In a potentially far-reaching ruling, the European Court of Justice (CJEU) has recently ruled that private individuals can be guilty of trademark infringements – if they act as intermediaries in the supply of counterfeits for commercial use. The CJEU issued this ruling in May 2020 in a legal dispute initiated by the German company Schaeffler Technologies together with the IP protection company Kolster in Finland in 2011. Now, a Finnish court has to decide whether the defendant can be held liable for infringing Schaeffler’s trademark rights in Finland.
Schaeffler’s legal action was triggered by the seizure of 150 counterfeit ball bearings by Finnish customs in 2011. The counterfeits, which originated from China, were received by a private individual in Finland and stored on private property. From there, the fake ball bearings were collected in small batches and transported to Russia. Schaeffler had attempted to have the counterfeits destroyed; however, the fake goods ended up on the market because private individuals could only be held liable for IP infringements if these were committed by a private trader or a private individual engaged in commercial activities, according to the legal interpretation at the time. Kolster said that this case was a typical example of a supply chain for counterfeit ball bearings. In such cases, counterfeiters often use the immunity of private individuals as a loophole to transport fakes.
Schaeffler initiated legal action after they learned of the transport of the fakes into Russia. “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,” said Schaeffler’s attorney Ingrid Bichelmeir-Böhn. The CJEU ultimately decided this year that private individuals can also be held liable if they act as intermediaries in supply chains of counterfeits for commercial use.
When they filed the initial lawsuit, Schaeffler and Kolster had not expected such a decision from the CJEU; rather, they argued that the defendant had not acted as a private individual at all. They now applaud the result as a clear step forward in the fight against counterfeiting. “The decision of the CJEU is far-reaching as it is binding to all national courts of EU member states. From Finland’s perspective, the new ruling allows us to help prevent Finland from being used as a transit country for counterfeit goods,” said Jani Kaulo, lawyer in charge of the process at Kolster. Schaeffler also praises the decision as “a genuine step forward for everyone fighting illegal business,” according to Bichelmeir-Böhn.