© The Author (2007). Published by Oxford University Press. All rights reserved
Parallel imports: more CD than WOW?
Legal context: Intellectual property rights, particularly trade marks, have as their primary aim the protection of the rights holder (and perhaps consumer) by allowing him and only him to sell eg, his patented product, or his product under his trade mark. Counterfeiters and infringers are stopped in their tracks. However, intellectual property law has a secondary use – allowing rights holders to stop products being marketed in Europe without their consent, even when said products are genuine.
Key points: This article summarises the law on parallel importation and exhaustion of rights, focussing on two recent UK cases; the successful action by the music industry for copyright infringement by CD-WOW, a leading CD retailer based in Hong Kong and the successful appeal against a finding of trade mark infringement by parallel importer Mastercigars Direct, which imports Cuban cigars.
Practical significance: Parallel imports provide a means for entrepreneurs to exploit price differentials between countries in Europe and countries in the rest of the world. As such, they occur on a significant scale, generating substantial revenues. IP rights holders have consistently taken action against such individuals, with Sony in particular heading to the courts on regular occasions, meeting mostly with success.
Key Words: There is little statute law regarding the parallel importation of lawfully manufactured goods into the European Union and the situations in which those goods may nonetheless not be resold without infringing national or regional IP rights. • The bare legislative bones have, however, been fleshed out by an extensive body of case law, interpreting the statutory provisions and adding extra dimensions when considering procedural and evidential points relating to them. • In the light of some controversial recent litigation in the UK, the author seeks to give a state-of-the-art review which focuses in particularly on the one single issue that has raised the most problems: when may an IP owner be taken to have consented to the importation for resale of goods first marketed outside the European Economic Area?
* Herbert Smith LLP, London.