Parallel Importation in U.S. Trademark Law

By Timothy H. Hiebert | Go to book overview

the first to unite the two essential components of modern trademarks--a public association of a mark with a known source of origin and a channeling of economic returns to that origin--into a single effective device. Schechter's musings that the mark was compulsory, or the user collective, missed this point.

Revealingly, Schechter defined "goodwill" simply as "the expectation of the trader or manufacturer that he will be undisturbed in the custom or trade which the merits of his wares or the ingenuity of his advertising have attracted from the consuming public."83 The other component of goodwill--the expectation of the consuming public--was absent from his theoretical framework and thus could not provide him with a tool to distinguish certification marks from other mandatory emblems. For Schechter, the role of public understanding in trade- mark rights was thus a "somewhat metaphysical question," 84 with little bearing on practical issues. The influence of Schechter's writings on the "quality assurance" function of trademark law, 85 which has endured to the present day, has been an unfortunate source of confusion on the nature of trademark "purposes" and "functions," as this study will later suggest. 86

For modern trademark lawyers, the problem of parallel importation has transformed the law's latent uncertainty on the balance between public and private interests into a concrete and vexing issue, demanding a clear answer. As the following chapters will attempt to show, this issue is but one of several important factors which governed the development of trademarks at the outset and which continue to exert their influence in modern attempts to deal with parallel importation.


NOTES
1.
The term "gray market" generally has been used to indicate the doubtful legality of parallel importation, which some see as lying in the "fringes of legality," Osawa & Co. v. B & H Photo, 589 F. Supp. 1163, 1170 (S.D.N.Y. 1984), somewhere between a clearly proper competitive activity and an illegal "black market." See El Greco Leather Products Co. v. Shoe World, Inc., 599 F. Supp. 1380,1397 (E.D.N.Y. 1984), rev'd, 806 F.2d 392 (2d Cir. 1986); R. Staaf , Law and Economics of the International Gray Market: Quality Assurance. Free-Riding and Passing Off, 4 INTELL. PROP. J. 191, 192 ( 1988). Although this study will often use the two terms interchangeably for convenience, it should be noted that the gray market actually encompasses more than just parallel importation. The U.S. trademark owner might not, for example, import the goods which it distributes, but might nevertheless suffer from a third party's importation of genuine goods bearing its trademark. In this instance of gray market activity, no "parallel" importation has occurred, because only one party imports the goods. See Vivitar Corp. v. United States, 761 F.2d 1552, 1555 (Fed. Cir. 1985). cert. denied, 474 U.S.1055 ( 1986). In truth, neither "parallel importation" nor "gray market" is an entirely satisfactory term: one is incomplete and the other is value-laden. On the "myriad" variations of the gray market, see John A. Young Jr., The Gray Market Case: Trademark Rights v. Consumer Interests, 61 NOTRE DAME L. Rev. 838, 838 n. 1 ( 1986).
2.
Stuart Taylor Jr., "High Court Backs Selling of Imports on Gray Market," N.Y. TIMES, June 1, 1988, at 6, col. 3. Cf. Stephen Wermiel, Justices Uphold Customs Rules on Gray Market, WALL ST. J., June 1. 1988, at 2, col. 2 ($6 billion estimate).

-13-

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Parallel Importation in U.S. Trademark Law
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • Notes ix
  • Chapter One - Parallel Importation and the Early History of Trademark Protection 1
  • Notes 13
  • Chapter Two - the Rise of Universality A. a Twofold Purpose 21
  • Chapter Three - Foundations of Modern Parallel Importation Law 43
  • Notes 56
  • Chapter Four - Related Companies Under Section 526 63
  • Notes 79
  • Chapter Five - Public Understanding and Private Expectations in the 1980s 85
  • Notes 98
  • Chapter Six - Evolving Conceptions of Territoriality and Goodwill 103
  • Notes 122
  • Chapter Seven - Territoriality Revisited 129
  • Chapter Eight the Future of Parallel Importation 151
  • Notes 157
  • Selected Bibliography 161
  • Index 177
  • About the Author 179
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