25 February 2014Trademarks

EU Parliament approves ‘goods-in-transit’ powers

The European Parliament has unanimously backed powers for customs bodies to seize counterfeit goods travelling through the EU.

Until now, customs can detain only fake goods suspected of entering the single market, rather than those heading for beyond EU borders.

The changes, approved today, February 25, will allow authorities to seize goods destined for non-EU countries too. They should make it easier to prevent fakes from entering other markets as well as being diverted back to the single market.

EU lawmakers approved the changes by 631 to 19, while 25 abstained. The draft law was already informally agreed with national governments.

According to the parliament, less than one percent of the proceeds of crimes such as counterfeiting is frozen and confiscated.

"Our priority must be to follow the money across borders and confiscate criminals' profits. Only then can we hope to reduce serious crime,” said rapporteur Monica Luisa Macovei.

In a statement, a number of business and IP organisations, including the International Trademark Association and Marques, said the changes are “robust”.

“We salute this vote and the political courage of MEPs Marielle Gallo and Bernhard Rapkay who sponsored the transit provisions which were adopted today. With this vote, the European Parliament signals that it is serious about stopping trademark counterfeits to protect consumers everywhere and that the EU should show leadership in the global fight against counterfeiting,” it said.

The current rules on detaining only goods that are likely to enter the single market were formed in 2011, when the Court of Justice of the European Union made its Philips/Nokia ruling.

“The Philips/Nokia ruling was right in law, but wrong in practice,” said David Stone, partner at Simmons & Simmons LLP. “It meant that counterfeit goods passing through the EU couldn’t be stopped, because they technically weren’t on the EU market. I don’t know about you, but I don’t think it’s right to allow known counterfeit brake pads, pharmaceuticals, car parts or even boot polish to be sent on to other countries. The European Parliament was right to fix this anomaly.”

The new provisions are not expected to affect the trade of legitimate goods under the EU’s international obligations under the World Trade Organization.

The draft law is part of a wider review, set in motion last year by the European Commission, of EU trademark legislation. Other proposals include changing the name of the Office for Harmonization in the Internal Market (OHIM) to the European Union Intellectual Property Agency.

In a study published in September, OHIM and the European Patent Office claimed that trademark-intensive industries account for 21 percent of all jobs and 34 percent of all GDP in the EU.

The European Council is set to approve the parliament’s changes in the “coming weeks”. Then, member states will have 30 months to incorporate the provisions into their national laws.

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