Parallel Importation in U.S. Trademark Law

By Timothy H. Hiebert | Go to book overview

Chapter Five
Public Understanding and Private Expectations in the 1980s

By the early 1980s, the uncertainty which had characterized the law of parallel importation for well over half a century remained its predominant feature. Now aptly referred to as the "gray market," the business of importing and selling genuine goods in the United States was entering a phase of unprecedented growth. A combination of low trade barriers and a strong U.S. dollar created attractive opportunities in the international arbitrage of trademarked goods; the lure of high profit margins drew many new firms into the field of intrabrand competition.

Inevitably, disputes arose with the established U.S. distributors, themselves eager to take advantage of the favorable exchange rates, and a stream of cases flooded into the federal courts. During the decade of the 1980s, the volume of reported gray market cases was twice that of the previous five decades combined. Cases arose, for example, involving the importation of Japanese cameras, Belgian batteries, Spanish figurines and dolls, and German toothbrushes. 1 In one typical scenario, Brazilian-made talcum powder found its way into the American market:

177,000 packages of JOHNSON'S Baby Powder (8 days supply) in an English language export package were bought in Brazil for a U.S. buyer by a trading company named TELEXPORT Importacao e Exportacao Ltda. The price was $0.34 per container of 400 grams (approximately 14 ounces). The product, after resale to a U.S. retailer, was put on the shelf in New York for $1.88 per container. [ Johnson & Johnson Baby Products Company's] price to the trade in the U.S. is $1.91 per container. The pre-tax profit loss to the Baby Products Company and the corporation is in excess of $200,000 in 1984. 2

-85-

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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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