Trademark Commodity Parallel Imports Legal Regulation

Parallel import of trademark goods is one of the hot issues under discussion in the fields of intellectual property right and international trade. It involves a series of legal systems and trade policies such as protection of intellectual property, reasonable usage of trademark rights, anti-unfair competition and free trade of international cargo. There are divergent theories on this issue, and the legislative and judicial practices in different countries vary significantly. To date, there is lack of a uniform worldwide viewpoint.In the past, disputes pertaining to parallel import of trademark goods were relatively rare in China. However, such disputes have become more common since the Asian finance crisis in 1997. With the rapid development of China's economy and international trade, particularly after China's accession to the World Trade Organization (WTO) in 2001, problems in relation to parallel import of trademark goods are more prominent. Yet prevailing Chinese laws still do not contain clear and relevant stipulations, which bring difficulties to Chinese judicial and administrative practices. Therefore, it is both necessary and urgent to hasten the legislative work in relation to parallel import of trademark goods. This paper introduces the basic theory of parallel import, analyses the issue from a jurisprudential perspective and suggests improvements for the relevant legislation.This paper is divided into four sections.The first section defines parallel import of trademark goods. Starting from the meaning of parallel import, the author goes on to clarify basic issues such as the concept, characteristics and types of parallel import and then analyze the rationale behind parallel import from the four perspectives: economic, legal, systematic and conditional. The first section will provide a broad platform for the discussion in the subsequent sections.The second section is an analysis of parallel import of trademarked goods from a jurisprudential perspective. The section researches on and discusses various legal theories including the principle of right exhaustion, the principle of territoriality, trademark function theory, unfair competition theory, implied license theory, property guarantee theory and international trade theory. Based on the analysis of the above theories, it is concluded that all the theories only emphasize unilateral interests and are employed as legal weapons by various stakeholders to seek their own interests. The theories do not resolve the disputes in parallel import of trademarked goods. By comparing the three interest conflicts involved in parallel import of trademarked goods, the author argues that the theory of balance of interests is the most appropriate to coordinate the complicated myriad of interests, thus making it the best theoretical construct to address the issue of parallel import.The third section discusses the current situation about parallel import of trademark goods in China. There is no legislation to provide any guidance although in practice, there are relevant decisions. However, due to absence of legislation, similar cases have completely opposite results. There is also lack of an authoritative theory in academic circle.The last section describes the author's suggestions on improving Chinese legislation on parallel import of trademarked goods. Under the the theory of balance and after weighing the benefits and detriments that parallel import of trademarked goods brings to the interests of China and other private persons, it is suggested that the"permit in principal, forbid as exception"legislative form should be adopted. On this basis, concrete amendment suggestions to prevailing Chinese Trademark Law are raised. A multi-angle legal system (including anti-unfair competition law, contract law, overseas trade law and Customs law etc.) should be established to control the negative elements and to protect all parties'interests that are involved in parallel import.