Parallel importation can be defined as the act of importing and trading in genuine goods that are sold without the original manufacturer’s knowledge or consent. These goods are also referred to as “grey goods”.
An example of how parallel importation typically takes place is when an individual travels to a foreign country, and purchases an item in said country at a lower retail value than that which the item is typically sold in South Africa. The individual then re-sells the item in South Africa, typically at a lower price than the average retail value, but still at a profit.1
Parallel imports are not counterfeit goods and are legally permissible, provided that they comply with the provisions of the Acts below.
Consumer Protection Act 68 of 2008 (CPA)
Section 25(2) of the CPA states that a person who markets parallel imports or grey goods is required to apply a “conspicuous notice” on those goods in the following prescribed manner and form:
- The notice must be written in an easily legible size (e.g. in the product description line), where the supplier, in plain language, expressly draws to the consumer’s attention (e.g. by adding an emboldened paragraph in the specification of the product) that the goods:
- have been imported without the approval or license of the registered owner of the trade mark embossed on the goods; and
- that no guarantee or warranty will be fulfilled by any authorised importer of such goods.
- The notice must be applied on the goods themselves (including the marketing material of the goods) where a consumer is likely to see that notice.2 Below is an example of a “conspicuous notice”:
Trade Marks Act 194 of 1993
In terms of the Trade Marks Act, as long as the goods have not been altered or interfered with, a distributor may still comply with the provisions of the CPA and the Trade Marks Act.
However, goods that bear a registered trade mark and which have been altered or interfered with cannot be defined as grey goods or parallel imports as they are no longer genuine goods, in the strict sense. Considering that these altered goods are no longer genuine, the importation and sale of these goods would not be permissible under South African law as they would fall within what is considered to be trade mark infringement, thus violating the Trade Marks Act 194 of 1993.3
In terms of the Counterfeit Goods Act 37 of 1997 (“the CGA”), any interested person may lay a complaint with an inspector relating to a consignment which is suspected to contain counterfeit goods.4
The customs authorities and police may also enforce Section 113 of the Customs and Excise Act 91 of 1964, which allows goods to be stopped to ensure that they are not counterfeit.5
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