Phones not on hold

Just out this morning and freshly available on BAILII is Mr Justice Kitchin's judgment n Nokia Corporation v Her Majesty's Commissioners of Revenue & Customs [2009] EWHC 1903 (Ch), in which he dismissed Nokia's application for judicial review of HMRC's refusal to detain a consignment of counterfeit 400 Nokia phones and accessories under the Counterfeit Goods Regulation (Regulation 1383/2003), which has been incorporated into UK law by The Goods Infringing Intellectual Property Rights (Customs) Regulations 2004 (SI 2004/1473).

Right: phoning from Colombia, Geraldine was baffled to discover that her brand new Nokia wasn't living up to her expectations ...

The items in question were on their way from Hong Kong to Colombia -- neither of which are countries within the European Union -- and it was during a brief transitory stop at London's Heathrow Airport that they were inspected and found to be fakes. "Detain these goods!", said Nokia. "Can't", said HMRC, which "had difficulty in understanding how goods could be counterfeit within the meaning of the Counterfeit Goods Regulation unless there was evidence that they might be diverted onto the EU market".

After an extensive recitation and review of the law, Kitchin J got straight to the heart of the issue:

"Clearly any power of arrest or detention of goods by HMRC must be exercised in accordance with law. It must have a clear basis for interfering with the property of a third party".

The judge then reviewed the not insubstantial ECJ case law and summarised it as follows:

"49. ... First, infringement of registered trade mark requires goods to be placed on the market and that goods in transit and subject to suspensive customs procedures do not, without more, satisfy this requirement. ...

50. Second, the position is different if the goods in the transit procedure are subject to the act of a third party which necessarily entails their being put on the market (“the Montex exception”). But the burden of establishing this rests on the trade mark proprietor.

51. Third, a mere risk that the goods may be diverted is not sufficient to justify a conclusion that the goods have been or will be put on the market.

52. Fourth, the Counterfeit Goods Regulation has not introduced a new criterion for the purposes of ascertaining the existence of an infringement of a registered trade mark or to determine whether there is a use of the mark which is liable to be prohibited".

Applying these four principles, Kitchin J could only refuse the application for judicial review and express his regret:

"80. ... I recognise that this result is not satisfactory. I can only hope it provokes a review of the adequacy of the measures available to combat the international trade in fake goods by preventing their transhipment through Member States".

The IPKat shares the judge's sentiments. Merpel adds, the same ruling presumably applies equally to situations in which the goods in question are fake brake pads, counterfeit medicines or, which is just as serious, tainted cat food. A review of both the policy and the mechanics of implementation of the detention of goods is certainly in order.

MP4 players stopped in their tracks

The IPKat has heard from his friends at international IP firm Howrey that earlier this month in Sisvel v Sosecal, the President of the District Court of The Hague ruled confirmed that, notwithstanding that unhelpful ruling of the European Court of Justice in Case C-281/05, Montex Holdings Ltd v Diesel SpA (noted in "Diesel can't strip Montex of its trousers", here, by the IPKat), you can still seize transit goods in the Netherlands under Council Regulation 1383/2003 -- the provision that allows the suspensive detention of goods when they enter the European Union so that you can find out if they're infringing or not.

Montex v Diesel appeared to rule that detention was not possible where the allegedly infringing goods were not intended for the country through which they were being transported and where they were destined for release into the market in another country in which their marketing would be lawful. But in Sisvel v Sosecal (July 18, 2008) the President of the court disagreed.

What actually happened was this: the Dutch customs detained a stock of MP4 players under Council Regulation 1383/2003. These players came from China, were intended for South America and were re-loaded in The Netherlands, where they were detained by customs. Sosecal said that, since the players were only in transit in the Netherlands, they couldn't be seized.

Left: if ECJ rulings won't prevent seizure of transit goods, try painting them with "anti-seize"!

The President however concluded that Montex v Diesel was a trade mark case while the alleged infringements before him involved patents. In any event, Montex v Diesel only dealt with the interpretation of the trade mark harmonization directive (Directive 89/104), not with the provisions of Council Regulation 1383/2003. He also held that the ECJ's ruling in Case C-383/98 Polo Lauren v Dwidua should be read as holding that the right of suspensive detention under an earlier Regulation that Council Regulation 1383/2003 replaced remained applicable -- and there was nothing in Montex v Diesel to suggest that the ECJ had changed its mind.

The IPKat is surprised at this analysis. It doesn't accord with his view of the thrust of the ECJ's decisions in Montex v Diesel or Case C- Class International v Colgate, and he wonders if it could survive an appeal. Merpel says, isn't Sisvel a licensor of much-loved Dutch electronics giant Philips? But this couldn't be of any bearing ...

Combat seizures here
Seize the day here
How not to spell seize here