Finally, it has been decided that India follows National Exhaustion. It has been made clear by Justice Manmohan Singh in his judgment on Samsung vs Kapil Wadhwa that India follows national exhaustion.
Facts of the cases
Plaintiffs (SAMSUNG) are engaged in the business of manufacturing and trading in electronic goods such colour televisions of all types, home appliances, washing machines, microwaves, air conditions, computers, printers and cartridges etc. The Plaintiff No. 1 has licensed the use of Samsung trademark in India to Plaintiff No.2(Samsung India) vide a trademark agreement dated 8th July 2003. The said agreement has also been filed with the Trade Mark‟s Registry for registration. The grievance of the plaintiffs in the present case relates to the important business of manufacturing, selling and distribution of wide range of printers under the mark SAMSUNG by them and rampant problem of parallel importation especially carried out by the defendant No. 1 and 2 whereby the plaintiffs are deprived to carry out their legitimate business under the mark SAMSUNG.
The plaintiffs have averred in the plaint that on 18th March 2011, the advertisement was published in the weekly The DQ week by the defendant No. 2 offering SAMSUNG printers for sale. The plaintiff also complained that the said advertisement used the SAMSUNG mark along with slanted device. The said advertisement quoted the price much below than the price of the printers ordinarily sold in the market as per the plaintiff.
The Defendant also operates a website whereby the defendant offers for sale a varied range of the printers under the mark SAMSUNG at the prices much lower than offered by the plaintiff. The defendants use the technique of deep hyperlinking whereby the defendant is also able establish a connect between his website with that of the plaintiff when it comes to displaying the product to the consumer. All this is done to confuse the consumer so as to believe that the products are emanated from the plaintiffs authorized representatives when the defendants are not so.
The plaintiffs by showing the above acts of the defendants allege that the defendants are guilty of the following infringement:
1. By way of parallel imports, the defendants are infringing the trade mark SAMSUNG of the plaintiffs in as much as the importation has been caused without the consent or permission of the registered proprietor and thus the defendants acts are infringement in view of Section 29 of the Trade Marks Act.
2. By way of doing meta tagging and deep hyperlinking, the defendants are guilty of the infringement of trade mark SAMSUNG as the defendants are using the mark in relation to the advertisement and the use of the same is treated to be use for the purposes of infringement and thus the defendants are violating Section 29(1) read with Section 29 (6) of the Act.
3. The defendants are passing off the goods which are not meant for Indian market giving the impression that the same are emanating from the plaintiffs when the plaintiffs have not given any such authorization or permission to the defendants to undertake such activities. All this is being done to the detriment of the plaintiffs is clear act of misrepresentation as well as deceit to the general public.
4. The defendants are also tarnishing the reputation of the plaintiffs well known trade mark SAMSUNG by providing the goods which are actually not intended to be served to the Indian public. Any element of dissatisfaction would then clearly attack or reflect on the reputation of the plaintiffs mark SAMSUNG.
Interpretation of section 30 (3) and (4) of Trademark Act 1999
Section 30 reads as under
Section 30 (3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of a trade by reason only of-
(a) The registered trade mark having been assigned by the registered proprietor to some other person, after the acquisition of those goods; or
(b) The goods having been put on the market under the registered trade mark by the proprietor or with his consent.
Section 30(4) Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose further dealings in the goods in particular, where the condition of the goods, has been changed or impaired after they have been put on the market.
Link for the judgment: http://lobis.nic.in/dhc/MAN/judgement/18-02-2012/MAN17022012IA77742011.pdf