The High Court has ruled that fake Nokia mobile phones being shipped from Hong Kong to Colombia, which were stopped in the UK by Her Majesty's Revenue and Customs, did not fall within the definition of 'counterfeit goods' for the purposes of the Counterfeit Goods Regulation. HMRC sent samples of the mobile phones, which bore Nokia's trade marks, to Nokia for inspection after stopping the consignment of 400 handsets at Heathrow. Nokia confirmed to HMRC that they were fakes and asked it to seize the goods pursuant to its powers under the Counterfeit Goods Regulations. HMRC refused, stating that it had no power to continue to detain or suspend the release of the mobiles in the absence of any evidence that they would be released on to the market in the EU.
Nokia applied for judicial review of HMRC's decision, which was rejected by the High Court. It found that HMRC could only take action against goods in transit if they were counterfeit goods, pirate goods or otherwise infringing an intellectual property right. In reaching its decision, the High Court ruled that the definition of 'counterfeit goods' was intrinsically linked to the notion that the goods must infringe a trade mark. For a product bearing a trade mark to be deemed to be counterfeit it must infringe someone's trade mark in the territory in question, and for a trade mark to be infringed the goods must be placed on the market there. If goods are in transit and subject to suspensive customs procedures they do not, without more, satisfy this requirement. A mere risk that the goods may be diverted onto the EU market was not enough to justify a conclusion that the goods had been or would be placed on the market. The High Court concluded that, as the mobile phones had not been placed on the UK market, they were not counterfeit within the meaning of the Regulation.
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