Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Circular No. 13/2012-Customs
New Delhi, dated the 8th May, 2012
To
All Chief Commissioners of Customs/ Customs (P),
All Chief Commissioners of Customs & Central Excise,
All Director Generals/Chief Departmental Representatives (CESTAT),
All Commissioners of Customs / Customs (P), and
All Commissioners of Customs & Central Excise.
Sir/Madam,
Subject: Enforcement of Intellectual Property
Rights on imported goods - Clarification on the issue of parallel imports –
regarding.
I am directed to invite your attention to the
Notification No.51/2010-Customs
(N.T.) dated 30.6.2010 and Board’s
Circular No. 41/2007-Customs dated 29.10.2007
prescribing certain conditions and procedures in implementation of Intellectual
Property Rights (IPR) such as trade mark, design, patent, geographical
indication and copyright under the IPR (Imported Goods) Enforcement Rules, 2007.
In this regard, certain representations have been received in the Board from the
trade as well as the field formations seeking clarification on the matter of
import of original/genuine products (not counterfeit or pirated) which are sold/
acquired legally abroad and imported into the country, by persons other than the
intellectual property right holder without permission/authorisation of the IPR
holder, which in trade parlance is known as ‘parallel imports’.
2.1. It may be recalled that the notification No.51/2010-Customs (N.T.) dated
30.6.2010 prohibits import of goods for sale or use in India, which are covered
under specified legal provisions of the following statutes that regulate
products with false trade mark, fraudulent or obvious imitation of design,
patent obtained without consent, false Geographical indication or product which
infringe registered copyright etc.
(i) Trade Marks Act, 1999
(ii) Designs Act, 2000
(iii) Patents Act, 1970
(iv) Geographical Indications of Goods (Registration and Protection) Act, 1999
and
(v) Copyright Act, 1957.
2.2. In terms of the legal provisions under the IPR (Imported Goods)
Enforcement Rules, 2007 read with notifications and circulars issued in this
regard, the determination of the fact that whether particular consignment of
imported goods infringes the rights of the IPR holder would be done by the
Customs authorities taking into account the provisions of the aforesaid parent
Acts.
2.3. It may also be noted that all infringements and consequential offences
stated in the aforesaid parent Acts is not limited to import of goods, as the
scope of these Acts are wide, interalia, covering enforcement of the legal
provisions of these Acts in the country. Hence, it may be noted that the
prohibition of imported goods for the purpose of protecting intellectual
property rights as specified under Notification No.51/2010-Customs (N.T.), does
not relate to all infringements under the parent Acts but only to those imports
that infringe the specific provisions of various parent Acts governing IPR,
mentioned in the notification No.51/2010-Customs (N.T.).
2.4. To illustrate, in case of the Trade Marks Act, 1999, prohibitions
against infringement of trade marks on import of goods intended for sale or use
in India, that attract the provisions IPR (Imported Goods) Enforcement Rules,
2007, have been given in para (i) and (ii) of aforesaid notification, viz,:
(i) imported goods having applied thereto a false trade mark, as specified in
section 102 of the Trade Marks Act, 1999 [for para (i)]
(ii) imported goods having applied thereto any ‘false trade description’ within
the meaning of definition provided in clause (i), in relation to any of the
matters connected to description, statement or other indication direct or
indirect of the product but not including those specified sub- clauses (ii) and
(iii) of clause (za), of sub-section (1) of section 2 of the Trade Marks Act,
1999[for para (ii)].
Thus, the prohibition under the para (i) and (ii) of aforesaid Notification
No.51/2010-Customs (NT) would be applicable only when the imported goods fall
within the purview of the above referred provisions of Trade Marks Act, 1999.
3. In this context, the issue of permitting import of original/genuine
products (not counterfeit or pirated) which are sold/ acquired legally abroad
and imported into the country, by persons other than the intellectual property
right holder without permission/ authorisation of the IPR holder, known in the
trade as ‘parallel imports’ was referred to the administrative Ministry i.e.,
Department of Industrial Policy and Promotion (DIP&P), Ministry of Commerce &
Industries, seeking their clarification.
4. In this regard, the Department of Industrial Policy and Promotion which is
nodal authority for all matters relating to (i) Trade Marks Act, 1999 (ii)
Patents Act, 1970 and (iii) Designs Act, 2000 has, interalia, stated that:
(i) Section 107A (b) of the Patents Act, 1970 provides that importation of
patented products by any person from a person who is duly authorised under the
law to produce and sell or distribute the product shall not be considered as an
infringement of patent rights. Hence, in so far as Patents are concerned,
Section 107A (b) provides for parallel imports.
(ii) Section 30(3)(b) of the Trade Marks Act, 1999 provides that where the goods
bearing a registered Trade Mark are lawfully acquired, further sale or other
dealing in such goods by purchaser or by a person claiming to represent him is
not considered an infringement by reason only of the goods having been put on
the market under the registered Trade Mark by the proprietor or with his
consent. However, such goods should not have been materially altered or impaired
after they were put in the market.
(iii) In so far as designs are concerned, it is clarified that parallel imports
are not allowed as indicated by Section 22 (1)(b) of the Designs Act, 2000.
(iv) As regards geographical indications, it is stated that there are no
identical or similar provisions as in Section 107A(b) of Patents Act, 1970 on
parallel imports under the Geographical Indications of Goods (Registration and
Protection) Act, 1999. The said Act does not address the issue of parallel
import at all. Hence, parallel imports are not covered under this Act.
(v) As regards ‘copyright’ since the clarification is awaited from the nodal
authority i.e., Department of Higher Education, the field formations may follow
the extant provisions of the Copyright Act, 1957 until further instructions are
issued in this regard.
5.1. In view of the above, the field formations are directed to decide cases
of import of ‘parallel imports’ on the basis of aforesaid legal provisions of
parent Acts, the provisions of Notification No. 51/2010-Customs(N.T.) dated
30.6.2010 and the clarification given by the administrative Ministry as detailed
in para 4 above.
6. The above instructions may be brought to the notice of all concerned
immediately and wide publicity of this circular may given through appropriate
Public Notice.
7. Receipt of this Circular may kindly be acknowledged.
(M. Satish Kumar Reddy)
Director (ICD)
F. No. 528/21039/08-Cus/ICD