19.2.94 OfficialJournaloftheEuropeanCommunities NoC52/37
OpinionontheproposalforaCouncilRegulation (EEC)layingdownMeasurestoProhibit
theReleaseforFreeCirculation ,ExportorTransitofCounterfeit andPiratedGoods(l)
(94/C52/13
On28September 1993theCouncildecidedtoconsulttheEconomic andSocialCommittee ,
underArticle198oftheEECTreaty,ontheabovementioned proposal .
TheSectionforIndustry ,Commerce ,CraftsandServices,whichwasresponsible forpreparing
theCommittee 'sworkonthesubject,adopteditsOpinionon3December 1993.The
Rapporteur wasMrMourgues .
Atits311thPlenarySession (meetingof21December 1993)theEconomic andSocial
Committee adoptedunanimously thefollowingOpinion .
1.GeneralComments
1.1.Themarketingofcounterfeit andpiratedgoods,
especially whenindustrial processesareused,usually
hasaseriousadverseeffectonholdersoftrademarks
andpatentsandofrightstomodels,designsandeven
worksofart.rights,copyright ,etc.,whohaveinvestedconsiderable
sumsinR&D,advertising andmarketing inorderto
beabletoofferahighqualityproducttotheconsumer .
Theresultantlossofearningscancreateeconomicand
financialdifficulties forcompanies ,impairworkers'
conditions andguarantees andevenleadtoredundanci­
es.Furthermore theinterestsofthemanufacturer or
dealerconcerned aredamagedindirectlybytheadverse
effectonthereputation ofhisproductandhiscompany
andthelossoftheexclusiveimageoftheproduct .
Exclusiveness ,imageandqualityareimportant factors
inconsumers 'decisionstopurchaseanauthenticprod­
uct.Importers andtheothereconomic agentscon­
cerned,inparticular thoseoperating onasmallor
mediumscale,likewisesufferasaresultoffallingsales
oftheoriginalproduct .SMEsareespeciallyhardhit
bythecostofthedriveagainstcounterfeit andpirated
goods.Consumers ,whobelievethattheyarepurchas­
inganoriginal,high-quality product,aremisledby
counterfeit goods.Suchgoodsareusuallyofinferior
qualityandarefrequently defectiveorevendangerous .
Thisisparticularly trueofpharmaceutical products,
asectorwherecounterfeiting istakingonalarming
proportions .1.2.Counterfeiting andpiratingcreateunfair,rep­
rehensible competition inindividual countries ,which
havelegislated—sometimes invaryingways—to
protecttheholdersofrights.
1.3."Witheffectfrom1July1994,thedraftCouncil
Regulation underreviewlaysdownanumberofnew
measuresdesignedtocurbthemarketing ofcounterfeit
andpiratedgoodsbyintroducing arrangements for
theirinterception .Thecustomsofficewhichseizessuch
goodsorrefusestoreleasethemisrequiredtoaskthe
competent authoritytotakeasubstantive decision .
1.5.1.Theproblemofcounterfeiting isallthemore
important fortheCommunity becauseitsinternational
competitiveness isbasedonhigh-quality goodswhose
reputation mustnotbejeopardized .1.4.ThedraftRegulation hastakenaccountofthe
preparatory workontheTRIPS(2)agreements ,inview
ofthefactthattheconclusions oftheGATTnego­
tiationscannotyetbefullyassessedandCommunity
actionisrequirednow.
2.Scopeofthenewmeasures1.5.ItisindeedessentialfortheEuropean Com­
munitytohaveeffectiverulesforcombatting counter­
feitingandpirating .Thebusinessworld,dealers,work­
ersandconsumers allsufferasaresultofthesedis­
honestpractices .Manufacturers ofcounterfeit goods
competeunfairlywithmanufacturers oftheoriginal
productsand/ortheholdersoftrademarks,design2.1.Themeasuresauthorize thecustomsauthorities
toactinrespectofexportsandgoodsintransit.
(i)OJNoC238,2.9.1993,p.9.2.2.Theygiveplaintiffs alegalremedyundercus­
tomslaw,namelyrefusaltoreleasegoodsforfree
circulation orexportandseizureofgoodsintransit.
TheCommittee notesthattheselegalremediesgenerally(2)TRIPS=TradeRelatedAspectsofIntellectual Property
Rights.

NoC52/38 19.2.94 OfficialJournaloftheEuropean Communities
satisfytheapplication ofgeneralandspecificprohib­
itionrulesandaretakenfromcustomslaw.
2.3.Thenewmeasuresextendthescopeoftheexist­
ingRegulation tocovercopyright andneighbouring
rightsandtodesigns.3.2.However ,thedraftRegulation saysnothing
aboutcustomsauthorities actingontheirowninitiative .
Investigations bytheirofficersduringmovement of
goodssometimes revealcounterfeiting orpirating,but
undercurrentlegislation thecustomsauthorities cannot
seizesuchgoodsorrefusetheirrelease;theycanmerely
urgetheholderofarighttoactveryquickly.Thedraft
Regulation shouldallowthecustomsauthorities toact
ontheirowninitiative .Subjecttotherightofappeal
oftheownerofthegoods,thecustomsauthorities
shouldbeabletointerveneforthwith ,incircumstances
similartothoseprovidedforinArticle8(2)ofthedraft
Regulation ,incaseswheretheyarethefirsttosuspect
thepresenceofcounterfeit goodsinaconsignment of
goodsbeingdeclared .2.4.ThedraftRegulation doesnot,however :
—equatetheillegaltradepracticesofcounterfeit­
goodsproduction andmarketing withbreachesof
customslaw(suchasprohibition rules,oreventhe
introduction oftheconceptoflegalpresumption of
smuggling );
—givethelegalauthorities (publicprosecutor )the
righttointerveneonbehalfofthegeneralinterest
ofconsumers .3.3.Itshouldalsobenotedthatitisnotpossiblefor
customsauthorities toactincaseswheredesignsor
modelsaretransmitted bynon-physical telecommuni­
cationmeans;specificprovisions shouldbeintroduced
tocoverthiscase.
2.5.NordoesthedraftRegulation defineuniform
penalties ,finesanddamageswhichmaybeimposed
bythecompetent legalauthorities ,inadditiontothe
application oftheprovisions ofArticle7.Itwould,
however ,bedesirabletoachieveadegreeofharmoniza­
tioninthismatter,whichfallswithinthecompetence
oftheMember States.3.4.Article1(2a)and(2b)stipulatethatthecustoms
authorities intheStateinwhichtheapplication for
actionbythecustomsauthority ismademayintervene
inthecaseofariskofaninfringement ofthelaw
governing intellectual propertyintheStateconcerned ,
inaccordance withthelawofthatState.Provision
shouldbemadeforthecustomsauthorities tointervene
incaseswherethereisariskofaninfringement taking
placeinanotherMemberState.Inthiscasetheholder
oftherightmustalsobeentitledtohavethecounterfeit
orillegallymanufactured goodsimpounded atthe
externalfrontiers .2.6.UnlessthescopeofthedraftRegulation is
extendedtocoverre-exported goods,theproposed
measureswillnotdirectlycovercustomsarrangements
forinwardandoutwardprocessing ,orforfree-trade
zonesandwarehouses wheregoodsprocessing provides
obviousscopeforcounterfeiting andpirating .Such
coveragewould,however,bedesirable .4.Specificconsiderations
4.1.ItisnotedthattheCommission considers the
legalbasetobeArticle113(qualifiedmajority).This
differsfromthatapplicable totheexistingRegulation
(EEC)No3842/86whichisArticles113(qualified
majority )and235(unanimity ).2.7.Theproposed measuresdonotcoverpatent
protection anddisputesoverbreachesofcontractfor
goodsmanufactured underlicence.TheCommittee
acknowledges theconstraints onanyapplication ofthe
draftRegulation tothesematters,whicharemuchmore
difficulttoidentify .However ,aprocedure covering
industrialdesignsandpatentsshouldenableright-hold­
erstopreventtheimport,exportandtransitofgoods
whichinfringetheirrights.
2.8.Paragraphs 2.4and2.5abovealsoshowthe
extentoftheriskoftradebeingdivertedbydifferences
innationallegislation .4.2.Article3ofthedraftRegulation imposesobli­
gationsontheholderofrightswhichwillinsomecases
bedifficulttomeetimmediately .Itisintheinterestsof
theholderoftherightstogatherasmuchinformation
aspossibleforsubmission tothecustomsauthorities ,
inaccordance withthenon-exhaustive listofrequire­
ments.TheCommittee thereforeurgesthatconsider­
ationbegiventothepossibility ofextending ,inrespect
oftimelimitsandtheareacoveredwithintheEC,the
validityofapplications forintervention .
4.2.1.Inparticular ,theholderofrightsshould,
whereappropriate ,beabletoobtainanextensionof
theperiodofrefusaltoreleasegoods,sothathecan3.Intervention bycustomsauthorities
3.1.ThedraftRegulation specifiesthetermson
whichaholderofarightcanasktheauthorities toact.

19.2.94 OfficialJournaloftheEuropeanCommunities NoC52/39
assembletherequisiteproof—withoutprejudiceto
theinterestsoftheimporterandothereconomicagents
concerned .
4.3.Theprovisionofasecurity,calculated inaccord­
ancewiththecriteriasetoutinArticle3(6)ofthedraft
Regulation ,should,however ,berequiredinallcases.limitedaslongasonlyrightsholderscanaskthecus­
tomsauthorities tointervene .Holdersofrightsmaybe
caughtoffguard,sincetradersincounterfeit goods
knowhowtousedistribution networksandoperatein
anincreasingly professional wayandonaneverlarger
scale.Inthepastthecounterfeit goodsweremainly
cheapandreadilyrecognizable and,forthemostpart,
madeintheFarEast;butmanufacturers ofcounterfeit
goodsnowusesophisticated technologies attheirdis­
posalandareabletoprovidetheirproductswithcon­
vincinglabelsandpackaging .Furthermore ,themanu­
facturersofcounterfeit goodsarenolongertargeting
exclusively thosesectorswhicharetraditionally the
victimofcounterfeiting ,suchasgarmentsandjewellery .
Alargenumberofhigh-technology productsarebeing
counterfeited orpirated,andthisworkisbeingcarried
-outinmanycaseswithintheCommunity .4.4.Article3(8)
4.4.1.Intensiveexchangeofinformation isnecess­
ary,asiscoordination ofdetectionworkandanyjoint
actioncarriedoutbythecustomsauthorities orother
bodiesdesignated bytheMemberStatesastheauthori­
tiescompetent todecideontheapplication .
4.5.Asregardsworksofart,itisafactthat—
leavingasideforgeriesproduced byindustrial means
(statues,forinstance )andthefactthatthelegaldefi­
nitionofthenumberof'original'reproductions differs
fromoneMemberStatetoanother—illegalrepro­
ductionsdamagetheartist'sinterestswhileheisalive
andtheculturalheritageafterhisdeath.Thisspecial
casecouldbecoveredbyaspecificRegulation .6.Concluding remarks
4.6.Article5(1)
Thecollection ofsamplesforthevariouspartiescon­
cernedshouldnotbeusedasapretextforexporting
goodswhichturnouttobecounterfeited orpirated,or
forputtingthemintofreecirculation .
5.Additional observations6.1.IntheOpinionsithasissuedoverthelastten
yearsontheannualreportsonECcompetition policy,
theCommittee hasconstantly expressed itssupportfor
theECcompetition policyandurgeditsmoreeffective
implementation inthesinglemarket.
6.2.TheCommittee thereforeregretsthefactthat
theCommission hasnotspecifiedinArticle13thatthe
reportontheoperationofthesystemshouldbereferred
totheCommittee .TheCommittee considers thatthis
omissionshouldbemadegood.
6.3.ThepresentOpinionrelatestoanillegalpractice
whichisdeemedbyexpertstoaccountforapproxi­
mately5%ofworldtrade.Itisimpossible toturna
blindeyetothefactthatthissituationcouldjeopardize
thephasedimplementation ofthepolicyoncompetition
betweentheECandnon-ECcountries ;theexisting
situation isanon-goingthreattofairtradeandto
producers whoenjoyawell-earned reputation asa
resultoftheirknow-how anddedication .
6.4.Theseconsiderations lendweighttotheview
thatcounterfeiting andpiratingare,liketheft,aserious
offencetohumanvaluesandareseriouseconomic
offences .Thisbeingthecase,theCommittee would
highlighttheimportance ofthedraftRegulation and
callsfortheestablishment ofsimilarharmonized
measuresintheSingleMarket.5.1.AfterreadingtheCommission 'sreporttothe
CouncilandtheEuropeanParliament ontheoperation
ofthesystemintroduced underCouncilRegulation
(EEC)No3842/86of1December 1986andtheproposal
foraCouncilRegulation underreviewhere,onecan
readilyunderstand thedifficulties encountered inensur­
inguniformapplication oftheRegulation inthevarious
Member States.TheCommittee considers thatthe
MemberStatesshouldseek,inconformity withthe
Maastricht Treaty,tosecureadegreeofharmonization
ofthelevelofsanctions .
5.2.Theimpactofthemeasurestocombatthemar­
ketingofcounterfeit andpiratedgoodswillremain
DoneatBrussels ,21December 1993.
TheChairman
oftheEconomicandSocialCommittee
SusanneTIEMANN