According to a recent judgement of the European Court of Justice, member states customs authorities would be entitled to act in cases where goods which are in transit on EU territory violate intellectual property rights protected in the European Union. The Court clarifies that for that purpose, it has to be demonstrated that there has been a commercial act directed to European consumers, such as advertising of these products in EU market.

The judgement of the European Court of Justice (ECJ) regarding the action of customs authorities in cases of counterfeit or pirated goods being in in transit in EU territory, answers two cases brought out by Belgian and British courts in which they questioned the ECJ about the action to be taken in cases where goods which breach intellectual property rights protected in the EU are in transit in the territory of the European Union. In these cases, goods were identified by customs authorities within the framework of inspections in the port of Antwerp and at London Heathrow Airport and affected products manufactured by Philips and Nokia, respectively.

In both cases, the companies whose intellectual property rights have been violated requested the customs authorities to take measures such as the destruction of the goods or the retention of the consignment itself. As these goods were in transit to third countries, customs authorities questioned the Court whether they could be classified as “counterfeit goods” or “pirated goods” under EU law, by the fact of being in EU customs territory without being released for free circulation.

In its ruling, the Court proceeds to clarify the circumstances under which the customs authorities of Member States may retain goods under a suspensive customs procedure. According to the Court, authorities may proceed to take action in the event that such goods infringing intellectual property rights protected in the EU have been subject to any commercial act aimed at European consumers, such as a sale or an advertising. Moreover, the Court considers that event in cases where there is not such an act of trade, customs authorities may intervene to retain the goods for which operators deem responsible for their manufacture, shipment or distribution are about to make such commercial act or if they hide their intentions in their regard.

Also, the Court clarified the elements to consider certain goods as “counterfeit” and “pirated” and considers that some goods for which it has not been proven, after substantive examination, that they are intended to be put on sale in the European Union cannot be classified as such. The sale of these products, offering for sale or advertising in the European Union are considered by the Court as evidence of this intention. However, the Court also reminds that if the detention of goods was not possible in grounds of such commercial evidences, they could still be seized for other reasons provided by the European Union Customs Code, such as health risk to consumers or security.