14 December 2018

Do goods in transit infringe an intellectual property right if there is no certainty that the goods will be sold in a country where the intellectual property right is valid? This was the central question in the Philips/Golden Shaver case, which dragged on for more than 15 years. On 22 October 2018, the Antwerp Court of Appeal ruled that the shavers in transit infringed the design right of Philips.

On 7 November 2002, the Belgian customs authorities had seized in the port of Antwerp a cargo of electric shavers from China. The shavers (named "Golden Shavers") had characteristics similar to a shaver protected by a registered design right of Philips in different countries, including in Benelux. Based on a presumption of counterfeiting, the customs authorities suspended the release of the goods and informed Philips.

Philips brought an action before the court of first instance of Antwerp for infringement of its registered design right. Philips argued that, on the basis of Article 6(2)(b) of Regulation (EC) no 3295/94 of 22 December 1994 (hereinafter "the old Customs Regulation"), the judge had to apply the fiction that goods being held in transit on Belgian territory and detained there by the Belgian customs authorities are deemed to have been manufactured in Belgium. 

The defendant argued that the Golden Shavers could not infringe the intellectual property rights of Philips as long as there was no evidence that they would be sold in the European Union. The court of first instance of Antwerp requested a preliminary ruling from the Court of Justice of the European Union in a judgment dated 4 November 2009. The court asked whether, on the basis of Article 6(2)(b) of the old Customs Regulation, the court – in its assessment of an infringement of an intellectual property right – may not take into account the temporary status/transit status of the goods, but must instead apply the fiction that the goods were manufactured in that same Member State and must decide by applying the law of that Member State whether the goods infringe the intellectual property right in question.

On 1 December 2011 the Court of Justice rejected the fiction that goods being held in transit in a Member State and detained there by the customs authorities of that Member State are deemed to have been manufactured in the same Member State (C-446/09).

The Court of Justice held that goods coming from a third country which are imitations of goods protected in the European Union by a trade mark right or copies of goods protected in the European Union by copyright, a related right or a design, cannot be classified as counterfeit goods or pirated goods merely on the basis of the fact that they are brought into the customs territory of the European Union under a suspensive procedure. These goods can, however, infringe the intellectual property right in question if it is proven that they are intended to be put on sale in the European Union. 

According to the Court, this is proven when it turns out that the goods have been sold to a customer in the European Union, or are offered for sale or advertised to customers in the European Union. Documents or correspondence which illustrate that diversion of the goods to the European Union is envisaged can also provide such proof. 

In its judgment of 14 February 2014, the court of first instance of Antwerp held that Philips had not brought evidence of the defendants' intention to divert the goods to customers in one of the Member States of the European Union where the design was registered. Philips lodged an appeal against this judgment. 

The Antwerp Court of Appeal decided in the appeal procedure that it was impossible for Philips to discover and prove the exact final destination of the shavers. The second defendant had always refused – and during the appeal procedure continued its refusal – to reveal the final destination of the goods. The Antwerp Court of Appeal held in its judgment of 2 October 2017 that Philips had demonstrated asufficiently likelihood that the defendants had the intention of diverting the Golden Shavers to the European Union. 

The Court of Appeal took into account, among other things, the CE marking on the shavers and their European plug, the use of European languages (French, English, German and Spanish) on the package, a fax from a defendant in which he declared his intention to offer the goods to customers in Europe, and an invoice that mentioned Antwerp as the final destination. 

The debates were subsequently reopened to allow the parties to take positions regarding the protection of the Philips shaver under design rights. The Court of Appeal eventually decided in its judgment of 22 October 2018 that the Golden Shavers constituted an infringement of the design rights of Philips. 

According to the Court of Appeal, the typical external characteristics of the casing and the handle of the shavers were not merely determined by their technical function but were the result of free choice by the designer. The Golden Shavers seamlessly copied these typical external characteristics. The Court of Appeal therefore decided that the Golden Shavers infringed the design right of Philips.