Source: EURLEX
Language: en
Format: md

19 . 2 . 94 Official Journal of the European Communities No C 52 / 37

Opinion on the proposal for a Council Regulation ( EEC ) laying down Measures to Prohibit

the Release for Free Circulation, Export or Transit of Counterfeit and Pirated Goods ( l )

( 94 / C 52 / 13

On 28 September 1993 the Council decided to consult the Economic and Social Committee,
under Article 198 of the EEC Treaty, on the abovementioned proposal .

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee 's work on the subject, adopted its Opinion on 3 December 1993 . The
Rapporteur was Mr Mourgues .

At its 311th Plenary Session ( meeting of 21 December 1993 ) the Economic and Social
Committee adopted unanimously the following Opinion .

1 . General Comments

1.1 . The marketing of counterfeit and pirated goods,
especially when industrial processes are used, usually
has a serious adverse effect on holders of trademarks
and patents and of rights to models, designs and even
works of art .

1.2 . Counterfeiting and pirating create unfair, rep ­
rehensible competition in individual countries, which
have legislated — sometimes in varying ways — to
protect the holders of rights .

1.3 . " With effect from 1 July 1994, the draft Council
Regulation under review lays down a number of new
measures designed to curb the marketing of counterfeit
and pirated goods by introducing arrangements for
their interception . The customs office which seizes such
goods or refuses to release them is required to ask the
competent authority to take a substantive decision .

1.4 . The draft Regulation has taken account of the
preparatory work on the TRIPS ( 2 ) agreements, in view
of the fact that the conclusions of the GATT nego ­
tiations cannot yet be fully assessed and Community

action is required now .

rights, copyright, etc ., who have invested considerable
sums in R&D, advertising and marketing in order to
be able to offer a high quality product to the consumer .
The resultant loss of earnings can create economic and
financial difficulties for companies, impair workers '
conditions and guarantees and even lead to redundanci ­
es . Furthermore the interests of the manufacturer or
dealer concerned are damaged indirectly by the adverse
effect on the reputation of his product and his company
and the loss of the exclusive image of the product .
Exclusiveness, image and quality are important factors
in consumers ' decisions to purchase an authentic prod ­
uct . Importers and the other economic agents con ­
cerned, in particular those operating on a small or
medium scale, likewise suffer as a result of falling sales
of the original product . SMEs are especially hard hit
by the cost of the drive against counterfeit and pirated
goods . Consumers, who believe that they are purchas ­
ing an original, high-quality product, are misled by
counterfeit goods . Such goods are usually of inferior
quality and are frequently defective or even dangerous .
This is particularly true of pharmaceutical products,
a sector where counterfeiting is taking on alarming
proportions .

1.5.1 . The problem of counterfeiting is all the more
important for the Community because its international
competitiveness is based on high-quality goods whose
reputation must not be jeopardized .

1.5 . It is indeed essential for the European Com ­
munity to have effective rules for combatting counter ­ 2 . Scope of the new measures
feiting and pirating . The business world, dealers, work ­
ers and consumers all suffer as a result of these dis ­
honest practices . Manufacturers of counterfeit goods
compete unfairly with manufacturers of the original 2.1 . The measures authorize the customs authorities
products and / or the holders of trade marks, design to act in respect of exports and goods in transit .

2.2 . They give plaintiffs a legal remedy under cus ­

( i ) OJ No C 238, 2 . 9 . 1993, p . 9 . toms law, namely refusal to release goods for free

( 2 ) TRIPS = Trade Related Aspects of Intellectual Property circulation or export and seizure of goods in transit .

Rights . The Committee notes that these legal remedies generally

( i ) OJ No C 238, 2 . 9 . 1993, p . 9 .

Rights .

No C 52 / 38 Official Journal of the European Communities 19 . 2 . 94

satisfy the application of general and specific prohib ­
ition rules and are taken from customs law .

2.3 . The new measures extend the scope of the exist ­
ing Regulation to cover copyright and neighbouring
rights and to designs .

2.4 . The draft Regulation does not, however :

— equate the illegal trade practices of counterfeit ­

goods production and marketing with breaches of
customs law ( such as prohibition rules, or even the
introduction of the concept of legal presumption of
smuggling );

— give the legal authorities ( public prosecutor ) the
right to intervene on behalf of the general interest
of consumers .

2.5 . Nor does the draft Regulation define uniform
penalties, fines and damages which may be imposed
by the competent legal authorities, in addition to the
application of the provisions of Article 7 . It would,
however, be desirable to achieve a degree of harmoniza ­
tion in this matter, which falls within the competence
of the Member States .

3.4 . Article 1 ( 2a ) and ( 2b ) stipulate that the customs
authorities in the State in which the application for
action by the customs authority is made may intervene
in the case of a risk of an infringement of the law
governing intellectual property in the State concerned,
in accordance with the law of that State . Provision

should be made for the customs authorities to intervene
in cases where there is a risk of an infringement taking
place in another Member State . In this case the holder
of the right must also be entitled to have the counterfeit
or illegally manufactured goods impounded at the
external frontiers .

3.2 . However, the draft Regulation says nothing
about customs authorities acting on their own initiative .
Investigations by their officers during movement of
goods sometimes reveal counterfeiting or pirating, but
under current legislation the customs authorities cannot
seize such goods or refuse their release ; they can merely
urge the holder of a right to act very quickly . The draft
Regulation should allow the customs authorities to act
on their own initiative . Subject to the right of appeal
of the owner of the goods, the customs authorities
should be able to intervene forthwith, in circumstances
similar to those provided for in Article 8(2 ) of the draft
Regulation, in cases where they are the first to suspect
the presence of counterfeit goods in a consignment of
goods being declared .

3.3 . It should also be noted that it is not possible for
customs authorities to act in cases where designs or
models are transmitted by non-physical telecommuni ­
cation means ; specific provisions should be introduced
to cover this case .

2.6 . Unless the scope of the draft Regulation is of the right must also be
extended to cover re-exported goods, the proposed or illegally manufactured
measures will not directly cover customs arrangements external frontiers .
for inward and outward processing, or for free-trade
zones and warehouses where goods processing provides
obvious scope for counterfeiting and pirating . Such
coverage would, however, be desirable .
4 . Specific considerations

2.7 . The proposed measures do not cover patent
protection and disputes over breaches of contract for
goods manufactured under licence . The Committee
acknowledges the constraints on any application of the
draft Regulation to these matters, which are much more
difficult to identify . However, a procedure covering
industrial designs and patents should enable right-hold ­
ers to prevent the import, export and transit of goods
which infringe their rights .

2.8 . Paragraphs 2.4 and 2.5 above also show the
extent of the risk of trade being diverted by differences
in national legislation .

3 . Intervention by customs authorities

3.1 . The draft Regulation specifies the terms on
which a holder of a right can ask the authorities to act .

4.1 . It is noted that the Commission considers the
legal base to be Article 113 ( qualified majority ). This
differs from that applicable to the existing Regulation

( EEC ) No 3842 / 86 which is Articles 113 ( qualified
majority ) and 235 ( unanimity ).

4.2 . Article 3 of the draft Regulation imposes obli ­
gations on the holder of rights which will in some cases
be difficult to meet immediately . It is in the interests of
the holder of the rights to gather as much information
as possible for submission to the customs authorities,
in accordance with the non-exhaustive list of require ­
ments . The Committee therefore urges that consider ­
ation be given to the possibility of extending, in respect
of time limits and the area covered within the EC, the
validity of applications for intervention .

4.2.1 . In particular, the holder of rights should,
where appropriate, be able to obtain an extension of
the period of refusal to release goods, so that he can

19 . 2 . 94 Official Journal of the European Communities No C 52 / 39

assemble the requisite proof — without prejudice to
the interests of the importer and other economic agents
concerned .

4.3 . The provision of a security, calculated in accord ­
ance with the criteria set out in Article 3(6 ) of the draft
Regulation, should, however, be required in all cases .

4.4 . Article 3(8 )

4.4.1 . Intensive exchange of information is necess ­
ary, as is coordination of detection work and any joint
action carried out by the customs authorities or other
bodies designated by the Member States as the authori ­
ties competent to decide on the application .

4.5 . As regards works of art, it is a fact that —
leaving aside forgeries produced by industrial means

( statues, for instance ) and the fact that the legal defi ­
nition of the number of ' original ' reproductions differs
from one Member State to another — illegal repro ­
ductions damage the artist 's interests while he is alive
and the cultural heritage after his death . This special
case could be covered by a specific Regulation .

4.6 . Article 5(1 )

The collection of samples for the various parties con ­
cerned should not be used as a pretext for exporting
goods which turn out to be counterfeited or pirated, or
for putting them into free circulation .

5 . Additional observations

5.1 . After reading the Commission 's report to the
Council and the European Parliament on the operation
of the system introduced under Council Regulation

( EEC ) No 3842 / 86 of 1 December 1986 and the proposal
for a Council Regulation under review here, one can
readily understand the difficulties encountered in ensur ­
ing uniform application of the Regulation in the various
Member States . The Committee considers that the
Member States should seek, in conformity with the
Maastricht Treaty, to secure a degree of harmonization
of the level of sanctions .

5.2 . The impact of the measures to combat the mar ­
keting of counterfeit and pirated goods will remain

Done at Brussels, 21 December 1993 .

limited as long as only rights holders can ask the cus ­
toms authorities to intervene . Holders of rights may be
caught off guard, since traders in counterfeit goods
know how to use distribution networks and operate in
an increasingly professional way and on an ever larger
scale . In the past the counterfeit goods were mainly
cheap and readily recognizable and, for the most part,
made in the Far East ; but manufacturers of counterfeit
goods now use sophisticated technologies at their dis ­
posal and are able to provide their products with con ­
vincing labels and packaging . Furthermore, the manu ­
facturers of counterfeit goods are no longer targeting
exclusively those sectors which are traditionally the
victim of counterfeiting, such as garments and jewellery .
A large number of high-technology products are being
counterfeited or pirated, and this work is being carried
- out in many cases within the Community .

6 . Concluding remarks

6.1 . In the Opinions it has issued over the last ten
years on the annual reports on EC competition policy,
the Committee has constantly expressed its support for
the EC competition policy and urged its more effective
implementation in the single market .

6.2 . The Committee therefore regrets the fact that
the Commission has not specified in Article 13 that the
report on the operation of the system should be referred
to the Committee . The Committee considers that this
omission should be made good .

6.3 . The present Opinion relates to an illegal practice
which is deemed by experts to account for approxi ­
mately 5% of world trade . It is impossible to turn a
blind eye to the fact that this situation could jeopardize
the phased implementation of the policy on competition
between the EC and non-EC countries ; the existing
situation is an on-going threat to fair trade and to
producers who enjoy a well-earned reputation as a
result of their know-how and dedication .

6.4 . These considerations lend weight to the view
that counterfeiting and pirating are, like theft, a serious
offence to human values and are serious economic
offences . This being the case, the Committee would
highlight the importance of the draft Regulation and
calls for the establishment of similar harmonized
measures in the Single Market .

The Chairman

of the Economic and Social Committee

Susanne TIEMANN