Russia - Trade mark law: Decision by the Constitutional Court on parallel imports
On 13 February 2018, the Constitutional Court of the Russian Federation reached a decision on the question of the level of penalties for parallel imports and counterfeiting.
The court stated that the relevant legal provisions on the infringement of intellectual property rights and the principle of exhaustion had to be interpreted in light of the general principles of fairness, equality and proportionality anchored in the Russian constitution. The interests of trade mark proprietors and their official distribution partners had to be weighed against the interests of other importers and against the interests of consumers. Application of the relevant provisions in respect of parallel imports was not to result in excessive restriction on the importation of certain goods such as vital drugs, and trade mark proprietors were not to be permitted to abuse the provisions concerned in order, beyond a reasonable economic degree, to impose a pricing policy that was detrimental to Russian consumers.
According to the court, the importation of counterfeit goods was also more of a risk because the trade mark proprietor bore not only the risk of financial loss here, but also the risk of considerable damage being done to its image and possibly also a risk to the public. This had to be taken into account when setting the level of penalties for the parallel importation of goods.
In the event of parallel importation, the court always had to check in each case whether the trade mark proprietor was not acting in an unlawful or legally abusive way when enforcing its rights and whether there may as a result be a risk to the lives and health of Russian citizens or other public interests may be prejudiced. The level of penalties and the amount of compensation for parallel imports was not to correspond to that for the importation of counterfeit goods unless the amount of damage caused was comparable. The seizure and destruction of parallel imports was only permitted if the goods were of defective quality and/or represented a safety hazard or a risk to life and health, nature or cultural assets.