Court agrees with Rolex: Watch will be destroyed
“As long as it’s for your private use, you’ll be fine”.
This used to be the phrase residents of the EU sought comfort in, when buying counterfeit goods from countries outside the EU, often from Chinese websites. But with a new ruling from the Court of Justice of the European Union (case C-98/13, Rolex v. Blomqvist) the tables have turned - and future online shoppers may be forced to hand over illegal goods for destruction, even though the purchase was done outside the EU and for personal use only.
In January 2010 Martin Blomqvist, a resident of Denmark, purchased a watch described as a Rolex watch from an online shop in China. The order was placed through the seller's English website and the watch was shipped to Denmark. Upon its arrival in Denmark, the Danish custom authorities inspected the parcel and decided to suspend customs clearance and retain the parcel, as they suspected that it was a counterfeit product. Both Rolex and Martin Blomqvist was informed, as the rules prescribe.
Rolex quickly established that the watch was in fact counterfeit, and asked Martin Blomqvist to give his consent to its destruction. Martin Blomqvist refused this, stating that he had bought the watch legally for his private use. Rolex then took him to the Danish Maritime and Commercial Court, seeking a judgment for destruction of the watch without any compensation. The court granted Rolex’s claim, but Martin Blomqvist appealed to the Danish Supreme Court.
The court was, however, unsure whether or not any IP rights had been infringed in Denmark, seeing as it had been established that Martin Blomqvist bought the watch for personal use, something that infringes neither Danish copyright law nor trademark law (personal use is excempt in the legislation). The question to be answered by the court was therefore, whether or not any distribution to the public or use in the course of trade had taken place. The court decided to seek a preliminary ruling from the Court of Justice of the European Union (CJEU).
The Danish Supreme Court asked the CJEU a series of questions to determine the interpretation and scope of both copyright and trade marks Directives. They asked whether or not the mere purchase from a website in a third country outside the EU is enough to constitute distribution to the public or use in the course of trade, when the goods are sent to a private purchaser with an address known to the vendor in a member state where the goods are protected - or if it is also a condition that the goods prior to the sale have been the subject of advertisement targeted at consumers in the member state in question.
The CJEU gave its verdict, determining that the legislation must be interpreted as meaning that the holder of an IP right over goods sold to a person residing within a member state through an online shop in a non-member state enjoys the protection already by virtue of the purchase of the goods. Therefore it is not necessary, in addition, for the goods to have been subject to any advertisement targeting consumers of that state.
This means that owners of IP rights, such as Rolex, can ask for the destruction of counterfeit goods, even when they are bought outside the EU for personal private use, as the protection comes into force as soon as the goods arrive in a member state.
The CJEU’s verdict binds the Danish Supreme Court, making the destruction of Martin Blomqvist’s watch inevitable.