When companies sell branded products around the world, they often adapt them to local conditions—changing packaging, ingredients, instructions, or even warranty coverage to match regulatory standards and consumer expectations in each market.
However, these same products can be brought into another country through parallel imports (also known as “grey market goods”) without the authorization of the trademark owner. While these goods are genuine, they may differ in important ways from the products designed for the local market.
The question is: Should trademark rights be considered exhausted once a product is sold anywhere in the world, or should trademark owners retain control in each country? This debate lies at the heart of the International Trademark Association’s (INTA) recent resolution.
What the Resolution Says
INTA acknowledges that in many countries, the rule of international exhaustion allows parallel imports freely. But this approach can create risks:
For consumers: Products may not meet safety or regulatory standards, or they may lack proper instructions, warranties, or after-sales service.
For brand owners: Differences in quality, packaging, or labeling may damage brand reputation and consumer trust.
To address this, INTA proposes a set of standardized exceptions that would allow countries to block parallel imports in specific cases.
When Exceptions Should Apply
According to the resolution, a parallel import should be restricted if it is “materially different” from the authorized domestic version. Some examples include:
1.- Differences in ingredients, quality, or appearance that affect consumer expectations.
2.- Failure to comply with local safety or regulatory requirements (important for medicines, food, cosmetics, electronics).
3.- Absence of mandatory consumer protections like warranties or product support.
4.- Packaging or labeling not in the local language or missing legally required information.
5.- Removal or manipulation of tracking codes or barcodes.
6.- Rebranding, de-branding, or packaging changes that could confuse consumers or harm brand reputation.
Why This Matters for Businesses
For companies, these guidelines are important because they:
For clients operating across multiple jurisdictions, this resolution highlights the importance of carefully managing distribution channels, monitoring parallel imports, and being aware of the regulatory environment in each market.
The Bigger Picture
Currently, there is no international agreement on whether trademark exhaustion should be national or international. Practices vary widely: some countries apply international exhaustion (e.g., China, Japan, Australia), others national exhaustion (e.g., Brazil, Russia), and some rely on the concept of material differences (e.g., the United States).
In this fragmented landscape, INTA’s proposal for standardized exceptions is not about limiting trade but about creating balance: promoting fair competition while protecting both consumers and trademark owners.
Key Takeaway
For businesses and brand owners, the resolution is a reminder that parallel imports are not just a legal issue—they are a commercial and reputational risk. By adopting clear and harmonized exceptions, companies can better defend their brands while ensuring that consumers continue to associate their trademarks with trust, safety, and consistent quality.
