Should It Be Permissible？
Analysis on Parallel Importation of Trademarked Goods in China
刘璐
【摘要】The propriety of parallel trade is a matter of intense controversial issue in a number of countries and in the world trade organization (WTO). Since intellectual property right is recognized on a territorial basis, each nation has established its own policy covering parallel imports. Countries have a policy of national exhaustion amounting to a government-enforced territorial restriction on international distribution. Original manufacturers retain complete authority to distribute goods and services; In contrast, countries permitting parallel imports are not territorially segmented. This paper aims to analyze whether China, as a developing country, should permit parallel imports in the context of trademarked goods, and seeks to answer this question by paying attention to the diverse approaches taken by other countries in this area. The article concludes in the last section with the suggestion that parallel importation of trademarked goods should be permitted in China with certain exceptions.
【关键词】parallel importation, exhaustion of rights, territoriality principle, free trade
【全文】
Introduction
Parallel importation reflects the contradiction between international trade and intellectual property right (IPR). On the one hand, with the rapid development of current economic globalization, free circulation of goods with a free trade policy has become a dominant trend in worldwide trading world. On the other hand, by virtue of IPR’s territoriality, to some extent it hinders such a free trade in order to protect intellectual property (IP) holders’ interests. How to deal with the parallel importation issue appropriately has been of great practical significance to each country. In the field of international trade related to trademarked goods, there have been growing relevant disputes and lawsuits taking place around the world. In essence, parallel importation can be perceived as a trade policy dilemma which derives from each nation’s complicated policy considerations. Balancing the conflict of interests among various parties involved is the essential point in this regard.
In China, parallel importation was not a practically notable phenomenon due to lack of the economic conditions in the past. China was widely known for its low labor and production costs, and prices in China were much lower than the international market prices. Because of this, together with high customs duties and a strict quota system, parallel imports had not been rampant in China. [FN1] However, with China’s accession to the WTO, and the growing economics, constant social improvement, parallel importation cases are springing up in recent years, e.g. the “Lux” case and the“AN’GE” case, [FN2] which will be discussed below. Nonetheless, China’s current legislations on parallel importation of trademarked goods, including the new Trademark Law (2001) and the Anti-Unfair Competition Law(1993) [FN3] , are still vague and insufficient for the present. While attention has been drawn in this subject academically, it is urgent to make efforts at the substantial level of legislation on parallel imports.
This article consists of seven sections, the first section is brief introduction, then followed by literature review on parallel importation of trademarked goods in the second section; The third section focuses on studies of parallel imports’ classic cases in China, and the fourth section examines international treaties on parallel imports; A view of other countries’ current situation on this issue is given in the fifth section. The last two sections of this article are general introduction of China’s legal environment in parallel importation of trademarked goods, and a conclusion of China’s future direction on trademarked parallel imports to be made on the basis of the analysis above.
Overview of “Trademarked Parallel Imports”
A. What are Parallel Imports?
Parallel imports, also called grey-market imports, are goods produced genuinely under a protection of a trademark, patent or copyright, placed into circulation in one market, and then imported into a second market without the authorization of the local owner of the intellectual property right. This owner is typically a licensed local dealer. [FN4] Regarding to parallel imports of trademarked goods, it refers to a genuine (ie. non-counterfeit) product placed on the market in one country, which is subsequently imported into a second country without the permission of the owner of the intellectual property rights which attach to the product in the second country. Parallel importers ordinarily purchase products in one country at a price (P1) which is cheaper than the price at which they are sold in a second country (P2), import the products into the second country, and sell the products in that country at a price which is usually between P1 and P2. [FN5] Frequently this form of parallel import occurs when the price of an item is significantly higher in one country than another. Parallel trade represents a form of arbitrage. Like other forms of arbitrage, parallel imports respond to international price differences that result from retailer price discrimination, vertical pricing restraints, or national differences in government price controls. [FN6]
