Parallel importation – also known as grey marketing – is when someone imports into Australia genuine goods that are intended for another market. The goods will bear a trade mark or copyright material that is separately licensed in the country of intended destination as opposed to Australia. Typically the parallel imported goods are cheaper than the locally licensed goods and the local distributor will be incensed at the importation of these competing goods. What can be done?
Unfortunately for the local distributor, there is not a lot that can be done under intellectual property laws. Under the Copyright Act there is a specific defence to infringement for parallel imported copyright material accompanying goods (like a label, logo, instructions manual etc.). Under s123 of the Trade Marks Act it is not an infringement of the trade mark registration if the trade mark was applied with the consent of the trade mark owner (which, if they are genuine goods, will normally be the case). There may be questions of whether the trade mark owner actually consented (or whether the overseas manufacturer made the goods outside the terms of its licence). Apart from this there may not be much that can be done.
But, in the law, as in life, there is often more than one way to skin a cat. Some parallel imported goods need to comply with Australian regulations. A case in point was Electrolux Home Products Pty Ltd v Delap lmpex KFT [2015] FCA 62. There a Hungarian website was selling to Australian consumers electrical equipment under the trade marks AEG and ELECTROLUX. It is not entirely clear from the case but the goods appeared to be parallel imports. No injunction was given by the Judge for trade mark infringement because of a technicality – the defendant was not represented at the hearing and so did not raise s123. However, the plaintiff succeeded in gaining an injunction against sale of the goods in breach of the Australian Consumer Law (ACL) because the imported goods did not comply with Australian safety standards.
There was also an issue that the goods did not comply with the consumer warranty provisions of the ACL. Unique to Australia is a certain form of words that must accompany all express warranties against defects for goods supplied to consumers. An injunction on this basis would only prevent imports until the warranty information was corrected, but it would serve to disrupt supply for a while.
Dealing with parallel importation can be challenging for right owners but as this decision shows there may actions worth exploring.
If you have any questions about parallel importation, please contact us at info@pof.com.au