CJEU - Judgment C-583/12 Sintax Trading 9 Apr 2014

JUDGMENT OF THE COURT (Second Chamber)

9 April 2014 (*)

(Request for a preliminary ruling — Regulation (EC) No 1383/2003 — Measures to prevent counterfeit or pirated goods being placed on the market — Article 13(1) — Powers of the customs authorities to establish the infringement of an intellectual property right)

In Case C-583/12,

REQUEST for a preliminary ruling under Article 267 TFEU from the Riigikohus (Estonia), made by decision of 5 December 2012, received at the Court on 12 December 2012, in the proceedings

Sintax Trading OÜ

Maksu- ja Tolliamet,

THE COURT (Second Chamber),

composed of R. Silva de Lapuerta, President of the Chamber, J.L. da Cruz Vilaça, G. Arestis, J.-C. Bonichot (Rapporteur) and A. Arabadjiev, Judges,

Advocate General: P. Cruz Villalón,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the Estonian Government, by N. Grünberg and M. Linntam, acting as Agents,

– the Czech Government, by M. Smolek, acting as Agent,

– the European Commission, by B.-R. Killmann and E. Randvere, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 28 January 2014,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights (OJ 2003 L 196, p. 7).

2 The request has been made in proceedings between Sintax Trading OÜ (‘Sintax Trading’) and Maksu- ja Tolliamet (Tax and Customs Office, ‘the Customs Authorities’) concerning the refusal by the latter to grant the release of goods detained on suspicion that they infringed an intellectual property right although the right-holder had not initiated the proceedings to determine whether there had been an infringement of such a right.

Legal context

International law

3 The Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the Agreement establishing the World Trade Organisation (‘WTO’), signed at Marrakesh on 15 April 1994, was approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1) (‘the TRIPS Agreement’).

4 Part III of the TRIPS Agreement contains, in particular, Article 41(1) to (4), which provides:

‘1. Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

2. Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.

3. Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay. Decisions on the merits of a case shall be based only on evidence in respect of which parties were offered the opportunity to be heard.

4. Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions and, subject to jurisdictional provisions in a Member’s law concerning the importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case. …’

5 Article 42 of the Agreement provides:

‘Members shall make available to right holders … civil judicial procedures concerning the enforcement of any intellectual property right covered by this Agreement. …’

6 Article 49 of that agreement, entitled ‘Administrative Procedures’, is worded as follows:

‘To the extent that any civil remedy can be ordered as a result of administrative procedures on the merits of a case, such procedures shall conform to principles equivalent in substance to those set forth in this Section.’

7 According to Article 51 of that agreement, entitled ‘Suspension of Release by Customs Authorities’:

‘Members shall, in conformity with the provisions set below, adopt procedures … to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods … may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. …’

8 Under the heading ‘Notice of Suspension’, Article 54 of the TRIPS provides:

‘The importer and the applicant shall be promptly notified of the suspension of the release of goods according to Article 51.’

9 Article 55 of that agreement, under the heading ‘Duration of Suspension’, is worded as follows:

‘If, within a period not exceeding 10 working days after the applicant has been served notice of the suspension, the customs authorities have not been informed that proceedings leading to a decision on the merits of the case have been initiated by a party other than the defendant, or that the duly empowered authority has taken provisional measures prolonging the suspension of the release of the goods, the goods shall be released, provided that all other conditions for importation or exportation have been complied with; in appropriate cases, this time-limit may be extended by another 10 working days. …’

European Union law

10 Recitals 2, 5, 8 and 10 in the preamble to Regulation No 1383/2003 read as follows:

‘(2) The marketing of counterfeit and pirated goods, and indeed all goods infringing intellectual property rights, does considerable damage to law-abiding manufacturers and traders and to right-holders, as well as deceiving and in some cases endangering the health and safety of consumers. Such goods should, in so far as is possible, be kept off the market and measures adopted to deal effectively with this unlawful activity without impeding the freedom of legitimate trade. …

…

(5) Action by the customs authorities should involve, for the period necessary to determine whether suspect goods are indeed counterfeit goods, pirated goods or goods infringing certain intellectual property rights, suspending release for free circulation, export and re-export or … detaining those goods.

…

(8) Proceedings initiated to determine whether an intellectual property right has been infringed under national law will be conducted with reference to the criteria used to establish whether goods produced in that Member State infringe intellectual property rights This Regulation does not affect the Member States’ provisions on the competence of the courts or judicial procedures.

…

(10) It is necessary to lay down the measures applicable to goods which have been found to be counterfeit, pirated or generally to infringe certain intellectual property rights. …’

11 Article 1(1) and (2) of Regulation No 1383/2003 provides:

‘1. This Regulation sets out the conditions for action by the customs authorities when goods are suspected of infringing an intellectual property right in the following situations:

(a) when they are entered for release for free circulation …

(b) when they are found during checks on goods entering or leaving the [European Union] customs territory …

2. This Regulation also fixes the measures to be taken by the competent authorities when the goods referred to in paragraph 1 are found to infringe intellectual property rights.’

12 Article 2 of the regulation states:

‘1. For the purposes of this Regulation, “goods infringing an intellectual property right” means:

…

(b) “pirated goods”, namely goods which are or contain copies made without the consent of the holder of a copyright or related right or design right, regardless of whether it is registered in national law …

…

2. For the purposes of this Regulation, “right-holder” means:

(a) the holder of a trademark, copyright or related right, design right, patent, supplementary protection certificate, plant variety right, protected designation of origin, protected geographical indication and, more generally, any right referred to in paragraph 1; or

(b) any other person authorised to use any of the intellectual property rights mentioned in point (a), or a representative of the right-holder or authorised user.’

13 In Chapter II of that regulation, entitled ‘Applications for action by the Customs Authorities’, Article 4(1), in Section 1 thereof, concerning measures that the authorities may take before an application for action has been lodged, provides:

‘Where the customs authorities, in the course of action in one of the situations referred to in Article 1(1) and before an application has been lodged by a right-holder or granted, have sufficient grounds for suspecting that goods infringe an intellectual property right, they may suspend the release of the goods or detain them for a period of three working days from the moment of receipt of the notification by the right-holder and by the declarant or holder of the goods, if the latter are known, in order to enable the right-holder to submit an application for action in accordance with Article 5.’

14 Under Article 5(1) and (2) of Regulation No 1383/2003, in Section 2 of Chapter II, entitled ‘The lodging and processing of applications for customs action’:

‘1. In each Member State a right-holder may apply in writing to the competent customs department for action by the customs authorities when goods are found in one of the situations referred to in Article 1(1) (application for action).

2. Each Member State shall designate the customs department competent to receive and process applications for action.’

15 The first subparagraph of Article 8(1) of that regulation provides:

‘The decision granting the right-holder’s application for action shall immediately be forwarded to those customs offices of the Member State or States likely to be concerned by the goods alleged in the application to infringe an intellectual property right.’

16 Article 9 of that regulation is in Chapter III thereof and is entitled ‘Conditions governing action by the Customs Authorities and by the authority competent to decide on the case’. It is worded as follows:

‘1. Where a customs office to which the decision granting an application by the right-holder has been forwarded pursuant to Article 8 is satisfied, after consulting the applicant where necessary, that goods in one of the situations referred to in Article 1(1) are suspected of infringing an intellectual property right covered by that decision, it shall suspend release of the goods or detain them.

…

2. The competent customs department or customs office referred to in paragraph 1 shall inform the right-holder and the declarant or holder of the goods … of its action and is authorised to inform them of the actual or estimated quantity and the actual or supposed nature of the goods whose release has been suspended or which have been detained, without being bound by the communication of that information to notify the authority competent to take a substantive decision.

3. With a view to establishing whether an intellectual property right has been infringed under national law, … the customs office or department which processed the application shall inform the right-holder, at his request and if known, of the names and addresses of the consignee, the consignor, the declarant or the holder of the goods and the origin and provenance of goods suspected of infringing an intellectual property right.

…’

17 Article 10 of that regulation is worded as follows:

‘The law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1) shall apply when deciding whether an intellectual property right has been infringed under national law.

That law shall also apply to the immediate notification of the customs department or office referred to in Article 9(1) that the procedure provided for in Article 13 has been initiated, unless the procedure was initiated by that department or office.’

18 According to Article 13(1) of Regulation No 1383/2003:

‘If, within 10 working days of receipt of the notification of suspension of release or of detention, the customs office referred to in Article 9(1) has not been notified that proceedings have been initiated to determine whether an intellectual property right has been infringed under national law in accordance with Article 10 or has not received the right-holder’s agreement provided for in Article 11(1) where applicable, release of the goods shall be granted, or their detention shall be ended, as appropriate, subject to completion of all customs formalities.

This period may be extended by a maximum of 10 working days in appropriate cases.’

19 Article 14(1) of that regulation provides for the possibility to obtain the release of goods suspected of infringing design rights, patents, supplementary protection certificates or plant variety rights on provision of a security. Subparagraph 2 thereof provides:

‘The security provided for in paragraph 1 must be sufficient to protect the interests of the right-holder.

…

Where the procedure to determine whether an intellectual property right has been infringed under national law has been initiated other than on the initiative of the holder of a design right, patent, supplementary protection certificate or plant variety right, the security shall be released if the person initiating the said procedure does not exercise his right to institute legal proceedings within 20 working days of the date on which he receives notification of the suspension of release or detention.

…’

20 According to Article 17(1)(a) of Regulation No 1383/2003, in Chapter IV thereof, entitled ’Provisions applicable to goods found to infringe an intellectual property right’:

‘Without prejudice to the other legal remedies open to the right-holder, Member States shall adopt the measures necessary to allow the competent authorities:

(a) in accordance with the relevant provisions of national law, to destroy goods found to infringe an intellectual property right or dispose of them outside commercial channels in such a way as to preclude injury to the right-holder, without compensation of any sort and, unless otherwise specified in national legislation, at no cost to the exchequer.’

Estonian law

21 Under Article 39(4) and (6) of the Customs Code (tolliseadus):

‘(4) In respect of goods which are suspected of infringing an intellectual property right within the meaning of [Regulation No 1383/2003] concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights, the right-holder shall, on the basis of an examination of samples, provide a written evaluation within 10 days of notification of the retention of those goods. The right-holder shall not receive payment for providing the evaluation.

…

(6) The customs authorities shall without delay forward a copy of the evaluation obtained from the right-holder to the relevant person, who may within 10 days of receipt of the copy of the evaluation submit to the customs authorities written objections to the evaluation together with relevant evidence.’

22 Article 45(1) of the Customs Code, entitled ‘Goods to be seized’, is worded as follows:

‘The customs authorities shall seize and sell, destroy under customs supervision, or hand over free of charge under the procedure laid down in Articles 97 and 98 the goods referred to in Articles 53, 57 and 75 of [Council Regulation No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), as amended by Council Regulation (EC) No 1791/2006 of 20 November 2006 (OJ 2006 L 363, p. 1)].’

23 According to Article 6 of the Code of Administrative Procedure (haldusmenetluseseadus):

‘Every administrative body is obliged to elucidate the facts of essential significance in the matter which is the subject of the procedure and if necessary collect evidence thereon on its own initiative.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

24 Syntax Trading imported into Estonia bottles of bath products supplied by a Ukrainian company. When they were imported, Acerra OÜ (‘Acerra’) informed the Customs Authorities that those bottles infringed a patent registered in its name.

25 As a result, the Customs Authorities suspended the release for free circulation of the goods concerned in order to carry out a further investigation which revealed a strong similarity between the shape of the bottles imported and Acerra’s patent. Suspecting an infringement of an intellectual property right it seized the goods and requested an opinion from Acerra. The latter confirmed those suspicions.

26 On that basis, the Customs Authorities found that the goods infringed an intellectual property right within the meaning of Regulation No 1383/2003 and therefore, on 11 February 2011, it rejected the application by Syntax Trading to obtain the release of the goods.

27 Syntax Trading brought an action against the decision of the Customs Authorities before the Tallinna halduskohus (Administrative Court, Tallin), which was confirmed by a second judgment of 17 February 2011. Finding procedural irregularities, that court ordered the release of those goods. On another ground, that judgment was upheld on appeal by the Tallina ringkonnakohus (Court of Appeal, Tallin), which held that Article 10 of Regulation No 1383/2003 did not authorise the customs authorities to give a decision themselves as to the existence of an infringement of an intellectual property right. According to that court, in the absence of proceedings to establish whether there had been an infringement of Acerra’s intellectual property right, the Customs Authorities could not detain the goods after the expiry of the period prescribed to that effect by Article 13(1) of Regulation No 1383/2003.

28 Hearing an appeal in cassation by the customs administration, the Riigikohus (Supreme Court) is unsure as to whether that interpretation is well founded, since Estonian law authorises the Customs Authorities to conduct, themselves and on their own initiative, adversarial proceedings in order to give a decision on the merits as to the existence of an infringement of an intellectual property right. However, the referring court wishes to know whether national law is compatible with Regulation No 1383/2003.

29 In those circumstances, the Riigikohus decided to stay its proceedings and to refer the following questions to the Court of justice for a preliminary ruling:

‘1. May the “proceedings … to determine whether an intellectual property right has been infringed” referred to in Article 13(1) of Regulation No 1383/2003 also be conducted within the customs department or must “the authority competent to decide on the case” dealt with in Chapter III of the regulation be separate from the customs authorities?

2. Recital 2 in the preamble to Regulation No 1383/2003 mentions as one of the objectives of the regulation the protection of consumers, and according to recital 3 in the preamble a procedure should be set up to enable the customs authorities to enforce as effectively as possible the prohibition of the introduction into the European Union customs territory of goods infringing an intellectual property right, without impeding the freedom of legitimate trade in accordance with recital 2 in the preamble to the regulation and recital 1 in the preamble to Regulation (EC) No 1891/2004 of 21 October 2004 laying down provisions for the implementation of Regulation No 1383/2003 (OJ 2004 L 328, p. 16).

Is it compatible with those objectives if the measures laid down in Article 17 of Regulation No 1383/2003 can be applied only if the right-holder initiates the procedure mentioned in Article 13(1) of the regulation for determination of an infringement of an intellectual property right, or must it also be possible, for the effective pursuit of those objectives, for the customs authorities to initiate the corresponding procedure?’

The questions referred for a preliminary ruling

30 By its questions, which it is appropriate to examine together, the referring court asks essentially whether Article 13(1) of Regulation No 1383/2003 must be interpreted as not precluding the customs authorities from themselves initiating and conducting the proceedings referred to by that provision in the absence of an initiative on the part of the intellectual property right-holder.

31 As is clear from the provisions of Article 1(1) and (2) thereof, Regulation No 1383/2003 not only sets out the conditions for action by the customs authorities when goods are suspected of infringing intellectual property rights, but also the measures to be taken by the competent authorities when such goods are found to infringe those intellectual property rights.

32 As regards the conditions for action by the customs authorities when the goods are suspected of infringing intellectual property rights, Regulation No 1383/2003 provides, in Article 5 to 7 thereof, that that action is to be made on the application of the holder of the intellectual property right concerned, or on the initiative of the customs authorities, as is clear from Article 4 thereof, but under conditions which must enable the right-holder to lodge an application for intervention in accordance with Article 5 thereof.

33 As the Advocate General noted in point 25 of his Opinion, the measures suspending release or detaining goods suspected of infringing intellectual property rights that may be taken by the authorities are temporary in nature.

34 First, when they are applied on the initiative of the customs authorities, such measures are intended solely to enable the right-holder to lodge an application for action by the customs authorities in accordance with the procedures and under the conditions laid down in Article 5 et seq of Regulation No 1383/2003. Second, when they are adopted following such an application, they aim solely to enable the applicant to establish that he has initiated proceedings to determine whether there has been an infringement of an intellectual property right under national law.

35 In that connection, it must be recalled that, in accordance with Article 10 of Regulation No 1383/2003, the law in force in the Member State within the territory of which the goods are placed in one of the situations referred to in Article 1(1) is to apply when deciding whether an intellectual property right has been infringed under national law.

36 It must also be recalled, as is clear from Article 13(1) of that regulation that, if, within 10 working days of receipt of the notification of suspension of release or of detention, the customs office referred to in Article 9(1) has not been notified that proceedings have been initiated to determine whether an intellectual property right has been infringed under national law, in accordance with Article 10 of that regulation, release of the goods must be granted, or their detention is to be ended, as appropriate, subject to completion of all customs formalities.

37 The aim of those provisions is that the customs authorities are to draw the appropriate conclusions from the inaction of the holder of the intellectual property right concerned with respect to goods suspected of infringing such a right. However, they do not in themselves exclude proceedings to determine if there has been an infringement of an intellectual property right under national law from being commenced on the initiative of the customs authorities, in the absence of any initiative by the right-holder concerned.

38 Moreover, various provisions of Regulation No 1383/2003 confirm that interpretation.

39 The same is true as regards the second paragraph of Article 10 of that regulation which, laying down the conditions for the notification of the fact that the procedure provided for in Article 13(1) thereof has been initiated, concerns cases in which those proceeding are initiated by a customs department or office.

40 Similarly, Article 14(2) of Regulation No 1383/2003 expressly refers to cases in which such proceedings have been initiated otherwise than on the initiative of the right-holder concerned.

41 Furthermore, although it is true that the holder of the intellectual property right has an essential role so that the measures necessary in order to prevent the placing on the market of counterfeit and pirated goods are taken in its own interest (see, to that effect, Case C-223/98 Adidas EU:C:1999:500, paragraph 26), such a finding cannot prevent the customs authorities from taking any action, for the purposes of Regulation No 1383/2003, without the initiative of the right-holder.

42 Moreover, having regard to the aims of that regulation which, as is apparent from recital 2 in the preamble thereto, seeks to prevent the placing on the market of goods which, in addition to infringing intellectual property rights, deceive and in some cases endanger the health and safety of consumers, other persons than the holders of those rights may, in order to eliminate those risks, rely on an interest in establishing the infringement of such rights.

43 Therefore, Regulation No 1383/2003 does not seek only to protect private rights and interests but also to protect public interests.

44 In those circumstances, Article 13(1) of Regulation No 1383/2003 does not preclude the Member States from providing that the customs authorities may themselves initiate proceedings to determine whether there has been an infringement of an intellectual property right under national law.

45 As to the question whether the customs authorities may conduct those proceedings and adopt a decision on the merits in order to determine whether there has been an infringement of an intellectual property right under national law, it must be recalled that, according to Article 10 of Regulation No 1383/2003, it is the law in force in the Member State in which the goods are situated which will be applicable in order to make that determination.

46 It does not appear either from Article 13(1) of any other provision of Regulation No 1383/2003 that the EU legislature intended to require the Member States to reserve the powers to give a decision on the merits of a case to certain authorities.

47 By thus limiting itself to referring to the application of the law in force in the Member State concerned in order to determine whether there has been an infringement of an intellectual property right, the EU legislature has not, in principle, ruled out the possibility that an authority other than a judicial authority may be designated as the authority competent to give a decision on the merits of a case. Furthermore, the Court has already held that such powers may be entrusted to an authority other than a judicial authority (see, to that effect, Joined Cases C-446/09 and C-495/09 Philips EU:C:2011:796, paragraph 69).

48 It must be observed, in that regard, that it is clear from the provisions of the TRIPS Agreement, which, according to the settled case-law of the Court, forms an integral part of the European Union legal order (see, to that effect, Case C-180/11 Bericap EU:C:2012:717, paragraph 67), and in particular the provisions of Article 49 thereof, that the enforcement of intellectual property rights may be ensured in the context of administrative procedures on the merits of the case provided that they conform with the guarantees laid down in particular by Article 41 of that agreement.

49 In those circumstances, Regulation No 1383/2003 cannot be interpreted as precluding, in principle, a provision of national law which entrusts to an administrative authority the task of determining whether there has been an infringement of an intellectual property right. In the same way, it does not appear from any of the provisions of that regulation that the Member States are prevented from designating the customs authorities themselves for that purpose.

50 Although it is for the national legal order of each Member State to lay down the rules for the exercise of such powers, pursuant to the principle of procedural autonomy, that is so provided that such rules are not less favourable than those governing similar national actions and that they do not render practically impossible or excessively difficult the exercise of rights conferred by EU law, in particular by Regulation No 1383/2003 to the holders of intellectual property rights and to declarants, holders or owners of the goods concerned (see, to that effect, Case C-429/12 Pohl EU:C:2014:12, paragraph 23 and the case-law cited).

51 In particular, it is for the national legal order of each Member State, in accordance with the provisions of Article 41(4) of the TRIPS Agreement to give the parties to proceedings the possibility to request the review by a judicial authority of final administrative decisions.

52 Although, as is apparent from the order for reference, the national law at issue in the case in the main proceedings entrusts to the customs authorities the task of determining whether there has been an infringement of an intellectual property right, it is for the national court to ascertain whether the relevant decisions taken by that authority may be subject to appeal ensuring that the rights derived by individuals from EU law are safeguarded and, in particular, from Regulation No 1383/2003.

53 Having regard to the foregoing considerations the answer to the questions referred is that Article 13(1) of Regulation No 1383/2003 must be interpreted as meaning that it does not preclude the customs authorities, in the absence of any initiative by the holder of the intellectual property right, from initiating and conducting the proceedings referred to in that provision themselves, provided that the relevant decisions taken by those authorities may be subject to appeal ensuring that the rights derived by individuals from EU law and, in particular, from that regulation are safeguarded.

Costs

54 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

Article 13(1) of Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights must be interpreted as meaning that it does not preclude the customs authorities, in the absence of any initiative by the holder of the intellectual property right, from initiating and conducting the proceedings referred to in that provision themselves, provided that the relevant decisions taken by those authorities may be subject to appeal ensuring that the rights derived by individuals from EU law and, in particular, from that regulation are safeguarded.

[Signatures]

* Language of the case: Estonian.

CJEU, 9 Apr 2014, C-583/12 (Sintax Trading), ECLI:EU:C:2014:244.