Legislative Analysis On Parallel Imports In China

Since the rise of globalization, multinational corporations have continued their rapid pace of global trade expansion, forging integration of world economy. In recent years, the term of " parallel imports " has been frequently used to describe international trade disputes. Parallel imports is spreading worldwide with their registered trademarks also extending to every corner of the world. It is fair to say that, as a main problem within intellectual property rights (IPR), international trade disputes triggered by parallel imports with registered trademark are being more serious than ever before.It is difficult to define whether international trade or IPR should be accountable for parallel imports of trademarks, due to the fact that interests would be involved in the matter of permit or ban of parallel importation of trademark. Once improperly handled, the issue would generate discontent and condemnation from global community, thus international consensus on resolving parallel imports has not yet reached. None of international conventions of various types unifies rules of parallel importation of trademark which are included in respective domestic law by trade members.As free trade expands in recent years, major trading powers have published a number of relevant laws in succession to address problems of parallel imports, in order to break down trade barriers and decrease disputes. It is evident that, with sovereignty interests as priority in policy-making, countries hold different opinions about parallel imports. However, the increase of relevant judicial precedents would entail solutions about trademark infringement in parallel importation. Currently, such infringement disputes are becoming increasingly fierce in China. To learn from other countries about judicial precedents would bring referential importance to China.By analyzing the lawsuit brought by LESGRANDCHAISDEFRANCES that sued MUTI International trade co., LTD (Tianjin) for trade infringement, the thesis probes into parallel imports through explaining concepts, main characteristics and theoretical basis. Further more, analysis of judicial practice of different countries is conducted on parallel importation of trademarks, followed by suggestions on improving its legislation in line with Chinese legislative conditions.This thesis include three chapters mainly discussing on legal regulations and judicial practice. Chapter one elaborates the concept and characteristics of trademark parallel imports as well as its two legal principles. In the final analysis, parallel imports is attributable to goods circulation in international trade. Principles of "territoriality" and "exhausion of right" are both adopted in state laws or regional laws with distinctive highlights over each out of respective interests. Countries that quote principle of "territoriality" claim that the right of trademark is protected by state law within a certain area; rather, those proposing the principle of "exhausion of the right" deem that once an obligee convert trademark and goods for cash, his exclusive right would be exhausted., which means he has no right to interfere with circulation of trademarks and goods afterwards. The principle of "exhausion of the right" might be applied in three scenarios:domestic exhausion, regional exhausion and international exhausion. Chapter second expounds how global community proceeds to evolve the establishment of regulations about parallel imports, and illustrate judicial practices. With changing trade environment and flux and reflux of strength competition among countries, opinions about parallel imports are different accordingly, but still, centering on safeguarding fundamental interests of sovereignty.Chapter three streamlines legislation on parallel imports in China at this stage, and puts forward author’s advise on legislation process.In author’s opinion, with trade contacts between China and other countries being ever closer, to conditionally lift the restriction on parallel imports is inevitable. It would expand the scope of international trade, and promote healthy competition in Chinese market and make quality goods survive. Meanwhile, there should be areas for restriction. For restriction area, considering that a few emerging industries are not yet well-established, to make them under protection is favorable to maintain the stability of domestic market and sound development of industries and unleash obligees’initiative in IPR. Law-makers should formulate regulations about parallel imports of trademark in light of world trade development and Chinese national conditions.