CAMBODIA: NEW NOTIFICATION REGARDING FILING AND RECORDING EXCLUSIVE DISTRIBUTORSHIPS

Author: Hau Nguyen, Daniel Greif

On December 24, 2019, the Cambodian Ministry of Commerce issued a notification (the “Notification”) to clarify the Regulations on Procedures to Record and File Permission Letters for Imported Goods Bearing Exclusive Trademarks, which was enacted on May 31, 2016 (the Regulation”). With the Notification, the Ministry established new requirements to the current procedure which requires importers, with the exclusive right to import and distribute goods that bear a trademark registered in Cambodia, to record that exclusivity in order to enforce their rights against third parties.

The Procedure Established by the Regulation

The Regulation procedure only applies to goods that bear a registered trademark, are genuine, and are new products that have not been sold first in Cambodia. It excludes pharmaceutical products, secondhand goods and goods prohibited by law.

The requirements/documents to register an exclusive distributorship are the following:

Distributor must be a legal person incorporated in Cambodia.
The trademark owner and distributor must use a short-form template provided by the Department of Intellectual Property Rights (“DIPR”) by which the trademark owner assigns the exclusive distributorship. The template must be signed by the trademark owner and certified by a notary public or competent authority;
Trademark certificates as well as a letter from either the trademark owner or the distributor, requesting registration of the exclusive distributorship, must be attached to the template;
Requests for recordal must be made to the DIPR and accompanied by payment of a fee;
DIPR’s approval letters are valid for two years, and they are renewable for further two-year periods.

The Regulation allows both trademark owners and distributors who registered an exclusive distributorship, to take enforcement actions against parallel imports. Parallel imports are genuine branded goods obtained from one market (i.e. country, economic area, etc.) that are subsequently imported into another market and sold there without the consent of the IP owner. Despite being prohibited in Cambodia, parallel imports remain a significant issue in Cambodia.

The Clarifications Provided by the Notification

In addition to the above requirements, letters setting out an exclusive distributorship should also lay out the specific models that trademark owners and distributors are authorized to import and distribute. The Ministry specified two ways of listing the goods subject to the exclusive right. They can be specified either:

as an annex to a short-form template letter of exclusive importation and distribution provided by the DIPR, or
in a short-form agreement of exclusive importation and distribution.

The Outstanding Issues

Neither the Regulation nor the Notification specify the procedures to enforce actions against parallel imports. As a result, previous practices should be followed.

Trademark owners or distributors who have successfully registered an exclusive distributorship can request the DIPR to forward a copy of its approval letter to the Customs Department. Then, the Customs Department may look out for and stop parallel imports at the border. Trademark owners and distributors may also seek remedies from a court of competent jurisdiction or go through a mediation process in front of the DIPR. However, it is still not clear whether penalties could be applied to these infringements.

Conclusion

The clarifications specified in the Notification will allow trademark owners and exclusive distributors to bring more effective enforcement actions. Also, Cambodia Customs will be able to monitor parallel imports more effectively. Thus, the Notification is a welcome development in the fight against parallel imports in Cambodia.

Source: Cambodian Ministry of Commerce

Photo by USEmbassyPhnomPenh on Foter.com / CC BY-ND

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CAMBODIA: NEW NOTIFICATION REGARDING FILING AND RECORDING EXCLUSIVE DISTRIBUTORSHIPS

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