Combatting parallel import in Russia

Can you combat parallel import in Russia?

In general, Russian legislation allows companies to take measures to combat and prevent parallel import. Based on the national (regional) principle of IP rights exhaustion, importing an original (non-counterfeit) product without the authorization of the trademark owner is considered a trademark infringement.

However, after the Constitutional Court ruling of February 13, 2018, the case law approaches to parallel import (unauthorized importation of original goods) have changed, and the mere fact of importation by an unauthorized party is insufficient grounds for the rights holder to claim an infringement.

Russian courts are now to assess whether the rights holder is dealing “in good faith.” Rights holders will be deemed acting in bad faith if they use the national (regional) exhaustion of rights regime to limit the import of specific goods into Russia (especially if these goods are of vital importance), or if they set higher Russian market prices than is usual for conducting standard business activity and for addressing the rights holder’s economic interests as compared to other markets.

Furthermore, courts are not to apply equal liability measures to parallel importers and counterfeit goods importers because the degree of danger to legal turnover and public interests is not the same. Remedies such as an injunction and destruction of goods may be applied to parallel importers only if the imported goods are confirmed to be of low quality and/or a threat exists to safety, the environment, or cultural values.

Accordingly, an infringement claim may require proof that original goods could not be imported into Russia for some reason, including improper characteristics, an absence of requisite certifications, lack of maintenance, expiration dates, etc. Otherwise, the rights holder’s actions can be considered an abuse of rights.

In order to proceed against parallel import, the claimant should have a registered trademark in Russia (either a national registration or an IR covering Russia) and an agreement with official distributors. Customs recordation is highly recommended in such cases.