Russia - Trade mark law: Decision by the Constitutional Court on Parallel Imports
On February 13, 2018, the Constitutional Court of the Russian Federation issued a decree on the question of sanctions against parallel imports and counterfeit goods.
The Court sets out that the relevant provisions of the Russian legislation concerning the infringement of IP rights and the principle of exhaustion must be interpreted in light of the general principles of justice, equality and proportionality laid down in the Russian Constitution. According to the Court, the interests of the trademark owners and their official distributors must be weighed against the interests of other importers and those of the consumers. The application of the relevant provisions to parallel imports must not result in an undue restriction of the import of certain goods such as, e.g., vital pharmaceuticals, and the trademark owner must not be allowed to misuse the relevant provisions in order to push through a pricing policy that is unduly to the detriment of the Russian consumers.
Moreover, the Court sets out, the import of counterfeit goods entails higher risks, namely, not only the risk of monetary loss for the trademark owner, but also the risk of serious damage to his reputation and possibly also a risk for the public. This must be taken into consideration when determining the punishment for parallel imports.
In cases of parallel imports, the courts must always make an assessment of whether the trademark owner, in asserting his rights, is acting in bad faith or abusing the law, which may result in danger to the lives and health of the Russian citizens or affect other public interests. The extent of punishment and award of damages for parallel import must not be equal to that for the import of counterfeit goods if the extent of damage caused is not comparable. Seizure and destruction of parallel imports will therefore only be permissible if the quality of the goods has been compromised and/or if they constitute a security risk or a danger for people's life and health, for nature or cultural values.