Exhaustion Of Right In The Trademark Parallel Import

With the prosperity of global trade and the reduction of trade barriers in theWTO system, the flow of intellectual property products in international marketbecomes more frequent, including the trademark products in the international trade.The parallel importer buys the trademark products in the low price market in onecountry and then import them to the high price market in another country, thisbehavior causes the competition of genuine products under the same brand or thesame group of brands. Whether the law forbid or allow,depends on the choice of theexhaustion rights.The first chapter gives the definition of the parallel importing of the trademarkproducts, denying the definition based on the ‘parallel’, and come to a conclusion ofthe definition grounded on ‘genuine ’and also analyze the main causes.The second chapter is the focus of this paper, it discuss the exhaustion of therights of the trademark parallel import. The only international treaty involved isTRIPS, according to the sixth clause,countries enjoy the free choice of the exhaustionof the rights.The analytics of the exhaustion of the rights can be divided to two parts.First isthe traditional theory: the reward theory and the implied license theory. Based on thecomparison,trademark holder lost the control of the trademark products after the firstsale.The traditional theory supports the international rights exhaustion.Second is the new theory. The traditional theory lacks the representative difference analysis. and the new theory makes up the loss.First is the analysis of the balancing of interests. There are three major interestconflicts: conflict between trademark rights and the ownership, conflict betweenregionalism of trademark and the free trade, conflict between trademark holder andthe consumer. The international rights exhaustion can ease the conflicts.Second, the parallel import of the trademark product with the materialdifferences can undermine the functions of the trademark which undermines the goodfaith the trademark substantially. So the material differences is the exceptionalcircumstances of the parallel imports of trademark products.In conclusion, whether from the view of the traditional theory or the newtheory,the international rights exhaustion applies with one exception: materialdifference.The third chapter is the legislative practice of different countries. This paperselect Japan,European, America to compare and draw the advantages anddisadvantages of these legislative modes.The forth chapter picture the legislative or the judicial modes of China. Thispaper holds that defaults in the trademark law are necessary, but the law should givethe basic definition in the parallel imports and forbid the essential differences in thecustoms legislation.