Studies On The Regulation Of Parallel Importation

Parallel import is a phenomenon in international trade. In some sense, the legal arguments on parallel imports come about the differences of policies on intellectual property protection of countries. The reason why it is designated as parallel import is that the imported are products or services involving intellectual property owned by nationals or firms of import countries. Parallel imported products are normally at lower prices than the same products of import countries and therefore have the competitive ascendancy over the latter. Import countries restrict parallel importation, which forms non-tariff trade barriers. On the contrary, the right owners in import countries permitting parallel import restrict parallel importation through agreements or unilateral acts, which form private trade barriers. The intellectual property laws of different countries or areas take varies approaches towards parallel imports and even differentiate products involving different categories of intellectual property. Private trade barriers fall within anti-monopoly laws. Regulation of parallel imports affects trade relations among countries and therefore is the subject matter of international trade agreements since parallel import is part of international trade. This thesis aims at reviewing the foreign and international legal institutions, doctrines and practices of regulating parallel import and looking to their future development. It is expected to be references for China to take in its adopting and improving a legal regime in this area. In addition to the Introduction, the thesis consists of five chapters. First chapter defines parallel import and determine the legal issues arising from it. It is most important to clarify what is parallel import without which I can not pursue my studies. In response to various definitions of parallel import, I start with determining the substantive problems of parallel import and the purpose of finding out the solutions of them. I try to distinct parallel import from other forms of trade. Based on analysis of related cases and adoption of inductive method, my suggestion is that'correlative' should be the basis in defining parallel import, namely, the products are manufactured by right owners or the licensees or by the firms which correlated to the right owners. Hence, this thesis defining parallel import as a phenomenon where goods or services which have been place on the market by the intellectual property holders of import territories or with his consent, or those with the same origin of the holder's rights, are imported without the holder's consent. On this basis, the legal features of parallel import are analyzed and categories of it are classified. Then main legal issues are brought about and the laws regulating it are determined, namely, intellectual property law, anti-monopoly law and international trade law.Chapter two explores how intellectual property law regulates parallel importation. The existence of intellectual property law is necessary for parallel importation to be defined and therefore the most emphasis should be put on it. The doctrines of intellectual property law concerning the regulation of parallel importation are the exhaustion of rights (national exhaustion, international exhaustion and modified international exhaustion), implied license, import rights, ect. This thesis not only explores the original meanings of them, their historical development, but also study on conditions of their application, the relations between them and their implications on parallel importation. Especially, the implied license doctrine and the exhaustion doctrine are compared and their relations and differences are explored. As far as import right is concerned, the conclusion is that import rights can not be used as direct basis to prohibit parallel importation.Chapter three analyzes the approaches of representative countries such as the U.S., the E.U., Japan and India towards parallel importation. For this purpose, many legislations and cases are cited.Chapter four deals with anti-monopoly law's regulation of restraint of parallel importation. The first issue addressed is the relationship between anti-monopoly law and intellectual property law in regulation parallel importation. The proposition is that anti-monopoly law affects parallel importation through directly regulating the restrictive conducts and it functions only in the circumstances where intellectual property law no longer protects the rights of the holder, or where the application of international exhaustion is based on the conclusion of anti-monopoly review. Under anti-monopoly law, the criteria of legality is the repercussions of the restrictive conducts on the competition within import countries, namely, whether they are substantially restricting competition. Then, this chapter explores how anti-monopoly law regulates those restrictive conducts. Based one the patterns through which anti-monopoly law operates, it classifies the restrictive conducts into two categories, namely horizontal and vertical restraints, and restraints by agreements and by unilateral acts. The results of the restrictive conducts of different patterns are summed up.The subject of chapter five is trade agreements involving the issue of parallel importation. Bilateral agreements, regional agreements and WTO agreements are analyzed in order because agreements of different levels reflect divergence of interests. This chapter is trying to explain that it is probable for developing and developed countries to reach bilateral agreements. These agreements, however, is often based on developed country's business powers. Regional agreements are postulated on the aim at achieving market unification within the region. The EU adopts regional exhaustion doctrine because it aims at establishing a single market within it. On the contrary, there are no provisions addressing the issue of parallel importation in NAFTA agreement because, in addition to the conflicts of interests among its members, no single market within it is planed to establish. It is difficult for Members of NAFTA to reconcile the interests among them. Only when the interests are reconciled or a single market is intended to be established, can regional agreements address parallel importation issues. WTO agreements are global and products of compromise in international community. Trips agreement circumvents the issue. Even though a breakthrough occurred in Doha Declaration and the Hong Kong amendment protocol, it is hard to predict future development.The last chapter focuses on the balance of different values manifested in national legislations and international agreements, including mainly protection of intellectual property and other policy considerations, in order to revealing basic causes of the divergent legislations and trying to envisage the tendencies in regulating parallel importation. On this basis, recommendations for adopting a legal regime regulating parallel importation in our country are suggested. First, parallel importation should be allowed in principle in this country and, at the same time, adjust the details of parallel importation. Secondly, in applying Chinese anti-monopoly law to private trade barriers, the existing western patterns and criteria of regulation should be taken as references. Lastly, internal trade regulatory measures can be used to resist parallel importation in certain industries by way of increasing the cost of importation.