Note: International exhaustion of IP rights means that once a product is legally sold by the rights holder in one country, their exclusive rights over that product are exhausted globally, preventing them from controlling its resale or distribution in other countries.

Facts:

• Kapil Wadhwa and Ors (Appellants) were engaged in importing Samsung printers and cartridges manufactured by Respondent No. 1 from foreign markets into the Indian market at cheaper prices compared to those sold by Respondent No. 2 in India.
• Samsung Electronics Co. Ltd (Respondent No. 1), a leading multinational electronics company headquartered in South Korea manufactures various electronic products such as TVs, Smartphones, home appliances, printers, etc, under the brand name ‘SAMSUNG’.
• Samsung India Electronics Pvt Ltd (Respondent No.2), is a wholly owned subsidiary of Samsung Electronics Co. Ltd. in India. Respondent No. 1 licensed the ‘Samsung’ trademark to Respondent No. 2 for use in India in an agreement dated 08.07.2003.
• Respondents registered ‘SAMSUNG’ in various classes and classes 7,9 and 11 of goods including printers and cartridges.
• The Respondents had filed a suit against the Appellants for infringement of the registered trademarks through parallel imports and sale of Samsung printers in India without their consent before the Single Judge Bench of the Delhi High Court.
• This present appeal by the Appellants arose out of the impugned decision passed by the Single Judge Bench of the Delhi High Court dated 17.02.2012.
  

Background:

• The Appellants filed IA No.10124/2011 under Order XXXIX Rule 4 of the Code of Civil Procedure seeking to vacate the ex-parte ad-interim injunction granted to the Respondents.
• The Respondents filed IA No.7774/2011 requesting that, during the pendency of the suit, the Appellants be restrained from importing and selling printers and their ink cartridges/toners bearing the Trade Mark 'Samsung,' as well as using the Trade Mark 'Samsung' in promotional activities including on their website.
• The impugned order dated February 17, 2012, passed by the learned Single Judge, resulted in the dismissal of IA No.10124/2011 filed by the Appellants and of IA No.7774/2011 filed by the Respondent was allowed.
  

Main Issue:

1. Whether parallel import of goods is permissible in India and if the sale of goods bearing a registered trademark by a third party without the consent of the owner will be termed as infringement?
2. Whether the Indian Trademark Act 1999 embodies the principle of International or national exhaustion of trademark rights? (Paragraph 5)