Dubai - seizure of infringing electrical goods valued at almost US$1 million
This is the story of a very large raid in which almost 30,000 infringing electrical goods, including washing machines and vacuum cleaners, were seized. The goods had been sourced from a factory in China and were in the possession of a UAE trader who was a Chinese national.
Background
Following enquiries in the market, our in-house team located washing machines bearing what appeared to be an obvious imitation of a couple of well known trade marks in the electronics sector. The goods had been manufactured in China and were being distributed in Dubai by a local trader who was a Chinese national. The brand owner was informed of the existence of these products in October 2004 and, on the client's instructions, contact was made with the Dubai Police.
The Dubai Police initially seized goods on a delivery truck and were then able to obtain information relating to six warehouses where further product was being held. When those premises were raided, we were surprised to find that the quantity of infringing electronic goods was huge! In all, close to 30,000 items were seized, including vacuum cleaners, washing machines, electric fans, oil radiators and water dispensers. The volume was sufficient to fill the equivalent of 72 twenty foot container units and took almost five days to be removed from the warehouses to safe storage.
Action
Samples were sent by the Dubai Police to the Dubai Police Forensic Laboratory for a report on the similarities and differences between the infringing and genuine products. All the seized goods bore infringing marks - they were not blatant counterfeits. The laboratory welcomed the assistance of the Trade Mark Registrar who provided a written opinion confirming the Police view that the goods were infringing.
The matter was then referred to the Public Prosecutor who brought the matter before the Court which imposed a prison sentence of two years on the first and second defendants plus a fine of AED 20,000 each. The third defendant was sentenced to one year imprisonment and a fine of AED 10,000. In addition, an order for confiscation and destruction of all infringing product was made. The Defendants appealed. The Court of Appeal reduced the prison sentences to three months for the First Defendant and one month for the second and third defendants. It cancelled the fines, but did confirm the confiscation and destruction of the goods.
As at September 2005, the destruction of the goods was still pending.
Comment
The case highlights several important practical issues. One relates to the fact that the Police currently require all seized goods to be removed from the Defendant's premises and kept in storage at the expense of the Claimant. This can create a difficult situation for the Claimant, particularly where, as in this case, the amount of product seized is large. The storage costs for 72 twenty foot container units were significant.
