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In general, the United States permits parallel imports of trademarked goods unless the trademark owner can show that the imports are of different quality from goods sold locally, or otherwise might cause consumers’ confusion.
European Union
Although the European Union (EU) has enacted regional exhaustion boundaries, the EU policy is not now substantially different from the U.S. policy. The EU policy of regional exhaustion is similar to that of the U.S. policy of domestic exhaustion, as the member nations of the EU are analogous to the individual American states. Exhaustion is recognized within the region/states, but not outside the region/states. Each member nation of the EU has their own intellectual property laws, but the creation of the EU region has brought with it uniformity. [FN27]
EU treats parallel imports in two different ways. In the European Economic Area (EEA), once a product bearing a trademark is sold either by the trademark owner or the distributor with the trademark owner’s permission, it is impossible for the trademark owner to use his registered trademark rights in other EEA countries to prevent that original product’s importation. However, it is still not clear how far a parallel importer can go, in case he decides to alter the original goods in any way. While outside the EEA, parallel imports of trademarked goods are blocked for non-member countries. As a result of recent European Court of Justice (ECJ) decisions, the owner of trade mark rights in the EEA can prevent the importation of an original product bearing that mark into the EEA from outside that European Economic Area unless the importer can unequivocally demonstrate that the trade mark owner has renounced his right to oppose the placing of the product on the EEA market. [FN28]
China’s Current Legal Environment of Parallel Importation in Trademark Goods
Debates on the controversial issue of parallel imports have been ongoing in China, in particular after China’s accession to the WTO. Nevertheless, China’s major laws and regulations surrounding trademarked parallel imports issue haven’t regulated it systematically. In the article 52(1) of the New Trademark Law (2001), it stipulates that “using a trademark which is identical with or similar to the registered trademark on the same kind of commodities or similar commodities without a license from the registrant of that trademark” should be held as an infringement act. And article 52(5) provides a “catch-all” provision that “causing other damage to the right to exclusive use of a registered trademark of another person.” Moreover, under Regulation For Implementation of the Trademark Law (2002), article 50(a) of the Regulation provides that it is an infringement of the trademark proprietor''s exclusive right to use a registered mark by: "using on identical or similar commodities or using a sign which is identical or similar to the registered trademark of other people as the name of commodity or as the decoration of commodity so that the general public are misled." In addition, this article makes it clear that confusion caused to the general public is indispensable if one is to successfully sue a parallel importer. Therefore, we may put it in this way, if there is no product confusion misleading the public, generally, the parallel importer should not be held liable for unlawful behavior.
With a view to other relevant laws of PRC, such as the Contract Law, the Customs Law, the Anti-Unfair Competition Law and so on, they have not addressed the parallel imports issue directly. In general, the parallel imports do not seem to be prohibited by laws in China.
Conclusion
Probing into the issue of trademarked parallel imports has a far-reaching influence on China''s foreign trade. It is acknowledged that different country faces different political, social and economic challenges, thus what is ideal for one country is not necessarily applicable to another. Based on this philosophy, in conjunction with China’s current position of trademarked goods’ parallel importation, when faced with the intractable issue of whether China should permit parallel importation, it is my view that, China should have a mixed policy on trademarked parallel imports. In other words, what might be feasible is to permit parallel imports with certain exceptions. In detail, I would suggest that the exceptions are the trademarked parallel imports should be of no material difference and should not generate consumers’ confusion; The criteria for “material difference” could refer to the U.S. law’s standard as a benchmark. Moreover, in some special industries, e.g. cosmetics, health care products and pharmaceuticals, parallel imports in these areas are suggested to be prohibited, because these products directly affect public health and safety. Thus a stringent standard for product imports is significantly needed.
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