Kolster and German company Schaeffler persevered in a nine-year legal process against counterfeits trade. The end result is staggering: The Court of Justice of the European Union (CJEU) has decided that the use of private individuals as intermediaries in the supply chain of counterfeit products is as illegal as that of companies. “This is a genuine step forward for everyone fighting illegal business,” says attorney Ingrid Bichelmeir-Böhn from Schaeffler.
Under the previous ruling, activities infringing trademark rights were unequivocally prohibited only if the infringer was a private trader or a private individual engaged in commercial activities. In spring 2020, however, the CJEU issued a new, significant preliminary ruling: private individuals are also guilty of trademark infringement if they act as intermediaries in the supply chain of counterfeit goods for commercial use.
The ruling is the result of a legal process initiated by German company Schaeffler Technologies AG & Co. KG and Kolster in 2011. The process was initiated in Finland as the case concerned counterfeits of ball bearings by Schaeffler seized by Finnish customs officials.
The decision of the CJEU is far-reaching as it is binding to all national courts of EU member states. The legal process in Finland will also continue: The Supreme Court overturned the Court of Appeal’s decision, which had found that no trademark infringement took place, and referred the judgment on compensation and damages back to the Court of Appeal.
Schaeffler and Kolster launched the legal process after discovering that ball bearings by Schaeffler for use in engines and bridges had been counterfeited and transported from China to Russia via Finland. The intermediary in the transit was a private individual.
Schaeffler sought permission to destroy the counterfeit goods in order to prevent their further use. After several turns of events, however, they ended up as part of counterfeits trade.
“Although the prevalence of counterfeits in our industry is not as high as with luxury goods, for example, we decided to launch legal proceedings together with Kolster. Even a single counterfeit ball bearing can be dangerous in use, which is why we needed them taken off the market,” says attorney Ingrid Bichelmeir-Böhn.
The supply chain for counterfeit ball bearings was a classic example of how counterfeit traders were previously able to take advantage of the “immunity” of private individuals in counterfeits trade. Counterfeit ball bearings shipped to Finland were received by a private individual and stored at a private residence, from where they were picked up in small batches and sent to Russia.
“As we opened the case, we did not expect that the Court of Justice of the European Union would ultimately rule on the matter. We launched the process because we rejected the argument that the adverse party acted ‘solely as a private individual’. Accepting the argument against the adverse party’s liability also makes future fights against counterfeit products more difficult. The new ruling also gives other trademark owners the opportunity to prove that the operations in question concern commercial activities instead of merely private purchases,” says Bichelmeir-Böhn.
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