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ECJ advisor says 'sufficient grounds' for suspicion enough for seizure of goods in transit


European customs authorities can seize suspected counterfeit goods if they think they will end up on the market in the EU even if the goods are in transit from and to non-EU countries, the European Court of Justice (ECJ) has been advised.

If the ECJ follows the advice it has been given it will partially reverse a ruling by the UK High Court on the impounding of counterfeits that appear to be passing through, rather than destined for, the UK.

The High Court had backed a decision by HM Revenue and Customs (HMRC) not to continue to impound counterfeit telephones which were only in the UK as part of their journey from Hong Kong to Colombia.

The Court said that the fake phones could not be 'counterfeit' as defined by the EU's Counterfeit Goods Regulation and the Trade Marks Directive unless they were placed on the market in the EU.

Nokia appealed against the decision and the Court of Appeal asked the ECJ whether a customs authority can take action against fakes if there is no evidence that the goods will end up on the market in the EU, either legally or illicitly.

The ECJ is yet to rule on the case but one of its advisors, Advocate General Pedro Cruz Villalon, has published an opinion recommending that it allow customs authorities to impound suspected fakes.

The opinion said that customs authorities should be able to stop consignments of fakes if they believe that those goods might end up on the market in the EU.

"Non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and are in transit from one non-member country to another non-member country may be seized by the customs authorities provided that there are sufficient grounds for suspecting that they are counterfeit goods and, in particular, that they are to be put on the market in the European Union, either in conformity with a customs procedure or by means of an illicit diversion," said his opinion.

Around 400 Nokia-branded phones, batteries and accessories were seized by HMRC in 2008 at Heathrow Airport. When sent samples, Nokia confirmed the phones as fakes.

When HMRC said that it could not detain them because it had no evidence that they were to be placed on the market in the EU, Nokia took legal action.

The High Court said that HMRC could not detain the goods, though.

"Infringement of registered trade mark requires goods to be placed on the market and that goods in transit and subject to suspensive customs procedures do not, without more, satisfy this requirement," said Mr Justice Kitchin in that ruling. "A mere risk that the goods may be diverted is not sufficient to justify a conclusion that the goods have been or will be put on the market."

"I have no evidence before me to suggest that there is any real prospect of the illicit diversion onto the market in the Community of goods which are in transit through the UK," he said.

The judge did express regret about his conclusion. "I recognise that this result is not satisfactory," he said. "I can only hope it provokes a review of the adequacy of the measures available to combat the international trade in fake goods by preventing their transhipment through Member States."

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