PARALLEL IMPORTS
Recent Indian court cases have clarified the rules on parallel imports, but there are still some grey areas, says Himanshu Bagai.
A parallel imported product is a non-counterfeit product purchased in country A and imported to country B for subsequent sale. Such non- counterfeit products are authorised for sale by the owner of intellectual property (trademark, copyright, patent) in country A, but may not be intended for sale in country B. Parallel importation or parallel trade represents another form of arbitrage wherein a legitimate product is shipped from an authorised (by the IP owner) market to another market where it commands a higher price. Parallel imports are also driven by price differences in various countries that may result from retailer price discrimination, vertical pricing restraints or national differences in government price controls.
Trademark law
Te Trade Marks Act, 1999 came into force on September 15, 2003 and governs trademark law in India. Te following provisions from Section 29 of the act, which defines trademark infringement, are relevant to parallel importation:
“29. Infringement of registered trade marks
(1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use,
uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.
(6) For the purposes of this section, a person uses a registered mark, if, in particular, he-
(a) affixes it to goods or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;
(c) imports or exports goods under the mark; or
(d) uses the registered trade mark on business papers or in advertising.”
Section 29(1) of the act read with Section 29(6)(c) states that any import or export of goods under a registered trademark without the consent of the proprietor, amounts to infringement of the registered trademark.
However, Section 30 of the Trade Marks Act administers certain limitations and lists certain conditions under which a registered trademark is not infringed:
“30(1) Nothing in Section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use-
(a) is in accordance with honest practices in industrial or commercial matters, and
(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark.
30(3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of trade by reason only of-
(a) the registered trade mark having been assigned by the registered proprietor to some other person, aſter the acquisition of those goods; or
(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.
(4) Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose further dealings in the goods in particular, where the condition of the goods, has
www.worldipreview.com
World Intellectual Property Review September/October 2010
29
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