Sebastian Hughes comments on the Court of Appeal decision in Mary Kay Inc v Zhejiang Tmall Network Co Ltd, addressing the exhaustion of rights (parallel importation) defence.

The Court of Appeal in Mary Kay Inc v Zhejiang Tmall Network Co Ltd (CAMP 301/2021, 15 March 2022) provided welcome guidance in respect of the proper determination of the exhaustion of rights (parallel importation) defence under s20 of the Trade Marks Ordinance. This was the first occasion this potential ground of defence has been considered in Hong Kong at the appellate level.

The Court of Appeal confirmed that there are 3 conditions, each of which must be satisfied, for the exhaustion of rights defence to apply:

(1) that the goods in question have been put on the market anywhere in the world under the trade mark by the owner or with his consent (whether express or implied or conditional or unconditional);

(2) that the condition of the goods has not been changed or impaired after they have been put on the market; and

(3) that the use of the registered trade mark in relation to those goods is not detrimental to the distinctive character or repute of the trade mark.

The Court of Appeal, having considered the judgment in Singapore of George Wei J in Samsonite IP Holdings Sarl v An Sheng Trading Pte Ltd [2017] 4 SLR 9, found that it was not possible, at the interlocutory stage, to resolve the first condition under s20 – as “a proper resolution of this question would require a detailed examination of the facts in order to determine the relevant “market””.

Sebastian Hughes and Lavesh Kirpalani represented Mary Kay.