Matthew Harris is a senior solicitor in Herbert Smith's intellectual property and technology group.
A recent decision by the English High Court is good news for parallel importers of goods from outside the European Economic Area (EEA) and has added to the significant controversy attached to grey-market dealing.
In Zino Davidoff SA v A&G Imports, Mr Justice Laddie held that the doctrine of "implied consent" will in many cases mean that trade mark rights cannot be used to prevent parallel importation of goods bearing the same trade mark from outside the EEA.
Zino Davidoff sold cigars and other luxury products under the marks Coolwater and Davidoff Coolwater. A&G parallel imported these goods from South East Asia, where they were significantly cheaper.
The contract of Zino Davidoff's South East Asian distributor was silent on whether the distributor's customers could import the goods into Europe. The judge held that English law governed the placing of the goods on the market in South East Asia and since the distributor's contract was silent as to subsequent use, Zino Davidoff had implicitly consented to the importation of the goods into the EEA. Therefore, the importation was not an infringement of trade mark.
However, the decision is not a parallel importer's charter. Firstly, it will only apply if English law governs the placing of goods on the market outside the EEA. Secondly, it will not apply where the placing on the market is subject to an express prohibition on subsequent importation into the EEA. Nevertheless, it is still significant, because it suggests that the recent Sil houette decision by the European Court of Justice (ECJ) was not as big a blow against parallel importation as many originally thought.
The case also raises some important questions. For example, if the trade mark owner is to prevent importation, must all purchasers of the goods be notified of the restriction? It is also likely that parallel importers will seek to apply the judge's reasoning to other rights, such as copyright.
The issues in this case are to be referred directly to the ECJ, with the long delay that this normally involves. In the meantime, many parallel importers have been given, at the very least, an important breathing space.