1. International Trademark
rights and Parallel
Imports
SANJEEV KUMAR CHASWAL
ADVOCATE AND IPR ATTORNEY
LL.M (IPR,ARB&ADR)
M.S (CYBER LAW AND CYBER SECURITY)

2. Intellectual Property Rights- A Intro
Rights-
• Intellectual Property Rights are the rights
given to persons over the creation of their
minds. They usually give the creator an
exclusive right over the use of his or her
creation for a certain period of time.
• Like any other property, ownership of
intellectual property can be transferred.
• Once a product protected by an IPR is sold
the IPRight is “exhausted”.

3. Purpose of Trademark Law
• The trademark rights exist in each country with basic purpose
of a trademark is to ensure according to that country’s
statutory provisions to ensure:
• A trademark indicates source of origin of goods.
• Minimal consumer confusion by clearly relating to trademark.
• Indentifying the territorial character from a particular
manufacturer.
• Consumer satisfaction through quality control that the
foundational intellectual property conventions.
• Thus, for example, the mark Dairy of national treatment. As
Milk on chocolate bars indicates that those particular different
rules of trademark law possess a territorial bars have been
manufactured by Cadbury and the character for different
reasons: customers can expect such bars to be of quality that
the public has come to associate with Cadbury’s

4. Trademark is Territorial law
• Trademark rights are territorial as the products identify the a
source of origin.
• Trademark laws are territorial as they are promulgated
primarily by national law making , whether judiciary or
legislature.
• A trademark is acquired through national statutory provisions
Thus, a manufacturer has to obtain separate registrations in
different countries for entitled to protection.
• Trademark rights are enforced on the basis of respective
national statutory provisions.
• This means that, irrespective of the trademark owner holding
rights in different countries, an action for infringement will lie
so far as it involves the vindication of the rights available in
such country .
•

5. Doctrine of Exhaustion of IP Rights
• It is a concept in Intellectual property law whereby an
intellectual property owner will “lose” or "exhaust" certain
rights following the sale of that IP.
• Exhaustion occurs at the moment when the intellectual
property rights (IPR) holder’s control over the use and
disposition of goods and services embodying IPR ceases
in order to permit the free transfer of goods and services
within and across national borders. This generally occurs
when goods and services are first sold or placed on the
market.
• For example, the ability of a trademark owner to control
further sales of a product bearing its mark is generally
"exhausted".
• The rights of commercial exploitation for a given product
end with the product’s first sale.

6. • Exhaustion of Intellectual Property Rights, also known as "The
First Sale Doctrine" -
• Basically the doctrine says whenever a good protected by
patents, copyrights, or trademarks is sold, then the owner of the
goods has realized the benefits of the protection. Those rights
are "exhausted" at the point of first sale.
• That "first purchaser" of the good is free to resell the good
wherever he wishes, even if he is competing against the original
producer.
• The exhaustion doctrine has received the blessing of the
European Court of Justice (Merck v. Stephar, 1981) and the
Supreme Court of Japan.
• The WTO rules, specifically the TRIPS accords, Article 6, permit
the "exhaustion doctrine." Countries make their own laws on
whether to permit parallel imports--if they do, they have ruled in
favor of "Exhaustion" or "First Sale" doctrine. Pharmaceutical
firms object to the Exhaustion Doctrine (and Parallel Imports),
and lobby vigorously against both.

7. Intellectual property Legal principle that, in general, the
first sale of a copyrighted, patented, or trademarked good
exhausts the Copyright patent Trademark
owners intellectual property right (IPR) in that he or she
cannot control the distribution or resale of the good.
Therefore if 'A' (the IPR owner) sells to 'B,' then 'B' can
sell to 'C' without the approval of 'A.' Also called doctrine
of first sale.
•

8. PATENTS EXHAUSTION
• For a patent, the Doctrine of Exhaustion means once a
patent owner makes a first sale of an item covered by a
patent, the patent owner is not entitled to any additional
royalty or compensation for subsequent sales of the same
item.
• The subsequent purchasers have an “implied license” to use
the invention. However, like any rule there are exceptions.
What if the sale of the patented item was made “out the
back door” by a licensee? If such a sale was not an
authorized sale and the patent owner did not receive
compensation for the sale, the patent owner could sue a
purchaser for infringement. Another exception is if a
patented item is merely being leased or licensed, then a
subsequent sale of that item would not exhaust the owner’s
patent rights.

9. EXHAUSTION UNDER PATENT ACT
SECTION 107 B EXHAUSTION OF RIGHTS
1. For the purposes of this Act, the rights of a patentee or
anyone claiming through such patentee shall be
exhausted after a patented article has been sold once
anywhere in the world (including within India), by or with
the authorization of such patentee.
2. The provisions of section 107B(1) shall apply in case
of sale of any patented article, notwithstanding:
any contractual stipulation
any notice in relation to the article placed by the patentee
or her authorized representatives or any other party
selling the patented article; unless such notice is
essential to ensure public health or safety.

10. TRADEMARKS EXHAUSTION
• In trademark law, a trademark owner cannot
control further sales of a product bearing its
trademark after the first sale. Thus, a buyer can
resell a product bearing the trademark.
• Of course, the first sale must be an authorized or
unrestricted sale. If the first sale were to someone
outside an authorized territory, such as in the
case of “gray market” goods, then the trademark
rights would not be exhausted.

11. EXHAUSTIONS UNDER T M ACT
• Section 30(3) of the Indian Trademarks Act, 1999 which
provides that: 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 a trade by reason only of a)……………………
• b) the goods having been put on the market under the
registered trade mark by the proprietor or with his consent.
• The wording of Section 30 is wide enough to subsume both
national and international exhaustion principles. Section 30
(3) provides that the general legal proposition that once
certain goods bearing a registered trademark are lawfully
acquired by a person, the subsequent sale of the goods in
the market or otherwise dealing in those goods is not an
infringement.

12. COPYRIGHTS EXHAUSTION
• The first-sale doctrine plays an important role
in copyright by limiting certain rights of a copyright owner.
The doctrine enables the distribution chain of copyrighted
products, library lending, gifting, video rentals and
secondary markets for copyrighted works (for example,
enabling individuals to sell their legally purchased books
or CDs to others). The doctrine is also referred to as the
"right of first sale," "first sale rule," or "exhaustion rule."
example, the distribution right could be infringed when a
retailer acquires and sells to public unlawfully made audio
or video CD’s or tapes.
• The first-sale doctrine creates a basic exception to the
copyright holder's distribution right. Once the work is
lawfully sold or even transferred gratuitously, the copyright
owner's interest in the material object in which the
copyrighted work is embodied is exhausted.

13. EXHAUSTION UNDER COPY RIGHT ACT
• The first sale doctrine with respect to literary works is
primarily derived from Section 14 of the Act. Section
14(a)(ii) authorizes copyright owners “to issue copies of the
work [they own] to the public not being copies already in
circulation”
• Explanation clarifies that “a copy which has been sold once
shall be deemed to be a copy already in circulation”.
• By the “first sale” of a copy, the copyright owner exhausts
his right to control further sale or distribution of that
particular copy.

14. The precise scope of exhaustion, however, hinges on the
question of the applicable territory:
Is a legal copy, which has been lawfully sold once in a
particular territory, deemed to be “already in circulation”
1. only within the particular territory/ country of sale, or
2. worldwide, or
3. in the territory designated by the copyright owner for its
sale?
In the first case, a copy once sold in India would be
considered to be “already in circulation” only within India,
and the first sale would result in “national exhaustion”. By
analogy, in the second and third cases, the first sale would
result in the “international exhaustion” and, possibly, the
“regional exhaustion” of rights, respectively.

15. Case Law in Copyright Exhaustion
• Justice Bhat in Warner Bros. vs V.G Santosh Cs(OS)
1682/2009 explicitly recognised that, in the context of
copyright law, while the principle of international
exhaustion may apply to literary, musical, dramatic or
artistic works; it does not apply to cinematographic film
[and to sound recordings as well]. This case involved the
import from US into India of legally purchased DVDs of
films produced by Warner Bros. which were not yet
released for public viewing in India. He based his decision
on the difference between the wordings of Sec. 14(1)(d)
[and (e)] and 14(1)(a)/(b)/(c). While under the former, the
copyright owner continues to exercise his right to sell or
give on hire a particular copy “regardless of whether such
copy has been sold or given on hire on earlier occasions”;
under the latter, he ceases to exercise these rights over
copies which are “already in circulation.”

16. CASE LAW Contd….
In John Wiley & Sons Inc. v. Prabhat Chander Kumar
Jain IA No. 11331 of 2008 in CS (OS) No. 1960 of 2008
order dated 17?5?2010 (Del)., the Delhi High Court stated
that “as the express provision for International Exhaustion is
absent in our Indian law, it would be appropriate to confine
the applicability of the same to regional exhaustion”.
In this case, LPEs intended for sale in the Indian
subcontinent were being sold online by the defendants after
purchasing them in the territory designated by the publisher.
The sale, and offer for sale, of such LPEs, meant for
exclusive use in India, by the defendant, who is clearly
targeting overseas buyers, to whom such products cannot be
sold at Indian prices, constitutes acts of infringement under
Section 51 of the Copyright Act.

17. PROPOSED AMENDMENT TO
COPYRIGHT LAW
• The Copyright (Amendment) Bill, 2010 (the Bill) proposes to
recognize the principle of international exhaustion for all
classes of works by amending Section 2(m) of the Act (which
defines infringing copies).
• The Bill proposes to add a proviso to Section 2(m) of the Act
stating:
“Provided that a copy of a work published in any country
outside India with the permission of the author of the work and
imported from that country into India shall not be deemed to
be an infringing copy;”
• If this proposed amendment were to become law, it would
become abundantly clear that India follows a principle of
international exhaustion.

18. TYPES OF EXHAUSTION OF RIGHTS
• There are three kinds of exhaustion of rights:
• a) National exhaustion of rights: National exhaustion of
rights refers to one of the limits of intellectual property
rights. Once a product protected by an IP right has been
marketed either by manufacturer or by others with his
consent, the IP rights of commercial exploitation over this
given product can no longer be exercised by manufacture
as they are exhausted. Any proper use of the goods after
the first sale of the product would not amount to
infringement. The concept of national exhaustion does not
allow the IP owner to control the commercial exploitation of
goods put on the domestic market by the IP owner or with
his consent. However, the IP owner (or his authorized
licensee) could still oppose the importation of original
goods marketed abroad based on the right of importation.

19. • Regional exhaustion of rights:
Regional exhaustion of rights refers to the first sale of the
IP protected product by the IP owner or with his consent
exhausts any IP rights over these given products not only
domestically, but within, the whole region and parallel
imports within the region can no longer be opposed based
on the IP right.
• International exhaustion of rights:
Once a product is exported in a market outside India and
the further sale of the same product there, would come
under the purview of International exhaustion of rights but
at the same time if the goods are purchased from the
international market and sent back to India for the purpose
of selling them here would not be allowed as per principle
of parallel imports.

20. EXCEPTIONS PRINCIPLE OF EXHAUSTION
• A parallel import is a practice whereby an unauthorized
third party exploits the doctrine of exhaustion and imports
goods which are less expensive in one country to be sold
parallel with more expensive goods which are either non
imported or imported from a source controlled by the
trademark owner.
• Parallel importation refers to the import of goods outside
the distribution channels contractually negotiated by the
manufacturer. Because the manufacturer / IP owner has no
contractual connection with a parallel importer, the
distribution channels are not controlled by the
manufacturer/IP owner and hence he opposes such
importation in order to separate his market

21. NO WORLD CONSENSUS ON
EXHAUSTION OF RIGHTS
• There is currently no international treaty in the field of
trademarks dictating a standard of national or international
exhaustion. The Paris Convention does not address the
issue. The Agreement on Trade Related Aspects of
Intellectual Property (TRIPs) is deliberately neutral on the
subject. Article 6 of TRIPs states:
For the purposes of dispute settlement under this
Agreement...nothing in this Agreement shall be used to
address the issue of the exhaustion of intellectual property
rights.
• In general, it was found that most countries favor some
concept of national exhaustion.

22. EXHAUSTION AND PARALLEL IMPORTS
• A standard of national exhaustion appropriately takes
into account many brand protection concerns that are
not addressed under a standard of international
exhaustion.
• The prices at which products are sold can vary from
country to country for a great variety of legitimate
reasons, among them differences in regulatory
requirements, environmental standards, labor and
material costs, and government subsidies and taxes.
• Parallel importers exploit these conditions by buying
products in a market where they are relatively cheap
and selling them where the price is higher.

23. Parallel imports
• Parallel import means that patented or marked goods are
purchased in a foreign market and resold in the domestic
market. These are known as passive parallel imports.
• Parallel imports involve cross-border trade in a product
without the permission of the manufacturer or right holder in
the importing country.
• This type of trade generally occurs where there is a
significant difference in price, quality, or availability of the
subject product in the second country.
• The Parallel import products are different from counterfeit or
pirate goods, since they are legally manufactured and sold
in the first country by the right holder, and in some countries
their importation is legal.
• Parallel imports are often referred to as grey product, and
are implicated in issues of international trade and IPR

24. APPROACH FOLLOWED BY DIFFERENT
COUNTRIES
• All countries allow parallel imports. However, little
uniformity exists in the overall approach.
• Article 6 of the General Agreement on Tariffs and
Trade/the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), of the World Trade
Organization (WTO) Agreement, provides that appropriate
laws regarding parallel imports should be drafted in such a
way that they do not violate the non-discrimination rules of
the most-favoured national and international treatments.
• ‘Nothing in this Agreement shall be used to address the
issue of the exhaustion of intellectual property rights.’
• It is therefore clear that the treatment of parallel imports is
subject to the national laws of different countries

25. • There are two prevailing theories regarding exhaustion,
namely, that once goods bearing a trademark have been
placed into commerce by, or with the consent of, the
trademark owner either
• (a) the owner cannot use his trademark rights to prevent
the further distribution of such goods anywhere, the so-
called international exhaustion rule; or
• (b) he cannot use his trademark rights to prevent further
distribution of such goods in the same country, but may
prevent such distribution in other countries, the so-called
national exhaustion rule.

26. THE UNITED STATES APPROACH
• The US adopted the universal rule (international
exhaustion through s526 of Tariff Act 1930 and s42 of
Lanham (Trademark) Act 1946, with respect to parallel
imports). Under these provisions, once a genuine trade
marked product is placed in the global market by, or with
the consent of, the trade mark owner, no infringement of
the rights of the trade mark owner occurs.
• Although there are a number of laws in the United States
that address the issue of parallel imports of trademarked
products, the treatment of parallel imports is fairly uniform.
In an early decision permitting the unauthorized importation
and sale of genuine bottled water from Europe, it was held
that once a trademarked product is placed on the market,
trade mark rights may not be used to control the product's
further destination Apollinaris Co. Ltd v. Scherer , 27 Fed
18 (SDNY 1886).

27. • Although decided under common law principles of trademark
law, this early decision was subsequently applied to the
codified trademark law and has remained the law to this day
under the infringement provisions of the present day Lanham
Act.
• The U.S. Supreme Court has recently decided a case
involving parallel imports in the copyright context, although
the imports involved would not normally be thought of as
warranting copyright protection. The goods were hair care
products that contained a label bearing copyrightable subject
matter.
• The Copyright Law provides the right to exclude others from
using any one of a bundle of exclusive rights. The primary
rights provided by Section 106 of the Copyright Act are the
right to exclude others from (1) reproducing the copyrighted
work, (2) preparing derivative works, (3) distributing copies
of a work, (4) performing a work publicly and (5) publicly
displaying a copyrighted work

28. The European Union approach
• The European Union has adopted a regional exhaustion
rule that originally developed through decisional law on the
theory that the ability to prevent further distribution of
genuine goods would distort trade among the member
states.
• Thus the principle of exhaustion of rights was adopted with
respect to trademarks, although this has been adopted only
on a regional level; namely, only with respect to goods first
placed on the market within the Community, or previously
imported into the Community through a member state.
• This regional exhaustion rule has been codified in the
harmonization directive [8] ("Directive"), in accordance with
which the member states were required to conform their
national trademark laws.

29. • Article 7 of the Directive provides that "the trade mark shall
not entitle the proprietor to prohibit its use in relation to
goods which have been put on the market in the
Community under that trademark by the proprietor or with
his consent" except under the provisions of Article 7(2),
which exempts altered or damaged goods. In addition, as a
result of the Agreement on the European Economic Area
(EEA) between the EU and the European Free Trade
Association countries of Iceland and Norway.
• However, the regional exhaustion rule does not imply
international exhaustion, where, for example, parallel
imports are in transit from one non-EEA member state,
through an EEA member state, to another non-EEA
member state, and are seized in the EEA member state as
parallel imports voilative of the trademark owner’s
trademark rights in the member state.

30. • The regional exhaustion rule does not imply international
exhaustion, as held by the European Court of Justice
and Silhouette International v. Hartlauer (Case C-
355/96)[1998] ETMR 539, holding that Trademark Directive
functioned as a complete harmonization of the rules and,
therefore, did not permit the member states to adopt an
international theory of exhaustion, which would conflict with
the EU’s regional theory of exhaustion and cause barriers
to the free movement of goods and provision of services.
• It is interesting to note that the European Commission
made overtures in 2000 to introduce an international
exhaustion theory into Community law, by publishing a
working paper on the issue. However, after the working
paper was laid open for debate and consideration, the
Commission withdrew from the debate by deciding in June
2001 not to propose changes to the law

31. Commonwealth approach
• The United Kingdom applies the European Union law on
exhaustion with respect to goods first placed on the market
in an EEA country. Article 12 of the new United Kingdom
Trade Marks Act of 1994 has enlisted the language of the
Directive. However, a separate body of English
jurisprudence, developed under the former Trade Marks
Act 1938 adopted an international exhaustion principle,
uninfluenced by the European Union law, and this body of
law, although arguably no longer applicable under the new
United Kingdom Trade Marks Act, serves as the model for
other British law countries in the Commonwealth.
• As a result, the court decided that proprietorship of a
registered trade mark does not entitle the proprietor to
control the distribution of his branded goods after they
have left his hands.

32. • Thus, the Commonwealth position considers that a
trademark serves as an indication of the origin or source of
the goods, not as a "badge of control" which would allow
the trademark owner to control the trademarked goods
throughout their passage in commerce.
• Other British law countries have interpreted these
passages to provide no cause of action to trademark
owners against sellers of genuine goods on which a
trademark has been placed by the trademark owner or
registered user.
• As Atari Inc. & Futuretronics Australia Pty. Ltd. v. Fairstar
Electronics Pty. Ltd. , (1984) 50 ALR 274 (action to stop
import of genuine goods for sale in Australia where first
plaintiff owned trademark and second plaintiff was sole
Australian distributor) adopted the Champagne theory of
exhaustion, denying interlocutory relief.

33. • See also R.A. & A. Bailey & Co Ltd v. Boccaccio Pty
Ltd. (1986) 6 I.P.R. 279 (S.C. of N.S.W.)(parallel import
of genuine BAILEY'S Irish Creme did not infringe
trademark since there was no deception as to the origin
of the goods.
• Smithers, J. articulated in the Atari /Fair star case, the
trade mark owner who releases goods "on the billowing
ocean of trade" will not be able to use the trademark to
control the ultimate destination of those goods.

34. Approach of Australia
• Both Australia's Trade Mark and Copyright Acts had been
amended to provide for a specific exemption to infringement
in this case in that the Act provided, for example: "The
copyright in a work a copy of which is, or is on, or embodied
in, a non-infringing accessory to an article is not infringed by
importing the accessory with the article". The judge found
that Ziliani's conduct came directly under this provision and
an exemption applied.
• The judgment is one of the first cases to deal with 1998
legislative amendments which were designed to free up the
ability of independent third parties to "parallel import"
products into Australia..

35. • The judge appears to have effectively given teeth to the
amendments. In the recent decision of Polo/Lauren
Company LP v Ziliani Holdings Pty Ltd[2008] FCA 49, the
Federal Court has closed off the capability of trade mark
owners to shut down parallel importation of a genuine
product using our Copyright Act.
• Ziliani purchased genuine out-of-season clothing bearing
Polo/Ralph Lauren's polo player logo at heavily
discounted prices in the US and imported the clothing
into Australia for retail sale. Polo/Ralph Lauren attempted
to shut down Ziliani's actions by arguing that the
importation amounted to an infringement of their
copyright in the polo player logo.

36. New Zealand Approach
• In New Zealand, the exhaustion of rights defence is more
broadly worded. In New Zealand, the exhaustion of rights
defence applies where the goods have been put on the
market elsewhere under the trade mark:
• by the owner
• with the owner’s express or implied consent, or
• by an associated person of the owner.
• The Act also broadly defines “associated person” to
include:
• same group companies
• body corporate consisting of substantially the same
members or directly or indirectly under the control of the
same person, where the person has effective control of the
other’s use of the trade mark, and

37. JAPAN AND KOREA
• Although many countries allow the war against parallel
imports to be fought by private parties in the courts or
before administrative tribunals, certain countries, such as
Japan and Korea, not only expressly permit parallel
imports, but also take affirmative steps to protect parallel
importers.
• However, under the current practice, if such acts fall under
"parallel import of genuine goods," they do not constitute
trademark infringement, even if no trademark license has
been obtained from the trademark owner. As an example,
the general requirements of "parallel import of genuine
goods," as presented by the Supreme Court in its
February 27, 2003

38. • The Fair Trade Commission Guidelines Concerning
Distribution Systems and Business Practices enacted in
Japan in 1991 under the Anti-Monopoly Act also prohibit
acts that serve to inhibit parallel imports, such as
preventing an overseas supplier, except a direct supplier to
an exclusive distributor, from supplying products to the
parallel importer; alleging, without sufficient basis, that the
parallel importer is handling counterfeit products;
purchasing all of the parallel imports from the distributor; or
unjustly interfering with advertising of parallel imports.
• Trademark owners, their licensees and authorized
distributors must always be cautious when contemplating
preventive or curative action against parallel imports since
such action, in many countries, may be considered to
conflict with local antitrust and free competition laws.
•

39. RUSSIA
• On September 10th 2008, the Moscow Arbitrazh Court
rejected the claim of a customs authority which initiated an
administrative proceeding against a Russian importer. This
company imported automotive parts labeled with Honda
Motors Co. and Nissan Motor Co. trademarks without being
an official distributor for these companies or having any
agreements with them.
• The customs authority accused the Russian firm of
importing counterfeit goods and of infringing the trade-mark
rights of the Japanese companies. The Court decided that
the importer had not breached any trade-mark rights
because the imported automotive parts were an original
production of Honda Motors Co. and Nissan Motor Co. and
therefore they were not deemed to be counterfeit by
Russian IP legislation.

40. INDIAN APPROACH
• India has adopted the national exhaustion principle to
regulate parallel imports, the same being enshrined in
s30 of the Trade Marks Act 1999 (the 1999 Act). As
per this principle, if the goods are sold for the first time
in a domestic market or within the territory of the
country in which the trade mark is registered, the
owner of that particular trade mark loses their rights
over the goods and cannot prevent any subsequent
sale of the same in the domestic market of that
country. Section 107 of the 1999 Act authorises
representation of a trade mark registered abroad to
operate in India as long as the same is sufficiently
indicated in English.

41. • Subsection (1) of Section 29 of the Act prescribes that an
infringement action can be initiated against a person who,
not being a registered proprietor or a permitted user, uses
the registered trade mark or an identical or deceptively
similar mark in the course of trade. Moreover, clause (c) of
subsection (6) of Section 29 prescribes that import and
export of goods under the mark shall be treated as use of
the mark for the purposes of Section 29.
• Thus, when subsection (1) of Section 29 and clause (c)
subsection (6) of Section 29 are read together it becomes
clear that if anybody imports the goods who is not a
registered proprietor and acts without the proprietor's
permission, then this action of import would fall under "use"
of the mark in the course of trade and hence would lead to
infringement of the right of the trade mark proprietor.

42. • From the provisions contained in the statute, it is clear that
the main objective behind Section 30(2) (c)(i) is to prevent
the owner of a trade mark from claiming infringement in
respect of a product against its use by another party to
whom the owner has expressly or implicitly granted
consent.
• A bare reading of Section 30(3)(b) reveals that where
goods bearing a registered trade mark are lawfully
acquired, the further sale or other dealings in such goods
by the purchaser or by a person claiming to represent the
purchaser is not considered an infringement, if the goods
have been put onthe market under the mark by the
proprietor or with the proprietor's consent. Here the words
"by the proprietor or with his consent" are to be stressed;
the proprietor is the trade mark owner in India.

43. • Hence this clause further reiterates that the consent of the
proprietor of trade mark in India is a must. Otherwise its use
(here, import for trade) would lead to infringement of the
trade mark. It may be pointed out that there can be no
infringement action if the goods are imported by the
importer for the importer's own use. In other words, the
statutory provisions contained in Sections 29 and 30 of
Trade Marks Act 1999 are applicable only in if the goods
are imported for trading purpose
• In the landmark case of Samsung Electronics Company &
Anr v G Choudhary & Anr the Delhi High Court held that
under Section 30 of the Trade Marks Act 1999 import of
even genuine goods must be made by or with the consent
of the registered proprietor of the trade mark in India.

44. • In Samsung Electronics Company Ltd & anor v G
Choudhary & anor [2001], the plaintiff prayed for an
interlocutory injunction that, in essence, sought to combat
and eradicate the parallel importation (by third parties into
India) of products manufactured by the plaintiff itself. The
Delhi High Court observed that Indian law was quite liberal
in permitting parallel imports of genuine goods bearing
registered trade marks, provided that such goods had not
been materially altered after they entered the market. The
Court held that the trade mark proprietor could, however,
impose contractual restrictions on a third party, such as a
foreign licensee, against importing genuine goods into
India, provided that such restrictions pass muster under
the 1999 Act and the Monopolies and Restrictive Trade
Practices Act 1969, which was – at the time – India’s
competition statute (substituted with the Competition Act
2002).

45. • The Delhi High Court has cleared the confusion around parallel
imports. In a landmark judgment, a Division Bench of the Delhi High
Court has ruled that parallel import is authorized under Indian
trademark laws and does not infringe the trademark of the rights-
holder.
• In a lawsuit between Samsung Electronics and Champion Computers,
Delhi-based IT hardware and peripherals distribution house, the bench
of Justices Pradeep Nandrajog and Siddharth Mridul overruled the
findings of a single judge who had in February 2012 held that
trademarked goods should be imported to India only through
authorized distributors of the trademark-holder or with his permission.
• The Division Bench observed that the learned single judge had
followed an erroneous approach to conclude that import of goods into
India needed the consent of the registered trade mark owner.
• The court recognized the principle of international exhaustion under the
Trade Marks Act, 1999, and held that the expression in any
geographical area, in the Act “clearly envisages that the legislative
intent was to recognize the principle of international exhaustion of
rights to control further sale of goods once they were put on the market
by the registered proprietor of the trade mark.”
•

48. Thank You
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