Samsung 'trademark violation' lands Indian traders in soup

NEW DELHI: The Supreme Court has issued notices on a complaint filed by South Korea's Samsung Electronics against the sale of imported Samsung-branded products without its authorisation, an issue which has major implications for trade and business in the country.

The company claimed that such sales by traders was an infringement of its trademark, whereas local traders claimed they were within their rights to sell goods legally bought abroad and imported into India.

Samsung was represented by senior counsel TR Andhyarujina, while Shyam Divan appeared on behalf of local traders who were importing and selling printers bearing the Samsung trademark without the company permission.

A three-judge bench, led by chief justice Altamas Kabir, issued the notices which will have to replied to within four weeks.

Samsung had earlier sought an order from a lower court seeking an injunction restraining the traders from infringing and diluting its trademarks, but failed.

The Delhi High Court had on October 3, 2012, ruled that local traders can import goods bearing a registered trademark into India and sell it further without any authorisation from the registered proprietor.

It held that such sales were legal under the Trade Marks Act, 1999.

But the company claimed that the HC had erroneously interpreted the provisions of the 1999 Act.

In its appeal, filed through K Hari Shankar and Associates, the company claimed that the court had failed to distinguish between domestic and overseas markets and that it had wrongly applied the principle of international exhaustion to the Indian market.

Under this principle, where parallel imports are legal, it becomes "extremely easy for counterfeiters to mix non-genuine goods with parallel imports and introduce them into the commercial stream in India."

This principle, the company claimed, will also cut into domestic sales of the trademark proprietor, not only adversely affecting authorised channels of trade but also reducing its incentive to further invest in the market.

It will also have the adverse effect of causing a loss to the economy and hamper employment opportunities that can be created for the local populace.

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