The parallel imports saga has seen many twists and turns, with
conflicting views emerging from the courts and the customs
Samsung Electronics Co Ltd v Kapil Wadhwa, a
single judge had held that Indian trademark law follows the
principle of national exhaustion of trademark rights (ie, any goods
imported without the consent of the registered proprietor will
amount to infringement); however, the Central Board of Excise
and Customs (CBEC), in a circular issued on May 8 2012, stated that
the Trademarks Act provides for the principle of international
exhaustion of rights, and clarified that parallel imports are
allowed as long as the goods are genuine and have not been
materially altered or impaired.
In the meanwhile, an appeal filed by Kapil Wadhwa and other
importers of Samsung printers in Samsung Electronics Co Ltd v
Kapil Wadhwa was heard by the Division Bench of Delhi High
Court. The court, in its
decision dated October 3 2012, ruled that India follows the
principle of international exhaustion, thus taking the position
advocated by the CBEC circular. The court reversed the decision of
the single judge in respect of the meaning of the word
'market' under the act, stating that it meant
"international and/or domestic market".
In particular, the court found that a conjoint reading of
Section 29(1) and Section 29(6) of the
Trademarks Act suggested that the sale of imported products
constitutes 'use of the mark' within the meaning this
section; however, this did not mean that the sale of imported
products without the consent of the registered proprietor was
The division bench interpreted Section 30(3) of the act as
permitting the sale of imported products without the consent of the
registered proprietor based on the following findings:
l The expression 'lawfully acquired' in Section 30(3)
does not mean "acquisition by consent for the purposes of
l The situations in Section 30(3)(a) and Section 30(3)(b) are
"distinct and operate in two mutually separate areas".
One section cannot be interpreted in a manner that renders the
other section otiose.
Thus, the further sale of "lawfully acquired" goods
cannot be prevented just because the trademark has been assigned to
l The scope of the expression 'the market' in Section
30(3) is not limited to domestic markets.
l The international statutes are of no assistance in
determining whether the principle of international exhaustion
applies in India.
l The Statement of Objects and Reasons of the Trademark Bill
1999, India's communications at the Uruguay Rounds and the
report of the Standing Committee on the Copyright (Amendment) Bill
2010 clearly showed that India supports parallel imports and the
principle of international exhaustion.
l The difference in services and warranties is not sufficient
to oppose further dealings under Section 30 (4), as this does not
constitute a material change or impairment of the goods.
The Division Bench thus found that the appellants were not
restrained from importing printers, ink cartridges and toners
bearing the trademark SAMSUNG, and selling them in India.
Nevertheless, the court held that: l the appellants were injuncted
from metatagging their website to that of Samsung; and l the
appellants should prominently display in their showrooms that the
goods are imported and that Samsung does not provide any warranties
or after-sales services.
Samsung had argued that, if India were to allow parallel
imports, brand owners and consumers would be disadvantaged.
However, the court took the view that this argument touches upon a
matter of policy and, therefore, it was for the legislature to take
a call on this issue. The courts must interpret the law based on
the objects and reasons of the statutes.
This judgment is welcome in that it provides much-needed clarity
and consistency on the issue of parallel imports.
Originally published inWorld Trademark
Review October 18 2012
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