Parallel Imports in Venezuela – An Alert for International Trademark Owners

Parallel Imports in Venezuela: An Alert for International Trademark Owners

This article first appeared on WTR Daily, part of World Trademark Review, in September, 2021. For further information, please go to www.worldtrademarkreview.com.

October, 2021

Venezuela is perhaps a territory that, due to the restrictions from international sanctions or the well-known economic limitations, many international companies have taken off their priorities when it comes to the protection of their trademarks.

However, this situation could change as a result of the measures that have been implemented by the Venezuelan government to stimulate imports of products to supply the local market and avoid shortages.

Among these measures is the recent Presidential Decree No. 6,636 of August 6, 2021, which aims to exempt from import taxes and VAT on certain products related to the pharmaceutical, automotive, telecommunications, clothing and food sectors.

This resolution has regulated a situation that has been occurring in fact at least in recent years, and related to measures that allow importation of products without major restrictions at customs; the lifting of former strict price controls, in addition to the relaxation of the exchange regime for the circulation of foreign currency within and from Venezuela.

This has led to the beginning of an economic activity consisting of parallel imports of well-known international products but whose owners either do not have direct operation in Venezuela, or having it, these products are not part of their regular offer for our country and these imports are conducted without their control. This phenomenon known as “bodegones”, has already been reviewed by the international news outlets, such as Reuters back in December 2019: https://www.reuters.com/article/us-venezuela-shops/costco-in-caracas-how-florida-goods-flood-venezuelan-stores-idUSKBN1YK16X

Thus, nowadays it is not strange to find in Venezuela in these import stores (which some of them are no longer convenience store but become real chains), products such as JIF peanut butter, Folgers coffee, vitamins such as Olly or Vitofusion, various products bearing the marks Kirkland from Costco or Great Value from Walmart; but also even products that require strict cold chains such as Chobani yogurts, Ben & Jerry’s ice cream, Talenti or My/Mochi.

In most of these cases, there is no local sanitary registration mandatory to evaluate the safety and efficacy of the products to the Venezuelan consumer, and the transport and storage conditions, among other logistical aspects, are unknown.

This situation has also been accompanied by a significant increase in new filings of applications for those international well-known trademarks filed unauthorized third parties. In several cases, those marks are not currently registered in Venezuela, so in many cases the applications are examined without major obstacles because they have not been object of oppositions. But even in the case of oppositions, they must also be supported by significant documentary work to convince the examiners of their international notoriety and unfair competition claims.

Consequently, companies that currently do not have Venezuela as the destination of their products, may be clearly harmed by this practice of parallel importation, since not only that imported products lack the quality controls of their owners or authorized distributors, but also It also exposes those marks that currently do not have protection in Venezuela to registration by third parties

Thus it is highly recommended for international trademark owners to validate whether their products are being subject to unauthorized commercialization in Venezuela through parallel imports, and to study the actions that may be taken. Furthermore, since Venezuela is a “first-to-file” jurisdiction, to also consider protecting their trademarks, even if there are no direct marketing plans in the immediate future.