International exhaustion of trademark rights permits import of genuine used goods, if disclosure safeguards are fully observed.

Import of genuine second-hand or end-of-life goods bearing a registered mark was treated as permissible in principle under international exhaustion, subject to lawful acquisition and full, truthful disclosure. Section 30(3) of the Trade Marks Act was read as allowing import of genuine goods, while Section 30(4) was confined to cases where the goods' condition is changed or impaired after first sale. The Court noted that resale or refurbishment may proceed if buyers are informed about the goods' nature, the absence of the original manufacturer's warranty, and the identity of the refurbisher or reseller. As the goods were still in customs custody and had not reached consumers, the seized goods were directed to be released on undertaking for sale as scrap after removal of the marks.

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Issues: Whether import and proposed resale of second-hand or end-of-life goods bearing the plaintiffs' registered trademarks was protected by the doctrine of international exhaustion subject to lawful acquisition and full disclosure, and whether the seized goods could be released on terms.

Analysis: The dispute was examined in the light of the principle that Section 30(3) of the Trade Marks Act, 1999 recognises international exhaustion, while Section 30(4) preserves the proprietor's right only where the condition of the goods has been changed or impaired after market introduction. The earlier decisions relied upon were treated as laying down that genuine goods lawfully acquired abroad may be imported and dealt with in India, including refurbished goods, provided there is complete and truthful disclosure about the nature of the goods, the absence of the original manufacturer's warranty, and the identity of the party undertaking resale or refurbishment. On the facts, the goods had been seized before reaching the defendant and remained in customs custody, so there was no actual misrepresentation to consumers. The Court also accepted that future dealing would be permissible if the defendant complied with disclosure norms, and that the seized goods could be released only on the assurance that they would be sold as scrap after removal of the plaintiffs' marks.

Conclusion: Import of genuine second-hand or end-of-life goods bearing the registered mark was not barred in principle, subject to disclosure and compliance with the safeguards identified. The seized goods were directed to be released on undertaking and the applications were disposed of accordingly.

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