Cognac and cigarettes for counterfeit ball bearings – a private person’s liability when importing counterfeits as a middleman

Cognac and cigarettes for counterfeit ball bearings – a private person’s liability when importing counterfeits as a middleman

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A referral from the Finnish Supreme Court to the CJEU brings clarity to the notion of acting in the course of business in trade in trademark infringement cases. The courts considered that the importation by a private person as a middleman can be considered to be done in the course of trade as the goods, in this case 150 industrial ball bearings, are manifestly not intended for private use because of their nature and volume. No relevance was given to the insignificance of the remuneration the private person received.

In a case before the CJEU and the Finnish Supreme Court, a company had requested a private person to receive a consignment of 150 counterfeit ball bearings. The customs clearance was completed in the person’s name and he had stored the goods for a short period of time, after which they were delivered to a third party to be exported to Russia. The ball bearings were the type used in heavy industry.

Referral to CJEU

The Finnish Supreme Court referred the case to the CJEU. In a preliminary ruling C-772/18, the CJEU found that where a person, on behalf of a company, receives a delivery of goods, which are manifestly not intended for private use due to their nature and volume, stores them and releases them for free circulation, he is considered to be acting in the course of trade regardless of whether that person is acting in business or not.

Furthermore, the court confirmed that the amount of financial benefit received by the person for his actions has no relevance on the interpretation of actions taking place in the course of trade. The only economic benefit the company afforded him as remuneration for his services was a carton of cigarettes and a bottle of cognac.

Finnish Supreme Court ruling

On the basis of the answers handed down by the CJEU, the Finnish Supreme Court handed down its ruling on 28 September 2020 (KKO:72:2020), finding the private person to have committed a trademark infringement.

Why is this of consequence?

The definition of when a party is acting in a course of trade is an important distinction, as under the EU Trademarks Directive, a trademark holder has the exclusive right to use trademark in the course of trade. Such exclusivity entails the trademark holder’s right to prohibit imports of goods with the trademark without the holder’s consent. The trademark holder, however, does not have the right to prohibit use of the trademark by private persons for private use.

In this case, the CJEU clearly took the position that using a trademark in the course of trade includes that the infringer accepts a delivery, stores the goods on behalf of a third party, even as the infringer is not professionally engaged in the trade of counterfeit goods.

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