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Authors

Danning Zhu

Abstract

Parallel import, also known as grey market goods, refers to the act of importing goods to a country and selling in the country without the permission of the domestic owner of IP vested in the imported goods. The importer can obtain profits through the price differences between parallel imported products and domestic products of the same variety. China and the United States have huge differences in parallel import policies, even though both countries have participated in major international IP treaties. The United States requires that parallel imported goods bearing a genuine trademark or trade name registered in the United States will be restricted from importing if the manufacturer or the owner of such goods has no relationship with or control of the owner of U.S. trademark or trade name. Different from the United States, China’s relevant laws and regulations do not explicitly limit parallel imports, including parallel imported goods that have no relationship with or control of the owner of the involved trademark registered in China. China’s approach encourages parallel imports. In practice, more and more international trademark holders have filed lawsuits in China, claiming that such parallel imports are trademark infringement which damage their benefits. These cases demonstrate China’s problem of the lack of regulations on restrictions of parallel imports even though such restrictions have been recognized by courts in practice. This Article recommends changes to China's current parallel import policy by referring to the relevant U.S. parallel import statutes and precedents. In considering the differences between the two countries, the Article does not recommend the adoption of the “common control” requirement.

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