New Zealand: Parallel Importing Given A Workout

Last Updated: 13 June 2007
Article by Earl Gray
and Fiona McKenzie

The New Zealand High Court decision in Leisureworld Limited v Elite Fitness Equipment Ltd, CIV 2006-404-3499, 21 July 2006 per Heath J, illustrated the ongoing conflict between the rights of New Zealand registered trade mark owners and the right to parallel import into New Zealand.


Leisureworld brought proceedings for an interim injunction against Elite, one of its competitors in the New Zealand marketplace for the sale of fitness equipment. Leisureworld alleged in particular that Elite had infringed its copyright and registered trade marks by importing its protected "Infiniti" branded equipment into New Zealand, as well as arguing that Elite had unlawfully interfered with Leisureworld's contractual relations with its Taiwanese manufacturer and was in breach of the Fair Trading Act 1986. Elite disputed liability on the basis that the equipment was legitimately parallel imported.

Leisureworld had bought a New Zealand business (Progym NZ) to obtain the New Zealand intellectual property rights (being two trade mark registrations for "Infiniti" and copyright) in the Infiniti-branded fitness equipment that Progym NZ's associated company, Progym Taiwan, manufactured. Progym Taiwan granted to Leisureworld "the exclusive right to import, sell, market, promote and distribute [the relevant equipment] in [New Zealand]". Progym Taiwan undertook not to supply such products directly or indirectly (with knowledge) to New Zealand.

Before the purchase of Progym NZ by Leisureworld, Elite had purchased "Infiniti" equipment directly from Progym Taiwan. Subsequently, Elite dealt with two other Taiwanese companies which obtained Infiniti equipment from Progym Taiwan. Elite also purchased Infiniti equipment from Progym Australia, said to own the Infiniti trade mark registrations in Australia.

Registered Trade Marks and Parallel Importing

The Court focused its decision on whether Elite's importation of the Infiniti branded equipment infringed Leisureworld's New Zealand registered trade marks, or whether the defence of legitimate parallel importing was available to Elite.

The parallel importing regime was intended to allow retailers, wholesalers and consumers to obtain goods subject to intellectual property rights directly from licensed or authorised overseas sources. This was to avoid the need for them to deal directly with local suppliers, licensees or agents, and to allow for competition between sources of the same or similar goods.

In 2003, an amendment was made to the Trade Marks Act 2002 to address concerns that registered trade marks were being used to thwart competition objectives underpinning the parallel importing regime, as follows:

"[Section] 97A Exhaustion of Rights Conferred by Registered Trade Mark

A registered trade mark is not infringed by the use of the trade mark (including use for the purpose of advertising) in relation to goods that have been put on the market anywhere in the world under that trade mark by the owner or with his or her express or implied consent."

The purpose of s97A was described in the explanatory note to the amendment Bill as follows:

"Consequential amendments are made to the Trade Marks Act 2002 to ensure that registered trade marks cannot be used to frustrate legitimate parallel importing, in line with the Government's parallel importing policy. For the avoidance of doubt, these amendments provide that a registered trade mark is not infringed by the use of the trade mark on parallel imported goods (including for the purpose of advertising) when a trade mark has been legitimately applied, whether that was in New Zealand or anywhere in the world. However, the parallel importing regime is not intended to encourage or legitimise attempts to sell pirated or counterfeit goods in New Zealand."

The Court found that Leisureworld had not expressly consented to the imported goods under the relevant trade mark being placed on the market anywhere in the world. The Court therefore applied the principles set out in the European Court of Justice decision, Zino Davidoff SA v A & G Imports Ltd [2002] Ch 109, to establish whether implied consent should be inferred.

In Zino Davidoff the European Court of Justice stated that evidence from which implied consent might be inferred must demonstrate unequivocally that the trade mark proprietor has renounced any intention to enforce its exclusive rights. For example, implied consent cannot be inferred from silence of the trade mark proprietor or its lack of opposition or warning against the goods being placed on the market elsewhere. Further, the onus of proving consent rested on the party alleging that consent had been given, and while consent could be express or implied, it must be expressed positively.

In Leisureworld Heath J stated that parallel importing may only be conducted lawfully if the registered trade mark holder has given consent to the goods being placed on the market anywhere in the world. The Court considered that the focus of the s97A inquiry should be on the intentions of the New Zealand registered trade mark holder. Heath J found that on the evidence before him, there was no basis to infer, from established facts, implied consent on the part of Leisureworld to the Infiniti-branded fitness equipment at issue being placed on the market anywhere in the world.

"Put on the market" for the purposes of s97A, Heath J stated, connotes an intention by the New Zealand registered trade mark owner that the goods be traded in markets outside New Zealand. Heath J held that the existence of a manufacturing agreement with a company in another jurisdiction was not evidence of consent for that manufacturer to make those goods available for sale elsewhere in the world. Leisureworld was therefore granted an interim injunction that restrained Elite from supplying Infiniti fitness equipment pending resolution of substantive proceedings.

Comments on the Decision

The Court appeared to be swayed by the particular circumstances of this case, for example, the deal Leisureworld believed it had with Progym Taiwan and Progym Taiwan's undertakings to Leisureworld regarding exclusivity in New Zealand.

However Leisureworld's deal recognised the fact that Infiniti branded fitness equipment was also sold legitimately outside of New Zealand and Progym Taiwan had the right to manufacture Infiniti branded fitness equipment for sale in countries outside of New Zealand. This could have been read as "implied consent" by Leisureworld to the goods being put on the market anywhere in the world (as per s97A).

It has been said that this decision flies in the face of the Government's parallel importing policy. However despite this criticism, the decision in general illustrates that the parallel importing defence against trade mark infringement does and should allow for different business structures and circumstances (for example, where the parallel imported goods being sold are of inferior quality to the same goods as previously sold in New Zealand) to preclude otherwise legitimate parallel importing.


It appears doubtful that the Leisureworld matter will proceed to a substantive hearing.

Although parallel importing was given a workout by the High Court in its decision in Leisureworld, the next round could well go the other way, if the factual matrix is different. This is particularly true in the context of global businesses, with varying approaches to structure and ownership of assets such as registered trade marks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.