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Parallel import

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**1. Legal Framework and Regulations:**

– Parallel import involves importing non-counterfeit products without permission.
– Often referred to as grey products.
– Implicated in international trade and intellectual property issues.
– Based on the exhaustion of intellectual property rights concept.
– Regulated differently in various jurisdictions.
– No consistency in laws between countries.
– Berne Convention and Paris Convention do not explicitly prohibit parallel importation.
– Specific regulations in different regions like Australia, European Union, Germany, Hong Kong, Japan, and the United States.

**2. Market Dynamics and Examples:**

– Impact on various markets like pharmaceuticals, automobiles, foodstuffs, and toiletries.
– Coexistence of parallel imports and locally made products.
– Quality variations in products from different sources.
– Examples of parallel importing in different regions (e.g., Australia, Hong Kong, New Zealand, Poland, Russia, European Union).
– Benefits include lower prices, wider product selection, and consumer support for more choice and competitive pricing.

**3. Intellectual Property Rights and Concerns:**

– Divide between supporters and critics of parallel importation.
– Concerns about discouraging innovation and copyright infringement.
– Intellectual property rights allowing higher prices but limiting market segmentation.
– Consumer organizations supporting parallel importation for more choice and lower prices.
– Impact of parallel imports on pricing dynamics within the European Union.

**4. Industry Specifics and Examples:**

– Unique legislation for automobile design in the US.
– Impact of legislation like the Imported Vehicle Safety Compliance Act of 1988.
– Specific regulations for parallel-imported foodstuffs, toiletries, and luxury goods.
– Examples of parallel imports in various industries and regions.
– Grey market activities observed in electronics and other industries.

**5. Legal Cases and Business Insights:**

– Copyright infringement arrests related to intellectual property rights and international trade.
– Insights on importing game strategy and business of parallel importation.
– Online shopping platforms offering parallel imports.
– References to legal cases, research articles, and reports on parallel import restrictions.
– Business ombudsmen opposition to parallel imports in certain regions.

Parallel import (Wikipedia)

A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, and intellectual property.

Parallel importing is based on concept of exhaustion of intellectual property rights; according to this concept, when the product is first launched on the market in a particular jurisdiction, parallel importation is authorized to all residents in the state in question. Some countries allow it but others do not.

Parallel importing of pharmaceuticals reduces price of pharmaceuticals by introducing competition; TRIPS agreement in Article 6 states that this practice cannot be challenged under the WTO dispute settlement system and so is effectively a matter of national discretion.

The practice of parallel importing is often advocated in the case of software, music, printed texts and electronic products, and occurs for several reasons:

  1. Different versions of a product are produced for sale in different markets. For example, the UK edition of Top Gear Magazine is officially sold in the UK, and Top Gear Australia is officially sold in Australia. However, some unofficial distributors in Australia also sell the UK edition of Top Gear Magazine.
  2. Companies, either the manufacturer or the distributor, set different price points for their products in different markets. 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 benefitting from arbitrage, sell the products in that country at a price which is usually between P1 and P2.
  3. Consumers who are able to obtain more competitively priced items and may be able to avoid local sales taxes, are placed on an even footing with consumers who have less access to overseas sales online.
  4. Some advocacy groups support parallel importing on the grounds of enhancing the free flow of information.
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