Introduction

Parallel importation is one of the most enigmatic issues in the laws of the UAE. This chapter studies the merits and demerits of parallel importation from the perspective of the UAE. It reviews the relevant provisions in the trademarks and agency laws as well as the relevant case law in the UAE. The chapter examines the options available to the UAE legislator to reform its laws and provides a set of conclusions and recommendations.

Trademarks have become the most precious asset of enterprises. The value of a trademark amounts to billions of dollars. Each year the Best Global Brands Report generates increasing amounts of interest from companies and practitioners associated with brands, and lists the top 100 valuable brands worldwide. Emirates Airline, in the United Arab Emirates (UAE), is the most valuable airline brand worldwide valued at US$5.48 billion.

The UAE encounters cases of parallel importation because it is a high-priced economy. Parallel imports can occur due to non-availability of a product in the market or sourcing lowpriced products from other countries; thus profits can be made through price differences. Generally, products on the grey market are about 10 per cent cheaper, owing to the absence of customer care and warranties. In the exceptional circumstances however, prices can soar and fluctuate. Retailers are tempted to opt for the grey market when manufacturers fail to launch a product. Low prices of the parallel imported products can affect the domestic sales of the trademarked products giving rise to the question of parallel importation.

The UAE is a member of several treaties and international organizations. For example, it is a member of the Gulf Cooperation Council (GCC). In addition, the UAE is a member of the World Trade Organization (WTO). Although the UAE has made many efforts to bring its intellectual property laws into compliance with international legal standards set forth in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) and other international treaties, the UAE has not taken a clear stance on many intellectual property issues such as trade secrets, including trademark exhaustion and parallel imports of trademarked goods. Trademarks have been the form of intellectual property most familiar to the business community in the UAE. Neither trademarks law nor agency law or practice addresses clearly parallel importation.