By now most of us are familiar with the grey hairs caused to companies all over the world by the importation of grey goods, also known as parallel imported goods. As a general rule of thumb, the importation and sale of grey goods is not unlawful in most African countries, albeit subject to certain conditions. For example, in South Africa persons dealing in grey goods are required to comply with the provisions of Section 25 of the Consumer Protection Act.
A recent decision by the Supreme Court of Mauritius may have signalled a change to that approach - well at least for Mauritius.
In the case of The Polo/Lauren Company, LP v Sudheer Maudhoo and the Mauritius Revenue Authority ; Nissan Jidosha Kabushi Kaisha v Zario Ltd. and The Mauritius Revenue Authority 2012 SCJ 494 (“The Polo/Nissan case”), the Supreme Court of Mauritius delivered a single judgment in respect of both matters in which the permissibility of parallel importation was considered.
In both matters genuine goods were imported by the Defendants after being purchased from dealers outside of Mauritius. In neither case did the copyright / trade mark owner consent to the importation of the goods into Mauritius.
In giving judgment the Court considered three issues, namely: i.) does Mauritian law authorize parallel importation; ii.) were the Plaintiffs barred from objecting to the importation of genuine goods as there was an exhaustion of their rights when the relevant goods were put on the market by their authorized dealers; and, iii.) what meaning must be attributed to “consent” under section 40 (5) of the Patents, Industrial Design and Trademarks Act 2002 (“PIDTA”).
Section 40 (5) of PIDTA provides that the rights conferred by registration of a mark shall not extend to acts in respect of articles which have been put on the market in Mauritius by the registered owner or with his consent (own emphasis).
The Court considered European judgments, provisions contained in article 7 of the Trademarks Directive of the European Union and section 12 of the UK Trade Marks Act ( which contains wording very similar to that of section 40 (5) of the PIDTA) .
The Court held that under section 40 (5) the national exhaustion concept was adopted and that traders were not free to merely import genuine goods into Mauritius. The Court therefore concluded that the relevant proprietors’ consent had to be obtained before their (the proprietor’s) goods could be imported and put on the Mauritian market. The Court then turned to the meaning of “consent”. It was common cause that no express consent had been given by the proprietors of the trade marks. The Court consulted several judgments of the European Court of Justice and held that, in order to answer the question whether implied consent was provided or not, the Court had to consider whether factors were present demonstrating that the trade mark proprietors had unequivocally renounced any intention to enforce their exclusive rights.
In the Court’s view, alleging that any person is free to import and sell goods bearing a trade mark, which goods have already been sold in Mauritius by the owner of the trade mark, is a misapprehension. The court further remarked that the case law consulted showed that the protection provided against parallel importation of goods subject to trade mark or copyright protection, did not rely on the question of whether the goods were genuine or not.
In the case of Reckitt & Colman (Overseas) Limited v Mohamad Nawaz Dauhoo and the Mauritius Revenue Authority 2012 SCJ 495, the Supreme Court of Mauritius followed the same approach as in the Polo/Nissan case. In the Reckitt & Colman matter, the Defendant (Dauhoo) imported 60 containers of lozenges bearing the STREPSILS trade mark.
Reckitt & Colman (the proprietor of the STREPSILS trade mark in Mauritius and Plaintiff in this matter) averred that the importation of these goods into Mauritius was done without its consent or authorisation and was therefore a breach of its rights as the trade mark owner under PIDTA.
The Defendant responded that he was not aware that the Plaintiff was the registered owner of the STREPSILS trade mark or even that the Plaintiff was a company in the UK. The Defendant further claimed that he imported the STREPSILS goods lawfully after obtaining the authorization of the Government of Mauritius.
In giving judgment the Court took into account that the goods were genuine goods produced by an affiliated company of Reckitt & Colman (“Reckitt Benckiser”), as well as the submissions by the Defendant that internet searches by him showed the Plaintiff not to be the global owner of the STREPSILS trade mark.
The Court held that parallel importation can only be lawful with the consent (either express or implied) of the trade mark owner and that the contention of the Defendant that he had lawfully imported the goods (by obtaining the authorization of the Ministry of Health) was of no assistance to him.
Although the judgment in The Polo/Nissan case has been set down for appeal next year, companies may enjoy some interim relief against parallel imports.
The influence of the French- and English legal systems in the development of Mauritian law cannot be denied and is evident from the case law consulted by the Court in the above matters. The question remains whether courts in countries outside of Europe will come to the same conclusion in the absence of legislation such as section 40 (5) of PIDTA and article 7 of Trademarks Directive of the European Union.
Brand holders exporting to Mauritius (and their licensees in Mauritius) have some legal backing to restrict the importation and sale of grey goods ... at least for the time being.