Coty ruling positive for counterfeit cosmetics battle as Court rules in favour of information sharing

The move is a positive one for the cosmetics and beauty industry as a whole as it has long battled the issue of counterfeit products being sold, particularly online.

Now, after the case brought by Coty Germany against national bank Stadtsparkasse Magdeburg​, companies that suspect counterfeit sales of their products are occurring cannot be refused access to certain information, ‘in an unlimited and unconditional manner’, according to the ruling.

This is not to say that companies will be given a right to information, but rather that a balance has been sought when there is a case of intellectual property infringement.

“Article 8(3)(e) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding a national provision, such as that at issue in the main proceedings, which allows, in an unlimited and unconditional manner, a banking institution to invoke banking secrecy in order to refuse to provide, pursuant to Article 8(1)(c) of that directive, information concerning the name and address of an account holder,”​ says the ruling.

How the story unfolds…​

The story began over four years ago when Coty says it purchased a bottle of its Davidoff Hot Water perfume from an internet auction platform, paying the purchase price into the seller's bank with the German banking institution Stadtsparkasse.

Coty then discovered that the item was fake and asked the auction platform to provide it with the seller's real name.

The person in question admitted to being the account holder but said she didn't sell the fake product and, relying on her right not to give evidence, refused to provide any further information.

This led the cosmetics company to contact Stadtsparkasse directly to ask it for the name and address of the account holder; a request which was denied due to German law on banking secrecy.

This opened up a difficult case as Coty obtained an order requesting the bank provide the information, however this was then reversed on appeal.

A further Coty appeal to this decision then led the case to be brought to the door of the European Court of Justice.

Despite Stadtsparkasse protests, the ECJ ruled in favour of brand owners, which is a step forward in the battle against counterfeit goods, and also means that those responsible cannot hide behind bank secrecy policies.

The ruling also takes into account respect for privacy and secrecy, as information can only be disclosed when it is a necessary component in the pursuit of justice.