1. Kapil Wadhwa vs.

Samsung [194 (2012) DLT 23]

Facts & Procedural History:

Samsung had sued Kapil Wadhwa (a former authorized dealer of Samsung products), for
unauthorized import of genuine Samsung printers from a foreign market into India and subsequent
sale thereof. The said printers as sold by Kapil Wadhwa were cheaper than the one sold
by Samsung in India.

Judgment of the Single Bench dated February 17, 2012: The Learned Justice Manmohan Singh in
his judgment held that India adheres to National Exhaustion, therefore such importation by anyone
who is not the right holder or is unauthorized to make such imports would be culpable of
infringement.

However, the order of the Single Bench was set aside by the Division Bench of the High Court

Issues:
 Whether India adheres to National Exhaustion or International Exhaustion?
 Whether unauthorized parallel importation of genuine goods into India is permissible?

Findings:
 Whether India adheres to National Exhaustion or International Exhaustion?

Section 30(3) of the Trademarks Act, 1999 provides for the principle of territorial exhaustion of
trademark rights in India. It states that once lawfully acquired, the purchaser of the goods may
further sell those goods in the market without it constituting as trademark infringement.

In order to determine whether parallel imports to India were permissible, the Court had to first
determine whether the term ‘market’ in Section 30(3) of the Trademarks Act, 1999 referred to a
national or a global market. The Single Bench of the Delhi High Court held that India only
recognised the principle of national exhaustion.

However, on appeal, the Division Bench made a reference to additional documents to determine the
intent of the legislature while inserting ‘the market’ in Section 30(3). The Division Bench relied
upon the Statement of Objects and Reasons of the Trademark Bill 1999 placed before the Indian
Parliament at the time of passing the Trademarks Act, India’s communication at the Uruguay
Rounds and a Report of the Standing Committee on the Copyright (Amendment) Bill, 2010. It
concluded that India follows the principle of international exhaustion of rights.
 Whether unauthorized parallel importation of genuine goods into India is permissible?

The Division Bench stated that Section 29 could not be read in isolation and must be read with
Sections 30(3) and 30(4). The Division Bench also stated that denial of parallel imports will restrict
the consumers’ access to a wider range of products at better prices and stated that trademark laws
are not intended to regulate the sale and purchase of goods but to protect trademark rights.

It further held that since India recognised the doctrine of international exhaustion, the Respondent
cannot prevent the parallel import of its products in India. It also permitted the sale of the printers
under the condition that the Appellants shall provide disclaimers that the product sold by them are
 imported independently and the Respondent gives no guarantees/warranty qua the goods nor
provide any after-sales service. The warranty and after-sales services provided by the Appellants is
at their own cost.

Judgement:

The Division Bench of the Delhi High Court permitted parallel imports to India, on the condition
that the Appellants would provide certain disclaimers in their shops. The principle of international
exhaustion laid down in this judgment has clarified a rather grey piece in India’s trademark
legislation.

2. John Wiley & Sons Inc. & Ors v Prabhat Chander Kumar Jain [2010 (170) DLT 701]

Facts:

The Plaintiffs in this case, Pearson Education, John Wiley & Sons etc. who are foreign publishing
houses (No. 1,3,5) and their exclusive licensees (No. 2,4,6) all of whom were subsidiaries, were in
the business of selling low-priced editions of advanced educational books in the Indian sub-
continent. There was a notable qualitative difference between the American edition and the Indian
edition of the Plaintiff’s books in terms of quality of paper, printing and accompanying online
features. The content however was same. The price difference between the Indian version and the
U.S. version was substantial, upto 150 U.S. dollars for some editions. The Defendants, Indian
businessmen, setup a website, to sell the low-priced Indian editions to customers in the U.S.A. The
Plaintiffs therefore filed the present lawsuit in India to shut down the Defendant’s business and
website.

Issues:
 Has Copyright of Plaintiff been infringed under S.51 of Copyright Act of 1957

Judgement:

The express provision for international exhaustion is absent in Indian law, it would be appropriate
to confine the applicability of the same to regional exhaustion. In the present case, the
circumstances do not even otherwise warrant this discussion as the rights if at all are exhausted are
to the extent to which they are available with the licensees as the books are purchased from the
exclusive licensees who have limited rights and not from the owner. In these circumstances, the
question of exhaustion of rights of owner in the copyright does not arise at all.

3. Penguin Books Ltd v. India Book Distributors [AIR 1985 Del 29]
Issue:
 Whether import by a third party without the express authorization of the copyright owner
constitutes infringement?

Law:

It should be noted that prior to the 1994 amendment of the Copyright Act, the first two clauses of
Section 14 read as- “(i) to reproduce the work in any material form; (ii) to publish the work”.

Judgement
 An infringing copy means a copy "imported in contravention of the provisions of the Act." The
central provision in section 51 which says that copyright shall be deemed to be infringed where
any person without a license granted by owner of the copyright "does anything, the exclusive
right to do which is by this Act conferred upon the owner of the copyright.

The owner of the copyright or his licensee has the "exclusive right" of printing, or otherwise
multiplying, publishing and vending copies of the copyrighted literary production in India. India
Distributors are infringing this right. Therefore, India Distributors are dealers in "infringing
copies".

It is also an infringement of copyright knowingly to import into India for sale or hire infringing
copies of a work without the consent of the owner of the copyright, though they may have been
made by or with the consent of the owner of the copyright in the place where they were made.

4. Warner Brothers v. Santosh V.G., [MIPR 2009 (2) 175]

Facts:
The plaintiff was a movie producer and has released its movie in theatres pursuant to which it
further released in other forms of media such as DVDs, rental cables and satellite television. The
plaintiff had released its film in US including in the media formats such DVDs, rental cables, etc.
The defendant, legally purchased these films stored in DVDs and other media formats in United
States and imported them to India for and started renting out such DVDs and other media
formats.
Issue:
 Is parallel importation under Section 14 (a)(ii) of the Copyright Act, 1957 ?
Judgement:
The High Court, acknowledged the applicability of doctrine of exhaustion in the Section 14 (a)(ii)
of the Copyright Act, 1957. However, noted that doctrine of exhaustion is applicable under
Section 14 (a)(ii) in respect of literary, dramatic and musical works but not in respect of
cinematographic films.
Findings:
This case acknowledged applicability of doctrine of exhaustion under the Section 14 (a)(ii) but it
fell short of stating whether such exhaustion was national or international.