No Stopping Class Goods (Goods In Transit Are Not 'imported' Into The UK)

The Court of Appeal has applied the European Court

of Justice's decision in Class v

Colgate-Palmolive1 on the meaning of

"import" for trade mark infringement so as to prevent

rights-owners from stopping shipments of branded goods through

the UK under Customs supervisory procedures.

The action, Eli Lilly v 8PM Chemist2,

concerned pharmaceuticals ordered by patients in the US from

Canadian internet pharmacies. The patients had prescriptions

issued by US doctors but, because of the high drugs prices in

the US, wanted to take advantage of the cheaper prices

available through the internet pharmacies. The internet

pharmacies source the pharmaceuticals they sell from around the

world. In this action it was Turkey. A pharmacist in Turkey

would put the prescribed drugs into a plain brown box addressed

to the individual US patient. A large number of these boxes

would then be packed together in a consignment and sent to the

UK where 8PM would receive the consignment, unpack the

addressed boxes and post or courier them to the US patient.

There were no trade marks visible on the boxes. The unpacking

and posting was carried out under the customs procedure known

as "Inward Processing Relief - Suspension" which

requires the person receiving the goods to declare that the

goods are for re-export in order to exempt them from

duties.

This trade came to Lilly's attention when one of the

consignments from Turkey to 8PM was detained by UK customs on

suspicion of containing counterfeits. It did not in fact

contain any but Lilly, whose branded products were included in

the consignment, sued 8PM for trade mark infringement. 8PM

defended relying on the decision of the European Court of

Justice ("ECJ") in Class. Class

concerned a consignment of toothpaste held in Rotterdam under

the Customs warehousing procedure. Colgate sued for trade mark

infringement but failed as the ECJ held that as long as the

goods were under the Customs external transit or warehousing

procedures, so there was no release of the goods into free

circulation, their mere physical introduction into the

territory of the Community was not "importing" or

"using the [trade mark] in the course of trade" for

the purposes of trade mark infringement. The rationale for the

decision was that, without release for free circulation, there

is no interference with the trade mark owner's right to

control the initial marketing of its goods in the

Community.

Returning to the Lilly case, and Lilly's application for

an...