Parallel importing occurs when a person in Australia imports ‘genuine goods’ from overseas and sells them in Australia in competition with an authorised distributor in Australia. Often the parallel importer will purchase the goods from an authorised distributor in a foreign country.

It is now firmly established that parallel importing in the circumstances described above generally constitutes trade mark infringement.

A defence to trade mark infringement in parallel importing cases is available under subsection 123(1) of the Trade Marks Act 1995. This defence is available if the owner of the registered trade mark consented to the application of the trade mark to the imported goods.

However, recent cases in the Federal Court of Australia demonstrate that the issue of consent will often turn upon the contractual terms between the manufacturer and third parties (i.e, the authorised distributor in a foreign country).

For example, the manufacturer’s consent to a distributor’s use of the trade mark in China may be conditional upon that distributor not selling the goods outside of China.

Naturally, the Australian parallel importer who imports the goods from China will most likely be unaware of that restriction, but will be liable for trade mark infringement notwithstanding that the imported goods are genuine and not counterfeit, because the owner of the registered trade mark did not give its consent for its trade mark to be used on those particular goods for import into Australia.

For more information, contact Daniel Fleming at d.fleming@pigott.com.au