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What is parallel importing?

As globalization has expanded, many large brands have established factories in different countries to distribute their products worldwide. While these products are sold under the same trademark, there may be variations in technical specifications and pricing. As a result, some traders engage in arbitrage by purchasing products at a low price in one country and selling them at a higher price in another. These authentic products are known as parallel imports, which differ from counterfeit or black-market goods because they originate from the genuine producer and bear authentic trademarks.

Parallel importing is a result of market segmentation strategies used by trademark-owning businesses. By implementing different pricing strategies, these businesses aim to segment markets and increase profits. However, the price gap between markets can incentivize the flow of goods from low-price to high-price markets. Once goods have been legally sold, the trademark owner can no longer intervene in the market using trademark rights as doing so would affect market transactions. This is known as the theory of exhaustion of rights. Despite this, there is currently no internationally agreed-upon approach regarding the exhaustion of trademark rights.

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