New Amendments to Australia’s IP Laws: Parallel Importation
The Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (the Act) is introducing new changes to Australia’s IP regime. This article will consider some of the major changes to parallel importations introduced by the Act and how these impact upon the current IP regime.
What is parallel importation?
Parallel importation, a.k.a. grey or direct importing, occurs when goods are imported into a country without the permission of the respective intellectual property rights holder. This typically occurs when there are different rights holders of a trade mark (or other IP asset) in different countries. It is important to note, however, that parallel importation is the unauthorised import of genuine goods, and does not cover counterfeit or knock-off goods.
Example:
XYZ Pty Ltd are the exclusive authorised resellers in Australia of organic chocolate called “EcuChoc” sourced from Ecuador. Sugar Loverz Co is an authorised reseller of “EcuChoc” in the US and sells “EcuChoc” at a discounted rate. Now consider that a third-party Max Rix Pty Ltd, wishes to offer “EcuChoc” in their supermarket stores throughout Australia. To be competitive in the Australian market, Max Rix Pty Ltd decides to purchase “EcuChoc” directly from the US reseller (Sugar Loverz Co). However, Max Rix Pty Ltd has not sought the consent of XYZ Imports Pty Ltd to sell “EcuChoc” in Australia. This means that Max Rix Pty Ltd is a parallel importer of “EcuChoc”.
Defences to parallel importation under the Trade Marks Act
Prior to the amendments introduced by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018, section 123(1) of the Trade Marks Act provided a defence to parallel importation, if the trade mark was applied to the goods ‘by, or with the consent of, the registered owner of the trade mark’. Section 123(1) has now been repealed and replaced with a new section 122A, which now significantly broadens the scope of the defence to trade mark infringement in relation to parallel imports.
Section 122A of the Trade Marks Act
The new section 122A provides a defence to trade mark infringement, where:
(a) the goods are similar to goods in respect of which the trade mark is registered;
(b) before the time of use, the person had made reasonable inquiries in relation to the trade mark; and
(c) that a reasonable person, after making those inquiries, would have concluded that the trade mark had been applied with the consent of a relevant person being:
(i) the registered owner of the trade mark; or
(ii) an authorised user of the trade mark; or
(iii) a person permitted to use the trade mark by the owner of the trade mark; or
(iv) a person permitted to use the trade mark by an authorised user who has the power to give such permission; or
(v) a person with significant influence over the use of the trade mark by the owner of the trade mark or an authorised user; or
(vi) an associated entity within the meaning of the Corporations Act 2001 (Cth), of any of the above mentioned relevant persons.
What does this mean?
The effect section 122A of the Trade Marks Act, will provide further protection to parallel importers where they can demonstrate that ‘reasonable inquiries’ were made in respect of the trade mark applied to the imported goods. That is, that the trade mark was being used with the consent of a relevant person.
Take-away points
- Section 122A provides a broader defence to parallel imports where ‘reasonable inquiries’ are made in relation to the trade mark before using it;
- Counterfeit or knock off goods will not be protected under s122A;
- The new defence will take effect from the 25 August 2018 irrespective of when the infringement took place.
If you would like to know more about this article or copyright protection, please do not hesitate to get in contact with the team at W3IP Law on 1300 776 614 or 0451 951 528.
Sam Gilbert, IP and Technology Consultant, B.A., LL.B University of Technology, Sydney
Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.
