing goods in transit. The court also confirmed that parties that are simply transporting counterfeit goods can still be found guilty of infringing trademark rights.

UAB Mita, a Lithuanian company, applied for and received a transit procedure covering Lithuania for the transportation and temporary storage of goods. However, pursuant to the Law on the Protection of Import and Export of Intellectual Property (Customs Law), part of the consignment was seized while in transit by the Lithuanian customs authorities on the grounds that it contained counterfeit goods bearing the LEE mark.

HD Lee Company Inc, the owner of the LEE mark, brought a claim before the courts requesting the destruction of the counterfeits.

The Vilnius District Court and then the Appeal Court of Lithuania upheld HD Lee's claim.

UAB Mita appealed to the Supreme Court, arguing that:

• provisions of Article 9 of the Paris Convention state that the authorities of signatory states "shall not be bound to effect seizure of goods in transit", therefore, the Customs Law should not have been applied;
  
  
• it was only involved in the transportation of the alleged counterfeit goods through Lithuania by way of a transit procedure, and was not liable for any infringement of the Customs Law; and
  
  
• the Vilnius District Court and the appellate court had failed to state that UAB Mita was at fault for the infringement.

The Supreme Court dismissed the appeal. It held that the provisions in the Paris Convention are optional in nature - the state can choose whether or not to seize goods in transit. Therefore, the Customs Law does not contradict the Paris Convention and was properly applied in the case at hand.

It also reasoned that UAB Mita had not only transported the infringing goods, but was also indicated as the recipient of the goods, as well as the party declaring the goods at customs. The Customs Law prohibits parties from bringing counterfeit goods into the customs territory of Lithuania. Thus, even if UAB Mita was simply transporting the counterfeit goods, it could still be held responsible for the infringement of the Customs Law.

The Supreme Court concluded that the question of whether UAB Mita was at fault for the infringement was irrelevant because the Customs Law prohibits any infringing acts and it had been established that an infringing act had taken place.

Vilija Viesunaite, AAA Legal Services, Vilnius