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Regulation of parallel imports in 2024

legal updates
11 / 07 / 2024
Parallel imports are commonly understood to mean imports into the country without the consent of the rightholder of goods to which a trademark is lawfully affixed and which have been lawfully introduced into civil turnover in the territory of any other state outside the Russian Federation. Such consent is usually required in countries where the national principle of exhaustion of the exclusive right to a trademark is applied.

History of the regulation of parallel imports in Russia

Regulation of parallel imports was initially aimed at protecting the interests of rightholders and for a long time remained an important tool for intellectual property protection. However, recently its role changed significantly.

After some foreign companies started to stop direct deliveries of their products to the Russian market through their subsidiaries and official distributors, there was a threat of shortages of a number of goods. This was due to the fact that the goods were no longer supplied by official importers but third parties were still not allowed to import them without the consent of the rightholder.

In this regard, Federal Law No. 46-FZArticle 18 of Federal Law No. 46-FZ "On Amending Certain Legislative Acts of the Russian Federation" of 8 March 2022 was enacted on 8 March 2022, which tasked the Government or another body to which such right has been delegated with approving a list of goods in respect of which parallel imports are permitted. In exercising this authority, the Ministry of Industry and Trade approved such a list (“List”). The List is currently approved by Order No. 2701“On approval of the list of goods (groups of goods) in respect of which the provisions of Articles 1252, 1254, paragraph 5 of Article 1286.1, Articles 1301, 1311, 1406.1, subparagraph 1 of Article 1446, Articles 1472, 1515 and 1537 of the Civil Code of the Russian Federation shall not apply, provided that such goods (groups of goods) are introduced into circulation outside the territory of the Russian Federation by the rightholders (patentholders), as well as with their consent” dated 21 July 2023, which replaced Order No. 1532“On approval of the list of goods (groups of goods) in respect of which the provisions of sub-clause 6 of article 1359 and article 1487 of the Civil Code of the Russian Federation shall not apply, provided that such goods (groups of goods) are introduced into circulation outside the territory of the Russian Federation by the rightholders (patent holders), as well as with their consent” dated 19 April 2022.

The List has been amended many times. As a rule, it includes trademarks belonging to companies that have left the Russian market, but there are also exceptions.

The List appliesLetter of FTS of Russia No. 01-11/17479 of 31 March 2022 only to original goods, while there is still a need for customs authorities to take measures to prevent the import of counterfeit (fake) goods.

Prospects for the development of parallel imports in Russia

At the St Petersburg International Economic Forum in 2024, it was announced that the existing approach to differentiated regulation of parallel imports would be extended to 2025.

At the same time, a decision was made to extend such approach to the use of inventions, utility models, industrial designs without the consent of the patentee with notification of the patentee as soon as possible and with the payment of commensurate compensation. On 27 June 2024, Rospatent published the relevant information and prepared application forms.

This requiresClause 5 of article 1229 of the Civil Code of the Russian Federation technical amendments to the Civil Code of the Russian Federation, since restrictions on exclusive rights to the results of intellectual activity and means of individualisation can only be established by the Civil Code.

Recent trends in court practice

Until 2022, courts were inclined to recogniseDecision of the Arbitrazh Court of the City of Moscow dated 18 December 2018 in case No. A40-45121/17-12-257 parallel imports as illegal and prohibited persons from selling goods without the authorisation of the rightholder, despite the usually very small amounts of compensation.

More recently, courts have taken a differentiated approach to the application of parallel import rules and have curbed abuses by importers:

  • parallel import rules are not allowed to be applied for goods not on the List. For example, in one case the Thirteenth Arbitrazh Court of Appeal, rejecting the respondent’s arguments that parallel importation was allowed, statedResolution of the Thirteenth Arbitrazh Court of Appeal No. 13AP-11586/2022, 13AP-11588/2022 of 9 June 2022 in case No. A56-109836/2021 (Decision of the Intellectual Property Rights Court No. C01-1527/2022 of 12 October 2022 left unchanged). that Robocar Poli toys were not named in the List. In another case, the Arbitrazh Court of the Primorsky Territory, analysing the List, foundDecision of the Arbitrazh Court of the Primorsky Territory dated 7 August 2023 in case No. A51-1583/2023 (the Decision of the Fifth Arbitrazh Court of Appeal No. 05AP-5606/2023 dated 11 October 2023 was left unchanged) that the parallel import of goods marked with the trademark “Holika Holika” was not permitted.
  • the rules on parallel imports do not apply retroactively. The IP Court rejected“On goods (groups of goods) in respect of which certain provisions of the Civil Code of the Russian Federation on the protection of exclusive rights to the results of intellectual activity expressed in such goods and the means of individualisation with which such goods are labelled cannot be applied” the respondent’s reference to Government Decree No. 506 of 29 March 2022, as at the time of the offence it was not yet in force and did not containResolution of the Intellectual Property Rights Court No. C01-796/2022 of 14 June 2022 in case No. A52-5048/2021 (Decision of the Supreme Court of the Russian Federation No. 307-ES22-18224 of 27 September 2022 left unchanged) a retroactive clause.
  • in order to apply the rules on parallel imports, it is necessary to confirm the originality of the goods. In several cases, the courts have indicatedDecision of the Intellectual Rights Court No. S01-2414/2022 of 1 February 2023 in case No. A33-14168/2022, Decision of the Intellectual Rights Court No. S01-2407/2022 of 25 January 2023 in case No. A51-4937/2022 that the burden of proving the originality of goods lies with the importers. For this purpose, the importer must possess the entire list of documents confirming the legitimacy of the application of trademarks on imported goods, as well as the legal introduction of goods into civil circulation in the territory of third countries.

Administrative liability practice

In contrast to situations with the import of counterfeit goods (fake and imitation products), in case of parallel importation, the declarant is not held administratively liable. The only exceptionResolution No. 05AP-7426/2022 of the Fifth Arbitrazh Court of Appeal of 11 January 2023 in case No. A51-15187/2022, Resolution No. 14AP-4430/2022 of the Fourteenth Arbitrazh Court of Appeal of 14 July 2022 in case No. A52-1056/2022 is where importers fail to prove that the goods are genuine and not counterfeit. If the fact of genuineness is proved, the courts considerResolution No. 06AP-3611/2020 of the Sixth Arbitrazh Court of Appeal of 26 August 2020 in case No. A73-5300/2020, Resolution < nobr>No. 06AP-7150/2019 of the Sixth Arbitrazh Court of Appeal of 4 December 2019 in case No. A73-12375/2019, Resolution No. 15AP-19029/2018 of the Fifteenth Arbitrazh Court of Appeal of 19 December 2018 in case No. A53-18244/2018 that the import of such goods does not constitute an offence article 14.10 of the Administrative Offences Code of the Russian Federation.

Civil liability practice

Resolution No. 10 of the Plenum of the Supreme Court (“SC”) of 23 April 2019 indicates that laws do not limit the ways in which a trademark may be used to the mere manufacture of goods and placement of such trademark on them. The exclusive right coversPoint 156, among others, the distribution (including offer for sale) and import into the territory of the Russian Federation, storage or transportation for the purpose of bringing goods (with labels, packaging, and documentation) bearing a trademark into circulation in the territory of the Russian Federation.

In this connection, the import of goods (along with other actions aimed at placing goods into circulation) is viewed as one of the ways of using a trademark and is only permitted with the rightholder’s consent, which entitles the rightholder to seek protection of their rights in court.

Special attention is to be paid to the question of whether the rights and legitimate interests of the rightholder are infringed by the purchase and resale of goods, for example, by a reseller. In this regard, one should take into account the principle of exhaustion of the exclusive right providing that the use of a trademark by other persons in respect of goods that have been placed into circulation in the Russian Federation directly by or with the consent of the rightholder does not constituteRussian Civil Code, article 1487 an infringement of the exclusive right to the trademark. The SC Plenum specifically statesResolution No. 10 of the SC Plenum of 23 April 2019, point 156(4) that such acts as the purchase of goods bearing a trademark, regardless of the purpose of the purchase, and the storage or transportation of such goods without the purpose of placing them into circulation in the Russian Federation, do not infringe on the rightholder’s exclusive right.

In practice, courts assumeResolution No. 13AP 12600/2020 of the Thirteenth Arbitrazh Court of Appeal of 23 March 2022 in case No. А56-10999/2019 that persons reselling goods after purchasing them from importers are to be held civilly liable only if they sell counterfeit goods (but not goods imported through parallel import).

The court practice trend suggestsResolution No. 05AP-4046/2023 of the Fifth Arbitrazh Court of Appeal of 31 August 2023 in case No. A51-3281/2023, Resolution No. 07АП-7220/2022 of the Seventh Arbitrazh Court of Appeal of 24 October 2022 in case No. A27-694/2022, Resolution of the Third Arbitrazh Court of Appeal of 27 June 2022 in case No. А33-4645/2022, Resolution No. 05AP-6973/2022 of the Fifth Arbitrazh Court of Appeal of 30 November 2022 in case No. A51-3412/2022, Resolution of the Arbitrazh Court of the Primorsky Territory of 7 August 2023 in case No. A51-1583/2023 that in disputes between rightholders and sellers (not importers) of goods decided in favour of the rightholders, it was not proven that the goods in dispute are genuine and not counterfeit.

However, the very fact of the existence of such cases suggests that we cannot completely rule out the risk that a person engaged in the retail sale of goods may have to spend time and resources on litigation and collecting necessary evidence (expert opinions on the genuineness of the goods, documents evidencing that they were lawfully purchased in the countries where they had been placed into circulation with the rightholder’s consent, etc.).

A person engaged in the retail sale of goods may however suffer indirectly as a result of the rightholder’s actions to protect their rights, for example, if the goods are seized to secure the rightholder’s civil claim against the importer (which is highly unlikely in practice).
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