Parallel imports

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Parallel imports

  1. 1. PARALLEL IMPORTATION Dhanya N. Menon Altacit Global
  2. 2. DEFINITION <ul><li>NON COUNTERFEIT PRODUCT </li></ul><ul><li>IMPORTED FROM ANOTHER COUNTRY </li></ul><ul><li>WITHOUT THE PERMISSION OF THE INTELLECTUAL PROPERTY OWNER/ORIGINAL OWNER </li></ul>
  3. 3. IN OTHER WORDS PARALLEL IMPORTS ARE LEGITIMATE PRODUCTS, BUT PACKAGED DIFFERENTLY AND MAY NOT CARRYING THE ORIGINAL OWNER’S WARRANTY
  4. 4. GREY PRODUCT/ GREY MARKET <ul><li>TRADE OF A COMMODITY </li></ul><ul><li>THOUGH LEGAL </li></ul><ul><li>ARE UNOFFICIAL OR </li></ul><ul><li>UNAUTHORIZED OR </li></ul><ul><li>UNINTEDED; BY THE ORIGINAL MANUFACTURER </li></ul>
  5. 5. BLACK MARKET <ul><li>TRADE IN GOODS / SERVICES WHICH ARE ILLEGAL IN THEMSELVES </li></ul><ul><li>DISTRIBUTED THROUGH ILLEGAL CHANNELS </li></ul>
  6. 6. WHY IT HAPPENS? <ul><li>DIFFERENT PRICING STRATEGIES BY THE MANUFACTURER </li></ul><ul><li>DIFFERENT PRODUCTION COST </li></ul><ul><li>THE INTERNATIONAL PRICE DIFFERENCE EXCEEDS THE COSTS OF TRANSPORTING AND SELLING GOODS ACROSS BORDERS </li></ul><ul><li>DIFFERENCE IN QUALITY </li></ul><ul><li>DIFFERENT LEVELS OF ADVERTISING </li></ul>
  7. 7. DOCTRINE OF EXHAUSTION <ul><li>LIMITATION ON INTELLECTUAL PROPERTY RIGHTS </li></ul><ul><li>FIRST UNRESTRICTED SALE OF A PRODUCT PROTECTED BY IP, EXHAUST THE IP OWNERS CONTROL OVER THE PARTICULAR ITEM </li></ul><ul><li>AN INTELLECTUAL PROPERTY OWNER WILL LOSE OR &quot;EXHAUST&quot; CERTAIN RIGHTS AFTER THE FIRST USE OF THE SUBJECT MATTER OF INTELLECTUAL PROPERTY RIGHTS. </li></ul><ul><li>IF A RIGHT BECOMES &quot;EXHAUSTED&quot; IN ONE AREA OR JURISDICTION, AN INTELLECTUAL PROPERTY OWNER MAY NOT BE ABLE TO ENFORCE ITS RIGHTS IN ANOTHER AREA OR JURISDICTION </li></ul>
  8. 8. <ul><li>THE ABILITY OF THE ORIGINAL OWNER TO PREVENT PARALLEL IMPORT LEGALLY DEPENDS UPON THE IMPORTING COUNTRIES TREATMENT TOWARDS THE EXHAUSTION PRINCIPLE . </li></ul><ul><li>AS PER THE TRIPS AGREEMENT, EACH COUNTRY IS PERMITTED TO ADOPT THEIR OWN STANDARDS FOR PROTECTING IPR. </li></ul><ul><li>ACCORDINGLY THEY CAN ADOPT THEIR OWN CONCEPT FOR EXHAUSTION PRINCIPLE </li></ul>
  9. 9. NATIONAL EXHAUSTION <ul><li>IP RIGHT ENDS UP UPON FIRST SALE OF THE PRODUCT INSIDE THE COUNTRY </li></ul><ul><li>THE IP OWNER CAN PREVENT PARALLEL IMPORT FROM OTHER COUNTRIES. </li></ul>
  10. 10. INTERNATIONAL EXHAUSTION <ul><li>IP RIGHTS ENDS UP UPON THE FIRST SALE ANYWHERE </li></ul><ul><li>PARALLEL IMPORT CANNOT BE EXCLUDED </li></ul>
  11. 11. REGIONAL EXHAUSTION <ul><li>THE IP RIGHTS ENDS UPON FIRST SALE WITHIN A GROUP OF COUNTRIES </li></ul><ul><li>ALLOWS PARALLEL TRADE AMONG THE GROUP COUNTRIES. </li></ul><ul><li>THE RIGHTS ARE NOT EXHAUSTED BY THE FIRST SALE OUTSIDE THE REGION. </li></ul>
  12. 12. 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
  13. 13. INDIAN POSITION <ul><li>PATENTS </li></ul><ul><li>TRADEMARKS </li></ul><ul><li>COPYRIGHT </li></ul>
  14. 14. PATENTS <ul><li>DOCTRINE OF IMPLIED LICENSE </li></ul><ul><li>PATENT RIGHTS ARE EXHAUSTED WHEN PATENTED PRODUCT FIRST PUT IN TO MARKET OUTSIDE INDIA WITH THE CONSENT OF THE PATENT OWNER </li></ul><ul><li>NO EXPRESS PROVISION BEFORE 2002 AMENDMENT </li></ul><ul><li>INCLUDED AFTER DOHA DECLARATION ON TRIPS AND PUBLIC HEALTH Contd… </li></ul>
  15. 15. <ul><li>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 </li></ul><ul><li>SUBJECT TO SECTION 107A OF THE ACT </li></ul>
  16. 16. <ul><li>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 </li></ul><ul><li>A PATENTEE CANNOT PREVENT THIRD PARTY FROM IMPORTING, IF SUCH PRODUCT WAS SOLD OR DISTRIBUTED OVERSEAS BY OR WITH HIS CONSENT </li></ul><ul><li>CAN PREVENT BY PLACING CONTRACTUAL RESTRICTION </li></ul>
  17. 17. RULE IN BETTS v. WILLMOT <ul><li>PATENTEE SELLS ANY OF HIS PATENTED PRODUCTS IN ONE TERRITORY </li></ul><ul><li>WITH OUT ANY RESTRICTIONS </li></ul><ul><li>THE PURCHASER GETS ABSOLUTE TITLE </li></ul><ul><li>FREE TO USE OR DISPOSE OF THE PRODUCT AS IT DESIRES </li></ul><ul><li>CONTRACTUAL RESTRICTIONS ARE ENFORCEABLE ONLY IF THEY ARE CLEAR AND EXPLICIT </li></ul><ul><li>BROUGHT TO THE NOTICE OF THE PARTY WHO IMPORTS </li></ul>
  18. 18. TRADE MARKS <ul><li>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. </li></ul><ul><li>CONDITION: GOODS HAVE NOT BEEN MATERIALLY ALTERED AFTER THEY HAVE BEEN PUT ON THE MARKET </li></ul><ul><li>SECTION 30 OF THE TRADE MARKS ACT, 1999 PROVIDES PARALLEL IMPORT Contd… </li></ul>
  19. 19. <ul><li>SECTION 30: IF THE GOODS BEARING A REGISTERED TRADE MARK </li></ul><ul><li>ARE LAWFULLY ACQUIRED </li></ul><ul><li>THE FURTHER SALE OR OTHER DEALINGS OF SUCH GOODS BY THE PURCHASER OR BY A PERSON REPRESENTING HIM </li></ul><ul><li>IS NOT CONSIDERED AS INFRINGEMENT </li></ul><ul><li>IF THE GOODS ARE PLACED ON THE MARKET WITH THE CONSENT OF THE PROPRIETOR. </li></ul>
  20. 20. COPYRIGHT <ul><li>MORE COMPLICATED WHEN APPLIED TO COPYRIGHT </li></ul><ul><li>THE RIGHT CONFERRED BY COPYRIGHT ITSELF IS COMPLICATE </li></ul><ul><li>CONFERS A BUNDLE OF DIFFERENT RIGHTS </li></ul><ul><li>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 </li></ul><ul><li>NO LICENSE TO IMPORT MAY BE IMPLIED </li></ul><ul><li>Contd… </li></ul>
  21. 21. <ul><li>IMPORT LICENSE REQUIREMENT APPLIES TO ALL COPYRIGHTED WORK MADE OUTSIDE INDIA BY FOREIGN LICENSEES. </li></ul><ul><li>NOT TO WORKS MADE IN INDIA AND EXPORTED TO FOREIGN COUNTRY THEN RE-IMPORTED TO INDIA- RIGHT EXHAUSTS </li></ul><ul><li>SECTION 51(b)(iv) EXPRESSLY PROHIBITS PARALLEL IMPORTS ON COPYRIGHTED WORKS </li></ul><ul><li>SECTION 2 (M): INFRINGING COPY </li></ul>
  22. 22. <ul><li>SECTION 51: SPEAKS ABOUT INFRINGEMENT </li></ul><ul><li>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. </li></ul><ul><li>SECTION 2 (M): INFRINGING COPY </li></ul><ul><li>INCLUDES ANY COPY IMPORTED INTO INDIA IN CONTRAVENTION OF THE COPYRIGHT ACT </li></ul>
  23. 23. CUSTOMS ACT <ul><li>PERMIT PARALLEL IMPORT IN GENUINE GOODS WITH IDENTICAL TRADEMARK </li></ul><ul><li>NOTIFICATION DATED 18 TH JANUARY 1964 </li></ul><ul><li>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 </li></ul>
  24. 24. EFFECT OF PARALLEL IMPORT <ul><li>IT TAKE A FREE RIDE ON THE MARKETING AND SERVICE SUPPORT PROVIDED BY THE AUTHORISED DISTRIBUTOR </li></ul><ul><li>IS A THREAT TO THE ORIGINAL MANUFACTURER SINCE IT WILL AFFECT THEIR PROFIT AND THEY CANT TAKE THE HELP OF ANY LAW TO PREVENT </li></ul><ul><li>IT ALSO AFFECT HIS ABILITY TO ESTABLISH A SEPARATE INTERNATIONAL MARKET. </li></ul><ul><li>PARALLEL IMPORTING NEVER ENCOURAGES CONSUMER DECEPTION AND TRADE IN COUNTERFEIT GOODS AND PIRATED GOODS. </li></ul>
  25. 25. BANE OR BOON? <ul><li>TWO DIFFERENT OPINIONS </li></ul><ul><li>- Supporting: </li></ul><ul><ul><ul><li>BENEFIT CONSUMERS BY LOWEREING THE PRICES </li></ul></ul></ul><ul><ul><ul><li>WIDENING THE SELCETION OF GOODS </li></ul></ul></ul><ul><ul><ul><li>WIDENING THE CONSUMPTION OF GOODS </li></ul></ul></ul><ul><li>- Not Supporting: </li></ul><ul><ul><ul><li>DISCOURAGES INTELLECTUAL PROPERTY OWNERS FROM INVESTING IN NEW AND INNOVATIVE PRODUCTIONS </li></ul></ul></ul>

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