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Europe-wide ban on counterfeit Daniel Wellington watches

Europe-wide ban on counterfeit Daniel Wellington watches

It is now established case law that holders of a European trademark can denounce the infringement in one member state but also immediately get a European ban, all in one lawsuit. A recent decision from the District Court of The Hague on counterfeit Daniel Wellington watches underscores this once again.

Article | 11 October 2018 | Joost Becker

Counterfeit products

Daniel Wellington (DW) asserted that the watches are fake or counterfeit goods in the sense that a sign identical to the DW trademarks has been put on them without its permission.

DW based its claims on Section 9 (2) (a) of the European Union Trademark Regulation. This article provides that the trademark owner has the right to prohibit any third party that has not obtained its permission for this from using a sign for goods and services in the course of trade if the sign is the same as the trademark and is used for goods or services that are the same as those for which the trademark has been registered.

Opinion of the court

DW substantiated with supporting documents that the watches were counterfeit. The judge also deemed that it had not been contested with sufficient reasons that the watches were counterfeit. ‘Despite it having been up to them to do so, as the sellers/buyers of the watches,’ the parties being sued (ITG and TT), according to the judge, ‘also did not give other, concrete information about the origin of the watches. The mere assertion that the watches came directly from DW’s channel, that they had been doing business with Almelog for some time and that they had never received complaints before is insufficient in this respect.’

Added to this is the fact that there were differences in how the watches were packaged, in the labels and in the watch bands: ‘After all, without further explanation it is not logical that before further trading, changes would have been made to the packaging, labels or watch bands of watches produced on DW’s instructions. The assertion that there may have been misprints or rejected lots involved also cannot benefit ITG and TT. If such lots were put on the market without DW’s permission, there is also a case of infringement of DW’s rights, after all. The fact that they have no access to DW’s serial number records, as ITG and TT argued, is in itself correct, but cannot result in a different opinion. After all, in respect of the information DW provided from its records with reference to prints, ITG and TT did not furnish any other concrete information – which they could indeed have had – about the origin of the watches.’

Trial purchase

DW had made a trial purchase to demonstrate that the watches were counterfeit. The judge accepted this evidence. The judge ruled that signs identical to the DW trademarks had been applied to the watches involved in the trial purchase without permission from DW. By importing the watches, ITG infringed the rights of DW as holder of the DW trademarks. By putting the watch bought in the trial purchase on the market, TT also infringed those rights.

What can be demanded in court in relation to counterfeit products?

DW filed a whole host of claims, most of which were awarded by the judge.

Prohibition against trademark infringement, subject to a periodic penalty payment, for all of Europe

The prohibitions against infringement and the declaratory judgment requested were awarded. The district court set the periodic penalty payment at €5,000 per day, or €1,000 per product, capped at €250,000.

The district court ordered defendants ITG and TT, each individually, to cease and desist within 24 hours in all member states of the European Union from any infringement of the DW trademarks, more specifically to refrain from importing, promoting, offering, selling or otherwise marketing watches on which the DW trademarks have been put without DW’s permission.

Specification (rendering account)

The specification requested was awarded, apart from the registered accountant demanded. This involves a specification of, among other things, the producers, suppliers and buyers, as well as prices, volumes, profit and other relevant data for the purposes of rendering account. These are required for calculation of the damage compensation (see below).

Recall and destruction

The recall and release for destruction demanded were also awarded. The time periods demanded were set at 14 and 60 days.

Damage compensation

The district court found that ‘since, given the trademark infringement ascertained, the possibility that DW has suffered or will still suffer damage is plausible, the claim under H., concerning compensation of damage to be assessed by the court, is awarded.’ 

DW has a legitimate interest in a surrender of profits, to the extent there is no case of accumulation thereof with (any) damage compensation as a result of lost income (in the sense of profit, to be possibly awarded in the follow-up proceedings for the determination of damages).

Legal costs

The defendants were ordered to pay the legal costs, each for themselves and jointly and severally, being the parties found to be in the wrong. These amounts come to over €8,000 for the defendant ITG and over €6,000 for the defendant TT.

Conclusion

In order to effectively combat counterfeiting, it is appealing to be able to register a European trademark and enforce this in court. With this, a European-wide prohibition, subject to a periodic penalty payment, can immediately be demanded before the Dutch court. In this case, (virtually) all other claims relating to the infringements and the counterfeit products were also awarded, and the defendants were ordered to pay the costs of the proceedings and pay damage compensation.

Joost Becker, lawyer specialising in trademark law

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