parallel imports
DESCRIPTION
TRANSCRIPT
PARALLEL IMPORTATION
Dhanya N. Menon
Altacit Global
DEFINITION
NON COUNTERFEIT PRODUCT
IMPORTED FROM ANOTHER COUNTRY
WITHOUT THE PERMISSION OF THE INTELLECTUAL PROPERTY OWNER/ORIGINAL OWNER
IN OTHER WORDS
PARALLEL IMPORTS ARE LEGITIMATE PRODUCTS, BUT PACKAGED DIFFERENTLY AND MAY NOT CARRYING THE ORIGINAL OWNER’S WARRANTY
GREY PRODUCT/ GREY MARKETTRADE OF A COMMODITY
THOUGH LEGAL
ARE UNOFFICIAL OR
UNAUTHORIZED OR
UNINTEDED; BY THE ORIGINAL MANUFACTURER
BLACK MARKET
TRADE IN GOODS / SERVICES WHICH ARE ILLEGAL IN THEMSELVES
DISTRIBUTED THROUGH ILLEGAL CHANNELS
WHY IT HAPPENS?DIFFERENT PRICING STRATEGIES BY
THE MANUFACTURER
DIFFERENT PRODUCTION COST
THE INTERNATIONAL PRICE DIFFERENCE EXCEEDS THE COSTS OF TRANSPORTING AND SELLING GOODS ACROSS BORDERS
DIFFERENCE IN QUALITY
DIFFERENT LEVELS OF ADVERTISING
DOCTRINE OF EXHAUSTION LIMITATION ON INTELLECTUAL PROPERTY
RIGHTS
FIRST UNRESTRICTED SALE OF A PRODUCT PROTECTED BY IP, EXHAUST THE IP OWNERS CONTROL OVER THE PARTICULAR ITEM
AN INTELLECTUAL PROPERTY OWNER WILL LOSE OR "EXHAUST" CERTAIN RIGHTS AFTER THE FIRST USE OF THE SUBJECT MATTER OF INTELLECTUAL PROPERTY RIGHTS.
IF A RIGHT BECOMES "EXHAUSTED" IN ONE AREA OR JURISDICTION, AN INTELLECTUAL PROPERTY OWNER MAY NOT BE ABLE TO ENFORCE ITS RIGHTS IN ANOTHER AREA OR JURISDICTION
THE ABILITY OF THE ORIGINAL OWNER TO PREVENT PARALLEL IMPORT LEGALLY DEPENDS UPON THE IMPORTING COUNTRIES TREATMENT TOWARDS THE EXHAUSTION PRINCIPLE.
AS PER THE TRIPS AGREEMENT, EACH COUNTRY IS PERMITTED TO ADOPT THEIR OWN STANDARDS FOR PROTECTING IPR.
ACCORDINGLY THEY CAN ADOPT THEIR OWN CONCEPT FOR EXHAUSTION PRINCIPLE
NATIONAL EXHAUSTION
IP RIGHT ENDS UP UPON FIRST SALE OF THE PRODUCT INSIDE THE COUNTRY
THE IP OWNER CAN PREVENT PARALLEL IMPORT FROM OTHER COUNTRIES.
INTERNATIONAL EXHAUSTION
IP RIGHTS ENDS UP UPON THE FIRST SALE ANYWHERE
PARALLEL IMPORT CANNOT BE EXCLUDED
REGIONAL EXHAUSTION
THE IP RIGHTS ENDS UPON FIRST SALE WITHIN A GROUP OF COUNTRIES
ALLOWS PARALLEL TRADE AMONG THE GROUP COUNTRIES.
THE RIGHTS ARE NOT EXHAUSTED BY THE FIRST SALE OUTSIDE THE REGION.
COUNTRY TRADE MARK
PATENT COPYRIGHT
EUROPEAN UNION
REGIONAL EXHAUSTION
REGIONAL EXHAUSTION
REGIONAL EXHAUSTION
USA NATIONAL EXHAUSTION LIMITED BY COMMON CONTROL
NATIONAL EXHAUSTION
NATIONAL EXHAUSTION
JAPAN INTERNATIONAL EXHAUSTION UNLESS BARRED BY CONTRACT
INTERNATIONAL EXHAUSTION UNLESS BARRED BY CONTRACT
INTERNATIONAL EXHAUSTION EXCEPT FOR MOTION PICTURES
AUSTRALIA INTERNATIONAL EXHAUSTION
FULLY PROTECTED
PARTIAL DEREGULATION
INDIAN POSITION
PATENTS
TRADEMARKS
COPYRIGHT
PATENTSDOCTRINE OF IMPLIED LICENSE
PATENT RIGHTS ARE EXHAUSTED WHEN PATENTED PRODUCT FIRST PUT IN TO MARKET OUTSIDE INDIA WITH THE CONSENT OF THE PATENT OWNER
NO EXPRESS PROVISION BEFORE 2002 AMENDMENT
INCLUDED AFTER DOHA DECLARATION ON TRIPS AND PUBLIC HEALTH Contd…
SECTION 48: A PATENT GRANTED CONFER UPON THE PATENTEE THE EXCLUSIVE RIGHT TO PREVENT THIRD PARTIES, WHO DO NOT HAVE HIS CONSENT, FROM THE ACT OF MAKING, USING, OFFERING FOR SALE, SELLING OR IMPORTING FOR THOSE PURPOSES THAT PRODUCT IN INDIA
SUBJECT TO SECTION 107A OF THE ACT
SECTION 107 A: IMPORTATION OF PATENTED PRODUCTS BY ANY PERSON FROM A PERSON WHO IS DULY AUTHORIZED BY THE PATENTEE TO SELL OR DISTRIBUTE THE PRODUCT SHALL NOT BE CONSIDERED AS AN INFRINGEMENT OF A PATENT
A PATENTEE CANNOT PREVENT THIRD PARTY FROM IMPORTING, IF SUCH PRODUCT WAS SOLD OR DISTRIBUTED OVERSEAS BY OR WITH HIS CONSENT
CAN PREVENT BY PLACING CONTRACTUAL RESTRICTION
RULE IN BETTS v. WILLMOT PATENTEE SELLS ANY OF HIS
PATENTED PRODUCTS IN ONE TERRITORY
WITH OUT ANY RESTRICTIONS
THE PURCHASER GETS ABSOLUTE TITLE
FREE TO USE OR DISPOSE OF THE PRODUCT AS IT DESIRES
CONTRACTUAL RESTRICTIONS ARE ENFORCEABLE ONLY IF THEY ARE CLEAR AND EXPLICIT
BROUGHT TO THE NOTICE OF THE PARTY WHO IMPORTS
TRADE MARKS
GENERAL RULE: ONCE THE TRADE MARKED GOODS ARE RELEASED ANYWHERE IN THE WORLD BY OR WITH THE CONSENT OF THE PROPRIETOR, HE CANNOT ASSERT HIS TRADE MARK RIGHT TO PREVENT THE IMPORT OF SUCH GOODS INTO INDIA.
CONDITION: GOODS HAVE NOT BEEN MATERIALLY ALTERED AFTER THEY HAVE BEEN PUT ON THE MARKET
SECTION 30 OF THE TRADE MARKS ACT, 1999 PROVIDES PARALLEL IMPORT Contd…
SECTION 30: IF THE GOODS BEARING A REGISTERED TRADE MARK
ARE LAWFULLY ACQUIRED
THE FURTHER SALE OR OTHER DEALINGS OF SUCH GOODS BY THE PURCHASER OR BY A PERSON REPRESENTING HIM
IS NOT CONSIDERED AS INFRINGEMENT
IF THE GOODS ARE PLACED ON THE MARKET WITH THE CONSENT OF THE PROPRIETOR.
COPYRIGHT MORE COMPLICATED WHEN APPLIED TO
COPYRIGHT
THE RIGHT CONFERRED BY COPYRIGHT ITSELF IS COMPLICATE
CONFERS A BUNDLE OF DIFFERENT RIGHTS
THE GENERAL RULE: A PERSON HAS TO OBTAIN A LICENSE FROM THE COPYRIGHT OWNER FOR IMPORTING THE WORK AND THE CONSENT MAY BE AN EXPRESS ONE
NO LICENSE TO IMPORT MAY BE IMPLIED
Contd…
IMPORT LICENSE REQUIREMENT APPLIES TO ALL COPYRIGHTED WORK MADE OUTSIDE INDIA BY FOREIGN LICENSEES.
NOT TO WORKS MADE IN INDIA AND EXPORTED TO FOREIGN COUNTRY THEN RE-IMPORTED TO INDIA- RIGHT EXHAUSTS
SECTION 51(b)(iv) EXPRESSLY PROHIBITS PARALLEL IMPORTS ON COPYRIGHTED WORKS
SECTION 2 (M): INFRINGING COPY
SECTION 51: SPEAKS ABOUT INFRINGEMENT
SECTION 51(b)(iv): COPYRIGHT IN A WORK SHALL BE DEEMED TO BE INFRINGED WHEN ANY PERSON IMPORTS INTO INDIA ANY INFRINGING COPIES OF THE WORK.
SECTION 2 (M): INFRINGING COPY
INCLUDES ANY COPY IMPORTED INTO INDIA IN CONTRAVENTION OF THE COPYRIGHT ACT
CUSTOMS ACT
PERMIT PARALLEL IMPORT IN GENUINE GOODS WITH IDENTICAL TRADEMARK
NOTIFICATION DATED 18TH JANUARY 1964
GOVERNMENT OF INDIA CAN PERMIT PARALLEL IMPORT OF GOODS BEARING AN IDENTICAL TRADE MARK IF THE GOODS CARRY THE NAME OF THE COUNTRY WHERE THEY ARE PRODUCED
EFFECT OF PARALLEL IMPORT IT TAKE A FREE RIDE ON THE MARKETING
AND SERVICE SUPPORT PROVIDED BY THE AUTHORISED DISTRIBUTOR
IS A THREAT TO THE ORIGINAL MANUFACTURER SINCE IT WILL AFFECT THEIR PROFIT AND THEY CANT TAKE THE HELP OF ANY LAW TO PREVENT
IT ALSO AFFECT HIS ABILITY TO ESTABLISH A SEPARATE INTERNATIONAL MARKET.
PARALLEL IMPORTING NEVER ENCOURAGES CONSUMER DECEPTION AND TRADE IN COUNTERFEIT GOODS AND PIRATED GOODS.
BANE OR BOON? TWO DIFFERENT OPINIONS
- Supporting:
BENEFIT CONSUMERS BY LOWEREING THE PRICES
WIDENING THE SELCETION OF GOODS WIDENING THE CONSUMPTION OF
GOODS
- Not Supporting:
DISCOURAGES INTELLECTUAL PROPERTY OWNERS FROM INVESTING IN NEW AND INNOVATIVE PRODUCTIONS