Document Type
Article
Disciplines
International Law
Abstract
The importation of counterfeit goods bearing another's trademark is generally considered, at least in developed countries, a wrongful and illegal act properly prohibited by law. "Gray market" or "parallel" imports present a very different issue, for the product is genuine and the trademark was affixed legally. But are gray market imports themselves "legal," and do they "hurt consumers badly," as Ms. Furness maintains?
Trademark holders and their licensed distributors argue that gray market imports are, or should be, illegal" as they result in the improper appropriation of the good will of the trademark owners by the gray marketers and because gray market products confuse and mislead consumers. Gray marketers, on the other hand, contend that the trademark owner is merely attempting to restrain trade and that consumers, far from being deceived, are given the option to purchase the "genuine article" at a lower price than that fixed by the trademark holder or its licensee.
The existing law is in chaos. The United States Customs Service, the administrative agency charged with enforcing the trademark law, has promulgated regulations which many contend are in direct conflict with the governing act of Congress. The decisions of the federal courts are in hopeless disarray, both among and within circuits and even within districts. The President has refused to enforce one decision of the International Trade Commission [ITCI prohibiting the import of gray market goods, but, undismayed, the ITC recently prohibited the importation of other gray market products. Commentators do not agree on the economic impact of gray market imports, nor has Congress been able to reach an appropriate solution.
This article explains the origins of this legal quagmire and reviews the approaches taken by various courts. After examining the legal issues surrounding the gray market, the article concludes that gray market imports should be permitted subject to existing and proposed safeguards which protect both the consumer and the trademark owner.
Recommended Citation
McDermott, John T., "The Gray Market in the United States: Law, Policy, and Myth" (1986). Connecticut Journal of International Law. 18.
https://digitalcommons.lib.uconn.edu/cjil/18
Accessibility Requirements
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