Parallel Imports in Ukraine: Legal Framework, Court Practice, and Enforcement Gaps

Parallel imports are one of the most significant—and at the same time controversial—concepts in the field of intellectual property, as they directly affect not only the interests of rights holders but also importers and end consumers. On the one hand, parallel import promotes healthy competition, lowers prices, and broadens product availability. Yet, such imports may undermine the rights holders’ strategies to control the distribution of their products in specific markets, ensure product quality, and maintain brand reputation.

In essence, parallel imports refer to the importation of genuine goods manufactured and first sold abroad with the rights holder’s consent but subsequently brought into another country without their further authorisation. The legal regime governing parallel imports primarily depends on how the principle of exhaustion of intellectual property rights is regulated. This principle defines the point at which a rights holder loses control over the further distribution of their goods.

Globally, there are three main approaches to the exhaustion of IP rights:

• National exhaustion – the rights holder loses control only after the first sale of the product within the country; goods sold abroad cannot be imported without authorisation;
• Regional exhaustion – the rights are exhausted within a specific region, typically an economic union, allowing free movement of goods within the region while restricting imports from outside (e.g., the EU);
• International exhaustion – the rights holder loses control after the first sale of the product in any country, thus facilitating global parallel trade;

Ukrainian legislation does not provide a statutory definition of parallel import or establish a unified approach to the exhaustion principle across all categories of intellectual property rights. Different types of IP rights are governed by different exhaustion regimes. For instance, the international exhaustion principle applies to trademarks, patents, utility models, and industrial designs, as stipulated in the following Ukrainian laws: Law of Ukraine On Protection of Rights to Marks for Goods and Services (Part 6, Article 16); Law of Ukraine On the Protection of Rights to Inventions and Utility Models (Part 3, Article 31); Law of Ukraine On the Protection of Rights to Industrial Designs (Part 3, Article 22).

These provisions establish that the exclusive right of intellectual property holders to prohibit the use of protected objects, such as trademarks affixed to goods, does not apply to goods placed on the market by the rights holder or with their consent. Importantly, the law does not set territorial limitations for the first sale, which, under the principle of the most favorable interpretation, indicates the application of the international exhaustion principle. Ukrainian courts also support this position.

For example, the Supreme Court of Ukraine, in its ruling of 26 May 2022 in case No. 911/3338/20^[1] stated:

“The provisions of Part 6 of Article 16 of Law No. 3689 do not link the exhaustion of trademark rights to the placement of the product (by the rights holder or with their consent) on the market exclusively within the territory of Ukraine. Accordingly, the placement of goods bearing the relevant mark on the market by the trademark owner (or with their consent) may also occur in the territory of another country, after which the owner cannot restrict or prohibit the resale of these goods in another country where their rights are also protected (including in Ukraine). Given the absence of territorial restrictions, this allows for the conclusion that Ukraine follows the international principle of exhaustion of rights.”

However, when it comes to copyright objects, the legislator has adopted a national exhaustion principle. According to Part 5 of Article 12 of the Law of Ukraine On Copyright and Related Rights: “If copies of a work have been lawfully placed on the market in Ukraine through their first sale, such copies may be further transferred without the consent of the copyright holder and without payment of remuneration (exhaustion of rights), except for original works of fine art, which are subject to resale royalty rights in accordance with Article 30 of this Law.”

Thus, only copyright objects are subject to the national exhaustion regime^[2], whereas the international exhaustion principle governs all other types of intellectual property rights.

In practice, parallel import in Ukraine largely depends on customs regulations, as customs authorities are the first checkpoint at the importation stage. Articles 397–403 of the Customs Code of Ukraine provide a mechanism for enforcing intellectual property rights by customs authorities. In particular, Ukraine maintains a Customs Register of Intellectual Property Objects, which rights holders can use to include their IP objects. Once registered, customs authorities are required to suspend the clearance of goods suspected of infringing the corresponding IP rights.

However, a significant limitation is set out in Part 3 of Article 397 of the Customs Code, which states that customs control measures do not apply to: “Original goods, that is, goods manufactured with the consent of the right holder, or goods produced by a person duly authorised by the rights holder to manufacture a certain quantity of goods, including in quantities exceeding those agreed upon between such person and the rights holder.”

This provision effectively establishes the international exhaustion principle without reference to specific types of intellectual property. As a result, if goods are not counterfeit, customs authorities may not suspend their import even at the request of the rights holder. This creates significant challenges for copyright holders, as the Law of Ukraine, On Copyright and Related Rights, adopts a national exhaustion approach, but customs legislation provides no mechanism to enforce it.

Ukrainian court practice also consistently supports the application of the international exhaustion principle and has developed settled approaches that significantly limit the ability of rights holders to challenge parallel imports.

For instance, in its decision of 18 June 2024 in case No. 910/2286/23^[3], the Supreme Court of Ukraine upheld the international exhaustion principle and placed the burden of proving counterfeit status on the plaintiff, stating:

“In this case, the burden lies with the plaintiff to prove that the company violated the rights of the trademark owner by selling non-original (counterfeit) goods.

In the absence of established facts about the specific goods bearing the trademark, proving the exhaustion of rights must also be assessed in light of the plausibility principle.”

Furthermore, the Supreme Court of Ukraine has affirmed the presumption of good faith acquisition. This was reiterated in its decision dated 17 March 2020 in case No. 911/2674/17^[4], where the plaintiff argued that the import was unlawful due to a licensing agreement limiting sales to a specific territory — Hong Kong. The court found that the importer had purchased the goods under a valid contract and could not have known about such distribution restrictions. It emphasised not only the international exhaustion principle applicable in Ukraine but also the presumption of the lawfulness of the transaction:

“A holder is presumed to act in good faith if, upon acquiring the goods, they did not know and were not obliged to know that the seller had no right to sell them. If the holder knew or ought to have known that they were acquiring the goods from someone unauthorized to dispose of them, they are considered to have acted in bad faith. Mere negligence is not sufficient — intent or gross negligence is required.

In addition, the presumption of the legality of a transaction is an important safeguard for the exercise of civil rights. It is based on the assumption that a person, by entering into a transaction, acts lawfully. A person may, by exercising their freedom of contract, engage in any lawful conduct to create, modify, or terminate civil rights and obligations. No express legal confirmation of such conduct is required — it is enough that the law does not prohibit it.

As established by the courts of previous instances, the company purchased the disputed goods from ‘INNES INTERNATIONAL, INC’ under Contract No. 01-17 of 10.01.2017. The said contract has not been declared invalid in the prescribed manner. In turn, ‘INNES INTERNATIONAL, INC’ acquired the aforementioned goods from ‘Shenzhen Zealkeys Sci-tech Co. LTD’.

Given the above, the Company’s argument that ‘Shenzhen Zealkeys Sci-tech Co. LTD’ had no right to sell the disputed goods does not indicate unscrupulous behaviour in the Company’s acquisition of ownership of the disputed goods and does not confirm the illegality of their importation into the territory of Ukraine.”

Thus, judicial practice in Ukraine consistently supports the international principle of exhaustion of rights and establishes a high standard of proof for rights holders seeking to restrict parallel imports. The Supreme Court of Ukraine not only places the burden of proving that the goods are counterfeit on the claimant, but also reiterates the presumption of the legality of transactions in this category of cases. This significantly complicates the ability of rights holders to prohibit parallel imports, including on the basis of contractual restrictions between the rights holder and exclusive distributors.

However, despite the general application of the principle of international exhaustion, the legislation provides for a number of exceptions that may potentially restrict parallel imports and grant rights holders additional means of protection. In particular, the rights holder may object to the further circulation of goods if:

• the goods have been altered or worsened after being placed on the market. For example, if they were repackaged or modified without the rights holder’s consent in a way that could affect their quality or consumer perception (as provided in Part 6 of Article 16 of the Law of Ukraine On Protection of Rights to Marks for Goods and Services);
• the importer misleads consumers regarding the origin, quality, or other characteristics of the goods. For example, through the incorrect translation of instructions, altered labelling, or use of intellectual property objects in a way that creates a false impression of affiliation with the rights holder (as provided in Article 5 of the Law of Ukraine On Protection Against Unfair Competition);
• the import infringes other intellectual property rights not subject to the exhaustion principle. For example, where the goods contain patented technologies protected in the country of import;
• the goods are subject to specific regulation or certification requirements, such as medicines, medical devices, or chemical products that may require separate authorisation or registration in the country of import. The absence of such certification may serve as grounds for the detention or withdrawal of the goods from circulation;
• the goods include licensed software, in which case further distribution may be restricted by the terms of the license agreement rather than by the principle of exhaustion. For instance, the distribution of digital copies of software or video games is often governed by the terms of use prohibiting resale without the rights holder’s consent.

Conclusion

The legal regime governing parallel import in Ukraine is characterised by a general adherence to the principle of international exhaustion of rights for most categories of intellectual property, such as trademarks, patents, utility models, and industrial designs. This approach aligns with Ukraine’s broader economic interests in promoting market competition, consumer choice, and integration into global trade systems. It is consistently upheld in judicial practice, where courts have emphasised both the high threshold of proof required from rights holders and the presumption of good faith acquisition of goods.

At the same time, the fragmented legal framework, particularly the national exhaustion principle that applies to copyright objects, creates inconsistencies and practical challenges, especially in customs enforcement. The lack of precise mechanisms allowing customs authorities to block copyright-based parallel imports undermines the effectiveness of national exhaustion in this area and creates legal uncertainty for both rights holders and importers.

Moreover, while the general principle favours international exhaustion, Ukrainian legislation provides several important exceptions that may be invoked to restrict parallel imports in specific circumstances. In this context, rights holders must adopt a nuanced strategy that combines IP enforcement tools with contractual and regulatory mechanisms to protect their market positions. At the same time, Ukrainian policymakers may consider harmonising the exhaustion regime across all IP categories or introducing more explicit enforcement rules at the customs level to ensure consistency and predictability in applying parallel import rules. Until such reforms are undertaken, parallel import will remain a legally permissible yet strategically complex tool that balances public interest, market access, and the rights of IP holders in a dynamic and evolving legal landscape.

^[1] https://reyestr.court.gov.ua/Review/104603051

^[2] The national exhaustion principle does not apply in copyright law only to: (1) original works of art (for example, paintings or sculptures, as well as similar works that exist as a single copy or in a limited edition by the author; the legislation protects the author’s right to receive a share from resale through the resale right remuneration (Article 30 of the Law)); and (2) the interactive making available of a work to the public (for example, via streaming services or digital libraries), since such access does not create a new copy of the work but only provides temporary rights to use it. These types of copyright works have specific characteristics and are not subject to any exhaustion principle, meaning the rightsholder retains control over their further use regardless of the place of first sale.

^[3] https://reyestr.court.gov.ua/Review/119870622

^[4] https://reyestr.court.gov.ua/Review/88277641