Parallel Importation in U.S. Trademark Law

By Timothy H. Hiebert | Go to book overview

Chapter One
Parallel Importation and the Early History of Trademark Protection

A. THE PARALLEL IMPORTATION DEBATE

A manufacturer wishing to sell its merchandise in a foreign market frequently does so by means of an exclusive distributor who builds goodwill through advertising, imports the goods from the manufacturer, and sells the goods for a profit. Depending on such variables as exchange rate differences or local pricing practices, a third party--the "parallel importer"--may then find it profitable to purchase identical goods from distributors in other countries and import them in competition with the exclusive local distributor. Relieved of local advertising expenditures and other costs, the parallel importer can sell the goods at prices well below those the authorized distributor is willing to charge. Increases in the volume of world trade over the past decade have heightened the importance of such parallel importation. In the United States annual retail sales of the unauthorized imports, or "gray market" goods, 1 may have approached $10 billion during the 1980s. 2

Governments around the world have struggled with the question whether the exclusive distributor ought to be able to block such parallel importation. 3 The unauthorized importers have maintained that because their activity encourages price competition and benefits the consumer, it should be freely permitted. Allowing foreign manufacturers to establish exclusive distributorships and prevent all intrabrand competition, they point out, would be inconsistent with the principles of free enterprise in a market economy 4 and would be inconsistent with the interests of consumers. As one gray market retailer pointed out:

-1-

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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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