List for Parallel Imports Issued
A list of products and brands for which parallel import protections are suspended has been issued. The list came into force on 19 April 2022 in Order No. 1532 issued by the Ministry of Industry and Trade and establishes how new Russian rules are applied for parallel imports.
Changes will allow some parallel imports
Russian law and practice are changing with regard to allowing parallel imports into Russia. Parallel import refers to legitimate products (not counterfeits) intended for sale in one country being imported into another country. These involve legitimate products but unauthorized imports into Russia.
Russian IP law provides that IP rights owners can generally control the introduction into circulation of products containing or branded with their IP. Under Russian law, though, this introduction into circulation is focused on the Russian market. This basically means that an IP rights owner may prohibit unauthorized import of products (parallel imports), even if those products were legitimately purchased outside of Russia.
As reported in an earlier legal alert (8 April 2022), changes were made to Russian IP law to essentially allow the Russian government to designate certain goods and groups of goods for which IP rights protections would be suspended. While the wording of the amendments to the law are broad, it was expected that the application of this new rule would be to allow parallel imports of products for which the Russian government might expect supply shortages. This expectation has proven to be correct.
The application of this new rule is essentially to remove this right to prohibit such parallel importation, so long as the products were legitimately acquired somewhere outside of Russia.
Delegation of authority to make the list
On 29 March 2022 the Russian government formally delegated the authority for compiling the list of products for which parallel imports would be allowed to the Ministry of Industry and Trade.
The list from the Ministry of Industry and Trade was published in Order 1532 and is effective from 19 April 2022.
Wide ranging list including both products and brands
It was unclear as to whether the rule allowing for a list of goods for suspension of IP rights would be applied to the types of goods or to specific brands, but the list clearly indicates that the intention is to apply to both. The list describes product types as well as specific brands.
The list is very long, over 20 pages specifying dozens of categories of products and specific foreign brands. The products range from raw materials to finished goods and technological hardware. It is advisable for any foreign manufacturer or distributor to check to see the degree to which their products or brands fall under this list.
Legitimate sales required
The text accompanying the list includes a requirement that the products to be imported must have been legitimately introduced into circulation by the IP rights owners somewhere before import into Russia. This means that stolen property or products initially sold outside of Russia without authorization by the IP owner may still be prohibited for import into Russia. While this may be difficult to prove in practice, it does indicate that the new approach seeks to continue to recognize IP rights for circulation of products, but on an international, rather than national basis.
From a technical standpoint, this would be considered in IP circles as a partial change of Russian IP rights from what is called a "national exhaustion" approach to an "international exhaustion" approach. The term "exhaustion" refers to the exhaustion of rights of an IP owner – basically, the IP owner has used up its rights to control the circulation of the product by releasing the product into the market.
Going forward
We are carefully monitoring changes to the list and clarifications on the application of the new rules. We are available to assist with identifying whether particular products or brands are likely to be affected by these developments.
