Sharing the Burden of Proof in Parallel Importation Cases: A Proposal for a Synthesis of United States and European Union Trademark Law

By Brasser, Elizabeth | The Journal of High Technology Law, Annual 2002 | Go to article overview

Sharing the Burden of Proof in Parallel Importation Cases: A Proposal for a Synthesis of United States and European Union Trademark Law


Brasser, Elizabeth, The Journal of High Technology Law


In the European Economic Area (1) (EEA), the European Court of Justice (ECJ) has recently held that parallel importers of trademarked goods carry the burden of proving that the mark holder consented to the importation of such goods within the EEA. (2) While the United States has allocated the burden of proof on the trademark holder under the Lanham Act, (3) the burden of proof is on the parallel importer under the Tariff Act. (4) First, this paper will demonstrate the inadequacy of the current allocation of the burden of proof under the United States Tariff Act. (5) Second, this paper will demonstrate the need for the ECJ to clarify the parallel importer's burden of proof in trade mark infringement cases. Finally, this paper will propose changes to both the United States' and the European Union's (E.U.) allocation of the burden of proof. For the purpose of simplicity, this paper will address the trademark holder as the "plaintiff" and the parallel importer as the "defendant."

I. THE UNITED STATES' BURDEN OF PROOF

The United States trademark law governing the parallel importation of genuine goods is found primarily in sections 42 and 32 of the Lanham Act and section 526 of the Tariff Act of 1930. (6) Under the Lanham Act, the burden of proof is on the plaintiff to prove that the goods are not "genuine" and thus likely to cause consumer confusion. (7)

Generally, genuine goods are those "which emanate from the plaintiff or his affiliates," are intended for sale in the United States market, and comply with any quality control measures the plaintiff trademark owner has established. (8) If the plaintiff fails to carry this burden, the "unauthorized sale of [genuine] goods does not give rise to a claim for trademark infringement." (9)

Under the Lanham Act a trademark holder has "the right to control the quality of the goods manufactured and sold under the ... trademark." (10) Where a parallel importer sells goods without maintaining the mark holder's quality control procedures, "the sale of the goods [is] sufficient 'use' for it to be liable for ... infringement and its claimed lack of knowledge of its supplier's infringement, even if true, provides no defense." (11) Thus in El Greco Leather Products v. Shoe World, (12) the goods were not genuine because the parallel importer failed to obtain the certificates of quality approval required by the mark holder's licensing agreement with the manufacturer. (13) Likewise, in Davidoff & CIE SA v. PLD Int. Corp., (14) where a third party removed batch codes on the mark holders products, the goods were deemed not genuine because "the defendants [deprived the plaintiff mark holder] of their exclusive right to control the quality of their products." (15)

Furthermore if goods are manufactured under quality control measures that are not established by the mark holder, the goods are not genuine. (16) Consequently, in Shell Oil Co. v. Commercial Petroleum Inc., (17) the court found an infringement where the third party implemented its own quality control procedures. (18)

The plaintiff's right to control quality measures, however, may be waived if the plaintiff has not previously enforced such quality control procedures. (19) In Polymer Technology Corp. v. Emile Mimran, (20) the mark holder claimed that the defendant had infringed its trademark by not complying with the Food and Drug Administration's (FDA) quality requirements. (21) The Polymer court, while noting that the trademark holder was subject to criminal penalty for failure to comply with the FDA's requirements, found that the mark holder must impose similar requirements on its authorized distributors in order to claim infringement by a non-complying third party. (22) Likewise, in Diamond Supply Co. v. Prudential Paper Products, (23) where the plaintiff mark holder told the defendant manufacturer to "do whatever it wanted" with rejected supplies, it thereby waived its right to enforce quality control procedures when the goods were sold to a third party. …

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Sharing the Burden of Proof in Parallel Importation Cases: A Proposal for a Synthesis of United States and European Union Trademark Law
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