Parallel Imports in a Sri Lankan Context by Anomi Wanigasekera

Parallel Imports in a Sri Lankan Context by Anomi Wanigasekera, Partner and Sabeera Shariff, Senior Associate at Julius & Creasy, Sri Lanka In The Global IP Matrix Issue 22, Anomi Wanigasekera, Partner, and Sabeera Shariff, Senior Associate at Julius & Creasy, Sri Lanka, examine the growing relevance of parallel imports in trademark law. As global trade expands and brand distribution systems evolve, the authors explore how Sri Lanka’s IP legal framework addresses the tension between legitimate trademark protection and market access to genuine goods imported through unofficial channels.

What Are Parallel Imports?

Parallel imports, or “grey market goods,” refer to genuine products imported and sold without the authorisation of the trademark holder. While the products themselves are not counterfeit, their resale often circumvents exclusive local agreements, raising concerns about fair competition, consumer protection, and legal rights.

Sri Lanka’s Legal Framework

Sri Lanka’s Intellectual Property Act, No. 36 of 2003, which governs all forms of IP, including trademarks, applies the doctrine of exhaustion. Under Section 122(b), once goods are lawfully placed on the market under a registered trademark, the trademark owner cannot prevent their resale, provided the goods remain unchanged.

This interpretation aligns with Article 6 of the TRIPS Agreement, which leaves it to member countries to decide how to address parallel imports. Sri Lanka’s position effectively permits parallel imports under certain lawful conditions.

Legal Nuance: What Counts as 'Lawfully Imported'?

While the law allows parallel imports, there remains ambiguity around the term “lawfully imported.” Disputes often arise when exclusive distributors or licensees claim that unauthorised imports damage their sales, brand value, and consumer expectations, especially when parallel importers under-invoice or exploit customs loopholes.

Sri Lanka’s Supreme Court ruling in 2012, which allowed the parallel importation of genuine HP products, reinforces the permissibility of such imports when authenticity and legality are established.

Economic and Legal Impacts

The authors highlight that parallel imports are especially common in sectors such as motor vehicle parts and fast-moving consumer goods (FMCG). These goods may create market diversity and pricing benefits, but also pose risks: lack of regulatory oversight, diminished accountability, and potential safety concerns.

Moreover, Sri Lanka Customs does not intervene as long as the goods are genuine and legally imported, limiting the enforcement tools available to authorised distributors.

Conclusion Wanigasekera and Shariff argue that a balanced legal framework is essential, one that respects the rights of trademark owners and distributors while upholding fair competition and protecting consumers. As Sri Lanka’s economy globalises, legal clarity on parallel imports will be critical for aligning domestic regulation with international trade realities.

Read the full article in The Global IP Matrix Issue 22 for a deeper understanding of how Sri Lanka is navigating the legal challenges and commercial realities of parallel imports.

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