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Nokia Loses Anti-Counterfeiting Lawsuit in the UK

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A controversial High Court ruling could render the UK a 'safe passage' for counterfeiters seeking to bring goods to market via Europe, according to trademark lawyers at Withers & Rogers LLP.

The ruling, which was given on last month, relates to a consignment of counterfeit phones and accessories, branded with Nokia's trade marks, which was seized by Her Majesty's Revenue & Customs (HMRC) in July 2008. Manufactured in Hong Kong, the counterfeit goods were bound for Columbia.

After discovering that the goods were not intended for sale in the UK, HMRC refused to confiscate them on the grounds that for goods to be considered counterfeit in the UK for the purposes of the Counterfeit Goods Regulation, they must infringe a trade mark having effect in the UK. HMRC argued that infringement of a trade mark in the UK must involve use "in the course of trade" which necessarily entails putting the goods in question on the market. HMRC therefore concluded that "counterfeit goods" did not encompass goods in transit.

Nokia sought a judicial review of the decision, arguing that it was an unduly restrictive interpretation of the Counterfeit Goods Regulation. The court disagreed and found in favour of HMRC, ruling that an infringement only occurs if goods are actually placed on the market and not if they are simply subject to passage through the UK.

In his judgment, Mr Justice Kitchin acknowledged that the situation was not desirable and he called for legal intervention to clarify the position and close the legal loop hole.

Tania Clark, trade mark attorney at Withers & Rogers LLP, said: "This decision places an extra burden on trade mark owners to trace the ultimate destination of goods which are found to be counterfeit and requires them to liaise with all relevant authorities along the way.

"This is unreasonable and circumvents the spirit of the Counterfeit Goods Regulation and the European Commission should take immediate steps to clarify the law and include goods in transit within the definition of counterfeit goods.

"In addition, the ruling raises real concerns that the UK could be viewed as a 'safe passage' by counterfeiters seeking to transit Europe en route to their trading destination. Clearly, this poses a significant threat for trade mark owners globally."

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Tags: withers & rogers  nokia  counterfeit  court  UK