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Trade mark law protects against parallel imports, says EU

Branded goods traded in Europe are sufficiently protected by EU law against the threat of parallel imports, according to a recent report from the European Commission.11 Jun 2003

Parallel imports are branded goods that are imported into the EU from countries which sell those goods at a lower price. The importers are therefore able to sell the goods more cheaply than the trade mark holder intends.

The system of preventing parallel imports is known as the exhaustion system.

Within the EU the exhaustion system is such that, according to the report, "in law, trade mark rights cannot be invoked to restrain the free movement of goods within the EU, but they can be used to restrain the entry of such goods into the EU."

The alternative is international exhaustion, which would allow the free movement of goods worldwide, without any recourse to trade mark rights.

The question considered by the Commission relates to a grey area of European law, where competition rules clash with those of intellectual property. The Commission seems to support the rights holders on this occasion.

The report states that "the Commission, as a result of the present investigation, has not found any deficiencies in current legal provision relating to possible abuses of trade marks within the EU."

No changes are therefore necessary to the current system, and trade mark holders throughout the EU have not seen international exhaustion brought in through the back door.

The Commission's report is available at www.europa.eu.int/comm/internal_market/
en/indprop/tm/docs/sec-2003-575/sec-
2003-575_en.pdf

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