Parallel Imports And The Trade Mark Risks In Singapore

• Published date: 09 August 2022
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Davies Collison Cave
• Author: Ms Esther Seow and Benita Lau

Does your business import and resell goods from overseas markets? Parallel import goods are commonly found in the Singapore market, with cars, chocolates and beauty products being just a few examples. However, does their prevalence mean it is safe to deal in parallel imports? In this article, we highlight some of the trade mark-related issues that businesses may face when trading parallel imports in Singapore.

What are parallel imports?

One way to understand parallel imports is by identifying what they are not. Importantly, parallel imports are not counterfeit goods. The term "parallel imports" refers to goods which are first sold in an overseas market with the brand owner's authorisation, only to be imported into another market (in this case Singapore) without the brand owner's authorisation.

Not only are the goods genuine products, but they may potentially be retailed at a lower price than the counterparts sold by authorised retailers. In fact, during a Singapore Parliamentary Debate, it was noted that parallel imports provide consumers with "a wider choice of products which they can purchase and also at cheaper prices".¹

The parallel import trade also offers opportunities for local entrepreneurs. Small or medium-sized businesses, in particular, may find that trading in parallel imports provides a foothold to compete with more established traders in the Singapore marketplace.

In many cases, these goods already have sufficient reputation in Singapore to attract customers, which saves parallel importers the expense of conducting extensive advertisements. Moreover, local businesses may wish to avoid being bound by licensing and distributorship agreements. By operating as parallel importers, they also may not need to provide warranties, guarantees and follow-up customer care services.

In summary, parallel imports are here in the Singapore market, and both local consumers and businesses appear to benefit. However...

Is it legal to trade in parallel imports?

This is a common query from local businesses, but one without a simple answer as there is no specific law on parallel imports. Instead, parallel imports are regulated under various rules and systems in Singapore, including trade mark laws.

Under Singapore's Trade Marks Act (TMA), trade marks include not just names and logos, but potentially even shapes, colours, aspects of packaging or combinations thereof. If a person or company desires to use a third party's trade marks in commercial activities, then it...