With Trademark Claims Against Gray Market Goods, the Devil Is in the Details

Farella Braun + Martel LLP
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Farella Braun + Martel LLP

When a third party purchases a manufacturer's goods intended for distribution outside of the U.S., and then imports those goods into and sells them to consumers in the U.S., the products are authentic, and so trademark infringement claims are difficult to prove since there is no confusion as to source. As such, “gray market goods” or “parallel imports” can be hard to stop.

But where the manufacturer can show that the products intended for sale internationally are different from those it sells in the U.S., there may be a valid claim for trademark infringement. Relevant differences can include those in the products themselves (e.g., different recipes for food products), the packaging (including different regulatory information required in the U.S.), product inserts (e.g., user manuals in foreign languages), and differences in or the lack of warranties.

Manufacturers' battles against being undercut by their own products start with strong distribution networks and agreements, but when their own goods intended for other markets are nonetheless sold in the U.S., trademark law may provide a remedy so long as the manufacturer can demonstrate the foreign market products are different in a way that is material to U.S. consumers.

[T]he international products use different packaging than its U.S. lenses which lack certain information intended for U.S. customers, like a patient helpline. By reselling those products to customers in the U.S., Alcon claims that the website is damaging the brand, just like a counterfeit would.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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