Is your company and brand ready and aimed to fire against the
threats posed by unauthorized grey market goods and parallel
imports? Recently, Justin Pierce, a Partner in Venable's
Trademark Practice Group, presented "Combating Grey Market
Goods in the United States and Europe" at the 7th
Anti-Counterfeiting & Brand Protection Conference in New
York.
Differing from counterfeits, grey market goods, also known as
parallel imports, are genuine trademarked goods purchased outside
of a country (e.g., the United States) or a specified
territory by someone other than the designated/exclusive importer,
who then imports these goods into the United States for sale in
competition with exclusive or authorized U.S. importers and
distributors. Grey market goods can have a significant impact on a
business and its brand as such goods can, for example, cause: (1)
loss in profits and margins; (2) disruption to relations with
authorized or exclusive importers and distributors, and with
internal sales forces; (3) brand dilution, i.e., loss of
control in branding and user experience because, e.g., the
goods are produced for various local preferences; and (4) health
and regulatory concerns, e.g., drug shortage profiteering,
and imported products that may not meet FDA standards.
There are a number of key legal concepts which directly affect how
a business should deal with grey market goods. These include: (1)
the standard for trademark infringement for grey market goods; (2)
the first sale doctrines for copyrighted and trademarked goods in
the context of foreign sales; and (3) the standards applied by
customs in stopping grey market goods. Over the course of the next
few months, IP Buzz will publish articles that examine
each of these issues in-depth.
Ultimately, the goal for every business is to implement an
effective grey market enforcement program, which should
strategically use trademark, copyright and customs law in concert
with certain business actions to limit the flow of unauthorized
grey market goods. The best practices include: (a) protecting your
business's IP; (b) keeping your own house in order; (c)
preventing the importation of grey market goods; (d) engaging in
grey market intelligence through the concerted assistance of
attorneys and investigators; (e) enforcing your rights; and (f)
educating your own company and other businesses, media, and public
on your efforts to combat grey goods and the value (economic and
public safety) of your anti-grey goods and counterfeit
efforts.
In today's globalized and technologically advanced market, it
behooves every business to employ a comprehensive brand protection
strategy. Stay tuned to Venable's IP Buzz publication
for upcoming articles that will delve further into the key concepts
and strategies for combating unauthorized grey market goods.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.