The legal and practical measures to prevent parallel imports

Transcription

1 APAA 60TH & 61TH COUNCIL MEETINGS IN Chiang Mai October 27-31, 2012 ANTI COUNTERFEITING COMMITTEE Singapore Submission for the Special Topic The legal and practical measures to prevent parallel imports Does your country recognize the concept of exhaustion of IP rights of commercialization/first sales doctrine - i.e. once an IP protected product is released upon the market by the IP rights owner or with his consent by way of sales or marketing, his IP rights of commercialization over that product can no longer be enforced by the IP rights owner in the subsequent open market. 1. Yes it does. Singapore s IP regime recognises the right of first sale, in which the IP proprietor s rights are exhausted by the first sale of articles produced by it or with its consent. 2. Patent In Singapore, a patent is not infringed if a parallel good is imported, used or disposed of in Singapore, if the parallel good to which the patented process is applied is done under a patent granted by or with the consent of the proprietor of the patent in any country outside of Singapore. The patent granted outside Singapore has to be in respect of the same or substantially the same invention as that for which a patent is granted under the Singapore Patents Act [s66(2)(g) Patents Act]. 3. Copyright If a person without the copyright owner s consent imports an article into Singapore for sale, hire, trade, distribution or exhibition and he knows or ought to have known the article was made without the consent of the copyright owner, it amounts to copyright infringement [s32 Copyright Act for authors works; s104 for entrepreneurial works]. The copyright in a work embodied in an accessory to an article is not infringed by a person who, without the license of the owner of the article, imports or sells the article into Singapore for a purpose specified in s32/ s33 (authors works) or s104/ s105 (entrepreneurial works) unless the article is an infringing copy [s40a Singapore Copyright Act for authors works; s116a for entrepreneurial works]. An accessory can be a label fixed on the article, the packaging or container in which the article is packaged or contained, a label on the packaging or container,

2 information provided with the article on its sale such as a warranty or certificate or an instructional sound recording or cinematograph film provided with the article on its sale [s7(1) Copyright Act]. The relevant copyright owner in this case is the copyright owner in the country of production. If no person is entitled to copyright in the country of production, then the relevant copyright owner is the Singapore copyright owner [s25(3) Copyright Act] 4. Registered Designs The right in a registered design is not infringed by the import, sale, hire, or offer or exposure for sale or hire of any article to which the design has been applied, and which has been placed on the market, whether in Singapore or elsewhere, by or with the consent (conditional or otherwise) of the registered owner [s30(7) Registered Designs Act]. Identify the industry specific agencies both public and private that may assist in the prevention of parallel imports in your country; nature and type of assistance such agencies are able to provide. 5. The importation of articles made by or with the consent of proprietors is permissible under Singapore IP laws. Under copyright law, these are genuine parallel imports (see Highway Video Pte Ltd v Public Prosecutor and other appeals [2001] 3 SLR(R) 830). 6. However, where the imported items are not genuine parallel imports according to the law as set out above, various agencies may be able to aide the prevention of these goods from circulating. 7. Consumers Association of Singapore ( CASE ) CASE is a non-governmental consumer watchdog aimed at protecting consumer interests and promoting fair and ethical trade practices. For parallel goods, businesses may deceive, mislead or make false claims about origin or model of the goods, or deliver goods that differ from what was promised in a contract of sale ( unfair practices ). Under the Consumer Protection (Fair Trading) Act, CASE can invite errant businesses to enter into a voluntary compliance agreement or take an injunction to stop the business from further engaging in the unfair practice. CASE also acts as an accreditation body. In 2009, it accredited parallel importers

3 of cars under the CaseTrust scheme, following high numbers of customer complaints from the public in Singapore against such importers. 8. Singapore Customs Singapore Customs is responsible for the implementation of customs and trade enforcement measures including those related to free trade agreements and strategic goods. Border enforcement measures are not available for parallel imports. However, where goods are not genuine parallel imports under the laws as set out above, proprietors have options for recourse. In relation to trade mark, a registered proprietor or licensee of a registered trade mark may give the Director-General of Customs notice of infringement of goods to be imported (s82 Trade Marks Act). If the goods bear a sign that is identical or similar to the registered trade mark and the goods are not parallel goods under s 29 of the Trade Mark Act, authorized officers may seize the goods. In relation to copyright law, the Director-General of Customs may also seize copyrighted materials, the making of which was carried out without the consent of the owner of the copyright if the goods are being imported into Singapore for sale, hire, trade, distribution or exhibition (140B Copyright Act). There are no border measures for patented goods. 9. Health Sciences Authority ( HSA ) Parallel imports in health and medical products can be curbed if the imports do not conform to national registration and labeling requirements. The HSA can act to stop the supply of unregistered medical devices and cosmetic products of which they have not been notified. They are also empowered to stop the sale of cosmetic products that do not comply with labeling requirements, including the requirement to state a product s country of manufacture and to name the parallel importer. These products are regulated under the Health Products Act. The HSA can also seize medical products that are unlicensed or improperly labeled under the Medicines Act. The Medicines Act regulates pharmaceuticals, contact lens substances and Chinese medicines, among others. What sort of sustained efforts can an IP owner take to educate consumers about the dangers of parallel imported goods. In this regard arguments may be advanced for and against parallel imports from (i) consumer interest and protection point of view as well as from (ii) the point of view of IP rights owners.

4 10. While Parliament has chosen a course of action favouring parallel imports, IP owners make efforts to inform consumers of differences in products not licensed by the Singapore IP rights holder. 11. For instance, authorised distributors of cars in Singapore will often state that a parallel imported version of the same car comes with an inferior warranty or after sales service, so that purchasing a parallel imported car carries an inherent risk. 12. With parallel imports, IP rights holders argue that the product in question may not be able to perform its stated function. For instance, electrical appliances may not be properly retrofitted with electrical plugs that are compliant with voltage standards in Singapore. 13. Some IP rights holders may even welcome parallel imports, because these goods, sold at lower prices, would discourage consumers from supporting counterfeit or pirated goods and reduce the overall trade in piracy. 14. Parallel importers do not need to expend resources to promote their product; instead, it is the authorised dealer invests in building brand awareness. Parallel importers are thus, on one view, free riding on the commercial investment of the authorised dealer to prime the market to purchase the product. Authorised dealers also find it harder to attract interest in franchising rights because the commercial value of the franchise is diminished by the presence of parallel importers. 15. Parallel imports are thought to benefit the consumer because consumers will be able to acquire identical goods, at a significant cost savings. However, parallel imports may sometimes be more costly, as with advance imports of the iphone before its release in the local market. 16. Consumers will also have greater choice, particularly if they are looking for variants of the same product only on sale in a foreign country (for instance, car models not available in Singapore). However, new technologies also ensure certain categories of goods can only be utilized in particular regions, so the trade in parallel imports does not positively impact consumer choice. Such is the case with DVD players which cannot play DVD encoded for a different region. What type, degree and materiality of differences must there be between the domestic goods and the parallel imported goods bearing the same trademark before the IP owner is entitled to take action against the parallel imported goods. 17. A registered mark is not infringed if goods are put on the market, whether in Singapore or outside Singapore, under that trade mark by the trade mark owner or

5 with his consent. This does not apply where the condition of the goods has been changed or impaired after they have been put on the market and the use of the trade mark is detrimental to the distinctive character or reputation of the registered trade mark [s29 Trade Marks Act]. 18. The importation and sale of products made by or with the consent of the trade mark proprietor is permitted, when there is no confusion as to the origin of the goods. 19. If there is deception as to the quality of goods, parallel importers can be stopped from claiming that they are authorized dealers. [Remus Innovation Forschungsund AbgasanlagenProducktionsgesellschaft mbh v Hong BoonSiong [1999] 1 SLR 179] To what extent has the advent and advancement of digital technology and the internet rendered IP laws against parallel imports in your country (if any) ineffective. 20. The advent of digital rights licensing has reduced the need to rely on parallel importation laws for copyrighted works, especially for digital products that can be streamed or downloaded. 21. Online stores, such as the Amazon Store, do not allow consumers to access content from non-us based IP addresses or to purchase music and films. American based video streaming services like Hulu and Netflix also do not allow access from Singapore, because distribution agreements for TV shows and films restrict them from being screened in Singapore. 22. However, digital technology has also made it easier to circumvent digital restrictions. Free software such as Hotspot Shield enables consumers to mask IP addresses and access content meant solely for another market. Illegal set top boxes also enable consumers to watch media content, such as English Premier League matches, licensed for other markets. 23. The parallel import laws in Singapore also do not prevent the de minimis importation of non-genuine goods by end users themselves. Because of the internet, end users are able to use e-commerce services to directly purchase editions of items not meant for sale in Singapore (banned DVDs, unregulated health products) and not manufactured by or with the consent of the IP right holder in the country of exportation.