Parallel Import involves the sale of goods by an authorized distributor that are not on a list of retailers or resellers. Sometimes, these goods are purchased from retail stores and offered on online marketplaces. In some cases, manufacturers who produce for an IP rights owner sell their extra products to an outside distributor. Regulations regarding parallel import are unclear. However, the benefits and risks of this practice are well worth exploring. Here are some examples of these activities:
Regulation
While parallel import is not illegal per se, many countries have attempted to restrict it, often to prevent competition in research-intensive industries. Parallel imports are also known as the gray market. Three principles may be used to regulate parallel imports, including the principle of national exhaustion. Under this principle, a patent holder may prevent importation of a product in the market where he owns an intellectual property right. This principle, however, is often subject to challenges.
There are several reasons why parallel imports occur. These include: (1) lack of regulation or compliance with existing laws; and (2) the presence of parallel importers in a given jurisdiction. The ACCC recognizes that parallel imports may benefit consumers, but also point out that some products may be inferior. In either case, the parallel importers are responsible for any problems with their products, and they must provide a prompt, reasonable response when consumers complain.
Benefits
The benefits of parallel import are numerous, and the process has a variety of advantages for both the importer and the consumer. While parallel imports often result in lower prices, they may not offer the quality or service that consumers want. It can also lead to a huge loss in revenue for Trademark Holders. The price differential that occurs between parallel imported and domestically produced goods is often significant enough to cause consumers to buy counterfeit products, but it may not always be possible to avoid it.
A pro-parallel import policy can lead to a reduction in prices for consumers in a particular country. This would result in market segmentation. Consequently, consumers would not benefit from the lower prices. There must be a balance between the net gains that parallel imports provide for the producer of a good, and the consumer. Parallel imports may favor the consumer when retail prices are high. The same holds true for patents.
Dangers
Manufacturers are generally against parallel importation. They cite concerns such as counterfeit products and inability to charge higher margins in some markets. Consumer interests, however, support parallel importation, which allows smaller markets to benefit from competition in larger markets. This article will explore the benefits and drawbacks of parallel importation. This article also explores the legal issues involved. Weigh the benefits and drawbacks of parallel importation.
Although the United States courts have ruled that parallel importation is legal, some jurisdictions have adopted stricter laws prohibiting it. Some countries have stricter rules for parallel importation, such as for pharmaceuticals. In fact, many European countries have significant parallel imports of pharmaceuticals from outside the EU. Pharmaceutical products from outside the EU are also subject to restrictions. In some countries, efforts to discourage parallel imports violate anti-monopoly laws. For instance, the Japan FYC has threatened a firm with sanctions for attempting to block the parallel importation of Steinway pianos.
Legality
Despite the widespread acceptance of parallel importation, there are still questions regarding its legality. Most consumers would agree that parallel importation has the potential to reduce prices and increase choice. Consumers also appreciate the fact that parallel importation offers the same legal protection as products produced locally. Parallel importation is not illegal in every country, however, and some countries do not allow parallel importation of certain products. In these cases, consumers may end up dissatisfied with the product, and it can damage the reputation of a trademark.
A parallel import is a legitimate product produced in another country and sold or imported in the country of origin without the consent of the original rights holder. These goods are sometimes called grey goods or grey markets. They are not counterfeit; they are authentic products produced by the brand owner in one country and exported to another without the rights holder’s permission. Parallel imports, however, pose a problem in international trade and proper use of intellectual property rights.
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