CIPR-INTA ANTI-COUNTERFEITING ROUNDTABLE

The heated public debate on whether to amend Russia’s IP laws and allow parallel imports into the marketplace was on display at the CIPR-INTA co-sponsored roundtable discussion - Exhaustion of IP Rights Issues, Parallel Imports and Product Counterfeiting: perspectives of rights holders, regulators and legal practitioners. The roundtable was held on November 25, 2009 and held at the offices of Lovells CIS in Moscow.

Supporters and opponents, lawmakers and regulators participated in a vigorous discussion about the potential impacts of legalizing parallel imports on IP protections, commerce and consumers. Supporters argued that prohibitions against parallel imports unfairly restricts trade, reduces opportunities for industrial expansion in Russia and lower prices for consumers. Russia’s IP laws should be amended to replace the national exhaustion of IP rights with the international standard of IP rights, and allow parallel imports into the Russian marketplace.

Rights holders and Russia government officials countered that Russian Customs ability to interdict against counterfeits at the border would be dramatically undermined and result in even higher levels of fake goods in the consumer marketplace. Legalizing parallel imports also creates higher potential for substandard legitimate goods entering the consumers market. Brand value and product consistency are hurt. Consumers are disappointed and blame trademark owners for damage to packaging and other quality issues, while unauthorized importers avoid any responsibility. Any short-term consumer benefits from lower prices, rights holders added, were outweighed by the harm done to consumers and trademark owners in the long-term.

Concerns about legalizing parallel imports and the new Customs Union between Russia, Kazakhstan and Belarus were discussed. Government officials and rights holders noted that Russia’s Customs Code will be the basis for the Customs Union’s code and that IP laws of the three countries will be harmonized. Giving legal protections to parallel imports in Russia would likely result in similar protections in Kazakhstan and Belarus.

CIPR is grateful to Lovells CIS for hosting the roundtable and to INTA for joining us to address a critical issue facing consumers, government officials and rights holders.