The article examines the dispute over amendments to the Civil Code that could effectively ban importing original goods into Russia without the rights holder's special permission. The author explains how this would hurt competition, assortment, and prices, and why public pressure helped block the controversial clause. It also gives a recent court example, the Primorsky Krai arbitration court upheld the legality of importing used Panasonic laptops into Russia without the official dealer's consent.
Recently, much debate has been taking place around the draft of part four of the Civil Code, which, among other things, deals with copyright and trademark rights. In addition, since last year the Supreme Court of the Russian Federation, together with the Supreme Arbitration Court, has been preparing a Resolution of their Plenums “On Certain Issues Arising in Connection with the Entry into Force of Part Four of the Civil Code of the Russian Federation”... The public reacted ambiguously to some provisions of this Draft Resolution. And there was indeed much to think about.Here is just one paragraph of point 63 of the draft law:
When considering cases involving infringement of the exclusive right to a trademark, courts should take into account that the import into the territory of the Russian Federation of goods bearing a trademark, in the absence of an agreement with the right holder on the transfer of the right to use the trademark in this manner, constitutes an independent infringement. A person who has imported goods into the territory of the Russian Federation is an infringer even if that person did not themselves affix the relevant trademark to the goods, and also if they acquired the goods from the right holder itself but did not conclude an agreement granting them the right to import the goods into the territory of the Russian Federation.
What would this mean in practice?
Each of us uses dozens of items in everyday life that bear a trademark—from a tube of toothpaste to a car. Such a mark, indicating the manufacturer, is present on virtually all industrial consumer goods. Unauthorized affixing of a trademark is, of course, a serious violation. If a factory somewhere in China produces sneakers and puts the “Adidas” mark on them, this forgery must be strictly punished. However, it would then no longer be possible to import genuine “Adidas” sneakers into Russia without the manufacturer’s special permission.
Only a very limited number of companies have or will obtain these special permissions—foreign manufacturers are not inclined to expand their dealer networks too much. As a result, foreign goods will be sold only by a narrow circle of companies. Right now, for example, we can buy spare parts for foreign cars in hundreds of stores, choosing from a large number of importers. But soon we will have to search in our city for a dealer who alone will have the right to sell us the spare part we need. In many cities, there may be no such dealer at all. In addition, many dealers are not exactly quick even now, and what will happen to them when they simply have no competitors left? Nor are dealers likely to compete on the quality of goods and services under conditions of artificially created scarcity. Prices will rise uncontrollably, and quality will “limp.”
What is the outcome?
To the delight of ordinary people, that is, all of us, under public pressure, this provision of the draft law was not adopted. Another attempt to monopolize the market failed. The open lobbying of a one-sided position by right holders for the confiscation of genuine goods, later veiled and masked by concessions “for personal needs,” failed. Thus, Russian citizens retained the right to impartial judicial protection of their property.
This is a small but significant step toward market liberalization! Monopoly has not yet arrived.
There are already precedents.
However, on 15.04.09 the 5th Arbitration Court of Appeal of Primorsky Krai confirmed the legality of the import into Russia by Vladivostok-based individual entrepreneur Ivanov A.V. in August of last year of eight used Panasonic laptops, the entrepreneur’s lawyer Gurov D.E. reports.
Thus, the Arbitration Court of Appeal of Primorsky Krai confirmed the already established judicial practice recognizing the legality of importing “branded” goods by parallel importers without the manufacturer’s permission and without the consent of the official dealer or representative of the trademark right holder.
The individual entrepreneur from Vladivostok concluded a supply contract for used laptops with one of the Japanese companies. In August 2008, he officially purchased and paid for about 40 used original portable computers of the “Panasonic,” “IBM,” and “NEC” brands. The goods were officially imported into Russia, and in accordance with the law a cargo customs declaration was submitted to the “Irkutsk Airport” customs post. During customs clearance and inspection, the Irkutsk Customs Service seized 8 “Panasonic” laptops and initiated an administrative case against the entrepreneur under Article 14.10 of the Code of Administrative Offenses of the Russian Federation (illegal use of a trademark).