Research Handbook on Intellectual Property Exhaustion and Parallel Imports
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Research Handbook on Intellectual Property Exhaustion and Parallel Imports

Edited by Irene Calboli and Edward Lee

From the Americas to the European Union, Asia-Pacific and Africa, countries around the world are facing increased pressure to clarify the application of intellectual property exhaustion. This wide-ranging Research Handbook explores the questions that pose themselves as a result. Should exhaustion apply at the national, regional, or international level? Should parallel imports be considered lawful imports? Should copyright, patent, and trademark laws follow the same regime? Should countries attempt to harmonize their approaches? To what extent should living matters and self-replicating technologies be subject to the principle of exhaustion? To what extent have the rise of digital goods and the “Internet of things” redefined the concept of exhaustion in cyberspace? The Handbook offers insights to the challenges surrounding these questions and highlights how one answer does not fit all.
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Chapter 20: Using trademark law to override copyright’s first sale rule for imported copies in the United States

Mary LaFrance


Can copyright owners use trademark law to circumvent the first sale rule of copyright law in the United States (U.S.)? In the case of parallel imports, the answer appears to be “yes.” In both trademark and copyright law, non-counterfeit goods that are imported without the consent of the owner of the domestic intellectual property rights are referred to as parallel imports, or “gray market goods.”1 Legal restrictions on parallel imports benefit domestic intellectual property owners by enabling them to maintain separate markets in different territories. In some cases, this benefits consumers by enabling merchants to tailor their offerings to meet the needs and preferences of consumers in different territories.2 However, it also allows merchants to engage in price discrimination, by offering their goods at higher prices in the U.S. than in foreign markets without facing competition from imports of the cheaper foreign goods or from domestic secondhand sales of the imported goods. Because secondhand sales by third parties generate no royalties for copyright owners, any strategy that reduces the number of secondhand copies on the market can increase revenues for copyright owners by enabling them (1) to sell more new copies; and (2) to charge higher prices for those new copies due to the absence of price competition from secondhand sales.

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