CJEU to claify dispute between Barcardi and Mevi on customs duty suspension arrangements

10 January 2013

Lara van Huizen, Armand Killan

On 30 October 2012 the Court of Appeal The Hague requested the Court of Justice of the European Union (CJEU) to provide clarification regarding goods under Bonded Warehouse status and the implications for the trade mark holder.

The dispute between Bacardi and Mevi concerns the seizures by Bacardi of (real) Bacardi products at Mevi, a company which deals with warehousing and transshipment of products. Part of the seized Bacardi bottles had a T1 status and the bottles were partly placed under duty suspension arrangements in a Bonded Warehouse. According to Bacardi, the Bacardi products in question had not been brought into the European Economic Area (EEA) with its permission.

The main issue is the question of when goods are considered to be ‘imported’ within the meaning of the Trademarks Directive and more specifically, whether Bonded Warehouse goods are regarded as 'imported', which requires use of the mark in the course of trade.

Background

There is a clear difference between T1 goods and Bonded Warehouse goods. T1 goods are, in short, non-Community goods (while awaiting transport) that remain under customs supervision (external transit procedure) and are neither subject to duties nor to commercial policy measures. Bonded Warehouse goods (AGP-goederen) are goods on which customs duties have been paid (and that are technically in free circulation), but which are placed under a duty suspension arrangement. A bonded warehouse is a warehouse authorised by Customs authorities for the storage of goods for which payment of duties is deferred until the goods are removed.

The case in discussion

With regard to the T1 status goods, the Court of Appeal The Hague, in discussing whether goods in transit are considered to fall within the trademark owner’s exclusive right to prevent others from importing goods bearing the trademark, referred to the Class International case(C-405/03, Oct.18, 2005).  In this case the CJEU ruled that the mere physical entering of goods into the EU does not constitute an act of ‘import’ which a trademark proprietor may prohibit when the goods are not assigned for free circulation.

Therefore, ‘importing’ within the meaning of the Trademarks Directive requires introduction of the relevant goods into the Community for the purposes of placing such goods on the Community market and must be distinguished from ‘importing’ for customs law purposes. The Bacardi bottles under T1 status (in transit) therefore did not infringe upon the exclusive rights of Bacardi as these goods are not released for free circulation.

Bonded Warehouse goods however, no longer have the T1 status, and it must be assumed that these goods are imported for customs law purposes and placed under the customs procedure for free circulation. Thus meaning that their customs status is no longer in the way of being ‘imported’ within the meaning of the Trademarks Directive, corresponding to the physical introduction of goods into the Community.

The Court of Appeal on the one hand agrees with Bacardi that Bonded Warehouse goods are imported for customs law purposes which means that they can also be considered to be ‘imported’ within the meaning of the Trademarks Directive.

However, on the other hand the Court of Appeal agrees with Mevi that Bonded Warehouse goods cannot, just like T1 goods, be put on the market in the Community before the excise duty is paid and the formalities to that effect are taken care of. Also it is not disputed that these Bonded Warehouse goods can be exported to a destination outside of the Community which means that the Bonded Warehouse status does not necessarily entail that those goods will be put on the market in the Community.

Conseqenses

This suggests that free circulation for customs law purposes does not automatically imply that the goods are being put on the market in the Community.

However, it is not unthinkable that goods changing from a T1 status to a Bonded Warehouse status implies that the goods will be brought into the European Union market.  In response, the Court of Appeal has asked the CJEU to address the following preliminary questions:

"This question concerns goods coming from outside the EEA and which, after they are brought into the territory of the EEA, in a Member State of the European Union (not by or with the consent of the proprietor), are placed under the external transit procedure or under the customs warehousing procedure (as referred to in Regulation (EC) No 450/2008).

When such goods are then placed under a duty suspension arrangement, must they then

i. be regarded as imported, or
ii. be regarded as not imported, or
iii. unless the contrary is proved, be presumed to be introduced in the EEA (for the purposes of putting them on the market)

Within the meaning of Article 5(3)(c) of the Directive 89/104/EEC (now Directive 2008/95/EC), so that it constitutes "use (of the sign) in the course of trade" which may be prohibited by the trade mark proprietor pursuant to Article 5(1), of the said Directives?”

A CJEU decision on this topic with clarification is much needed as the current standing creates uncertainty regarding goods placed under a suspensive customs procedure and the implications that follow for the trade mark holder. It will be interesting to see whether the CJEU will place the Bonded Warehouse goods in the same category as the T1 goods and, following Class International, will rule that the mere entering of goods into the EU under a Bonded Warehouse status does not constitute an act of ‘import’ which a trademark proprietor may prohibit when the goods are not assigned for free circulation.

Other articles related to the Food Law Digest Newsletter for January 2013:


> Poland: Dairy producers against private label products

> The regulation of transfer agreements for agricultural products – an update on the “Liberalisation Decree”

> Popular wine brand 'Tokaj' remains in Slovakia

> Deficiencies in food control in Sweden

> The Czech Republic loses its famous butter spread

> Sarika Connoisseur Cafe Pte Ltd v Ferrero SpA

> Nutritional claims and new beer tax in France


> Indirect advertising for alcoholic beverages

 

[1]  Case C-405/03, 18 October 2005, Class International BV v. Colgate-Palmolive Company and others [2005] ECR I-8735, para. 47 (hereinafter ‘Class International’).

Authors

Killan-Armand

Armand Killan

Partner
Netherlands

Call me on: +31 (0)70 353 8800
Image of Lara van Huizen

Lara van Huizen

Associate
Netherlands

Call me on: +31 (0)70 353 8800