Business is pumping parallel rights – Kommersant

The Association of Parallel Imports suggested that the government amend the bill being considered by the State Duma on toughening liability for infringement of intellectual property rights, including in relation to products imported through parallel imports. The organization considers it necessary to give full ownership rights to Russian importers of foreign goods. But experts warn that such a decision could disrupt trade relations with friendly countries and suppliers.

Kommersant got acquainted with the letter sent on May 2 by the Association of Parallel Imports (established in June 2022, representing the interests of importers of foreign goods) to Prime Minister Mikhail Mishustin and devoted to amendments to the Civil Code of the Russian Federation, submitted to the State Duma on April 28 by a group of senators and deputies. The amendments affect the issues of intellectual property rights for products imported through parallel imports: it is proposed to increase the lower and upper limits of compensation (from 50 thousand rubles to 10 million rubles) for the use of goods with infringement of intellectual rights.

The association notes that the draft includes amendments that equate original goods with fakes, as a result of which goods imported by parallel imports are subject to seizure and destruction, and compensation in the amount of their double value is allowed for their circulation. The Association proposes to make amendments to the draft that would secure “recognition of the full ownership of Russian entrepreneurs in the foreign goods they purchase”, that is, to protect the rights of parallel importers.

The association told Kommersant that importers are already facing difficulties, for example, due to regular changes in the list of goods for parallel imports maintained by the Ministry of Industry and Trade: “The list is being updated, and the goods that were originally included in it may be deleted” . The ministry explained that the list “is revised when production and supply of imported products are resumed or stopped, the scale of changes is always different.” The State Duma did not answer “Kommersant”.

The Russian authorities legalized the supply of products without the permission of the copyright holder, the so-called parallel import, in July 2022, after a number of vendors limited supplies to the Russian Federation against the backdrop of sanctions. The first version of the list of the Ministry of Industry and Trade was published even before the status was fixed, in May (see Kommersant dated May 6, 2022).

Some companies involved in parallel imports could indeed have difficulties due to changes in the lists, “there are no uniform rules of the game yet,” the Russian-Asian Union of Industrialists and Entrepreneurs admits. But many market participants call the current mechanism at least acceptable. “The principle of working with a list of goods, which is guided by the government, is a healthy compromise that allows you to maintain a balance of interests of bona fide right holders, domestic companies, saturating the market with goods,” says Alexei Popovichev, executive director of Rusbrand.

The EAEU has a regional principle of exhaustion of the right to a trademark, when the import of branded goods is allowed only with the consent of the copyright holder, explains the representative of the Association of Trading Companies and Producers of Electrical Household and Computer Equipment RATEK (Samsung, Huawei, M.Video, Yandex.Market) etc.) Anton Guskov. The government has changed this principle by introducing a list of goods for parallel imports, and it is “adequate and flexible enough,” the expert believes. According to Mr. Guskov, there is no need for changes towards full legalization, because “it is necessary to protect companies that have production facilities in the country and continue to deliver on a regular basis.”

Ensuring the full ownership of Russian entrepreneurs in foreign goods is too broad a wording that can infringe on the legal rights of friendly suppliers, too, Vitaly Mankevich, chairman of the Russian-Asian Union of Industrialists and Entrepreneurs, warns: “This is an even greater aggravation of the situation.”

Tatyana Isakova, Vadim Krasnikov