Parallel Importing: Unlawful Use of Trade Marks
| Author | Mark J Davison |
| DOI | 10.1177/0067205X9001900404 |
| Published date | 01 December 1990 |
| Date | 01 December 1990 |
| Subject Matter | Article |
420
Federal
LawReview
[VOLUME
19
PARALLEL IMPORTING: UNLAWFUL USE
OF
TRADE
MARKS
MARK
J
DA
VISON*
There has recently been considerable discussion
of
the law concerning parallel
importing
of
copyright materials.1Yet the legality
of
parallel importing
of
trade
marked products has still to
be
decided
at
an appellate level in Australia despite a
number
of
Australian single judge decisions2on the issue.
The term 'parallel importing' can
be
applied to anumber
of
different activities.
However,
it
usually involves the application in an overseas country
of
an
Australian trade mark (Australian in the sense
of
being physically identical
to
the
Australian mark) to products manufactured overseas. The application
of
the mark
and the subsequent sale
of
the product in the overseas country is undoubtedly
lawful but some
of
the marked products are then imported into Australia without
the express consent3
of
the Australian registered proprietor. This importation in
competition with the Australian registered proprietor is parallel importing.
This article explores the several possible ways in which the Australian Trade
Marks Act 1955 ("the Act") could
be
interpreted
so
as
to give effect to either a
pro-
or
anti-parallel importing policy.
In
the course
of
doing so,
it
concludes that
parallel importing constitutes infringement
of
atrade mark in the absence
of
strong evidence
of
implied consent to the importing by the Australian trade mark
proprietor. In particular,
it
concludes that the Australian decisions involving
cases where the trade mark proprietors in the country
of
export and the country
of
import are identical are wrong in their conclusion that such parallel importing
does not constitute "use"
of
atrade mark within the meaning
of
the Act.
After
an
examination
of
the relevant black letter law, it then goes
on
to
examine the major competing policy considerations associated with the debate
on
parallel importing.
It
concludes
that
the arguments
in
favour
of
parallel
importing are based
on
concern about anti-trust consequences which are
not
universally applicable whenever parallel importing is prohibited.
On
the other
hand, permitting parallel importing can defeat the objectives
of
trade
mark
legislation. Therefore, the objectives
of
trade mark legislation should
be
upheld
by
prohibiting parallel importing
and
anti-trust legislation should deal with
those limited situations in which such aprohibition may
lead
to
adverse
•
2
3
Lecturer-in-Law. Monash University. The author wishes
to
acknowledge the assistance
of
Dr Sam Murumba in formulating the views expressed herein concerning the
interpretation
of
the Trade Marks Act 1955 (Cth). The views themselves are
nevertheless this author's.
Eg Copyright Law Review Committee.
TM
Importation Provisions
of
tM
Copyright
Act 1968 (1988); Prices Surveillance Authority Report No 25: Inquiry into Book
Prices -Final Report (1989); Prices Surveillance Authority Report No 35: Inquiry into
tM
Prices
of
Sound Recordings (1990).
Bailey vBocaccio (1986) 6IPR 279; Atari Inc and Futuretronics Australia Pty Ltd v
Fairstar Electronics Ply Ltd (1983) 50
AlR
274; Delphic Wholesalers Pty
Ltd
yElco
Food Co Pty Ltd (1987) 8IPR 545. But see Atari vDick Smith (1980) 33 ALR 20
and Fender Australia Ply
Ltd
vBevk (1989)
89
AlR
89.
One
of
the issues surrounding parallel importing is whether and.
if
so. when consent
to the importation can
be
implied.
1990]
Parallel
Importing:
Unlawful
Use
of
Trade
Marks
421
consequences. Finally, the article notes that the Australian cases on the issue fail
to properly address
or
implement any
of
the competing policy considerations
because
of
an undue emphasis on the identity
of
the authorised importer
of
the
marked goods and its relationship to the overseas trade mark proprietor.
1THE RIGHTS
OF
REGISTERED PROPRIETORS
The rights
of
aregistered trade mark proprietor are defined in s58 and s62
of
the Act. Section 58 confers upon the registered proprietor
of
the trade mark:
The right to the exclusive use
of
the trade mark in relation to the goods or
services in respect
of
which the trade mark
is
registered and to obtain relief in
respect
of
the infringement
of
the trade mark in the manner provided by this
Act.
Section
62
supplements this right by providing:
Aregistered trade mark is infringed by aperson who, not being the registered
proprietor
of
the trade mark or aregistered user
of
the trade mark using by way
of
permitted use, uses amark which is substantially identical with,
or
deceptively similar to, the trade mark, in the course
of
trade, in relation to
goods or services in respect
of
which the trade mark is registered.
In the light
of
these sections, the following approaches may
be
taken towards
parallel importing:
1. Parallel importing is not "use"
of
the trade mark by the importer for the
purposes
of
either s58
or
s62.
2. Parallel importing is "use"
of
the trade mark by the importer but the use
may
be
consented to by the registered proprietor.
The difficulty with choosing from the above options is that what constitutes
"use as atrade mark" seems to vary according to the context in which it is to
be
defined. For example, "use
of
atrade mark" has to
be
defined for the purposes
of
s
23
of
the Act. Section
23
provides for the deregistration
of
trade marks which
are not used for aspecified period
of
time. Some cases4 concerning s
23
suggest,
by implication, that parallel importing constitutes use
of
atrademark and thus
infringement
of
atrade mark proprietor's rights.
On the other hand, "use
of
atrade mark" has to
be
defined for the purposes
of
infringement
of
atrade mark either under s58
or
s62
of
the Act. It is this use,
rather than the use considered in s23 cases, which relates directly to parallel
importing.
The
majority
of
cases on that aspect
of
use suggest that parallel
importing is not use
of
atrade mark by the importer in situations where the trade
mark proprietors in the country
of
export and import are the same entity. But as
we shall see, there are conceptual difficulties with this approach, and considerable
doubt about the early case authority on which this view is based.
2PARALLEL IMPORTING
IS
NOT USE
OF
THE TRADE MARK BY
THE
IMPORTER
The
earliest and most cited decision concerning parallel importing
of
trade-
marked articles is
Champagne
Heidsieck et
cie
Monopole
Societe
Anonyme
v
Buxton.
SIt is this case which has been relied upon in later Australian cases and
4
SW D
and
H 0 Wills (Aust) Ltd
\I
Rothman's Ltd (1956) 94 CLR
182.
(1930)
47
RPC
28.
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