the current eu framework regarding border measures against ... · brands as e.g. chanel, rolex,...

Jura Falconis Jg. 52, 2015-2016, nr. 1 (oktober) 77

The current EU framework regarding border

measures against goods in transit: A viable

and balanced set of instruments?

Richard Steppe

Under the scientific guidance of Ana Nordberg, Ph. D.*

1. INTRODUCTION AND RATIONALE BEHIND

BORDER MEASURES

INTRODUCTION: THE RISE OF GLOBALIZATION – Throughout the past few

decades, the world has been characterized by a swift and seemingly incessant

process of globalization. Such an increasingly interdependent and

interconnected environment generates countless advantages on a multitude of

aspects1, e.g. shown by the highly reduced international transportation and

communication costs2 as well as a strongly expanded political cooperation.

The subsequent establishment of a cross-border knowledge-society and a

highly intensified inter-state trade, however, have additionally shown an array

of contemporary concerns and challenges when it comes to the field of

intellectual property protection. It has namely emerged that, taking into

account the aforementioned rise of globalization, a nationalist and domestic

approach to the enforcement of intellectual property rights (“IPRs”) is no

longer deemed sufficient, nor viable.3

BRAND-RECOGNITION AND SUBSEQUENT POSSIBILITY OF ABUSE – The

globalization of markets was nonetheless an undeniably prominent catalyst for

worldwide brand recognition. However, as international market demand for

brands as e.g. Chanel, Rolex, Samsung and Louis Vuitton grew, it conjointly

became clear that product desirability does not consistently overlap with

* Centre for Information and Innovation Law, University of Copenhagen.

1 For more information about the impact of this trend, see the article regarding globalization by the

INTERNATIONAL MONETARY FUND: IMF STAFF, “Globalization: Threat or Opportunity?”, IMF

Publications 2000, http://www.imf.org/external/np/exr/ib/2000/041200to.htm#II, Chapter II. 2 A. SILVA, “Enforcing Intellectual Property Rights by Diminishing Privacy: How the Anti-

Counterfeiting Trade Agreement Jeopardizes the Right to Privacy”, American University

International Law Review 2011, 602. 3 A. ANDERSON and A. RAZAVI, “The globalization of intellectual property rights: TRIPS, BITS

and the search for uniform protection”, Georgia Journal of International and Comparative Law

2009-10, 266.

http://www.imf.org/external/np/exr/ib/2000/041200to.htm#II

RICHARD STEPPE

78 Jura Falconis Jg. 52, 2015-2016, nr. 1 (oktober)

product affordability. With the rise of a new group of consumers – namely

those who are fully aware of the current set of quality brands, yet do not

always find themselves in a financial position capable of acquiring the

correlating products – a new group of suppliers, filling up this need for well-

known brands at a lower price, spawned synchronously. 4 The subsequent

products manufactured by this new category of suppliers, however, are often of

an IPR-infringing nature and could possibly be categorized as ‘COUNTERFEITS’

or ‘PIRATED GOODS’ depending on the nature of the violated IPR.5 It may

accordingly be clear that globalization, as well as the subsequent elevated level

of brand-recognition, does not constitute an undividedly beneficial trend for

current right-holders.

RATIONALE BEHIND THE PROHIBITION OF COUNTERFEITS AND PIRATED

GOODS – In order to understand the philosophy behind the subsequent

introduction of border measures in the EU, it is prominent to primarily

comprehend the possible detrimental effects of cross-border counterfeit

businesses and product piracy. While the latter trends have seemingly existed

for a very long time6, they have recently known a vast market increase due to

inter alia globalization, lower trade barriers7, an increasingly sophisticated

industrial production capacity in particular countries8 and the lack of adequate

IPR enforcement9. The entirety of these determinants have thereby induced a

general atmosphere of low risks and comparatively high profits10, as well as

inter alia a loss of profit and market share for right-holders, a distortion of

competition, the degeneration of a brand’s exclusive perception as well as – on

a macro-economic level – a loss of jobs, a loss of foreign investment, a loss of

tax and social security income as well as general consequences for the gross

4 V. LAKSHMI, “Intellectual Property Protection at Border”, Journal of Intellectual Property Rights

2009, 330 and P. CHAUDHRY and A. ZIMMERMAN, The Economics of Counterfeit Trade –

Governments, Consumers, Pirates and Intellectual Property Rights, Berlin, Springer, 2009, 24. 5 The difference between counterfeit goods and pirated goods lies in the nature of the infringed

IPR. While counterfeits are “an unauthorised imitation of a branded good” and thus infringe the

rights of the trade mark owner, pirated goods encompass “an unauthorised exact copy–not a simple imitation–of an item covered by an intellectual property right”. The two terms are

additionally defined in the TRIPS Agreement, cf. footnote 14 of article 51, as well as in article

2(5) and 2(6) of Regulation 608/2013 (cf. infra, footnote 44). View also MEMO/10/272 of the EUROPEAN COMMISSION, http://europa.eu/rapid/press-release_MEMO-10-272_en.pdf as well as

M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER

(eds.), Enforcement of Intellectual Property Rights through Border Measures, Oxford, Oxford

University Press, 2012, 96-103 for a more extensive analysis of the terminology. 6 CHAUDHRY and ZIMMERMAN even state that “counterfeiting has been with us for at least 2,000 years”. See P. CHAUDHRY and A. ZIMMERMAN, The Economics of Counterfeit Trade –

Governments, Consumers, Pirates and Intellectual Property Rights, Berlin, Springer, 2009, 7. 7 P. CHAUDHRY and A. ZIMMERMAN, The Economics of Counterfeit Trade – Governments, Consumers, Pirates and Intellectual Property Rights, Berlin, Springer, 2009, 19. 8 Such as China. View the following communication from the Commission on the latest trends in

counterfeiting and piracy: COM(2005)479 final, 6. 9 H. RUSE-KAHN, “A trade agreement creating barriers to international trade?: ACTA border

measures and goods in transit”, American University International Law Review 2011, vol. 26, 646. 10 COM(2005)479 final, 6.

http://europa.eu/rapid/press-release_MEMO-10-272_en.pdf

THE CURRENT EU FRAMEWORK REGARDING BORDER MEASURES AGAINST GOODS IN TRANSIT: A

VIABLE AND BALANCED SET OF INSTRUMENTS?


national product. 11 & 12 It may thus be clear that the repercussions of IPR-

infringing goods are not to be underestimated and that in the European Union

specifically, as the European Commission has accordingly described it, “the

health and safety of EU citizens, their jobs, […] trade and investment in

research and innovation are all under increasing threat from the industrialized

production of fakes”.13

AN EU PERSPECTIVE: BORDER MEASURES – While the phenomenon may thus

be generated by an array of inducements, the lack of adequate IPR

enforcement has nonetheless been particularly regarded as constituting a vital

impediment in the international trade of goods protected by IPRs. 14 The

member states of the European Union (“the Member States”) had also

recognized the growing need for efficient and effective measures against

product counterfeiting but, due to the abolition of border controls between

Member States15, the detection of infringing products became more difficult

once they had entered the EU. As a consequence, it had emerged that the

possible seizures of those goods – often manufactured outside of the EU –

were better performed at the outer borders. 16 EU ‘border measures’ were

consequently put into place so as to facilitate “the seizure and disposal of IP-

infringing products, before they enter the channels of commerce within the

EU”17, while nonetheless conjointly avoiding the impediment of the freedom

of legitimate trade as much as possible18. IPR-infringing goods arriving at the

EU borders, and thus subject to the mentioned border measures, may be of two

types: they may either be intended to be used within the territory of the EU, yet

may also be shipped ‘in transit’ and thus have a destination located outside the

Member States’ territories.19 The border measures against the latter category,

11 M. SCHNEIDER and O. VRINS, “The magnitude and the economic and social consequences of

counterfeiting and piracy”, in O. VRINS and M. SCHNEIDER (eds.), Enforcement of Intellectual

Property Rights through Border Measures, Oxford, Oxford University Press, 2012, 15-20. 12 For an in-depth analysis of the detrimental effects of counterfeits and pirated products, view the

study commissioned by the BUSINESS ACTION TO STOP COUNTERFEITING AND PIRACY

(BASCAP), an initiative of the International Chamber of Commerce: FRONTIER ECONOMICS, “Estimating the global economic and social impacts of counterfeiting and piracy”,

http://www.iccwbo.org/Data/Documents/Bascap/Global-Impacts-Study-Full-Report, 61 p. 13 COM(2005)479 final, 3. 14 H. RUSE-KAHN, “A trade agreement creating barriers to international trade?: ACTA border

measures and goods in transit”, American University International Law Review 2011, vol. 26, 646. 15 For a very well-put explanation regarding the freedom of transit of goods within the EU, see:

ECJ C-115/02, Administration des douanes et droits indirects v. Rioglass SA, Transremar SL, §18,

view verdict at http://bit.ly/1B415c0. 16 A. KUR and T. DREIER, European Intellectual Property Law – Text, cases & materials,

Cheltenham, Edward Elgar Publishing, 2013, 462. 17 Emphasis added. View A. KUR and T. DREIER, European Intellectual Property Law – Text, cases & materials, Cheltenham, Edward Elgar Publishing, 2013, 462. 18 A. VERHAUWEN, “Border seizure proceedings” in M. HAEDICKE and H. TIMMANN (eds.), Patent

Law – A Handbook on European and German Patent Law, München, Verlag C.H. Beck, 2014, 976-977. 19 V. LAKSHMI, “Intellectual Property Protection at Border”, Journal of Intellectual Property

Rights 2009, 331.

http://www.iccwbo.org/Data/Documents/Bascap/Global-Impacts-Study-Full-Report

http://bit.ly/1B415c0

RICHARD STEPPE


namely the so-called ‘goods in transit’ (“GIT”), will account for the key

investigative matter within this essay. Finally, it is worth mentioning that a

recent study, commissioned by the International Chamber of Commerce,

estimated that – by 2015 – the global value of counterfeit and pirated goods

could reach as high as $1.77 trillion. 20 Adding to that the fact of 86.854

customs detention cases for suspected violations of IPRs at the EU external

borders in 2013, with a domestic retail value of € 768.227.929, it may be clear

that this topic will professedly provide food for a strongly actualized and

relevant essay.21

OUTLINE OF THE ESSAY (1): THREE-FOLD FOCUS – The main inquiry this essay

thus hopes to answer is the following: does the EU framework regarding

border measures against IPR-infringing GIT form a viable instrument and a

suitable compromise between the necessity of a fluent world trade, on the one

hand, and the ability of IPR-holders to enforce their rights and claims on the

other hand? Before dissecting the relevant framework so as to answer this

query, it is important to note that – due to set maximum essay limits – the

scope of this thesis will be limited by means of the following threefold focus:

(i) the relevant framework of the EUROPEAN UNION sensu stricto will be the

center of analysis and comparison, therefore generally disregarding

international initiatives such as the Anti-Counterfeiting Trade Agreement

(“ACTA”)22; (ii) the EU mechanism tackling IPR-infringing goods AT THE

OUTER BORDERS by means of the Border Measures23 will provide the main

focal point, thereby excluding other IPR infringement remedies such as the

Enforcement Directive 24 and (iii) while shortly touching on the general

background of EU border measures, I will mainly concentrate on the border

measures’ approach to the transit of goods with a non-EU destination, thus

excluding strictly intra-Community transit.25 In addition, the essay will mostly

deal with border measures in the light of trade mark rights. Nonetheless, the

20 View footnote 12 for more information about the study. View page 9 of the full report:

FRONTIER ECONOMICS, “Estimating the global economic and social impacts of counterfeiting and

piracy”, http://bit.ly/14TpoxB. 21 The statistics of 2014 have not yet been published. View nonetheless the (very detailed) 2013

statistics at the following link: EUROPEAN COMMISSION, “Report on EU customs enforcement of

intellectual property rights – Results at the EU border 2013”, http://bit.ly/17XEPqM, 7. 22 J. RAYNARD, “IP enforcement in Europe: acquis and future plans” in C. GEIGER, Constructing

European Intellectual Property – Achievements and new perspectives, Cheltenham, Edward Elgar

Publishing, 2013, 387. 23 Border Measures Regulations in plural, as in: the five generations of the Regulation. 24 Seeing as this Directive harmonizes the laws of Member States on the level of civil measures for IPR enforcement. See J. RAYNARD, “IP enforcement in Europe: acquis and future plans” in C.

GEIGER, Constructing European Intellectual Property – Achievements and new perspectives,

Cheltenham, Edward Elgar Publishing, 2013, 386. Also see the original legislative document, namely Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on

the enforcement of intellectual property rights, view http://bit.ly/1Ef98Uf. 25 For an interesting comparison between the IP protection of intra- and extra-Community transit, however, read pages 512-517 of H. RUSE-KHAN and T. JAEGER, “Policing Patents Worldwide? –

EC Border Measures Against Transiting Generic Drugs Under EC and WTO Intellectual Property

Regimes”, International Review of Intellectual Property and Competition Law 2009.

http://bit.ly/14TpoxB

http://bit.ly/17XEPqM

http://bit.ly/1Ef98Uf




latter focus is not intentional but rather caused by the largely trade mark-

oriented ECJ case law and the complementary legislative proposals. In each

case, sufficient attention will be given to the applicability of the current

measures to other IPRs such as patents and copyr ights.

OUTLINE OF THE ESSAY (2): INDEX – Having shortly reviewed the general logic

and ratio legis of border measures in this current part, part two will further

analyze the substance of the EU framework in the light of its general and GIT-

specific provisions. The second part will therefore contain an elaboration on

the relevant legislation and ECJ case law, while continually comparing and

cross-comparing the cases and legislative documents throughout the course of

the analysis. In part three, the essay will additionally provide the general

positives and negatives of the current GIT-framework, to then evaluate the

future legislative initiatives and their impact on the issues described in the

previous chapters. Part four will ultimately conclude by balancing out all the

parts of the essay. This thesis does not pretend to be exhaustive. The content of

the essay will nonetheless be highly thorough, detailed and researched upon so

as to provide the readers with as much relevant and structured information as

possible for them to form an own opinion regarding the current state of affairs.

The choice for an analysis of GIT may appear to be a logic one, as much ink

has been spilled about this subject throughout the last few years and the

importance of this topic can never be underestimated. It is, however, not an

easy subject: the legislation and case law behind the framework has been

uncertain, complicated and sometimes seemingly contradictory. The reality of

a necessary combination of multiple legislative instruments of a different

nature 26 , each addressing only a portion of the issue, as well as the

incorporation of the relevant case law, only adds to the challenging nature of

the framework. Nonetheless, this background only renders the framework even

more interesting and necessary to unravel.

2. DESCRIPTIVE OVERVIEW OF LEGISLATION

AND CASE LAW

2.1. GENERAL EVOLUTION OF BORDER MEASURES (PRO MEMORIA)

THE FIRST STEPS: SHORT OVERVIEW – The evolution of the European

framework regarding border measures originated as early as 1986 by means of

EC Regulation 3842/8627, allowing right-holders to initiate procedures in the

26 As will become clear throughout the essay, a combination of the Union Customs Code, the

Border Measures Regulation and the Trade Mark Directive or Regulation, completed with ECJ

case law, is to be invoked in order to fully understand the framework behind the approach to GIT. 27 Council Regulation (EEC) No. 3842/86 of 1 December 1986 laying down measures to prohibit

the release for free circulation of counterfeit goods, view http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:31986R3842&from=EN.

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31986R3842&from=EN


RICHARD STEPPE


cases of product importations that infringe trade mark rights. 28 While the

latter regulation did not encompass a new set of competences for customs to

start procedures, the regulation did constitute a – albeit generally considered

inefficient – first step in the further development of measures at EU borders.29

The scope of the 1986 Regulation was broadened eight years later via EC

Regulation 3295/9430, making the enactment of border measures additionally

available for the infringements of copyrights, neighboring rights and designs. 31 Border measures regarding infringements of patent rights and supplementary

protection certificates were subsequently added to the protected list in 1999

through an amendment32 of the 1994 Regulation, leading the framework to

encompass a truly wide scope.33

ADDITIONAL CONSOLIDATION AND AMPLIFICATION – The thus far existing

array of regulations was consolidated in 2003 in EC Regulation 138334 (which

goes by many names, such as but not limited to: the ‘Border Measures

Regulation’35 (which I shall N.B. use as the main term in this essay to address

the collectivity of the generations of border measures regulations), the ‘fourth

generation Regulation’36, the ‘Border Seizure Regulation’37, the ‘Counterfeit

28 S. KUMAR, “International Trade, Public Health, and Intellectual Property Maximalism: The Case

of European Border Enforcement and Trade in Generic Pharmaceuticals”, Global Trade and Customs Journal 2010, 158. 29 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER

(eds.), Enforcement of Intellectual Property Rights through Border Measures, Oxford, Oxford University Press, 2012, 67. 30 Council Regulation (EC) No. 3295/94 of 22 December 1994 laying down measures to prohibit

the release for free circulation, export, re-export, or entry for a suspensive procedure of counterfeit and pirated goods, view http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:31994R3295&from=EN. 31 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 68. 32 Council Regulation (EC) No. 241/1999 of 25 January 1999 amending Regulation (EC) No. 3295/94 laying down measures to prohibit the release for free circulation, export, re-export or

entry for a suspensive procedure of counterfeit and pirated goods, view http://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31999R0241&from=en. 33 S. KUMAR, “International Trade, Public Health, and Intellectual Property Maximalism: The Case

of European Border Enforcement and Trade in Generic Pharmaceuticals”, Global Trade and

Customs Journal 2010, 158 and A. KUR and T. DREIER, European Intellectual Property Law – Text, cases & materials, Cheltenham, Edward Elgar Publishing, 2013, 438, footnote 11. 34 Council Regulation (EC) No. 1383/2003 of 22 July 2003 concerning customs action against

goods suspected of infringing certain intellectual property rights and the measures to be taken

against goods found to have infringed such rights, view http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:196:0007:0014:EN:PDF. 35 O. VRINS and M. SCHNEIDER, “Cross-border enforcement of intellectual property: The European

Union” in P. TORREMANS (ed.), Research Handbook on Cross-border Enforcement of Intellectual

Property, Cheltenham, Edward Elgar Publishing, 2014, 213. 36 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 70. 37 A. VERHAUWEN, “Border seizure proceedings” in M. HAEDICKE and H. TIMMANN (eds.), Patent

Law – A Handbook on European and German Patent Law, München, Verlag C.H. Beck, 2014,

976.



http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31999R0241&from=en

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31999R0241&from=en

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:196:0007:0014:EN:PDF

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:196:0007:0014:EN:PDF




Goods Regulation’38 or the ‘Anti-Piracy Regulation’39) and was implemented

by means of EC Regulation 1891/2004 in the following year40. EC Regulation

1383/2003 set out the conditions and procedures for action for the competent

EU customs authorities when dealing with goods suspected of infringing

IPRs41 & 42 and allowed for border measures in an even wider series of IP

violations, such as infringements regarding trade marks, copyrights or related

rights, design rights, patents, supplementary protection certificates, national

plant varieties and protected geographical indications and designations43. In

2013, this Regulation was replaced and repealed by EU Customs Regulation

608/201344 (“the new Border Measures Regulation”). This regulation, which

will also be further analyzed throughout this essay, extends the scope of EU

border measures once more via inter alia the inclusion of actions against the

infringement of trade names, topographies of semiconductor products and

certain utility models45, as well as via new provisions46 regarding the use of

small consignments 47 for counterfeiting businesses. 48 The new Regulation,

38 G. THEUWS, “ECJ to decide on ‘manufacturing fiction’ under Counterfeit Goods Regulation”,

http://www.eplawpatentblog.com/PDF_December09/Fiction%20Geert%20Theuws.pdf, 1. 39 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS (eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014,

133. 40 Commission Regulation (EC) No. 1891/2004 of 21 October 2004 laying down provisions for the implementation of Council Regulation (EC) No. 1383/2003 concerning customs action against

goods suspected of infringing certain intellectual property rights and the measures to be taken

against goods found to have infringed such rights, view http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32004R1891&from=EN. 41 EUROPEAN COMMISSION, “Guidelines of the European Commission concerning the enforcement

by EU customs authorities of intellectual property rights with regard to goods, in particular medicines, in transit through the EU”,

http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_

piracy/legislation/guidelines_on_transit_en.pdf. 42 S. KUMAR, “International Trade, Public Health, and Intellectual Property Maximalism: The Case

of European Border Enforcement and Trade in Generic Pharmaceuticals”, Global Trade and

Customs Journal 2010, 158. 43 View article 2(1) of EC Regulation 1383/2003. 44 Regulation (EU) No. 608/2013 of the European Parliament and of the Council of 12 June 2013

concerning customs enforcement of intellectual property rights and repealing Council Regulation

(EC) No. 1383/2003, view http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:181:0015:0034:en:PDF. 45 Regarding the latter three examples, view preamble 5 of EU Regulation 608/2013. 46 COM(2014)12 final, 70. See also recital 17, article 2(1), article 26(1) e) and article 26(10) of EU

Regulation 608/2013. 47 Small consignments are defined as follows: “a postal or express courier consignment, which (a)

contains three units or less or (b) has a gross weight of less than two kilograms”. View article

2(19) Regulation 608/2013. 48 O. VRINS, “The EU policies and actions in the fight against piracy” in I. STAMATOUDI and P.

TORREMANS (eds.), EU Copyright Law – A commentary, Cheltenham, Edward Elgar Publishing,

2014, 838.

http://www.eplawpatentblog.com/PDF_December09/Fiction%20Geert%20Theuws.pdf



http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/legislation/guidelines_on_transit_en.pdf


http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:181:0015:0034:en:PDF


RICHARD STEPPE


applicable as of the 1st of January of 201449, additionally covers almost all

forms of IPR infringements.50

2.1. SPECIFIC EVOLUTION OF THE APPROACH TO GOODS IN TRANSIT

2.2.1. Principles and justifications of customs supervision

THE PRINCIPLE: EU CUSTOMS SUPERVISION – GIT, from an EU dimension, may

be defined as “goods which are in the process of being exported, re-exported

or leaving the [Union] customs territory”51 or as “goods moving from one

point located within the customs territory of the [Union] to another point

equally located within that territory, to be […] re-exported […] [afterwards]

outside the internal market”52. Under article 134 of the Union Customs Code53

(“UCC”), it is established that “goods brought into the customs territory of the

Union shall […] be subject to customs supervision and may be subject to

customs controls”. GIT are thereby placed under a so-called ‘suspensive

procedure54 – more particularly under the ‘external transit procedure’ – and are

therefore not subject to import duties or other charges or to any commercial

policy measures.55 Nonetheless, GIT are supervised by EU customs from the

moment of their entry in the EU56 until the time of EU (re-) export.57

49 EUROPEAN COMMISSION, “Customs action to tackle IPR infringing goods – Frequently Asked

Questions”, http://europa.eu/rapid/press-release_MEMO-13-738_en.pdf, 1. 50 Excluding, however, “parallel imports of goods produced by the right holder or under license from the latter and goods transported in personal luggage provided that there are no indications

to suggest that they are of a commercial nature”. View article 1(5) and preamble 4 of the new

Regulation. View also O. VRINS and M. SCHNEIDER, “Cross-border enforcement of intellectual property: The European Union” in P. TORREMANS (ed.), Research Handbook on Cross-border

Enforcement of Intellectual Property, Cheltenham, Edward Elgar Publishing, 2014, 213. 51 H. RUSE-KHAN and T. JAEGER, “Policing Patents Worldwide? – EC Border Measures Against Transiting Generic Drugs Under EC and WTO Intellectual Property Regimes”, International

Review of Intellectual Property and Competition Law 2009, 510. 52 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 80. 53 The Union Customs Code is the successor of the Modernized Customs Code and thus repeals the latter one. While the Code has already entered into force on the 30th of October, 2013, its

substantive provisions will only apply as of the 1st of May, 2016. See the text of the UCC:

Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013

laying down the Union Customs Code, view http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1. Also view the relevant page of the European Commission regarding the UCC:

http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/index_en.htm

(last consulted: 2 January 2015). 54 See A. VERHAUWEN, “Border seizure proceedings” in M. HAEDICKE and H. TIMMANN, Patent

Law – A Handbook on European and German Patent Law, München, Verlag C.H. Beck, 2014,

975. 55 Article 226(1) of the UCC. 56 Article 134(1), 1st paragraph of the Union Customs Code. 57 Article 134(1), 4th paragraph of the Union Customs Code.


http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0952&rid=1

http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/index_en.htm




SUPERVISION JUSTIFIED ON THE GROUND OF IPR. – Article 134 of the UCC

further specifies that goods brought into the EU customs territory can be

subject to prohibitions and restrictions justified on the ground of “the

protection of industrial or commercial property, including […] goods

infringing certain intellectual property rights”.58 Additionally, article 36 of the

Treaty on the Functioning of the European Union (“TFEU”) likewise mentions

the possibility of “restrictions on […] goods in transit justified on grounds of

[…] the protection of industrial and commercial property”. In that sense, the

Border Measures Regulations seem to merely convey a further specification of

the previous allocations of competence set out in e.g. the UCC and the TFEU. 59 The question may be raised, however, if the Border Measures Regulation in

itself is also applicable to goods if they are merely ‘in transit’.60

2.2.2. Early case law: Polo/Lauren and Rolex

‘EARLY’ CASE LAW: POLO/LAUREN AND ROLEX – Before the introduction of

Regulation 608/2013, it had already emerged that Regulations 1383/2003 and

3295/94 were both applicable to GIT. 61 Although article 1, a) stated that the

Regulation lays down “the conditions under which the customs authorities

shall take action where goods suspected of being counterfeit or pirated are

found when checks are made on goods placed under a suspensive procedure

within the meaning of […] [the] Community Customs Code”62, the European

Court of Justice (“ECJ”) nonetheless additionally decided to clear up an array

of doubts in the POLO/LAUREN COMPANY case. In this case, the ECJ confirmed

the applicability of Border Measures Regulation 3295/94 to GIT by stating that

the Regulation was applicable to suspensive procedures, and that “the term

‘[suspensive] procedure’ designates, inter alia, external transit” 63 . It

complementarily added that the mentioned regulation could also be invoked by

IP right-holders with a non-EU office.64 The court further confirmed this point

of view in the MONTRES ROLEX SA case65&66 and added that Regulation 3295/94

58 Article 134 of the Union Customs Code. 59 O. VRINS, “The real story of a fiction: transit after Montex under Regulation (EC) 1383/2003”, Journal of Intellectual Property Law & Practice 2010, 358. 60 A. KUR, “Harmonization of Intellectual Property Law in Europe: the ECJ Trade Mark case law

2008-2012”, Common Market Law Review 2013, 795. 61 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 81. 62 Emphasis added. 63 Emphasis added. See ECJ C-383/98, The Polo/Lauren Company, L.P. v. PT. Dwidua Langgeng Pratama International Freight Forwarders, §26, view verdict at http://bit.ly/1tPaDIk (further

referred to without URL). 64 ECJ C-383/98, The Polo/Lauren Company, L.P. v. PT. Dwidua Langgeng Pratama International Freight Forwarders, §27. 65 ECJ C-60/02, Rolex and others v. X., §56, view verdict at http://bit.ly/1AsUVlt (further referred

to without URL). 66 By virtue of the following ‘negative’ observation: “If the national court were to find that the

relevant provisions of national law do not prohibit and, thus, do not penalise the mere transit of

counterfeit goods through the Member State concerned, contrary none the less to the requirements

http://bit.ly/1tPaDIk

http://bit.ly/1AsUVlt

RICHARD STEPPE


applied to GIT regardless of whether civil, criminal or administrative remedies

have been sought.67

RATIO OF THE EARLY CASE LAW – The rationale behind both verdicts was that

it constitutes a legal fiction to state that GIT did not enter the internal market

when transported throughout the Community territory.68 As the ECJ observed,

such qualification might even bring about a “direct effect on the internal

market as there is a risk that counterfeit goods placed under the external

transit procedure may be fraudulently brought on to the Community market”.69

As the rationale behind these cases is easily transposable to Regulation

1383/2003, it had been quickly presumed that the latter regulation also

generally applies to every case of external transit – thus both encompassing

goods transported through the territory, but not meant for the EU, as well as

goods that are transported “from an external border to an internal customs

office”.70 However, some uncertainty already emerged as early as these two

cases, as POLO/LAUREN and ROLEX seemed notably difficult to reconcile with

the earlier ECJ RIOGLASS verdict, which stated that the transit of goods71 does

not “involve any marketing of the goods in question and is therefore not liable

to infringe the specific subject-matter72 of the trade mark”. 73&74

2.2.3. ‘Subsequent’ case law: Class International and Montex

A SEEMING DIFFERENCE IN THE ECJ’S OPINION – Further ECJ case law has,

however, proven this first-glance assumption to be at least incomplete. The

under Articles 2 and 11 of Regulation No 3295/94, it would be proper to conclude that those articles preclude the national provisions in question” – cf. case C-60/02, Rolex and others v. X.,

§58. 67 Which does not, however, mean that the Regulation determines any criminal liabilities. See ECJ C-60/02, Rolex and others v. X., §61. 68 T. COOK, EU Intellectual Property Law, Oxford, Oxford University Press, 2010, 742. 69 ECJ C-383/98, The Polo/Lauren Company, L.P. v. PT. Dwidua Langgeng Pratama International Freight Forwarders, §34. 70 A. VERHAUWEN, “Border seizure proceedings” in M. HAEDICKE and H. TIMMANN (eds.), Patent

Law – A Handbook on European and German Patent Law, München, Verlag C.H. Beck, 2014, 975-976. 71 In this case defined as “goods lawfully manufactured in a Member State to a non-member

country by passing through one or more Member States”. See ECJ C-115/02, Administration des

douanes et droits indirects v. Rioglass SA, Transremar SL, §27. 72 The subject-matter of the trade mark is thereby described as “to guarantee to the owner that he has the exclusive right to use that mark for the purpose of putting a product on the market for the

first time and thus to protect him against competitors wishing to take unfair advantage of the

status and reputation of the trade mark by selling products illegally bearing it”. See footnote 73

for source. 73 ECJ C-115/02, Administration des douanes et droits indirects v. Rioglass SA, Transremar SL,

§18. 74 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 93-94.




ECJ namely stated in CLASS INTERNATIONAL75 that the physical introduction of

GIT into the EU territory does not necessarily entail that the (in casu) trade

mark is ‘IMPORTED’ or ‘USED IN THE COURSE OF TRADE’ in the sense of the

wording in the Community Trade Mark Directive76 and the Community Trade

Mark Regulation77. In other words: the mere transit of a counterfeit good does

not necessarily signify an IPR infringement under the EU trade mark

framework. The owner of a trade mark can – as subsequently stated in the

MONTEX V. DIESEL case78 – only prohibit GIT from passing through a Member

State in which the trade mark is protected, if those goods are “subject to the

act of a third party” while being placed under the external transit procedure,

which “necessarily entails their being put on the market in the Member State

of transit”. 79 This exception – generally referred to as the ‘Montex

exception’80 – consequently signifies that the mere risk of the infringing goods

not arriving in the country of destination (where the goods are not trade mark-

protected), as well as the consequent possibility of the goods being

fraudulently marketed in the country of passage, is not sufficient to prohibit the

transit of the goods in question.81 Quite the opposite, “the risk of deviance to

the transit market must be manifest”.82

RIGHTS AND RESPONSIBILITIES OF THE PROPRIETOR – From the previous may be

deduced that, in order to prohibit the transit of goods infringing an IPR, it is

the right-holder’s obligation to prove (1) that the IPR-infringing goods, which

were originally not destined for the EU market, are nonetheless released for

free circulation in a Member State that protects the IPR in question or (2) the

existence of another act that involves their introduction to a Member State

market. 83 If the (in casu) trade mark proprietor is unable to provide the

75 ECJ C-405/03, Class International BV v. Colgate-Palmolive Company, Unilever NV, SmithKline

Beecham pic, Beecham Group pic, §44, view verdict at http://bit.ly/17NjFLS (further referred to

without URL). 76 First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the

Member States relating to trade marks, view http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1989L0104:19911223:EN:PDF. This has now been repealed as well as replaced by Directive 2008/95/EC, view http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:299:0025:0033:en:PDF. 77 See Council Regulation No. 40/94 on the Community trade mark, currently repealed and replaced by Council Regulation (EC) No. 207/2009 of 26 February 2009 on the Community trade

mark, view http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:078:0001:0042:en:PDF. 78 ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, view verdict at http://bit.ly/14FXncL

(further referred to without URL). 79 ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §23. 80 A. MICHAELS and A. NORRIS, A practical guide to trade mark law, Oxford, Oxford University

Press, 2014, 270. 81 ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §24. 82 H. RUSE-KHAN and T. JAEGER, “Policing Patents Worldwide? – EC Border Measures Against

Transiting Generic Drugs Under EC and WTO Intellectual Property Regimes”, International Review of Intellectual Property and Competition Law 2009, 515. 83 This was confirmed in the MONTEX case, yet had already earlier been set out in the CLASS

INTERNATIONAL case. View ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §26 and ECJ C-

http://bit.ly/17NjFLS

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1989L0104:19911223:EN:PDF

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1989L0104:19911223:EN:PDF





http://bit.ly/14FXncL

RICHARD STEPPE


necessary proof for any of these two requirements, this would – as also stated

in the CLASS INTERNATIONAL case84 – signify that the proprietor cannot oppose

“the […] entry into the Community of original goods bearing that mark which

have not already been put on the market in the Community previously by that

proprietor or with his consent” 85 and his IP rights would thus not be

‘exhausted’.86&87

2.2.4. Case law uncertainty and the quest for a possible solution

DIFFERENTIATING CASE LAW – Judging from the previous sections, it may be

noticeable how a seeming inconsistency has risen between – what I call88 – the

‘early’ and the ‘subsequent’ case law. While POLO/LAUREN and ROLEX indicate

the framework of EU border measures to be applicable to GIT without

question89, the CLASS INTERNATIONAL and MONTEX cases qualify the transit of

goods as not comprising an infringement, except for when specific conditions

are met. However, one might also not see it is an inconsistency, yet see it as

follows: the early cases set out a larger structure, which the subsequent case

law then further fills in and specifies. While it is indeed a matter of

perspective, the point remains that such case law may easily be prone to legal

and practical uncertainties. Another relative difference between the two

generations of cases may consist of the fact that the early cases are based on

the Border Measures Regulation and the – then still applicable – Community

Customs Code90, while the subsequent cases focused more on the Community

Trade Mark Directive and the Community Trade Mark Regulation and thereby

not so much on the Border Measures Regulation. 91 It may thus be stated that,

405/03, Class International BV v. Colgate-Palmolive Company, Unilever NV, SmithKline

Beecham pic, Beecham Group pic, §75. 84 ECJ C-405/03, Class International BV v. Colgate-Palmolive Company, Unilever NV, SmithKline

Beecham pic, Beecham Group pic, §33. 85 ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §20. 86 For an interesting contribution, as well as more information about the exhaustion of rights, view

J. DAVIS, “The ‘exhaustion approach’ to trade mark protection: a parallel universe or a better

way?”, Journal of Intellectual Property Law & Practice 2014, 742-749. 87 See also H. RUSE-KHAN and T. JAEGER, “Policing Patents Worldwide? – EC Border Measures

Against Transiting Generic Drugs Under EC and WTO Intellectual Property Regimes”, International Review of Intellectual Property and Competition Law 2009, 515. 88 Seeing the four-year difference between POLO/LAUREN and ROLEX. 89 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property Magazine May 2014, 34. 90 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property

Magazine May 2014, 34. 91 T. COOK, EU Intellectual Property Law, Oxford, Oxford University Press, 2010, 743 and C. DE

MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”, Journal

of Intellectual Property Law & Practice 2012, 346 and 348.




while POLO/LAUREN and ROLEX focused more on the ‘procedural’ aspects92,

CLASS INTERNATIONAL and MONTEX rather regarded the ‘substantive’ parts.93

THE MANUFACTURING FICTION (1): PRINCIPLE – A possible solution for the

aforementioned concerns was found by means of a combination of recital 8

and article 1094 of Border Measures Regulation 1383/2003. Recital 8 namely

states that “proceedings initiated to determine whether an intellectual property

right has been infringed under national law will be conducted with reference

to the criteria used to establish whether goods produced in that Member State

infringe intellectual property rights” and thereby lays down the main ratio

behind the so-called ‘MANUFACTURING FICTION’95. This ‘fiction’ represents the

assumption that GIT are manufactured in the Member State wherein the GIT

have been held back by customs96, even though it is not contested that they are

manufactured in a non-EU country97 and thus not in the Member State in

question. This signifies the following: GIT that do not infringe any IPRs in the

country of origin or in the country of destination could still be regarded as

infringing IPRs in the country of transit under the Border Measures

Regulation, because of the fact that – under the fiction – the goods are

regarded as manufactured within the transit Member State in question.98

THE MANUFACTURING FICTION (2): CRITICISM – While endorsed by some

authors, this new solution was also criticized as it appeared to be incompatible

with paragraph 40 of the MONTEX verdict, which stated that “none of the

provisions of Regulation No. 3295/94 introduces a new criterion for the

purposes of ascertaining the existence of an infringement of trade mark law or

to determine whether there is a use of the mark liable to be prohibited because

it infringes that law”99. While the substantive trade mark legislation100 did not

92 O. VRINS and M. SCHNEIDER, “Cross-border enforcement of intellectual property: The European Union” in P. TORREMANS (ed.), Research Handbook on Cross-border Enforcement of Intellectual

Property, Cheltenham, Edward Elgar Publishing, 2014, 213. 93 T. COOK, “Revision of the European Union Regime on Customs Enforcement of Intellectual Property Rights”, Journal of Intellectual Property Rights 2013, 487. 94 Article 10, in its first paragraph, states the following: “The law in force in the Member State

within the territory of which the goods are placed in one of the situations referred to in Article 1(1) shall apply when deciding whether an intellectual property right has been infringed under

national law”. 95 Also known as the “production fiction”, view ECJ Joined Cases C‑446/09 and C‑495/09, §53

(cf. infra, footnote 104 for full reference). 96 G. THEUWS, “ECJ to decide on ‘manufacturing fiction’ under Counterfeit Goods Regulation”, http://www.eplawpatentblog.com/PDF_December09/Fiction%20Geert%20Theuws.pdf, 2. 97 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014, 134. 98 X. SEUBA, Border Measures Concerning Goods Allegedly Infringing Intellectual Property

Rights: The Seizures of Generic Medicines in Transit, Geneva, International Centre for Trade and Sustainable Development, 2009, 11 and B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in

their tracks”, Intellectual Property Magazine May 2014, 34. 99 ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §40.

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RICHARD STEPPE


consider GIT as possibly IPR-infringing, this fiction would convey the

opposite approach and thereby even possibly cancel out the MONTEX verdict.101

This fiction complementarily bears the risk of obstructing legitimate

international trade transactions of goods passing through the territory of the

EU.102

2.2.5. The final verdict: joint cases Philips/Nokia

THE NEED FOR CLARITY – Considering the omnipresent character of doubt

regarding the ECJ case law and the proper approach towards GIT, a further

clarification of the ECJ became more than needed. Two EU courts – namely a

Belgian district court (via the case PHILIPS V. LUCHENG) and the Court of

Appeal for England and Wales (via the case NOKIA V. HMRC) – therefore

requested further information from the ECJ regarding inter alia (1) the

substantive court proceedings if a GIT was to be detained, (2) the

possibility of applying the manufacturing fiction and (3) the conditions under

which EU customs may impede the transit of goods. 103 Seeing their

interrelatedness, both cases were eventually joined in the ECJ PHILIPS/NOKIA

case.104

PHASE I: DETENTION OR SUSPENSION OF RELEASE – In the following

PHILIPS/NOKIA case verdict, the ECJ has firstly lowered the severity of the

aforementioned requirements of proof regarding the ability to invoke

detentions and suspensions of release.105 In order for EU customs to be able to

suspend the release of or detain GIT, it now suffices that there is ‘material’ that

gives rise to the suspicion that the GIT will be the subject of a commercial act

towards EU customers. 106&107 According to the ECJ, this so-called ‘material’

100 As in: the Trade Mark Directive and the Trade Mark Regulation. Cf. supra, footnotes 76 and 77

for further sources. 101 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”, Journal of Intellectual Property Law & Practice 2012, 347. 102 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014, 135. 103 For more details regarding the preliminary questions and factual background, see B.

WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS (eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014,

129-132. See also: C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a

safe harbour”, Journal of Intellectual Property Law & Practice 2012, 347-348. 104 ECJ Joined Cases C‑446/09 and C‑495/09: respectively Koninklijke Philips Electronics NV v.

Lucheng Meijing, Industrial Company Ltd, Far East Sourcing Ltd, Röhlig Hong Kong Ltd and

Röhlig Belgium NV; and Nokia Corporation v. Her Majesty’s Commissioners of Revenue and

Customs, view http://bit.ly/1yq02lz (further referred to as “ECJ Joined Cases C‑446/09 and C‑495/09”). 105 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property

Magazine May 2014, 35. 106 ECJ Joined Cases C‑446/09 and C‑495/09, §61. 107 The same principle counts for goods other than those placed under the external transit situation,

such as: customs warehousing or temporary storage, entry into free zones or free warehouses, and

http://bit.ly/1yq02lz




may consist out of “[1)] the fact that the destination of the goods is not

declared whereas the suspensive procedure requested requires such a

declaration, [2)] the lack of precise or reliable information as to the identity

or address of the manufacturer or consignor of the goods, [3)] a lack of

cooperation with the customs authorities or [4)] the discovery of documents or

correspondence concerning the goods in question suggesting that there is

liable to be a diversion of those goods to European Union consumers”108, as

long as the suspicions in question are based on the facts of the case109. In this

statement, I notice an additional recapture of the earlier MONTEX case law110:

the mere risk of the GIT being fraudulently introduced on the EU market is

thus not sufficient, as it would possibly lead to arbitrary detentions.111 In any

case, if this ‘material’ has been successfully provided, then the relevant

customs authorities must suspend the release or detain the GIT – placing right-

holders in a considerably more favorable position.112 However, the right-holder

will have to collect as much intelligence as possible regarding the possible

diversion to the EU market if he wants to succeed in his infringement claim113,

as there nonetheless still lies a heavier burden of proof on the right-holder in

the actual substantive proceedings.114

PHASE II: THE SUBSTANTIVE PROCEDURE – Secondly, the ECJ overrules the

proposed manufacturing fiction doctrine by stating that goods under a

suspensive procedure cannot be classified as pirated goods or counterfeits

merely because they fall under the latter procedure – with which it essentially

repeats its earlier verdicts in CLASS INTERNATIONAL and MONTEX.115&116 There

may, however, exist an infringement of IPRs if mentioned GIT constitute “the

subject of a commercial act directed at European Union consumers, such as a

transshipment. View O. VRINS, “Regulation 608/2013: Towards a more effective customs

enforcement of intellectual property rights?”, BMM Bulletin 2013, vol. 3, 127. 108 ECJ Joined Cases C‑446/09 and C‑495/09, §61. 109 ECJ Joined Cases C‑446/09 and C‑495/09, §62. 110 See for example §24 of the case. ECJ C-281/05, Montex Holdings Ltd v. Diesel SpA, §24. 111 This sentiment may find a second confirmation in §62 of the PHILIPS/NOKIA, stating that “If

[the] […] suspicion and the resulting action were capable of being based merely on the abstract

consideration that fraudulent diversion to European Union consumers cannot necessarily be ruled out, all goods in external transit or customs warehousing could be detained without the slightest

concrete indication of an irregularity. Such a situation would give rise to a risk that actions of the

Member States’ customs authorities would be random and excessive” – view ECJ Joined Cases C‑

446/09 and C‑495/09, §62. 112 ECJ Joined Cases C‑446/09 and C‑495/09, §78. 113 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014, 138. 114 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”,

Journal of Intellectual Property Law & Practice 2012, 349 and R. SCHOEFS, “Strijd tegen namaak: Douane schakelt een versnelling hoger met Verordening nr. 2013/608”, Nieuw Juridisch Weekblad

2014, 101. 115 ECJ Joined Cases C‑446/09 and C‑495/09, §56. 116 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”,

Journal of Intellectual Property Law & Practice 2012, 348.

RICHARD STEPPE


sale, offer for sale or advertising”. 117 In other words, there has to be specific

evidence displaying the possibility of fraudulent diversion to EU customers.118

Nonetheless, manufacturers of GIT cannot suffer dispossessions – such as the

destruction or abandonment of the goods – or penalties “on the sole basis of a

risk of fraud or on the basis of a fiction”.119 With the latter statement, the

query as to the existence of a ‘manufacturing fiction’ has been unmistakably

and expressly answered (negatively). 120

RATIONALE BEHIND THE JUDGMENT – The ECJ finally noted that “imitations

and copies coming from a non-member State and transported to another non-

member State may comply with the intellectual property provisions in force in

each of those States” and that an obstruction of goods’ ability to pass in transit

through EU territory would signify a considerable interference with the further

development of international trade. In that sense, interpreting Regulations

3295/94 and 1383/2003 as “permitting the detention of goods in transit

without the slightest indication suggesting that they could be fraudulently

diverted to European Union consumers” would constitute such an interference

and should therefore be avoided.121 It seems to me that the ECJ has thereby

taken the original philosophy of the concept of border measures into

consideration. A parallel can thus be struck with the prominence of balancing

out interests, which I have mentioned earlier in the essay: the task of EU

border measures is indeed to prevent IP-infringing products from entering the

EU channels of commerce and to ensure the ability of right-holders to enforce

their IPRs, yet these measures should never go as far as impeding legitimate

international trade. In any case, it is very clear how the ECJ incontestably

struggles to maintain the mentioned harmony between these two ‘extremes’122

and I highly support the seeming endeavor of the ECJ to preserve the original

philosophy behind the Border Measures Regulation. Nevertheless – and

despite the perceivable efforts taken – one might wonder if PHILIPS/NOKIA has

not tilted the aforementioned seesaw further in favor of international trade,

instead of providing a fitting enforcement of right-holders’ interests.

117 ECJ Joined Cases C‑446/09 and C‑495/09, §57. 118 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014, 135 and B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property

Magazine May 2014, 34. 119 Emphasis added. ECJ Joined Cases C‑446/09 and C‑495/09, §69. 120 M. RIEGER-JANSEN and M. MARELL, “Koninklijke Philips Electronics NV and Nokia

Corporation CJEU Judgment”, http://www.twobirds.com/en/news/articles/2010/nokia-newsflash (last consulted: 5 January 2015). 121 Emphasis added. ECJ Joined Cases C‑446/09 and C‑495/09, §63. 122 M. RIEGER-JANSEN and M. MARELL, “Koninklijke Philips Electronics NV and Nokia

Corporation CJEU Judgment”, http://www.twobirds.com/en/news/articles/2010/nokia-newsflash

(last consulted: 5 January 2015).

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2.2.6. Case law applicability to other IPRs and Regulation 608/2013

APPLICABILITY OF THE ECJ CASE LAW TO IPRS OTHER THAN TRADE MARKS –

Seeing as the heretofore analyzed case law mostly regarded trade mark rights,

one might wonder if the principles of PHILIPS/NOKIA and the other discussed

ECJ cases are likewise applicable to other IPRs. A short response may suffice

with regard to this question, as the European Commission has explicitly stated

that the relevant findings of the ECJ are applicable to other IPRs such as e.g.

copyrights, design rights and even patents.123 An explicit confirmation of this

statement may e.g. be shown by the recent 2014 Case C-98/13 BLOMQVIST V.

MONTRES ROLEX SA, wherein the ECJ stated the following:

“Goods coming from a non-member State which are imitations of goods

protected in the European Union by a trade mark right or copies of goods

protected in the European Union by copyright, a related right or a design can

be classified as ‘counterfeit goods’ or ‘pirated goods’ where it is proven that

they are intended to be put on sale in the European Union, such proof being

provided, inter alia, where it turns out that the goods have been sold to a

customer in the European Union or offered for sale or advertised to consumers

in the European Union.”124

Essentially, this quote echoes the principles set out in MONTEX, CLASS

INTERNATIONAL and PHILIPS/NOKIA, yet applies it to other IPRs. The principles

set out in the aforementioned ECJ cases shall also remain applicable to other

IPRs under the new Border Measures Regulation 125

NEW REGULATION 608/2013: QUID WITH PHILIPS/NOKIA? – As Regulation

608/2013 explicitly states that it “sets out the conditions and procedures for

action by the customs authorities where goods suspected of infringing an

intellectual property right are […] subject to customs supervision or customs

control within the customs territory of the Union in accordance with […] the

Community Customs Code” 126 , which particularly includes goods “placed

under a suspensive procedure”127, it appears that the new Border Measures

Regulation is likewise – continuing the trend of Regulations 1383/2003 and

123 EUROPEAN COMMISSION, “Guidelines of the European Commission concerning the

enforcement by EU customs authorities of intellectual property rights with regard to goods, in

particular medicines, in transit through the EU”, http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_

piracy/legislation/guidelines_on_transit_en.pdf, 2-3. 124 ECJ Case C‑98/13, Martin Blomqvist v. Rolex SA & Manufacture des Montres Rolex SA, view

at http://bit.ly/1IPPGju. 125 T. COOK, “Revision of the European Union Regime on Customs Enforcement of Intellectual Property Rights”, Journal of Intellectual Property Rights 2013, 488. 126 See article 1(1) EU Regulation 608/2013. 127 See article 1(1), c) EU Regulation 608/2013.



http://bit.ly/1IPPGju

RICHARD STEPPE


3295/94128 – applicable to GIT.129 EU customs authorities are thereby allowed

to act against goods of which there is a reasonable indication that they infringe

IPRs 130 , noting however that the mere transit of a good cannot by itself

establish an IPR infringement. 131 Regulation 608/2013 does thereby not

modify the approach laid down in the PHILIPS/NOKIA cases132, causing the

latter cases to remain entirely relevant. 133 Rather to the contrary, the

Regulation seemingly even reiterates the PHILIPS/NOKIA test for customs in

recital 15.134&135 EU customs authorities are therefore still to abide by the

conditions of PHILIPS/NOKIA. The manufacturing fiction – explicitly rejected in

PHILIPS/NOKIA – has conjointly disappeared in Regulation 608/2013, as I do

not seem to find any traces of the previous recital 10 of Regulation 1383/2003

(enshrining the infamous fiction) or any similar notions.

SUMMARY TABLE – For the sake of clarity, and previously to moving onto a

more normative analysis of the current framework, I shall conclude this part by

providing a recapitulative table so as to maintain a clear view on the overall

perspective.

128 M. SCHNEIDER and O. VRINS, “Regulation (EC) 1383/2003” in O. VRINS and M. SCHNEIDER


University Press, 2012, 81. 129 As is also confirmed by NORMAN: H. NORMAN, Intellectual Property Law Directions, Oxford,

Oxford University Press, 2014, 50. 130 View article 2(7) of Regulation 608/2013. 131 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 128. 132 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property Magazine May 2014, 35. 133 O. VRINS and M. SCHNEIDER, “Cross-border enforcement of intellectual property: The

European Union” in P. TORREMANS (ed.), Research Handbook on Cross-border Enforcement of

Intellectual Property, Cheltenham, Edward Elgar Publishing, 2014, 215, footnote 184. 134 Recital 15 namely states the following: “In order to ensure the swift enforcement of intellectual property rights, it should be provided that, where the customs authorities suspect, on the basis of

reasonable indications, that goods under their supervision infringe intellectual property rights,

they may suspend the release of or detain the goods whether at their own initiative or upon application, in order to enable a person or entity entitled to submit an application to initiate

proceedings for determining whether an intellectual property right has been infringed” (emphasis

added). 135 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation

and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice

2013, 773.




Polo/Lauren &

Rolex

Montex &

Class

International

Philips/Nokia

Suspension of release

or detention of GIT possible

under the Border Measures

Regulation?

Yes – broad EU

jurisdiction for

protection of

IPRs. However,

no guidance as

to when it would

apply.136

Specification:

yes, but only

if deviance of

GIT to

Member State

that protects

the IPR

Further

specification:

yes, if there is

material

giving rise to

the suspicion

that a

commercial

act will be

directed to

EU

consumers

(cf. the 4

examples by

the ECJ)

Conditions for classification

of GIT as IPR-infringing

No conditions

provided, but

national law that

does not

prohibit/penalize

GIT may be

disregarded

under the Border

Measures

Regulation.

Only if GIT

are the subject

of a

commercial

act directed at

European

Union

consumers,

such as a sale,

offer for sale

or

advertising.137

Only if GIT

are the subject

of a

commercial

act directed at

European

Union

consumers,

such as a sale,

offer for sale

or advertising

Manufacturing fiction possible? Not yet under

discussion

Uncertainty No

136 T. COOK, “Revision of the European Union Regime on Customs Enforcement of Intellectual Property Rights”, Journal of Intellectual Property Rights 2013, 487. 137 ECJ C-405/03, Class International BV v. Colgate-Palmolive Company, Unilever NV,

SmithKline Beecham pic, Beecham Group pic, §61.

RICHARD STEPPE


3. ASSETS, REMAINING ISSUES AND FUTURE

LEGISLATIVE INITIATIVES

3.1. NORMATIVE COMMENTS ON THE PRESENT FRAMEWORK

3.1.1. Assets of the current approach

ASSETS OF THE PHILIPS/NOKIA JUDGMENT – While the stipulations in

PHILIPS/NOKIA may perhaps sometimes be regarded as a mere confirmation of

the principles laid down in CLASS INTERNATIONAL and MONTEX, as well as more

general principles, the ECJ has nonetheless succeeded in taking away a portion

of the doubt that the previous case law had provoked.138 The earlier concern

that the CLASS INTERNATIONAL and MONTEX cases were perhaps more based on

the Community Trade Mark Directive and the Community Trade Mark

Regulation, and thus not on the Border Measures Regulation, has been cast

aside via the ECJ’s explicit references to the latter Regulation139 Moreover, the

chapter of the manufacturing fiction has been closed for good and EU customs

have received substantially more guidance regarding the conditions for the

detention of GIT.140 Additionally, the low requirements for detention (‘the

mere existence of an indication’) along with its liberal examples set out by the

ECJ, as well as the new obligation of EU customs to take action when the

requirements are fulfilled, are all highly favorable features for right-holders.141

ASSETS OF REGULATION 608/2013 – While some of the advantageous aspects

of the new Border Measures Regulation have already been mentioned, the

Regulation has certainly also incorporated other specific measures to deal with

GIT in particular.142 This may be illustrated by e.g. the new ability of EU

customs authorities to share information regarding potentially IPR-infringing

goods – including goods in transit – with countries outside the territory of the

EU (such as knowledge about: the nature and quantity of goods, the suspected

IPRs infringed, the origin and destination of the goods and the means of

transportation 143 ). 144 However, it remains unsure how this cross-border

138 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014,

129. 139 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”, Journal of Intellectual Property Law & Practice 2012, 348. 140 M. RIEGER-JANSEN and M. MARELL, “Koninklijke Philips Electronics NV and Nokia

Corporation CJEU Judgment”, http://www.twobirds.com/en/news/articles/2010/nokia-newsflash (last consulted: 5 January 2015). 141 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”,

Journal of Intellectual Property Law & Practice 2012, 348. 142 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 129. 143 View article 22(2) of Regulation 608/2013 for the complete list.





cooperation will be practically organized and whether the relevant customs

will truly take the opportunity to inform their third country colleagues when

necessary. 145 Furthermore, the Regulation also further extends the instruments

of right-holders to act against GIT 146 , increases the customs authorities’

assisting tasks with regard to right-holders 147 , improves the quality of the

information in the right-holders’ applications to action 148 and introduces a

directly applicable simplified procedure for rapid destruction of suspect goods

and GIT.149

3.1.2. Possible drawbacks of the current approach

ISSUES OF THE PHILIPS/NOKIA JUDGMENT: THE (HEAVY) BURDEN OF THE

PROOF – While the threshold for detention may thus be relatively low and

merely requires a suspicion, the opposite story is true for the substantive

procedures: as mentioned above GIT can namely only be categorized as

counterfeits if they are the subject of a commercial act directed at European

Union consumers, such as a sale, an offer for sale or an advertising.150 The

concern has therefore been raised that it might prove to be highly challenging –

if not impossible – to satisfy the heavy burden of proof established by the three

‘generations’ of case law. As DE MEYER and GOMMERS put it: “the IP holder

is not in possession of the information regarding the destination. When that

information is not provided to customs, customs may retain the goods—but

what’s next? How can hard and reliable information on the destination be

brought to the surface? Certainly not by the owner of the IP right”.151 In other

words: the risk exists that only the parties involved in the underlying

commercial transaction have the actual relevant knowledge that is demanded –

and those are generally not very eager to share the latter information.152

144 View recital 21 of Regulation 608/2013. Also cf. the very relevant article 1(2). View also J.

MORTON and T. SCOURFIELD, “EU customs detention in intellectual property cases: analysis of the latest statistics”, http://bit.ly/1tX5h8f, 3. 145 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 129. 146 N. MULDER and A. VOERMAN, “Greater protection against fake goods in EU as of 1 January

2014”, http://bit.ly/1IQbU4Q (last consulted: 11 January 2015). 147 R. CROZIER, “A further blow to counterfeiters”, http://www.clarkewillmott.com/news/1036/a-further-blow-to-counterfeiters (last consulted: 11 January 2015). 148 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 134. 149 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 134. 150 ECJ Joined Cases C‑446/09 and C‑495/09, §57. 151 C. DE MEYER and C. GOMMERS, “Urgent memo to the EU: don’t let transit be a safe harbour”,

Journal of Intellectual Property Law & Practice 2012, 349. 152 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation

and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice

2013, 771.

http://bit.ly/1tX5h8f

http://bit.ly/1IQbU4Q

http://www.clarkewillmott.com/news/1036/a-further-blow-to-counterfeiters


RICHARD STEPPE


ISSUES OF REGULATION 608/2013 (1): A SHORTFALL IN ADDRESSING

PHILIPS/NOKIA – While Regulation 608/2013 was anticipated to alleviate the

heavy burden of proof for right-holders laid out by the PHILIPS/NOKIA case, it

has nonetheless not met this expectation.153 The widespread legal opinion of

many authors154 is that the effect of PHILIPS/NOKIA has not been (properly)

addressed in Regulation 608/2013 and that “we will have to wait and see

whether the Commission’s trade mark proposals will be adopted in their

current form, so as to at least partly address this issue”155. I must hereby

mention that I could possibly live with the Council’s decision not to address

the issue of GIT in the Border Measures Regulation: after all, this regulation is

a procedural legislative instrument that does not create new substantive IPRs. 156 As, on the other hand, the issue of GIT is a substantive topic157, the latter

concern is most likely best dealt with on an according – likewise substantive –

level. The strength of Regulation 608/2013 thus lies in the powerful new tools

and competences it provides158, and needs to be viewed in correlation with

substantive intellectual property law in order to reach its full potential. 159

However, a major problem arises when neither procedural, nor substantive law

eventually tackles the seemingly unbalanced GIT framework – which is, at

153 DE BRAUW BLACKSTONE WESTBROEK, “New Anti-Piracy Regulation offers more protection

for IP right holders”, http://www.debrauw.com/newsletter/new-anti-piracy-regulation-offers-protection-ip-right-holders/?output=pdf, 2. 154 Such as the following ones: F. EIJSVOGELS, “The new Customs Regulation, the Commission’s

proposals relating to trademarks and transit – Back to previous Dutch practice?”, BMM Bulletin 2013, vol. 3, 139; KING & WOOD MALLESONS, “New customs enforcement regulation – some

improvements for brand owners”, http://bit.ly/1xRTdKw (last consulted: 11 January 2015); R.

CROZIER, “A further blow to counterfeiters”, http://www.clarkewillmott.com/news/1036/a-further-blow-to-counterfeiters (last consulted: 11 January 2015), O. VRINS, “The EU policies and actions

in the fight against piracy” in I. STAMATOUDI and P. TORREMANS (eds.), EU Copyright Law – A

commentary, Cheltenham, Edward Elgar Publishing, 2014, 838 and O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual property rights?”, BMM

Bulletin 2013, vol. 3, 119. 155 KING & WOOD MALLESONS, “New customs enforcement regulation – some improvements for brand owners”, http://bit.ly/1xRTdKw (last consulted: 11 January 2015). 156 See recital 10 of Regulation 608/2013, stating: “This Regulation solely contains procedural

rules for customs authorities. Accordingly, this Regulation does not set out any criteria for ascertaining the existence of an infringement of an intellectual property right”. Also view O.

VRINS and M. SCHNEIDER, “Cross-border enforcement of intellectual property: The European

Union” in P. TORREMANS (ed.), Research Handbook on Cross-border Enforcement of Intellectual

Property, Cheltenham, Edward Elgar Publishing, 2014, 213. 157 AIM, “Comments on transit controls of goods suspected of infringing IPRs”, http://www.aim.be/uploads/news_documents/14-01-

28_AIM_comments_on_transit_in_the_Trade_Mark_Package.pdf, 2. 158 Such as, but not limited to: a simplified procedure for destroying IPR-infringing goods, an expansion of the rights of right-holders regarding information provided by customs, provisions

concerning the destruction of counterfeits in small consignments, applicability to topographies of

semiconductor products, utility models. 159 For a comparable opinion, see B. MARTINET, “European Regulation Strengthens IP Protection”,

http://www.rmmagazine.com/2014/09/01/european-regulation-strengthens-ip-protection/ (last

consulted: 11 January 2015).

http://www.debrauw.com/newsletter/new-anti-piracy-regulation-offers-protection-ip-right-holders/?output=pdf

http://www.debrauw.com/newsletter/new-anti-piracy-regulation-offers-protection-ip-right-holders/?output=pdf

http://bit.ly/1xRTdKw




http://www.aim.be/uploads/news_documents/14-01-28_AIM_comments_on_transit_in_the_Trade_Mark_Package.pdf

http://www.aim.be/uploads/news_documents/14-01-28_AIM_comments_on_transit_in_the_Trade_Mark_Package.pdf

http://www.rmmagazine.com/2014/09/01/european-regulation-strengthens-ip-protection/




least at the time of writing this thesis160, the unfortunate case for essentially all

IPRs.

ISSUES OF REGULATION 608/2013 (2): AN EVEN HIGHER BURDEN OF PROOF

THAN PHILIPS/NOKIA – While the PHILIPS/NOKIA case law is thus still

applicable under the new Border Measures Regulations 608/2013, it has

emerged that Regulation 608/2013 might go even further than the ECJ

cases.161 Although the ECJ had indeed previously stated that it would – for the

substantive procedures – be sufficient to prove that the GIT are the subject of a

commercial act directed at European Union consumers, this requirement has

seemingly been narrowed down under the new Border Measures Regulation.

As the Regulation namely only allows EU customs to act against ‘goods

suspected of infringing an intellectual property right’162, the latter category

being defined as “goods with regard to which there are reasonable indications

that [they are the subject of an act infringing an IPR] in the Member State

where those goods are found”163, it is feared by some authors that these

provisions now leave out the possibility of invoking an infringement on the EU

market as was previously ruled by the ECJ case law.164 Consequently, the

Council now seemingly demands evidence of an infringement in the Member

State wherein the goods are detected by the competent customs.165 This –

perhaps largely overlooked, yet nonetheless highly unsettling – development

has led to strong statements, such as: “the revised Customs Regulation will

become effective as from 1 January 2014, after which holders of intellectual

property rights could, in our opinion, no longer act against goods in transit,

unless such goods were to be released for sale in the Member State in which

these are detained by the customs authorities”166 and “the new Regulation

might […] not be able to fulfil its ambition to keep fake products ‘off the Union

market’”167. I certainly believe authors VRINS, EIJSVOGELS, DE MEYER and

GOMMERS make a very plausible claim in their separate analyses regarding this

matter and – regardless of any possible counterarguments – it is evident that

160 However, it is to be expected that the issue will soon be dealt with for the category of trade

marks within the Trade Mark Reform Package. 161 F. EIJSVOGELS, “The new Customs Regulation, the Commission’s proposals relating to

trademarks and transit – Back to previous Dutch practice?”, BMM Bulletin 2013, vol. 3, 139. 162 See article 23 Regulation 608/2013. 163 Which differs from the provisions in Regulation 1383/2003 (namely article 10). Emphasis

added, view article 2(7) of Regulation 608/2013. View also: O. VRINS, “Regulation 608/2013:

Towards a more effective customs enforcement of intellectual property rights?”, BMM Bulletin

2013, vol. 3, 129. 164 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice

2013, 773. 165 F. EIJSVOGELS, “The new Customs Regulation, the Commission’s proposals relating to trademarks and transit – Back to previous Dutch practice?”, BMM Bulletin 2013, vol. 3, 139. 166 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation

and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice 2013, 774. 167 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 129.

RICHARD STEPPE


sufficient reasonable doubt has risen. It will therefore be crucial to track the

further development of this potential complication.

3.2. LEGISLATIVE AND OTHER INITIATIVES IN THE LIGHT OF GIT

THE NECESSITY OF ADDITIONAL LEGISLATIVE BACK-UP – From the former

discourse has hence emerged how the right-holders might face an

unreasonably heavy burden of proof under the ECJ case law, further

maintained under Regulation 608/2013. As the latter regulation is of an

essentially procedural nature, which has nonetheless also been seemingly used

as a shield to prevent a thorough change of the approach to GIT, an adequate

revision of substantive legislation could perhaps prove to be form more

effective solution (as I had proposed earlier). This idea has now been

envisaged in the 2013 Commission proposals to reform the EU trade mark

framework (“the Reform Package”) by means of an update of the Community

Trade Mark Directive and the Community Trade Mark Regulation.168

THE TRADE MARK REFORM PACKAGE (1): RELEVANCE – The Reform Package –

inter alia laying out (1) a proposal for a directive to approximate the laws of

the Member States relating to trade marks169 (“the proposal Directive”) as well

as (2) a proposal for a regulation amending Council Regulation (EC) No.

207/2009 on the Community trade mark170 (“the proposal Regulation”) – has

the ambition of constituting a trade mark modernization rather than a

revolution171, and counts amongst its general goals to improve the EU trade

mark registration systems so as to make them “cheaper, quicker, more reliable

and predictable” as well as to further enhance innovation stimuli for

businesses.172 Its most important aspect in the light of this essay, however,

consists of the objective to implement a superior framework of trade mark

protection in order to establish an efficient obstacle against the increasing

amount of counterfeits and fake GIT.173 More specifically, article 9(5) of the

proposal Regulation and article 10(5) of the proposal Directive are of

particular interest to the issue of GIT from a substantive point of view. The

two almost identical articles provide the right-holder with the possibility to

168 For more information about the Reform Package, view T. COOK, “European Union Trademark

Law and its Proposed Revision”, Journal of Intellectual Property Rights 2013, 283-286. 169 Proposal for a Directive of the European Parliament and of the Council to approximate the laws

of the Member States relating to trade marks (Recast), view http://bit.ly/15cXu0A. 170 Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No. 207/2009 on the Community trade mark, view http://bit.ly/1Aqa2cV. 171 EUROPEAN PARLIAMENT, “Hitting the mark: updating the rules for trade marks”,

http://www.europarl.europa.eu/news/en/news-room/content/20140222STO36701/html/Hitting-the-mark-updating-the-rules-for-trade-marks (last consulted: 13 January 2015). 172 These principles may be found in the following document: EUROPEAN COMMISSION, “Trade

marks: Commission proposes easier access and more effective protection”, http://europa.eu/rapid/press-release_IP-13-287_en.pdf, 1. 173 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property

Magazine May 2014, 35.

http://bit.ly/15cXu0A

http://bit.ly/1Aqa2cV

http://www.europarl.europa.eu/news/en/news-room/content/20140222STO36701/html/Hitting-the-mark-updating-the-rules-for-trade-marks

http://www.europarl.europa.eu/news/en/news-room/content/20140222STO36701/html/Hitting-the-mark-updating-the-rules-for-trade-marks

http://europa.eu/rapid/press-release_IP-13-287_en.pdf




take action against IPR-infringing GIT when an array of conditions is met.174

Article 10(5) of the proposal Directive by the Commission reads as follows:

“The proprietor of a registered trade mark [“of a European trade mark” in

the proposal Regulation] shall also be entitled to prevent all third parties

from bringing goods, in the context of commercial activity, into the customs

territory of the Member State [“of the Union” in the proposal Regulation]

where the trade mark is registered without being released for free circulation

there, where such goods, including packaging, come from third countries and

bear without authorization a trade mark which is identical to the trade mark

[“to the European trade mark” in the proposal Regulation] registered in

respect of such goods, or which cannot be distinguished in its essential aspects

from that trade mark.”175

The proposal would thus allow trade mark proprietors to act against goods

brought within the customs territory of a Member State, for nationally

registered trade marks, and within the customs territory of the European Union

for European trade marks. While it is undeniably true that this was already

possible under ECJ case law and Regulation 608/2013, the peculiarity lies in

the fact that trade mark right-holders would no longer need to deliver the proof

of a possible commercial act directed towards EU consumers. On the contrary:

the proprietor in question could prevent all third parties from bringing IPR-

infringing goods into the customs territories wherein his trade mark is

registered, even when those goods have not been released for free circulation

in the territory in question.176 It may be clear that this proposal would be able

to greatly expand the scope of possible actions against counterfeit goods and

could, in practice, additionally result in significantly tempering or even

overturning the PHILIPS/NOKIA verdict when it comes to registered trade marks. 177 The disparity between the remainders of the PHILIPS/NOKIA case and the

current proposals is remarkably visible: from the “inappropriately high

burden”178 to prove a commercial act to EU consumers, to the possibility of

acting against counterfeits without the goods necessarily being released for

free circulation in the EU. Fortunately according to some, unfortunately

according to others, the scope of the current proposals will of course be limited

to trade marks and will not (yet) regard any other IPRs such as patents,

174 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice

2013, 774. 175 Article 10(5) of the proposal Directive and 9(5) of the proposal Regulation. 176 B. WOLTERING, “Joined Cases C-446/09 and C-495/09” in P. CLAASSEN and J. KEUSTERMANS

(eds.), Landmark IP decisions of the European Court of Justice 2008-2013, Ghent, Larcier, 2014,

138 and footnote 38. 177 KING & WOOD MALLESONS, “New customs enforcement regulation – some improvements for

brand owners”, http://bit.ly/1xRTdKw (last consulted: 11 January 2015). 178 COM(2013)161 final, view http://bit.ly/1Aqa2cV, 8.


http://bit.ly/1Aqa2cV

RICHARD STEPPE


copyrights or designs. For the latter categories of IPRs, the current state of

affairs as set out by the ECJ and Regulation 608/2013 will still prevail.179

THE TRADE MARK REFORM PACKAGE (2): CURRENT DEBATES – The

Commission’s proposals are currently pending before the Council and the

Parliament and the final round of the correlating negotiations has recently been

postponed to January 2015. 180 While it is to be awaited what will finally

remain of the submitted articles – as the issue of GIT within this Reform

Package will be one of the main points of discussion at the (higher181) political

level182 – agreements have nonetheless already been reached on many issues,

including the treatment of GIT.183 The reality of the political debate may be

shown by the Parliament’s motion to modify articles 9(5) and 10(5) of

respectively the proposal Regulation and the proposal Directive by including

“Without prejudice to WTO rules, in particular Article V of the GATT184 on

freedom of transit” in front of the existing articles.185&186 This amendment,

initiated by the European People’s Party and the Progressive Alliance of

Socialists and Democrats, aims at avoiding exorbitantly high barriers to

international trade187 and was clearly introduced to meet the Parliamentary

criticism that a stricter regulation of counterfeits would disadvantage e.g.

European ports, airports and manufacturers of generic medicines 188 . The

European Parliament has also made other amendments to the Commission’s

179 T. COOK, “Revision of the European Union Regime on Customs Enforcement of Intellectual Property Rights”, Journal of Intellectual Property Rights 2013, 489 and C. DE MEYER and C.

GOMMERS, “The transit dilemma revisited: the new Customs Regulation and the legislative

package on trade marks”, Journal of Intellectual Property Law & Practice 2013, 775. 180 N. SALORANTA, “Trade marks negotiations to continue in January”,

http://www.europarl.europa.eu/news/en/news-room/content/20141216IPR02130/html/Trade-

marks-negotiations-to-continue-in-January (last consulted: 13 January 2015). 181 A few issues, including the approach to GIT, remained outstanding and had to be addressed at

“a higher political level”. View document 2013/0088(COD), http://bit.ly/1BF9XX6. 182 COMMITTEE ON LEGAL AFFAIRS, “Juri Report at the meeting of 1, 2 and 3 December 2014”, http://bit.ly/1BlgC9T, 13. 183 N. SALORANTA, “Trade marks negotiations to continue in January”,

http://www.europarl.europa.eu/news/en/news-room/content/20141216IPR02130/html/Trade-marks-negotiations-to-continue-in-January (last consulted: 13 January 2015). 184 The General Agreement on Tariffs and Trade, of which article V elaborates on what is

considered ‘goods in transit’ and the ‘freedom’ of such transit. 185 View the European Parliament legislative resolution of 25 February 2015 on the proposal for a

regulation of the European Parliament and of the Council amending Council Regulation (EC) No.

207/2009 on the Community trade mark, and the European Parliament legislative resolution of 25

February 2015 on the proposal for a directive of the European Parliament and of the Council to

approximate the laws of the Member States relating to trade marks (recast), respectively at http://bit.ly/1BkX2cy and http://bit.ly/1DEa4UT. 186 For a very concise and interesting contribution regarding the GATT perspective of the Border

Measures Regulation, see H. GROSSE RUSE-KHAN, “An international trade perspective on transit seizures”, BMM Bulletin 2013, vol. 3, 142-149. 187 B. ALAMINOS and M. OKER-BLOM, “Stopping fakes in their tracks”, Intellectual Property

Magazine May 2014, 35. 188 VAN BAEL & BELLIS, “Trade Mark Package Voted in EU Parliament – Changes Affecting

Goods in Transit”, Van Bael & Bellis on Belgian Business Law 2014, vol. 2,

http://www.vanbaelbellis.com/site/download.cfm?SAVE=9898&LG=1, 7.

http://www.europarl.europa.eu/news/en/news-room/content/20141216IPR02130/html/Trade-marks-negotiations-to-continue-in-January


http://bit.ly/1BF9XX6

http://bit.ly/1BlgC9T



http://bit.ly/1BkX2cy

http://bit.ly/1DEa4UT

http://www.vanbaelbellis.com/site/download.cfm?SAVE=9898&LG=1




original approach to GIT, currently embodied in e.g. recital 18 of the proposal

Regulation and recital 22 & 23 of the proposal Directive. These latter recitals

explicitly refer to Border Measures Regulation 608/2013 and more specifically

to the right thereby granted to the right-holder to act against IPR-infringing

GIT via the use of detention and destruction. Recital 18b in the proposal

Regulation additionally recapitulates the right-holder’s liability under article

28 of Regulation 608/2013 when the pertinent GIT are not found to be of an

infringing nature.

THE TRADE MARK REFORM PACKAGE (3): RECEPTION – The specific references

to Regulation 608/2013189, as well as the provisions allowing for facilitated

actions against non-released IPR-infringing goods, could certainly increase the

partnership between the ‘substantive’ trade mark framework and the

‘procedural’ Border Measures Regulation. Additionally, consideration may be

given to what I have mentioned earlier: the trade mark framework, as well as

Regulation 608/2013, are merely components of the powerful weapon that (in

casu trade mark) right-holders may invoke so as to preserve their IPRs.

Accordingly, the concept of border measures will solely work in its most

effective and efficient way if the interrelatedness of the constituting separate

instruments is fully accepted and properly enshrined within the legislative

framework. While DE MEYER states that he is unsure of the actual acceptance

of the Reform Package’s approach to GIT and that “another round of political

maneuvering is [undoubtedly] to be expected”190, I remain more hopeful. The

current proposals have been thoroughly prepared and consulted upon before

their official introduction in the pertinent EU bodies, thereby increasing their

likelihood of being widely accepted.191 The inclusion of references to both

Regulation 608/2013 as well as to article V of the GATT – both introduced by

the European Parliament – do thereby not affright me, yet further feed my

optimism regarding the potentially beneficial effects of the Trade mark Reform

Package. If anything, the references emphasize the fact that there should be no

substantive components without procedural ones, and that there should be no

protection of right-holders without bearing in mind the crucial balance that

needs to be struck between the enforcement of IPRs and the stimulation of

international trade transactions. I believe this proposal might indeed very well

achieve such a purpose and I thus look very much forward to seeing how this

Package further unravels. As the January negotiations appear to merely regard

the necessity of carrying out conclusive touches so as to ensure the quality,

comprehensiveness and coherence of the proposed instruments, we might

189 For the references in the proposal Regulation, view recitals 18a, 18b, 19 and article 9(4). For the references in the proposal Directive, view recitals 22a, 22b, 23 and article 10(4). 190 C. DE MEYER and C. GOMMERS, “The transit dilemma revisited: the new Customs Regulation

and the legislative package on trade marks”, Journal of Intellectual Property Law & Practice 2013, 775. 191 T. COOK, “European Union Trademark Law and its Proposed Revision”, Journal of Intellectual

Property Rights 2013, 285.

RICHARD STEPPE


already very soon be able to acknowledge whether any optimism regarding the

Package was justified.192

THE ‘BIGGER PICTURE’ – Previously to concluding this thesis, it is important

for the reader to comprehend that the discourse of this essay has analyzed

merely a few – albeit quite important – possible approaches to the issue of IPR

infringement via GIT. Accordingly, one must not forget to remain aware of the

larger international picture. That this latter picture does not always need to

involve legislative initiatives, but may also involve international cooperation,

may e.g. be shown by the recent ACTION PLAN CONCERNING EU-CHINA

CUSTOMS COOPERATION ON IPR 2014–2017193 which contains plans between

China and the EU for inter alia the “enhancement of cooperation between

Customs and other law enforcement authorities in order to dismantle

production and distribution networks of IPR infringing goods” and for the

“exchange of knowledge and experience of each other’s IPR enforcement

policies and practices”.194&195 Another noteworthy initiative may consist of the

recently adopted ‘EU CUSTOMS ACTION PLAN 2013–2017’, containing 10

specific measures regarding the enforcement of IPRs. These actions consist

e.g. out of strategies to tackle the trade of IPR-infringing goods, methods to

effectively implement and monitor EU customs enforcement of IPRs

legislation, as well as schemes to strengthen the cooperation between the

‘European Observatory on infringements of IPRs’ 196 and law enforcement

authorities.197 Consequently, it must not be forgotten that approaches such as

international cooperation by means of bilateral agreements, intellectual

192 A. KROOK and M. HOLLANDS, “Legal Alert – Update on the EU enforcement database and

other EU initiatives in the fight against the sale of counterfeit goods”, http://bit.ly/1zoyAHY (last

consulted: 12 January 2015). 193 View the original Action Plan at http://bit.ly/1AtfKuz. This action plan forms part of the

STRATEGIC FRAMEWORK FOR CUSTOMS COOPERATION BETWEEN THE EU AND CHINA, view

http://bit.ly/1xCImiP, 6 p. 194 EUROPEAN COMMISSION, “China”, http://bit.ly/1wiDZJr (last consulted: 13 January 2015). 195 The action plan focuses on 4 major points, namely: “the exchange of statistical information, the

creation of a network of customs experts in key-ports, the enhancement of cooperation with other enforcement administrations and development of partnerships with business communities”. View

EUROPEAN COMMISSION, “Customs action to tackle IPR infringing goods – Frequently Asked

Questions”, http://europa.eu/rapid/press-release_MEMO-13-738_en.pdf, 3. 196 The European Observatory on infringements of IPRs is an international network of experts and

specialist stakeholders, of which the objectives are to: “(1) provide evidence-based contributions

and data to enable EU policymakers to shape effective IP enforcement policies and to support

innovation and creativity; (2) provide data, tools and databases to support the fight against IP

infringement; (3) provide knowledge and learning programmes for IP and enforcement authorities as well as for businesses and IP practitioners; (4) develop initiatives to help innovators, creators

and businesses (especially SMEs) protect their IP rights and (5) design campaigns to raise

awareness of the value of IP and the negative consequences of IP infringement”. View https://oami.europa.eu/ohimportal/en/web/observatory/about-us (last consulted: 12 January 2015). 197 View COUNCIL OF THE EUROPEAN UNION, “Second yearly summary report on the state of

implementation of the EU customs Action Plan to combat IPR infringements for the years 2013 to 2017”, http://data.consilium.europa.eu/doc/document/ST-16696-2014-INIT/en/pdf, 2. For the

original communication, view: COM(2014)392 final,

http://ec.europa.eu/transparency/regdoc/rep/1/2014/EN/1-2014-392-EN-F1-1.Pdf.

http://bit.ly/1zoyAHY

http://bit.ly/1AtfKuz

http://bit.ly/1xCImiP

http://bit.ly/1wiDZJr


https://oami.europa.eu/ohimportal/en/web/observatory/about-us

http://data.consilium.europa.eu/doc/document/ST-16696-2014-INIT/en/pdf

http://ec.europa.eu/transparency/regdoc/rep/1/2014/EN/1-2014-392-EN-F1-1.Pdf




property dialogues, technical cooperation, as well as participation in

international fora such as the WTO and the WIPO, may conjointly prove to

play a notable role. 198&199

4. GENERAL CONCLUSION

Nearing the end of the essay, I hope to have provided the readers with

sufficient material so as to grasp a clear overview of the current state of affairs

and so as to further develop their own views regarding the sometimes puzzling

matter. Admittedly, the framework of EU border measures in the light of GIT

does not consistently establish the most comprehensible or intrinsically

coherent scheme. While the roots of this uncertainty have originated as early as

the POLO/LAUREN and RIOGLASS cases, further reinforced by the consecutive

ECJ case law and the new Border Measures Regulation, EU customs

legislation nonetheless remains a strong instrument – even amongst the

“strongest in the world”, according to the Commission in 2005.200

Nevertheless, the present reality has – and should – put us back with both feet

on the ground, since I do not perceive the contemporary GIT-structure to strike

an appropriate balance between effective IPR enforcement and the

preservation of international trade flows. This concern may for a large part

stem from the heavy burden of proof set by the ECJ, further toughened by

Regulation 608/2013: as liberal the conditions may be for a suspension or

release of goods, as remarkably onerous are the requirements in the actual

substantive proceedings. While the manufacturing fiction was thereby far from

an ideal solution, its undivided rejection by the ECJ has additionally not

improved the current conditions for right-holders to act against GIT. 201 IPR-

infringing GIT may consequently be able to avoid detrimental actions at the

EU customs in many, if not most cases.202

While I thus call for a certain sense of realism, I nonetheless most definitely do

not wish to induce any unwarranted pessimism. Quite to the contrary, I remain

hopeful and optimistic in relation to the possible assets of future initiatives, as

198 View pages 894-931 of the following source for more information about these techniques: O.

VRINS, “The EU policies and actions in the fight against piracy” in I. STAMATOUDI and P.


2014. 199 O. VRINS, “Regulation 608/2013: Towards a more effective customs enforcement of intellectual

property rights?”, BMM Bulletin 2013, vol. 3, 128. 200 COM(2005) 479 final, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52005DC0479&from=EN, 8. 201 F. EIJSVOGELS, “The new Customs Regulation, the Commission’s proposals relating to

trademarks and transit – Back to previous Dutch practice?”, BMM Bulletin 2013, vol. 3, 138. 202 O. VRINS, “The EU policies and actions in the fight against piracy” in I. STAMATOUDI and P.


2014, 934.

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52005DC0479&from=EN

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52005DC0479&from=EN

RICHARD STEPPE


shown by the great potential of the current Trade Mark Reform Package.

Although the new Customs Regulation may not provide an appropriate balance

between international trade and IPR enforcement, a combination of the latter

‘procedural’ Regulation with the ECJ case law and the ‘substantive’ Trade

Mark Reform Package – if adopted as mentioned above – may prove to be

highly advantageous for all parties involved. While this future reform would

indeed solely apply to trade marks, thereby leaving other IPRs to remain bound

by the current framework, it would certainly stand for a significant step in the

right direction. As was mentioned in the very first paragraph of this essay,

globalization has indeed irreversibly changed the international intellectual

property landscape. Nonetheless, with great change also comes great

opportunity – and I am looking very much forward to seeing how these

opportunities will be realized throughout the next couple of years.