March 2, 2026
On February 24, 2026, the Senate of the Supreme Court of the Republic of Latvia issued a judgment in case No. SKA-73/2026, which focuses on the protection of intellectual property rights during customs controls. A key issue in this case was whether the State Revenue Service (Customs) had the right to confiscate goods solely based on suspicions of an infringement of intellectual property rights arising from risk analysis and without further evidence beyond an assessment provided by the rights holder. A brief answer is no. This decision significantly restricts the arbitrary destruction of goods at customs.
Background and Circumstances of the Case
A dispute arose after the State Revenue Service (SRS) decided to confiscate and destroy 9,000 units of toy cars containing sweets on the grounds that they infringed on the intellectual property rights (trademarks and industrial designs) of an automotive brand. The owner of the toys objected to their destruction and challenged the SRS’s decision in court.
Both the Administrative District Court and the Administrative Regional Court upheld the SRS’s actions, rejecting the owner’s application. The courts concluded that the toys qualified as counterfeit goods because they featured an exact reproduction of a protected design, including specifics like the shape of the windows and the engine grille. Additionally, the invoices used terms that corresponded to a registered trademark, although the trademark was not registered for food products (such as confectionery) and did not appear on the disputed toys themselves.
The Senate was required to address the following questions:
1. On what grounds may the SRS decide to confiscate goods due to an infringement of intellectual property (IP) rights if the declarant or possessor of the goods objects to their destruction?
2. May customs authorities destroy goods based solely on “reasonable suspicion” if the owner of the goods objects?
3. What is the standard of proof required to establish an infringement of IP rights within the framework of customs procedures?
Key Conclusions of the Senate
In reviewing the cassation appeal, the Senate analyzed the EU Regulation (EU) No 608/2013, as well as relevant national regulations. The key findings presented by the Senate in its judgment are as follows:
• The Regulation permits the destruction of goods based solely on suspicion only if both parties (the rights holder and the possessor of the goods) consent to it. Since there was no such consent in this case, the State Revenue Service (VID) was obligated to prove the actual occurrence of the infringement.
• The Senate emphasized that in cases where the declarant or possessor of the goods objects to their destruction, “suspicion” or risk analysis alone is insufficient for the customs authority (or the court). In such a situation, a full-scale investigation must be conducted to ascertain whether an infringement of intellectual property rights has actually taken place.
• The approach taken by the lower courts, focusing on establishing only the “grounds for suspicion” rather than the infringement itself, is incorrect and inconsistent with applicable legal norms. In the Senate’s view, both lower courts erred in concluding that “reasonable suspicion” was sufficient to justify a decision to destroy the goods in a situation where a dispute exists regarding an infringement of intellectual property rights.
• The Senate pointed out that a unilateral statement from the rights holder cannot serve as the sole evidence. The authority itself must independently assess the evidence (for example, photographs) and reach a reasoned conclusion. Consequently, binding case law has established the principle that an assessment provided by an intellectual property rights holderstating that goods are counterfeitcannot be regarded as incontrovertible proof. Instead, customs authorities and the courts are obliged to conduct an independent and objective analysis; furthermore, they cannot rely solely on general assertions but must perform a detailed comparison between the specific goods in question and the registered trademark or design.
• Finally, the Senate confirmed that both the authority and the court must carry out a comprehensive assessment to determine whether an infringement of intellectual property rights has occurred. In the view of the Senate, the courts of both lower instances failed to conduct an actual comparison between the goods and the objects of intellectual property (IP) rights, and did not provide an assessment regarding potential infringements of trademarks or industrial designs. The Senate pointed out that the court must compare and evaluate the specific seized and confiscated goods against specific trademarks and industrial designs. This assessment must take into account both the scope of legal protection afforded to trademarks and designsand, consequently, the criteria for determining potential IP rights infringements, as well as the relevant case law from national courts and the Court of Justice of the European Union concerning these criteria and their evaluation.
Consequently, the Senate concluded that the Regional Court’s findings regarding IP rights infringements were insufficiently substantiated and were based on an erroneous interpretation and application of legal norms. Therefore, the Senate set aside the judgment of the Administrative Regional Court and remanded the case to the appellate court for a new hearing.
Consequences
This judgment by the Senate is highly significant, as it protects the owners of goods against the arbitrary destruction of such goods by customs authorities. It sets a higher evidentiary threshold for state institutions (such as the State Revenue Service/Customs): if the declarant or the possessor of the goods objects, the authority must substantiate and prove the infringement, rather than merely relying on suspicions and the opinion of the owner of the relevant intellectual property right.