Case C-583/12, Sintax Trading – who decides whether imported goods infringe design rights?

For the purposes of the EU’s counterfeit goods Regulation No 1383/2003, who is to decide on whether the design of 64 000 bottles of mouthwash imported into Estonia from Ukraine infringes a registered design in Estonia?

The Republic of Estonia maintains a database of designs, and in February 2010 OÜ Acerra registered the design of a bottle.

In December 2010, the claimant company OÜ Sintax Trading was sent a consignment of 64 000 bottles of mouthwash from a company in the Ukraine.

On 6 December 2010, OÜ Acerra informed the Estonian tax and customs authority that Sintax was trying to import bottles which corresponded to Acerra’s protected design. On 23 December, Estonian customs launched an investigation into the goods sent to Sintax Trading. Estonian customs decided that the goods corresponded to Acerra’s bottle design and suspected intellectual property rights were being infringed. Consequently, customs impounded the goods in a customs warehouse on 27 December, and it invited Acerra to inspect the goods. On inspection, Acerra believed the goods were identical to its design  and that there should be no attempt to put these onto the market in the Community’s customs territory. Sintax Trading made a formal objection to customs, and requested the goods’ release.

In February 2011, Sintax Trading petitioned an Estonian court in Harju to have Acerra’s design right revoked.

And in response to customs’ continued refusal to release the goods, Sintax Trading wrote to the customs authority stating its belief that the goods did not fall within the definition of ‘pirated goods’ in Article 2(1)(b) of Regulation 1383/2003 (concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights).

In turn, the Estonian customs authority merely justified its position by referring to Article 14(1) of the Regulation because releasing the goods onto the market would infringe Acerra’s IP rights.

Sintax Trading escalated the dispute to the administrative division of the Tallinn district court, and was successful before it. The goods were ordered to be released. However, the court was also of the opinion that an infringement of an intellectual property right could  be ascertained either by a judicial procedure initiated by the right holder, or by the customs authorities in accordance with proceedings in administrative law. As such, customs’ informing a third party in this way could be said to constitute the first stage of the customs authorities in a procedure concerning intellectual property law, and that this complies with Article 13 of the EC Regulation.

On appeal, the Ringkonnakohus upheld the judgment but perfected a part of the legal reasoning. That is to say, it recalled Advocate General Cruz Villalón’s Opinion in C-446/09, Philips (paras 39-41, 103 and 105), and the CJEU’s judgment (paras 61 and 75), and it noted that customs authorities do not enjoy competence on the basis of Article 10 of the Regulation to take a substantive decision on whether the intellectual property rights of interested third parties have been infringed or not. In the present situation, Acerra should have asked for a judicial declaration from the Estonian court in Harju that its rights were being infringed.

On appeal to the Estonian Supreme Court, the customs authority submitted that the Ringkonnakohus had been wrong to conclude that Regulation 1383/2003 did not enable the customs authorities to make a substantive finding of intellectual property right infringement in the context of an administrative law procedure. That court had omitted a provision of the customs code. And the court’s interpretation undermined the effective implementation of the prohibition in the Regulation because if the right holder did not enforce his rights before the court in Harju, customs would not be able to protect consumers.

Questions Referred
According to the Curia website, the Estonian Supreme Court has asked:

‘May the ‘proceedings … to determine whether an intellectual property right has been infringed’ referred to in Article 13(1) of Regulation No 1383/2003 also be conducted within the customs department or must ‘the authority competent to decide on the case’ dealt with in Chapter III of the regulation be separate from the customs?

Recital 2 in the preamble to Regulation No 1383/2003 mentions as one of the objectives of the regulation the protection of consumers, and according to recital 3 in the preamble a procedure should be set up to enable the customs authorities to enforce as effectively as possible the prohibition of the introduction into the Community customs territory of goods infringing an intellectual property right, without impeding the freedom of legitimate trade in accordance with recital 2 in the preamble to the regulation and recital 1 in the preamble to implementing regulation No 1891/2004.  Is it compatible with those objectives if the measures laid down in Article 17 of Regulation No 1383/2003 can be applied only if the right-holder initiates the procedure mentioned in Article 13(1) of the regulation for determination of an infringement of an intellectual property right, or must it also be possible, for the effective pursuit of those objectives, for the customs authorities to initiate the corresponding procedure?’

Update – 17 December 2013
The Second Chamber is due to hear Advocate General Cruz Villalón’s Opinion on 9 January 2014.

Update – 12 January 2014
The Opinion is now scheduled for 28 January 2014.

Update – 20 March 2014
The CJEU’s judgment is due out on 9 April 2014.

Update – 10 April 2014
According to the Curia website, the operative part of the judgment in Sintax reads:

Article 13(1) of Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights must be interpreted as meaning that it does not preclude the customs authorities, in the absence of any initiative by the holder of the intellectual property right, from initiating and conducting the proceedings referred to in that provision themselves, provided that the relevant decisions taken by those authorities may be subject to appeal ensuring that the rights derived by individuals from EU law and, in particular, from that regulation are safeguarded.