Detailed Analyses

*Relationship among relevant parties

In 1991, the Australia enacted to permit the parallel import of publications printed in a foreign country, which ensued the denouncements from the American Publisher Association, International Publisher Association and International Publisher Copyright Commission, commonly asserting that this enactment has destroyed the territorially allocating rights of the publisher as to how the publication should be published and/or issued and damaged benefits and investments of the publisher through ruining the commercial structure of the international publication and violating the copyright territorialism. It is interested to note here that these organizations apply the copyright territorialism for resorting to the local protection and banning the parallel import, in view of the universal principle that the copyright will automatically be produced nearly all over the world (except in Taiwan being stopped by Mainland China from entering into the international organization or treaty) once the work is completed.

Certainly, the universal principle does not necessarily directly conflict with the territorialism. Nevertheless, it is believed that the copyright territorialism will find more difficult to be supported than the trademark territorialism since the trademark owner always needs pay additionally efforts and expenses in order to develop a localized trademark right whereas the copyright owner needs not or does not need to pay so much. In the copyright side, relevant parties may only include the copyright owner having a right automatically generated universally and the parallel importer. In this case, two copyright owners in two respective countries in fact are of the same entity. Is it apparent now that the copyright owner has an improper enrichment? Do we consider the same copyright owner having once sold its work in a first country could certainly exercise its copyright for banning the parallel import in a second country through the derivation of rights from copyright territorialism if the copyright owner does not license or transfer the local copyright to any third party or make any kind of efforts in promoting its work in a second country? Is it fair that the copyright owner should be double enriched simply because it has another local copyright when not only said another local right is obtained for free but also it pays no cost or efforts in maintaining, advertising or promoting said another local right. If we believe in this specific situation, we had better take the position that the copyright owner has no legitimate rights to ban the parallel import, this would mean we have admitted the exhaust theory to some extent till now. If this is true, is it correct for us to take that we need not wonder or wander about whether the parallel import is legitimate since it would appear that there is not a big gap between the above situation and the one that the copyright owner licenses or even transfers its local copyright in the second country to a third party? This is because the licensee or transferee often is affiliated with the copyright owner or has a close relationship therewith, e.g. an arm’s length arrangement.

If the copyright owner licenses or transfers or assigns its copyright to a third party in a second country, both the copyright owner and the local right owner in the second country should have the obligation to respect each other for performing the goal of the agreement entered therebetween. Each party shall not act against the purpose of the agreement and the other party shall have the right to claim damage otherwise. As such, the parallel importer cannot be either one of parties to the licensing or assigning agreement. Otherwise, the other party can claim damage against the parallel importer according to the agreement. Accordingly, it will make senses for us to be troubled so much only when the parallel importer is a third party to two parties to the agreement. It appears to be a great idea to resolve the parallel import issue by returning to the principles of contract.

Specifically, the parallel import made by the third party is an accident to two parties to the licensing or assigning agreement. In order to perform the goal of the agreement faithfully, two parties to the agreement have duties to compromise or make remedies honestly. More specifically, the copyright owner shall not act to damage the rights of the right owner in the second country who in turn shall not produce trouble for the copyright owner for return, in order that the purpose of the agreement can be wonderfully performed. Accordingly the parallel import issue should be resolved somehow according to or in the licensing or assigning agreement in order not to trouble the government or the public.

Those who advocate to curb the parallel import issue might illustrate the following examples to name a few to contest against the above reasoning:

1. The parallel importer having known the serving period of an article is to expire soon still import the goods for sale to harm the health of the public;
2. If a kind of goods has a high custom tax, the parallel importer will gain unduly enriched if it tries to escape the tax;
3. If the currency in the importing country is appreciated, the parallel importer will won a wonderful chance to profiteer.

It is believed that the above examples cannot divert our belief any a bit since in the first example, the parallel importer will be held liable if the public get harmed somehow because the parallel importer fails to duly remind or advise the consumer what it is selling. In the second case, the government or the custom must so have a duty dereliction that the parallel importer has the opportunity of escaping from being taxed as required by the law. In the third example, not only it is purely accidental but also it does not relate to the core problem of the parallel import issue. Accordingly it seems that even if the cons can illustrate further examples, it appears that we can stand motionlessly as we are.

*15 USC 1125(a), 19 USC 526 & 19 CFR 133.21

Section 1125(a)(1) of the US Trademark Law (or Section 43(a) of the Lanham Act stipulates that: Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which---

1. is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
2. in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

It is true that this provision is a good measure to curb the parallel import but it is equally true that this provision could not be taken as a provision for specifically dealing with the parallel import issue. We would like to investigate the prerequisites for an act violating this provision:

1. There must be a person: Such person should include a juristic person and a natural person. Nevertheless, there is a loophole from which a juristic person might be interested in trying to escape its liabilities (we have no intention to instigate any ‘person’ to act against the law but instead, the US Congress might be interested to take a look here). As the words are used in 15 USC 1125(a)(1)(A), “approval of his or her goods” can be based to persuade that the ‘person’ here is referred to the natural person only;
2. who, on or in connection with any goods or services, or any container for goods: the drafter for this section must be a genius in order to complete such a seamless article. It appears to be somewhat more cruel if the words “any container for goods” are changed into “any container or material for goods or service”;
3. uses in commerce: If what the “wrongdoer’ does does not relate to commerce, its act would be no problem;
4. any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact: There are four primary types of media by which an act could be pursued as violating this section, namely:

1. any word, term, name, symbol, or device, or any combination thereof: These are the usual vehicles by which trademarks exist and should require no further explanations;
2. any false designation of origin: This should also call for no further mention;
3. false or misleading description of fact: It does not matter whether the relevant act is false or misleading, but must relate to description of fact. Such fact may relate to the ‘person’ or another person; and
4. false or misleading representation of fact: Although it is very easy for everybody to know this clause is different from the preceding clause by one word, it appears that the talented drafter desires to trouble the world since it is uneasy to differentiate “description” from “representation.” According to Webster’s Ninth New Collegiate Dictionary, to “describe” is to “represent or give an account of in words.” From this interpretation, it appears it is a terrifying task to distinguish “describe” over “represent.” There are many meanings for ‘representation’ according to that dictionary. One of which is “a statement or account made to influence opinion or action.” We strongly doubt whether we have successfully selected the best one construction here therefor. Let us suppose we have done it in order to conclude that Item III) is an ‘active’ interpretation but this Item is a ‘passive’ one.

1. which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person: Accordingly, the act of the wrongdoer must “be likely to”:

1. cause confusion or mistake, or deceive;
2. as to:

1. the origin;
2. sponsorship;
3. approval, by another person, of his or her:

1. goods;
2. services; or
3. commercial activities; or

1. in the course of commercial advertising or promotion, the act of the wrongdoer:

1. misrepresents;
2. so far as the wrong contents are concerned,

1. the nature;
2. characteristics;
3. qualities; or
4. geographic origin;

1. of his or her or another person’s: This clause will be more cool if changed into “of its, his or her or another person’s”;
2. goods, services, or commercial activities.

Since title 15 is the US trademark law, it is also correct that section 1125(a) relates to the trademark matter. Although it might be wonderfully applied to curb the parallel import in respect of the trademark side, it appears to be apparent we have the following problems to consider:

1. It is a pity such brilliant provisions do not present in other related laws, e.g. the patent law or the copyright law since the parallel import issue does not occur only in the trademark field;
2. Which one of the trademark regulation and the unfair regulation is the more proper one to put therein the contents of this section? It has been quite common for a country to have a law regarding the unfair competition. After repetitively reading this section, do we still consider that this section is more closely related to the trademark law than the unfair competition law?
3. Certainly, we can put similar sections in all relevant laws. If the parallel import issue does relate to the unfair competition, why we need be bothered to respectively have provisions in all relevant laws?
4. Is this section primarily provided for curbing the parallel import issue? Is it necessary that we require so many wonderful words to achieve our goal? Is it necessary that in different laws, we need splendidly skillful differently phrased sections?
5. Is it possible that a single simple section in a specific law could work to solve all troubles as experiences?

It is reported that before 1921, the US adopted the conventional theory of universality to take that the parallel import involves no illegitimate act. Such position is switched in 1921 by the Supreme Court in A. Bourjois & Co. v. Katzel. The switched position was established by Section 526 of the 1922 Tariff Act abolishing the theory of universality but adopting the modern theory of territoriality to ban the parallel import. 19 USC 526 provides in part:

It shall be unlawful to import into the United States any merchandise of foreign manufacture if such merchandise, or the label…bears a trademark owned by a citizen or a corporation organized within the United States, and registered in the Patent and Trademark Office…unless written consent of the owner of such trademark is produced at the time of making entry.

According to the US Supreme Court in Coalition to Preserve the Integrity of American Trademarks (COPIAT) v. the United States in May, 1988, out of the following three parallel imports:

1. The parallel imported goods are manufactured by an independent foreign supplier and a US citizen or corporation owns a local trademark right;
2. The parallel imported goods are manufactured by an entity hold or controlled and licensed by a US trademark owner; and
3. The parallel imported goods are licensed to be locally manufactured and sold in a foreign country by an independent company licensed by a US trademark right owner,

only the second case is legitimate and the first and third situations will be illegitimate under 19 USC 526. Here, we could encounter the following problems:

1. It is to be particularly noticed that according to 19 USC 526, a trademark needs be “owned by a citizen or corporation organized within the United States.” This clause seriously harms the sublimity or integrity of this section to serve as an unfair competition principle since it is so much related to prejudicially protect a US citizen or corporation rather than a general US trademark right owner being a foreigner rather than to loftily establish a general game rule.
2. Since this section only provides the situation about the trademark, the similar problems we examine above for 15 USC 1125(a) will also apply.

Perhaps, owing to these and other problems, the US enacted in 1972 in code of federal rule limitations for 19 USC 526. According to 19 CFR 133.21(c), 19 USC 526 shall not apply in any one of the following situations:

1. Two local trademark right owners are of the same entity;
2. Two local trademark right owners are affiliated or commonly owned or controlled;
3. The parallel imported goods bear the same trademark licensed by the US trademark owner; and
4. The same trademark has been removed before imported into the US.

Nevertheless, the US Supreme Court took in K Mart v. Cartier in 1988 that 19 CFR 133.21(c)3) literally conflicts with 19 USC 526(a) and that in view of the uncertainly as to how to define the word “own” in 19 USC 526(a), it cannot determine whether 19 CFR 133.21(c) is correct but will respect the interpretation thereon by the customs. It is to be noticed that although the customs can exercise the administrative discretion to determine whether the parallel imported goods should be permitted or banned, such discretion cannot bind the court which can certainly judge by itself independently about any situation it encounters.

All the above provisions certainly have shown the complexity of the parallel import issue but cannot explicitly or implicitly suggest or teach how we can deal with the parallel import issue.

*How does the parallel import issue interact with related laws?

How the parallel import issue can be regulated? In which law it should be stipulated, respective intellectual property laws, the trading law or the competition law, and/or the accompanying goods labeling act or tariff act? It is easily understandable that the country offering the most favorable protection for the right owner will attract the most investments from all over the world. It is also easily recognizable that offering the most favorable protection is different from having the fairest provisions among the right owner, the consumer and the society.

So far as respective intellectual property laws are concerned, the US Trademark Law has shown us a good example to regulate the parallel import. It is apparent, however, we have the following questions:

1. Although 15 USC 1125(a) might be able to govern the parallel import issue in the trademark side, does it call for us some consideration whether its spirit can be applied to regulate similar issues in the other intellectual property fields, e.g. the patent and the copyright sides? If yes, how this trademark section should be transferred into the other field?
2. Do these respective sections in different fields serve our intended purposes well? Do we believe that these sections are much related to respective intellectual property laws than to other law?
3. It is asserted that different intellectual property fields have different features. For example, patent inventors and copyright authors have higher contributions to the human civilization than trademark registrants have. Patents and copyrights subject to expire relatively easily while trademark rights can be prolonged unlimitedly. Is a simple and unified provision possible for the parallel import issue? If yes, why sections in the patent and copyright fields have not provided?

We have no interests to deeply discuss all these and other questions or problems in this short article. It is welcome that any one who is attracted by the viewpoint of this article can base on our findings to build more stoutly the entire theory with clues presented here.

It is generally believed that to regulate the parallel import issue with the trading law is improper since the trading law is much related to the administrative measure and appears to be inappropriate to regulate an act whose economic effect is indeterminate. It has also been well-established that the competition law is originally intended to handle the economic phenomenon of an indeterminate economic effect since the competition law normally include the considerations of evaluating the economic effect and the act legitimacy. So far as these factors are concerned, we have the following questions:

1. Is the parallel import issue an act of an indeterminate economic effect? Is it possible that the parallel import issue is so regarded simply because the human being has not yet grasped which property it really is?
2. Is it correct for us to take that the competition law is the best medium to handle an act of an indeterminate economic effect? If yes, is it a wonderful idea for us to govern the parallel import by the competition law?

*Is a new model possible to properly regulate the parallel import phenomenon?

According to the theories of contract, when there is an accident happened to an agreement, how the accident should be resolved or who should be responsible therefor should be determined from the contract spirit to be read from the full text of the agreement. If there is a parallel import issue which is not anticipated by either one of parties to the agreement and one of said parties claims to be damaged or troubled for compensation, whether there is a party who should be held responsible should find its answers from the original agreement. It goes without saying that the parallel import is an issue because the licensing or assignment agreement normally makes no mention thereof. As such, there must be one or both of said parties to the agreement who should be separately or jointly responsible therefor since it is the fault of said two parties to the agreement who are not able to predict or try to curb in advance the parallel import problem.

Since the parallel import issue is a problem which should fall into the private field, the government or the law need not actively and/or positively engage in the game of solving the parallel import issue but make necessary interference only when the situation becomes absolutely necessary. Specifically, if the local right owner feels damaged through the parallel import, it should claim damages against the original right owner. If the original right owner can assert or show no negligence or intention on its side, the claim of the local right owner should be rejected. Furthermore, it is possible for the contract parties to enter into a supplemental agreement to provide how the parallel import should be solved. Before seeking to execute such supplemental agreement, it would be baseless for any party to claim damages to be compensated by the other party.

If there is no provision in the agreement regarding the parallel import, since the parallel imported goods are genuine, the consumer should not be got into troubles simply because there is what kind of implications between (intellectual property) right owners in different countries. It is the fault of the two right owners but never that of the consumer, which causes such troubles in the society through the lack of provisions in respect of the parallel import in the relevant agreement. Since the imported goods are genuine, the consumer must take the risk of whether it has bought a product deserving the price it spent.

If there is a cheat, swindle or the like so far as the quality or contents expressed of the goods are concerned, the parallel importer should be pursued by a public prosecutor for administrative punishment or criminal penalty by applying, e.g. the Consumer Protection Act or the Criminal Code. The parallel import act per se does not contain any offensiveness against the public order or policy so that it should not violate the law in any way if the parallel imported goods do not embody any element capable of doing harm to the consumer. Now that the parallel import issue is brought forward to this civilized society by the contracting parties, it is the duty of them to solve the issue somehow.

Accordingly it is quite simple for us to solve this complex issue. Specifically it is the requirement imposed on the relevant parties who may present the parallel import issue to confuse the world to include a clause providing how the parallel import should be solved. If there is no such provision in the agreement, the consumer, the public and the government need not devote any efforts to overcome on behalf of the local right owner any troubles it may encounter since the consumer need not live dependent on the local right owner, the public need not dispose of their living convenience in exchange of the private right of the local right owner, and the government should not try to protect the private right of the local right owner at the sacrifice of the taxed public.

Through such arrangement, the social fairness can be found in that the contracting parties between respective (local) right owners are definite and relatively very few and thus can be put in regulation relatively quite easily. In contrast, the public and the consumer are indefinite and myriad and thus can be hardly controllable. Is it not clear there exists a tremendous difference between solutions obtainable through efforts from the contracting parties with a contract clause and from the indeterminate public without any effective or predictable measure, which automatically comes to consent to such arrangement?

Parties of local right owners involved in the parallel import might be the same entity. In this case, it appear that we cannot effectively find sound bases for prohibiting the parallel import. Even in the situation that parties of respective right owners are different, they should have a contract in some stage of their businesses. Contracting parties are often affiliated, and if not, have been linked to some extent to each other in some stage during their business ages. Either one of contracting parties has enough opportunity to include in the licensing or assigning agreement a simple clause or complicate pages to govern how the parallel import should be treated. If they are so lazy as to fail to add in advance or supplement later in the relevant agreement provisions relating to the parallel import, why the consumer, the public and/or the government need to bear unhappy consequences left thereby and try hard to solve on their behalves this simple problem, which has consumed so much energies of so many scholars and has been transformed into a complex issue having caused so much troubles to the societies.

If the contracting parties have duly provided the parallel import in the agreement, the local right owner can claim damages against the original right owner if the original right owner fails to curb as agreed upon its goods to be imported into the territory the local right owner has the right to exclusively use the trademark. If the parallel import is permitted in the agreement, there will be no parallel import issue. If the agreement is silent on the parallel import, it should be first construed as having consent to the parallel import but the parallel importer has the basic obligation to particularly notice the consumer or the public what it is selling are parallel imported goods rather than ones from the local right owner, in order to protect the local right owner. Here we have two problems to solve. One is why the parallel importer has the obligation to differentiate its goods from those of the local right owner? The other is how the original right owner can control where its sold goods are eventually imported to which place?

The local right owner has been operating its business. It appears to be impossible that the parallel importer does not know there is the local right owner engaging in the operation of selling specific goods protected under a local right. Since what the parallel importer intends to sell are so much similar to those of the local right owner, in order to distinguish its goods from those originating from the local right owner in order to establish it has no evil intention to take advantages of the local right owner, the parallel importer should be so obliged. It is a basic rule of existence that a newcomer must and can only subsist by respecting and/or staying away from what have been occupied by preemptors in order to avoid conflicts of interests. Accordingly such obligation imposed on the parallel importer is never an inappropriate requirement.

It appears to be ridiculous from a prima facie viewpoint to require the original right owner control where its sold goods should finally go. Nevertheless, after a further thought, it would readily become apparent that it is not. Before the parallel import can become an issue, there must be an act importing quite a lot of goods. Since the quantity to be imported is normally so large, it never is a problem for the original right owner to curb such importation/exportation. If the original right owner is so honest and faithful, it could easily and should naturally perform as or locate on its behalf a manufacturer to fabricate or sell its goods to the dealer with a proviso in the manufacturing or dealing agreement that the fabricated or purchased goods could not be sold to the country where the local right owner is located. Buying/selling goods in a substantial amount is never an act uneasy to find out or regulate. If the original right owner does not so follow in its home country, it is not a righteous party to the licensing or assigning agreement and thus is punishable. If the local right owner finds damaged somehow by the parallel import, it certainly can claim damages against the original right owner for compensation. Specifically such licensing or assigning agreement is an international agreement since it involves in rights and duties to be enjoyed and performed in different countries.

Under such model, the parallel import only relates to extremely few interrelated right owners and has nothing to do with any one else, possibly being the consumer, the public or the government. How the world will become beautiful a bit through such model? Are we too naive, artless or innocent to solve this complex parallel import by having erroneously taken what kinds of important or complicate natures of the parallel import issue?

Even at some situations where the parallel import issue gets out of control under the agreement, the parallel import issue can still be solved by applying the principles of the contract. From the expediency of the operation of law, such model is desired and justified in that the contracting parties have ample tools or resources to overcome the parallel import issue whereas it is relatively difficult or nearly impossible to prevent or eradicate the parallel import issue. Can any one assert now we are wrong because of what kinds of reasons?

Such model for solving the parallel import issue has nothing to do with the theory of exhaustion, theory of universality, theory of territorialism and/or new theory of modern territorialism but are built on the bases of the contract law since the contracting parties do exist a kind of relationship which is private therebetween and should not bring forth any disaster or inconvenience to the public or the society. Nevertheless, this model happens to comply with the meanings of theories of exhaustion and universality and does not necessarily confront against the classical or modern theories of territorialism.

*How does the new model regulate illustrated examples?

By applying the new model established above, it will naturally come to the conclusion that in principle, all parallel import acts are legitimate. It goes without saying that all illustrated examples described in the background statement are legal if there is a parallel import. Nevertheless, we would like to examine and briefly comment on the examples:

1. Trademark owner A is different from Trademark owner B, but they are affiliated entities. Normally Trademark owner B is an offspring or branch entity of Trademark owner A. They are so closely related as to be little different from being the same entity. For the following two situations:

1. Trademark owner B can exercise its own discretion as to how to exploit the second trademark right: This situation often occurs when Trademark owner A realizes or finds it applicable that Trademark owner B, although being a different independent entity from Trademark owner A according to the law, that it is important for Trademark owner B to discern by itself the real situation it faces. Nevertheless, since A and B are affiliated, it would be easy for them to settle down how the parallel import should be handled. In order to protect B, if A really so desires, A should exercise some kinds of plans, which is never difficult, to curb the parallel import;
2. Trademark owner B can make its decision as to how to make use of the second trademark right only after having obtained approval from Trademark owner A: In such situation, B is much closely related to A than the situation I). A should have a strong drive to protect B from being damaged by the parallel import through effective measures to be adopted in its home country;

2. Trademark owner A is different from and has no affiliation with Trademark owner B, but Trademark owner A assigns the second trademark right to Trademark owner B: Since B derives its right from A, B has an adequate opportunity to include in the assignment a clause governing the parallel import. If not, it is the laches of B to so request. Certainly, the prescription is suitable to function here. B should ask for compensation against A or an addition of the parallel import clause later in the assignment. If denied by A, B should pursue its rights for specific performance before the court to substantiate its rights of assignment by declaring that what it desires to be assigned is an integral right free from being threatened or damaged by the parallel import;

3. Trademark owners A and B are of the same entity, and the goods imported into Y country are manufactured by Trademark owner A or B: As disclosed above, in this situation, A or B has few bases to fight against the parallel importer since it is the matter of A as to whether it desires to be damaged through no active involvement in the exporting country. Since A can take effective measures relatively easily in the exporting country to safeguard itself from being damaged in the second country, how can we believe that the society should exercise additional endeavors to twice or double protect A having been generously conferred with local rights respectively in two countries? If A has no motivation to be unduly enriched, why it keeps silence in curbing the purchase of the parallel importer in the first country? If A intentionally or negligently allows the parallel import to occur, is it proper for the government in the second country to protect A’s local rights in the second country without any hatred?

4. Trademark owners A and B are of the same entity and the goods imported into Y country are manufactured by a licensee D licensed to manufacture the imported goods by Trademark owner A or B: This situation does not differ much from the Item 3. Under the “arm’s length arrangement,” it makes no difference whether A or B or the licensee is the manufacturer of the imported goods since it is under the control of A whether it should manufacture the goods by itself or license D to manufacture on its behalf. Accordingly the answer to this situation does not differ from that in the above Item 3.

Certainly as mentioned above, under any one of the above situations or sub-situations, we have the following two cases which will be briefly discussed also:

1. The quality of imported goods is the same to that of those manufactured by Trademark owner B: In this case, the local right owner can find less supports in soliciting an additional local protection for prohibiting the parallel import no matter how the quality is defined. Certainly in this connection, it is even harder for the local right owner to promote its goods if its price in higher than the parallel importer’s. Likewise, it requires more techniques for the parallel importer to perform the obligation of distinguishing its goods from those of the local right owner in view of the same quality since it must make it clear how and why its goods have been distinguished thereover on the one hand, while trying to promote its goods on the other hand;
2. The quality of imported goods is different from that of those manufactured by Trademark owner A: If the quality of imported goods is different from that of the local right owner, it is easier for the parallel importer to distinguish its goods from the local right owner’s. It is hard, however, for the parallel importer to loftily declare its goods have an inferior quality before the consumer. Nevertheless, it is imperative that the parallel importer expresses somehow on the goods that they are different from those from the local right owner in order to stand aside civil liability claimable thereby. It appears that the local right owner will have a hardship if the parallel importer provides parallel imported goods having a higher quality. Although it might be difficult for the parallel importer to promote its goods in such situation, it is a downhill work for it to advertise how its goods are distinguished from those from the local right owner

Accordingly under this new model, all confusing situations can find solved quite easy to the extent capable of trapping all of us in a wonder why we are puzzled before the parallel import issue in the past years? Are we rational to construct this new model? Are we wrong somewhere in some stage upon formulating this new model? Are all questions thus raised thereto really problems which will conduce to unanticipated or uncontrollable issues? Why all the elite in the world will not join to scrutinize in the strictest manner this article?

1. Article 24 of the Fair Trade Law of Taiwan, R.O.C. stipulates that “any business shall not engage in other cheating or apparently unfair act capable of influencing the trading order except otherwise provided by this law.” It appears that an article of such contents can effectively govern the parallel import in various fields, including patent, trademark and copyright. If this is agreeable, we further assert that any one needs not be troubled to judge whether there is a cheating or apparently unfair act and/or such act will influence the trading order. What one needs to judge is whether the parallel importer has duly distinguished its imported goods through some proper measure from the goods from the local right owner.
2. In the country where no article can regulate the parallel import, it is a good time at present to consider to make it clear that the parallel import might not be so much related to the respective intellectual property law, trading and/or competition law but relates only to the contract law and the civil law. Specifically there is an implicit contract relationship between respective local right owners and there is a civil obligation on the parallel importer who is required to distinguish its goods from those of the local right owner in order to stay away from a tort claim. Even the parallel importer’s obligation here will be arguably categorized otherwise, it should be able to be considered to be one under the competition law.
3. It is reported that Hungry and three countries in Northern Europe adopt for the patented parallel import goods a ‘constructive license’ principle by which is meant if there is no indication of limited license use or sale territory, it is constructed that the patentee has licensed its goods to be re-sold worldwide. This practice only deals with the patent matter and govern the relation between the right owner in the exporting territory and the parallel importer. We are of the opinion that what is important is whether the parallel importer has somehow acted for distinguishing or expressing its goods in any a specific situation but not whether there is an indication of limited license use or sale territory. Further, we believe it is also important for the parallel import to abide by its obligation under the civil law and/or the competition law.
4. It was reported in 1990 by the International Industrial Property Protection Association that according to its investigation, most of the 22 industrial countries negate the legitimacy of the parallel imported patented products. We do not think this is a good idea according to what has been disclosed and discussed above.
5. If there should be an article specifically dealing with the parallel import, it appears to be a good idea to let it have the contents, like “the parallel importer shall be liable for other’s damages if its imported goods are not caused to be appropriately distinguished from a relevant right owner.”
6. We are too busy to fully develop our finding. Nevertheless, we believe we have raised enough inklings for an interested entity to continue the development. We welcome such entity to feedback some benefits to this firm if its ultimate development richly reaps somehow.