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Intellectual Property - Trade Marks and Parallel Imports

Date: May 04, 2008

Authors: LAC Lawyers

In certain circumstances where the distributor of a product in Australia is the same as the owner of trade mark overseas a person may purchase the products overseas and distribute the products in Australia. However, the same may not apply where the products are distributed by another third party in Australia.

As you maybe aware parallel importation occurs when a trade mark is applied to products overseas either by the owner of the trade mark in the country, overseas, or with the owner’s consent. The products are then imported into Australia by a person other than the brand owner. The products are not an imitation and are manufactured with the consent of the overseas brand owner.

Parallel importation generally occurs where the parallel importer is competing with an Australian distributor of the products. If that distributor has expended a substantial sum of money in order to obtain a distributorship then it is likely that parallel importation is an infringement. It is unclear whether the brand owner can take legal action to stop the parallel importation.

The Australian trade marks legislation was amended to include a defence to infringement of a registered trade mark under s section 123 of the Trade Marks Act 1995 (Cth). S 123 states:

ldquo;a person who uses a registered trade mark in relation to products that are similar to products in respect of which the trade mark is registered does not infringe the trade mark if the trade mark has been applied to, or in relation to, the products by, or with the consent of, the registered owner of the trade mark.

An important question arises; whether importation of trade-marked products involves use of the trade mark by the importer.

If importation into Australia does not involve use of the trade mark then there is no infringement of the trade mark and a parallel importer need not rely upon the defence under section 123.

If the overseas trade mark owner and the Australian trade mark owner are one and the same, then the position is clear: a parallel importer has a good defence to a claim for trade mark infringement. But if the trade mark in Australia is registered to a person different to the overseas trade mark owner then the question is much more difficult to answer.

Is the Australian distributor said to have consented to the application of the trade mark to products in countries outside Australia - or is express consent required? The answer is complex.

For competent legal advice and assistance call LAC Lawyers in Sydney and Melbourne.

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