Customs declaration is a TM infringement
A trademark right consists of many things – e.g. the sole right to sell, import and export goods under your brand – so called “commercial use” of the trademark. But what if the commercial use wasn’t intended - if the violation of a trademark wasn’t done on purpose? A new ruling from the Danish Maritime and Commercial Court might have the answer.
Back in 2003, the French company Beauté Prestige International S.A. (hereafter Beauté Prestige) entered into agreement with a Turkish distributor. The distributor obtained the right to sell perfumes from Beauté Prestige – including perfumes from the popular brand Jean Paul Gaultier. Some years later in 2008, however, the distributor went bankrupt. Beauté Prestige tried to get their perfumes back, but the estate sold the lot to a Turkish buyer, who then resold the lot to the Danish company Scan Everest S.M.B.A. (hereafter Scan Everest).
The perfumes were shipped to Denmark, where they were declared. After the perfumes had gone through customs declaration, they were retained by the Danish customs authorities, as they suspected that the goods might be counterfeit. The customs authorities contacted Beauté Prestige, who took Scan Everest to court for violation of Beauté Prestige’s trademark rights.
Beauté Prestige stated that Scan Everest was guilty of trademark violation, as Scan Everest had brought the perfumes in question into the market of the EU without authorisation – an infringement of the Danish Trademark Act article 4, which gives the trademark owner the sole right to use the trademark in the course of trade.
Scan Everest argued that the perfumes weren’t intended for sale within the EU, as they were supposed to be repacked on new pallets and shipped off to a buyer in Cyprus. The goods were therefore only in transit, and the declaration they had undergone was a mistake. As the declaration – and thereby the infringement – wasn’t intended, Scan Everest did not see any violation of the Danish Trademark Act.
The question to be answered by the Danish Maritime and Commercial Court was therefore, whether or not the customs declaration of the perfumes if self meant that the goods had been put on the market within the EU.
The court’s ruling was mainly based on the fact that Scan Everest had actually been asked about the declaration of the goods when the perfumes first arrived in Denmark – and that Scan Everest were said to have agreed to the declaration, even though no declaration was needed for the goods in transit.
The court therefore found that the declaration of the goods was evidence of use in the course of trade – and therefore an infringement of Beauté Prestige’s rights. Beauté Prestige was therefore entitled to demand the perfumes in question to be handed over for destruction.
Furthermore, Beauté Prestige asked for compensation and damages in the total sum of 100.000 DKK. The court, however, found the amount too high, and instead fixed the amount to be 10.000 DKK – 5 % of the turnover from Scan Everest’s intended sale to the Turkish buyer. In addition, Scan Everest was required to pay 35.531 DKK in legal costs.
The case determines that customs declaration is considered use in the course of trade – even if the declaration was not intended. One could, however, imagine that the case would have had a different outcome, had Scan Everest clearly told their shipping agent that no declaration should happen. However, as long as the importer admits that he may have agreed to the declaration, the customs declaration it self constitutes a violation.