Nokia, Philips May Benefit From EU Ruling on Fakes in Transit
December 02, 2011, 1:53 AM ESTBy Stephanie Bodoni
(Updates with Nokia comment in fifth paragraph, Philips in 10th paragraph.)
Dec. 1 (Bloomberg) -- Nokia Oyj, Royal Philips Electronics NV and other companies seeking to protect their brands against counterfeit products entering the 27-nation European Union may benefit from the region’s top court setting limits on when EU customs officials can detain fakes in transit.
Counterfeit phones, as in the case concerning Nokia, can be intercepted when in transit through the EU if there is some proof they will be delivered within one of the bloc’s member nations. That proof should show the fake products have been sold to a customer in the EU, have been offered for sale or advertised in the EU or “where it is apparent from documents or correspondence” that the products are intended to be diverted to EU customers , the EU Court of Justice said in a ruling today.
Nokia is challenging the U.K.’s position that customs officials can’t seize fake products in transit through the EU without proof they will actually end up in one of the region’s countries. Espoo, Finland-based Nokia argued this risks making the EU a “safe harbor” for counterfeiters.
U.K. customs officials stopped a shipment of about 400 fake Nokia mobile-phone handsets and accessories in transit from Hong Kong to Colombia. While Nokia, the world’s largest maker of mobile phones, said the products were fakes, the U.K. officials said they couldn’t intercept them because they lacked evidence that they would be diverted back into the EU.
‘Secretive Nature’
The EU court “has recognized the secretive nature of traffickers in fake goods, who often exploit customs procedures,” said Lucy Nichols, director of brand protection at Nokia, and it “found that fake goods in transit should, under certain circumstances, be intercepted by Customs and has provided valuable guidance” on those situations.
Nokia’s case was referred to the EU court by the English Court of Appeal, which will now rule on the case based on today’s decision.
“In the light of this decision, Nokia believes that the U.K. Court of Appeal will agree that the circumstances of this consignment of fake phones justified its continued detention by customs,” Nichols said.
In a related case today involving Amsterdam-based Philips, the court said officials had more leeway to seize counterfeits if customs documents don’t name a final destination for products.
Undeclared
“The fact that the destination of the goods is not declared” or that there is a “lack of precise or reliable information as to the identity or address of the manufacturer or consignor of the goods” can be used as indications that the goods may ultimately be delivered to EU customers, the Luxembourg-based court said.
Philips said it was happy that the EU court “confirmed that customs must intercept infringing goods in transit when there are indications that these will be put on the EU market,” according to an e-mailed statement. “Philips is confident about a positive outcome of the case” which had been referred by a Belgian court “and sees this ECJ ruling as a positive development for consumers and IP owners in Europe.”
The cases are: C-495/09, Nokia Corporation v. Her Majesty’s Commissioners of Revenue and Customs, C-446/09, Koninklijke Philips Electronics NV v. Lucheng Meijing Industrial Company Ltd. and Others.
--Editors: Christopher Scinta, Peter Chapman
To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
