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Supreme Court of Cassation legalizes parallel import.

17 July 2009

In a session on 15.06.2009 The General Assembly of the Trade Division of The Supreme Court of Cassation (SCC) gave Interpretative ruling ¹1 from 2008, which gives and answer to the widely discussed question „Does the parallel import of goods constitute and infringement of the rights over a trade mark".

The case was started in 2008 after a request by the Chairman of the SCC because of the controversial practice concerning parallel import that existed in the acts of both the Sofia City Court and the Sofia Court of Appeal, as well as in the decisions of the SCC itself.

In its motives the Court mentions the contradictory interpretations of the provisions of art.73, par.1 in conn. to art.13, par.2, point 3 of the Law on Trade marks and Geographical Indications (LTGI) and has tried to interpret the question of infringement by parallel import of goods by a third person, while keeping in mind the protection of trademark rights as a guarantee for the origin of a certain product on one side and the right of free commerce within the EU and the prohibition for competition restrictions on the other, while taking into account the regulations of the European law.

Whilst quite unclear, the motives of the ruling show that, according to the Court, the protection of infringed trademark right via the claims as provided in art.75 and art.76 of the LTGI refers only to the right of the owner of the mark according to art.13, par.1 of the LTGI to forbid the use without his consent of a sign by a third party in its commercial activites, which sign is identical or similar to the registered trade mark. The other rights of the trade mark owner listed in art.13, par.1 of the LTGI are viewed as subject of regulation by the general civil and trading law. The exhaustion of rights, regulated in art.15 of the LTGIis also deemed irrelevantin respect to the infringement regulated by art.73, par.1 in conn. art.13, par.2, point 3 LTGI. According to the SCC the trade mark owner should use the institutes of the contract lawin order to realize his right against the third parties conducting commerce with goods, the rights over which are not exhausted, since in such a case the right of disposition of the mark would be violated.

These contradictory grounds have led the SCC to the conclusion that

"The import of original goods, branded with trade mark signs with the consent of the trade mark owner, which import is carried out without the consent of the trade mark owner does not constitute an infringement of the rights over a registered trade mark according to art. 73, par. 1 in conn. to art. 13, par. 2, point 3 of the LTGI."

The ruling is signed with three reservations, including by the Chairman of the Trade Divison himself - judge Mario Bobatinov. In all of these reservations there is a heavy accent on the intolerability of isolating the rest of the rights of the trade mark owner from protection under the special trade mark law, as well as on the clear connection between the exhaustion fo the right according to art.15 of the LTGI and the infringement according to art.73, par.1. Clearly though, these substantial arguments were not enough to convince the rest of the judges.

Thus Bulgaria has created a concerning precedent with regard to the application of the Community law in the field of intellectual property. It will be interesting to see what the reactions of the other member countries of the EU will be, as well as what kinds of new challenges before the protection of IP rights, both in Bulgaria and within the Union, this ruling shall pose.

Vasil Pavlov,
Attorney at Law
Industrial Property Representative
European Trademark and Design Attorney

Image: by walknboston


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