The EU has recently released its new proposal for an update of its substantive trademark protection regime. The proposal has interesting language specifically addressing the conditions under which goods in transit infringe – regardless whether they actually are destined for a domestic market of one of the EU member states – substantive EU trademark law. This has significant implications for the ability of right holders to request for their detention, based on EU border measure regulations (BMR): To the extent such transit goods infringe the law of the EU transit country, it appears that they may be subject to detention and seizure under the BMR.
The new proposal addresses goods in transit in its introduction, in recital 18 and especially in an enhanced substantive scope of protection in Art.9 (5) of the draft regulation:
Introduction (p.9):
“6. Goods brought into the customs territory
According to the Court of Justice in the Philips/Nokia judgment, the entry, presence and movement of non-EU goods in the customs territory of the EU under a suspensive procedure does, under the existing acquis, not infringe intellectual property rights as conferred by substantive law of the Union and its Member States. Such goods can only be classified as counterfeit once there is proof that they are subject of a commercial act directed at EU consumers, such as sale, offer for sale or advertising. The implications of the Philips/Nokia judgment have met with strong criticism from stakeholders as placing an inappropriately high burden of proof on rights holders, and hindering the fight against counterfeiting. It is evident that there is an urgent need to have in place a European legal framework enabling a more effective fight against the counterfeiting of goods as a fast-growing activity. It is therefore proposed to fill the existing gap by entitling right holders to prevent third parties from bringing goods, from third countries, bearing without authorization a trade mark which is essentially identical to the trade mark registered in respect of those goods, into the customs territory of the Union, regardless of whether they are released for free circulation.”
Recital 18:
“(18) With the aim of strengthening trade mark protection and combatting counterfeiting more effectively, the proprietor of a European trade mark should be entitled to prevent third parties from bringing goods into the customs territory of the Union without being released for free circulation there, where such goods come from third countries and bear without authorization a trade mark which is essentially identical to the European trade mark registered in respect of such goods.”
and especially Art 9(5):
“5. The proprietor of a European trade mark shall also be entitled to prevent all third parties from bringing goods, in the context of commercial activity, into the customs territory of the Union 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 European trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark.” (emphasis added)
The full text of the new TM regulation is available here.
It sounds as if now there is no more the need for any sort of evidence that the goods are destined for any of the EU markets (a la Nokia judgement of the ECJ and previous case law). As soon as the goods are counterfeit (the draft adopts the same approach as in Art.51, fn.14 TRIPS) and pass through a member state, this as such amounts to an infringement and hence can be subject to seizure under the Border Measure Regulation.
Unless the BMR review adopts specific safeguards for medicines in transit, this new widened scope of trademark protection may also have implications for their seizure. As long as generic medicines contain a trademark identical (or essentially similar) to a trademark registered in the EU, then even their mere transit is an infringement under the new rules. A trademark holder may hence rely on the BMR to detain such medicines.
Of course, if the generic medicines are using International Nonproprietary Names (INNs) as brands or use other signs which are not identical or essentially the same to a protected trademark, then they should fine. Whether that is a sufficient safeguard against seizure of generics akin to those which led to the WTO dispute by India/Brazil against the EU, remains to be seen. I could imagine that these developments will be of specific interest for India – for the MoU that has put its WTO dispute on hold, and for its current negotiations for an FTA with the EU.
