Memorandum submitted by Shaneel Enterprises
In August 1993: Returned Goods Relief. Goods
Seized at Southampton and London Airport of Perfumery Products
ex USA and Singapore. Goods made in EU, but Customs demanded proof
of manufacture, which only brand owner can give. Previous practice
over three years had not been to demand this. Neverthless relief
refused as brand owner would not co-operate.
EU 1 Certificate: VAT & Duties Tribunal
in December 1995. Goods made in Italy and shipped to UK via Malta.
Customs say Maltese authorities cannot give EUR 1, despite fact
that goods already had an Italian EUR 1.
March 1997. Goods Initially Seized by French
Customs in France while en-route from Malta to the UK. Final destinations
of goods were USA & Russia. French customs released the goods
to the brand owners in France, who are now still holding goods
and the case is pending in the French courts as of today.
August 1998, following the Silhouette Decision,
Lancaster UK & Germany, part of the Coty Group, put an injunction
on goods while in UK customs bond, orginating from Singapore.
Goods inspected by Lancaster with Trading Standards (not customs)
on pretext that counterfeit. Case pending.
In simple terms, the Law as it stands, and people
enforcing the Laws are not at all helpful to the consumers or
Parallel traders and favour the branded goods owners. This is
exactly the opposite in USA.
4 March 1999
Summary letter from Mr Mehta's Solicitors
A British company, Shaneel Enterprises Limited,
of Amertrans Park, Bushey Hill Lane, Watford, is a co-defendant
with a Maltese company, LCD Company Limited, in four actions taken
by the French perfume houses Parfums Christian Dior, Socie«te«
des Parfums Rochas, Yves Saint Laurent Parfums et Socie«te«
Paco Rabanne Parfums, before the Tribunal de Grande Instance
(High Court) in Aix en Provence. The proceedings have been pending
since April/May of 1997 following the seizure of a consignment
of perfume by the French Customs Authorities. It is important
to note that there is no dispute that the goods seized are genuine
products of the aforementioned French perfume houses. Moreover,
it is undisputed that the goods were produced within the European
There are two fundamental legal issues in the
actions brought against Shaneel and LCD. The first issue concerns
whether or not the goods were initially put on the market in France
by the French perfume houses themselves. In all four cases, the
perfume houses sold the goods to intermediaries before the goods
were purchased by LCD in Malta. The question of whether or not
the goods were indeed put on the market in France is crucial given
the doctrine on the exhaustion of rights in the trade mark, which
would come into effect once the goods were put on the market within
the European Community by the trade mark owner or with the consent
thereof. On the facts, it can be argued that the initial sales
of the goods by the French perfume houses themselves did indeed
take place within the EC, with payment in French francs and delivery
on French territory. Currently, the only argument submitted by
perfume houses against a finding that the goods were put on the
market within the EC relies on the fact that the intermediaries
to which the perfumes were initially sold have their registered
offices outside the European Community.
The second legal issue concerns the fact that
the goods were to be shipped from Malta to Shaneel's bonded warehouse
in the United Kingdom. The goods were then to be sold onto customers
in the United States and Russia. At all times, the goods were
subject to the external transit regime by which goods may cross
the territory of the European Community from port of entry "A"
to port of exit "B" without being subject to import
duties precisely for the reason that the goods are not intended
for importation into a member state of the European Community.
During the shipment, however, the perfumes were seized as they
crossed French territory.
The legal issue which arises in the present
case, if upheld, would constitute a further restriction on parallel
imports going beyond the recent decisions of the European Court
of Justice in the Silhouette case. In the Silhouette
decision, and in most cases to date, proceedings have been taken
against parallel importers in situations where the genuine goods
have been imported into an EC member state and actually placed
on the market, ie, the goods are sold to consumers at retail outlets.
In the present case, LCD and Shaneel Enterprises Limited are the
subject of proceedings because they shipped the goods in transit
across French territory although they were never intended for
sale within the European Community, but were destined for customers
in the United States and Russia.
The French perfume houses are relying on an
interpretation of the French Code of Intellectual Property and
on a decision of the supreme French Civil Court, the Cour de
Cassation in 1990, which allows the seizure of goods even
when subject to the transit regime. Nevertheless, the Cour
de Cassation decision involved criminal proceedings for goods
which were not genuine but counterfeit and therefore it remains
a moot point within the current proceedings whether or not any
breach of the French legislation has actually occurred.
On both legal issues, it may be necessary to
seek a preliminary ruling from the European Court of Justice,
firstly, as to what constitutes putting the goods on the EC market
for the first time; and, secondly, whether or not the interpretation
which the plaintiffs would like to give to the French legislation
is compatible with European Community Law, and notably with Directive
89-104 EEC of 21 December 1998.
9 April 1999