Piracy and its disastrous effects are very well known. However,
it is yet another less known villain that sometimes also causes
harmful effects to the rights of intellectual property owners -
Parallel Imports.
Parallel Importation is the non-authorized introduction of
legitimate goods into a country. As its name reveals, it follows
non-regular channels of commerce and therefore may cause various
unforeseen harms:
- to the title-holder, damages to the reputation of its marks, since its products may have a different quality than the one required under local legislation;
- to local licensees or distributors, as adherence to local laws generates additional burden as compared to parallel importers, whose products have not been subject to them;
- to consumers, who may acquire similar, but differentiated products or lack technical assistance;
- to the country, by loss of investments and evasion of taxes.
The Brazilian Industrial Property Law (n°9279/96) renders
illicit the trade of goods being introduced in the country for the
first time without due authorization from its title-holder. But how
can they effectively obstruct parallel importation?
First, the license agreement with the distributor must be recorded
before the Brazilian Patent and Trademark Office (BPTO), making it
effective before third parties, including any exclusiveness
established therein.
Second, an initial cease and desist letter must be remitted and a
detailed investigation of the product's commercial path into
the local market, the importer himself, products specifications and
declared price at Customs must be conducted.
Finally, the Customs Office is an important ally in the cohibition
of parallel imports. Thus, title-holders must avail of themselves
to them through their local attorneys, in the case of illegal
merchandise seizure.
Parallel import may have undesirable consequences, as it could be
detrimental to the local goodwill of the trademark owner, to the
investments made by local licensee or distributor, to the consumers
and the country. Title-holders must be keen to take effective and
timely measures to avoid it and protect their interests.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.