[Ip-health] EU Member States agree to include enforcement of EU trademarks on goods in-transit in new trademarks legislation

Baker, Brook b.baker at neu.edu
Thu Jul 24 09:42:12 PDT 2014

There is a good chance that the proposal contradicts the revised customs
regulation that allowed interception only when there was a risk of the
diversion of a nominally in-transit product into an EU country market.

This contradiction of pre-existing law is directly acknowledged in
8066/13, p. 7:
"According to the Court of Justice in the Philips/Nokia judgment12, 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."

Paragraph 22 of the Preamble specifies the purpose of interfering with
goods in transit for civil trademark infringement even where there is no
proof of infringement in the country of production or ultimate destination:

"(22)	With the aim of strengthening trade mark protection and combatting
more effectively, the proprietor of a registered trade mark should be
entitled to prevent
third parties from bringing goods into the customs territory of the Member
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 trade mark registered in respect of such goods."

The operative enforcement right of the trademark holders is set forth in
Article 10.5:

"5. The proprietor of a registered 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
Member State 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 registered
in respect of such
goods, or which cannot be distinguished in its essential aspects from that
trade mark."

As far as I can see, this regulation makes no direct reference to the new
EU border regulation that was supposed to protect goods in transit that
only violated fictive IP rights in the country of transit, unless there
was a likelihood of diversion into an EU market.  There is also no direct
acknowledgement of the TRIPS Agreement, which requires IP violations for
goods-in-transit to be assessed with respect to IP rights in the country
of destination, not the country of transit.

Hopefully, amendments will be forthcoming or that the regulation's
in-transit provisions will be challenged and invalidated in the future.

Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
Alternate NGOs Board Member UNITAID
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
skype: brook_baker
b.baker at neu.edu

On 7/24/14 11:32 AM, "Helle aagaard" <helle.r.aagaard at gmail.com> wrote:

>*EU Trademark reform: agreement on common Council position *
>For the past year the European Union has been working on a review of
>existing European trademark legislation. The review proposal from the
>European Commission introduced enforcement of the European trademark on
>goods in transit through the EU to other markets as a new tool for rights
>holders to combat counterfeiting.
>Despite intense advocacy by several NGOs warning of potential negative
>public health impacts, including MSF, the European Parliament adopted a
>position of supporting in-transit enforcement earlier this year. Yesterday
>EU Member States decided to support this approach also in spite of the
>in-transit provisions being highly controversial among several Member
>States who confidentially expressed clear opposition.
>The final legislative text will still need to be negotiated between the
>European Parliament and the Council, however, with both legislative
>chambers supporting in-transit provisions the chance of having it removed
>from the text is very small at this point.
>Instituting such enforcement policies without meaningful safeguards
>over-enforcement and abuse by rights holders will lead to barriers to
>movement of generic medicines  en route to patients in developing
>countries. Wrongful seizure and detention of generic medicines in transit
>can lead to harmful delays for people who need access to life-saving
>medicines. In addition, the detention and risk of destruction of medicines
>in transit can have a chilling effect on trade in generic medicines, and
>increase costs for generic manufacturers and suppliers or treatment
>providers such as MSF, which are required to take costly steps to avoid
>running afoul of overzealous IP enforcement.
>MSF has been advocating strongly for the removal if the in-transit
>enforcement provisions from the legalisation and we are therefore very
>disappointed to see that both the European Parliament and the EU Member
>States have chosen to maintain these provisions in the legislation. This
>will make the general IP enforcement climate in the EU disproportionately
>favour the interests of European rights holders, while ignoring public
>health interests of patients in developing countries. We also believe that
>the legislation, because of the threat to free movement of legitimate
>generic medicines, may be inconsistent with WTO rules and subject to
>dispute resolution. This concern has also been raised by some Member
>over the last couple of months.
>In September the European Council and the European Parliament will
>negotiate the final text, although there is little opportunity that the
>most harmful provisions will be removed from the final text.
>For additional info on the agreement reached yesterday please follow this
>For MSFs response to the Parliament position adoption in February:
>If you any questions please don't hesitate to get in contact.
>*Helle Aagaard*
>*EU Policy and Advocacy Advisor *
>*Médecins Sans Frontières - Access Campaign*
>*Mobile: +32.4.768.632.54*
>*Office: **+32.2.474.75.24*
>*Email: Helle.aagaard at msf.org <Helle.aagaard at msf.org>*
>*www.msfaccess.org* <http://www.msfaccess.org/>
>Ip-health mailing list
>Ip-health at lists.keionline.org

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