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Lawyers for Nokia, the mobile phone maker, are asking the European Union’s top court to decide whether fake goods which are simply passing through the 27-country bloc can be seized by custom officials.

The case, which was heard on Thursday in the European Court of Justice in Luxembourg, could have important implications for companies’ battle against the estimated $20bn global trade in counterfeit merchandise.

A shipment of 400 “fake” Nokia phones which were being sent from Hong Kong to Colombia, were stopped by British customs officials at Heathrow airport. The company identified them as counterfeits and asked that they be seized.

But HM Revenue & Customs, after taking legal advice, said it had difficulty seeing how the goods could be considered “counterfeit” unless they were put on the EU market – since that was the point at which the Nokia trademark would be used and infringement would occur.

The company asked for a judicial review of that decision in the English courts where a judge last year agreed with the authorities’ interpretation. On appeal, guidance was sought from the EU’s top court.

Lawyers said if judges in Luxembourg decided that goods which were only in transit through the EU can be seized, there could be a significant practical impact. “Europe is a massive trans-shipping point for luxury goods and other things, like phones, which are often made elsewhere,” said Geoffrey Pritchard, barrister at Three New Square, a London-based chambers acting for Nokia.

The European Commission, which has been battling the growth in counterfeit trade for years, said it believed customs authorities should be able to intervene if there was a suspected breach of intellectual property rights, even where the shipment was only in transit. Countries which support intervention are thought to include Italy, Poland, Finland and Portugal.

However, there was some division among member states: aside from HMRC’s view, the Czech Republic is also believed to disagree with Nokia’s position.

it is expected to be several months before the court rules on the case.

Copyright The Financial Times Limited 2017. All rights reserved.

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