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Court allows prosecution of repro Bauhaus furniture distributor

Differences in national copyright laws not an artificial partitioning of markets

21 June 2012

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Importers of reproduction Bauhaus furniture manufactured in breach of the maker’s copyright in the country of delivery may be prosecuted in the destination country, European judges have ruled.

German national Titus Donner had been shipping copies of modern furniture masterpieces, including Eileen Gray’s adjustable table and seats by Le Corbusier, from Italy, where they were made, to buyers in Germany.

The furniture was sold by Italian company Dimensione Direct Sales, which advertised in German magazines and on German-language websites, even though it did not have distribution rights in Germany.

While these items were copyright protected in Germany, they temporarily fell out of protection in Italy, allowing replica manufacturers to start producing cheaper copies and later avail themselves of Italian case law which shields them from prosecution.

Mr Donner’s company, InSpem, paid for the goods on collection in Italy and later received payment from the end-purchasers in Germany.

In law, this meant ownership was transferred to German clients in Italy but distribution took place in Germany, giving German authorities the opportunity to start criminal proceedings against Mr Donner.

In his defence, Titus Donner said German law was incompatible with the EU’s principle of free movement of goods.

Ruling in case C-5/11 Donner, the European Court of Justice suggested that ‘distribution’ could be deemed to occur in a given country in situations where a business was targeting customers through advertising, or making delivery possible, in that country.

If distribution was deemed to have taken place in Germany in this case, the Luxembourg judges said, the German court could lawfully apply German criminal rules on the protection of intellectual property rights.

Although these rules constituted a restriction on the freedom of movement, they were justified by the need to ensure the protection of industrial and commercial property.

Intellectual property laws were inseparably linked to national jurisdiction lines and the resulting differences from one country to another could not be regarded as giving rise to “a disproportionate or artificial partitioning of the markets”, the court said.

On the contrary, the judges said, “The application of provisions such as those at issue in the main proceedings may be considered necessary to protect the specific subject matter of the copyright, which confers inter alia the exclusive right of exploitation

The restriction on freedom of movement was therefore “justified and proportionate to the objective pursued”, the court concluded.

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