Seizing counterfeit goods in transit: Brand owners must show suspected diversion to EU

Seizing counterfeit goods in transit: Brand owners must show suspected diversion to EU

Seizing counterfeit goods in transit: Brand owners must show suspected diversion to EU

Koninklijke Philips Electronics NV v Lucheung Meijing Industrial Company Ltd (C-446/09)
Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs (C-495/09).

The Court of Justice, the EU’s highest court, has confirmed that counterfeit goods travelling via the EU from one non-EU country to another cannot automatically be seized by EU Customs authorities unless the brand owner provides sufficient evidence to suspect that the counterfeit goods will enter the EU market. This constitutes a serious blow to EU brand owners in their fight against potentially dangerous counterfeit goods.

Seizing EU goods in transit: the requirements

The EU allows Customs authorities to seize suspected counterfeit goods at their borders at the request of brand owners if certain conditions are met.

Goods in transit are not regarded as “counterfeit” and liable to seizure in the EU unless they are intended to be put on sale in the EU.

Based on guidance given by the Court of Justice, brand owners should look for the following kinds of evidence as a basis to seize counterfeit goods in transit in the EU:

  • The fact that the destination of the goods is not declared;
  • The lack of precise or reliable information regarding the identity or address of the manufacturer or consignor of the goods;
  • A lack of cooperation with Customs authorities;
  • The discovery of documents or correspondence concerning the goods in question, suggesting that there is liable to be a diversion of those goods to EU consumers.

This decision will make it more difficult for brand owners to fight counterfeit goods generally, to the potential detriment and danger of consumers.

The Australian position

Customs authorities in Australia do not have power to seize goods in transit that are suspected of infringing a registered trade mark. However, if the goods are intended for the Australian market or the goods are being transhipped through Australia (ie. the goods are imported into Australia and are loaded onto a different container for export), infringing goods can potentially be seized.

The most effective way for brand owners to be in a position to obtain seizures is for the brand owner to provide appropriate notice of its registered rights to Customs. We can assist with preparing the relevant documentation for the recordal of your rights with Australian Customs authorities.