Parallel Import Enforcement in Cambodia

INTRODUCTION

Parallel imports—branded goods imported into a domestic market and sold there without the consent of the intellectual property (IP) owner—pose a unique challenge for IP owners. In contrast to counterfeit goods, parallel imported goods are manufactured by or under the license of the IP owner and formulated or packaged for a particular jurisdiction then imported into a different jurisdiction without the authorization of the IP owner.

Intellectual property laws and perspectives on parallel import vary throughout Southeast Asia. The distinct legal landscape in each nation should be carefully navigated in consultation with legal experts to ensure brand protection to the fullest degree. This guide provides insight into the legal frameworks relating to parallel imports in Cambodia.

Cambodia is unique in its recognition of the national exhaustion doctrine, found under the Law on Marks, Trade Names, and Acts of Unfair Competition (“Cambodian Trademark Law”).

The Cambodian Trademark Law confers on registered trademark owners the exclusive right to use their trademarks, including on any goods it wishes to import, distribute, and sell in Cambodia. The law further provides that the rights over trademarked goods will be exhausted once the trademark owner or their representative puts the trademarked goods on the domestic market in Cambodia.

Up until this first domestic sale, a trademark owner has control over the trademarked goods, and its consent is required for any imports, distribution, or sales. Once this first sale is made with consent of the trademark owner, its rights over the specific trademarked good are exhausted.

Parallel imports, however, are trademarked goods put on the market without the consent of the trademark owner. Any imports and sales without consent thus infringe on the exclusive right of the trademark owner under the Cambodian Trademark Law.

In practice, Cambodian authorities require trademark owners that wish to take action against parallel imports to register an exclusive distributorship in Cambodia. Without this registration, authorities will normally not enforce a trademark owner’s rights against parallel imports.

In 2016, the Ministry of Commerce introduced a prakas (ministerial proclamation) to regulate the registration of exclusive distributorship, and to set out the rights of exclusive distributors and trademark owners, including the right to enforce against parallel imports. This Prakas on the Procedures to Record and File Permission Letters for Imported Goods Bearing Exclusive Trademarks affirms that an exclusive distributorship provides a trademark owner or distributor the exclusive right to import and distribute goods that bear a trademark registered in Cambodia.

This exclusive distributorship must be registered at the Department of Intellectual Property Rights (DIPR) for the trademark owner or distributor to enforce their rights against third parties, including parties that engage in parallel imports.

Remedies

To obtain protection against parallel imports, brand owners should register their trademarks.

The registration can be maintained by submitting an affidavit of use to the DIPR five years after the initial registration, and a request for renewal after ten years.

It is also a good idea to register an exclusive distributorship in relation to the trademark registration, as the authorities currently require this registration in order to enforce against parallel imports. A distributorship registration which is filed with the DIPR remains valid for two years and can be renewed starting three months before the expiry date.

An approved registration of an exclusive distributorship must be published in a local newspaper to inform the public and other traders on the market. Three months after the registration and publication, the trademark owner or distributor may start enforcing against parallel imports, including filing complaints with enforcement authorities and requesting that they take action. The trademark owner or distributor may also sue parallel importers.

The approval letter of a registered exclusive distributorship can also be forwarded to the Cambodian customs authorities so they can look out for and stop any imports not authorized by the registered exclusive distributor. In addition to protecting against parallel imports, this approach may also contribute to intercepting counterfeits, as shipments attract greater scrutiny from customs officials. Local distributors and affiliates should seek the advice of local counsel to navigate the Cambodian Trademark Law and to obtain protection against parallel imports to the fullest extent possible.

By Jay Cohen, Tilleke & Gibbins, Cambodia, a Transatlantic Law International Affiliated Firm.

For more information on this topic, please contact cambodia@transatlanticlaw.com  

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