Trademark

SpicyIP Tidbit: Customs Department allows parallel import of Dell computers; orders Dell to pay damages


In an interesting report carried in the Economic Times, it has been reported that the Commissioner of Customs has not only allowed the parallel imports of Dell computers into the country but also ordered Dell to pay demurrage & warehousing charges to the importers whose goods had been seized for over two months due to a complaint made by Dell. 
While the report does not specifically explain the law under which the consignments were withheld, I’m guessing that Dell had filed a complaint with customs under the IPR (Imported Goods) Enforcement Rules, 2007 that the import of Dell computers into India, by unauthorized dealers, infringes its trademark rights in India. As per the IPR Import Rules, the Customs may seize such goods for a certain period of time during which the Customs authorities is required to arrive at a judgment on the validity of the infringement claims. 
As per the ET report, the importers argued that the products were genuine Dell products and that they had a right to import such goods under the provisions of Section 30 of the Trade Marks Act, 1999. Readers may remember the highly controversial Samsung judgment of the Delhi High Court which interpreted Section 30(3) of the Trade Marks Act to specifically prohibit the parallel imports on the grounds that the same amounted to trademark infringement in India. Arun Mohan had covered this case in a guest post over here
The Customs Commissioner obviously had a different interpretation of Section 30(3). Normally such seizure orders under the IPR Import rules are done only when the complainant provides a surety that covers any possible damages to the defendant in the case of a wrongful seizure. In this case since the seizure was deemed as having no basis in the law, Dell was required to compensate the defendant for the losses suffered by them due to the seizure of their imports. 
It will be interesting to see the decision of any appeals court especially since there seems to be a general unanimity of opinion that the Samsung judgment of the Delhi High Court is untenable in law. 
 p.s.: Anybody with a copy of the order is please requested to share the same with us.

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

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