3 October 2018Copyright

AG advises CJEU on IP rules for warehouse goods

Advocate general Manuel Sánchez-Bordona today advised Europe’s highest court to find that IP infringement occurs when goods which are identical to those being sold in a shop are stored in a warehouse by the seller.

The Swedish Supreme Court had referred the case to the Court of Justice of the European Union (CJEU), after trader Imran Syed appealed against a judgment which convicted him of selling clothing and accessories that featured protected images and motifs related to rock music.

The goods were also stored in an adjoining warehouse and a warehouse located in a southern suburb of Stockholm.

According to the attorney general of Sweden, Syed’s offence was twofold.

First, he was guilty of trademark infringement through importing the goods, selling them and storing them in both the shop and the warehouses. Second, Syed had infringed copyright by selling clothes featuring protected images.

The Court of First Instance sentenced Syed for trademark infringement, finding that the sale was not limited to the fake goods in the shop, but also the goods stored in the warehouse.

However, the court discharged Syed with regard to the fake goods that were stored in the warehouses and were not identical to the goods in the shop, as he had not offered them for sale.

Syed appealed against the judgment and the Swedish Patent and Market Court of Appeal partially upheld the appeal.

It overturned the finding of infringement on the stored goods that are identical to those sold in the shop, concluding that the possession of the goods in the warehouses didn’t constitute an attempt of preparation to commit the offence.

The attorney general appealed against the decision to the Supreme Court, arguing that the offer for sale of goods in a shop should also cover the offer for sale of identical goods that are stored in warehouses.

Syed objected to the appeal, arguing that active conduct to sell every specific object to the public is required.

The Supreme Court asked the CJEU to determine whether, where the fakes are offered for sale in a shop, there is also infringement of the author’s exclusive right of distribution in respect of identical goods stored in premises by the person selling the goods.

Today, in an opinion for the CJEU, Sánchez-Bordona concluded that identical goods stored by the seller infringe an author’s exclusive right to prohibit any form of distribution to the public.

“I consider that the offer to sell is not limited solely to the products exhibited in a given commercial establishment, but also applies to those that, identical to the latter, are stored temporarily in a warehouse of the seller and prepared for replacing products that are exhausted,” he said.

Sánchez-Bordona advised the CJEU to find that the author’s right to prohibit distribution extends to goods which are stored by a merchant and are identical to those being sold in a shop by the seller.

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