Parallel Imports, a Grey Area of the Law

Grey market goods constitute yet another in a long line of obstacles companies must overcome in order to protect themselves from illegal activity damaging their brands. Grey market goods, or parallel imports, as they are also known, refers to authentic, non-counterfeit products that are sold legally but through channels that were not originally intended by trademark owners or manufacturers.

A common example of parallel import is when a product is purchased in one country and then resold in another. This phenomenon generally occurs when there is a significant variation in the price of a good in two different countries, when a good is entirely unavailable in a certain region, or when products have varying launch dates for different geographic locations. The cosmetics industry is an example of a sector in which this frequently occurs.

Parallel imports are currently perfectly legal with the exception of products that are resold with material differences compared to the originals. What constitutes material differences can be difficult to argue but are generally considered to be variances that can cause consumer confusion. Numerous importers have fallen before the courts after trademark owners accuse them of false advertising and unfair competition amongst other things, by promising features that a product cannot actually deliver.

 

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