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A contractual approach to the gray market

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  • Gallini, Nancy T.
  • Hollis, Aidan

Abstract

Parallel imports are genuine products imported without the authorization of the trademark or copyright owner in a country. Authorized dealers have employed trademark and copyright law to exclude parallel imports using claims of infringement. Our assertion is that trademark and copyright laws are inappropriate for enforcing restrictions against parallel imports for two reasons. First, trademark exclusion of parallel imports indiscriminately eliminates intrabrand competition and should be scrutinized from an antitrust perspective. Second, trademark laws inefficiently constrain the feasible set of distribution systems. We propose a policy combining contract, tort, and antitrust law to regulate parallel imports.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 19 (1999)
Issue (Month): 1 (March)
Pages: 1-21

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Handle: RePEc:eee:irlaec:v:19:y:1999:i:1:p:1-21

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  1. Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization, Elsevier, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier.
  2. Mathewson, Frank & Winter, Ralph, 1994. "Territorial Restrictions in Franchise Contracts," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 32(2), pages 181-92, April.
  3. G.F. Mathewson & R.A. Winter, 1984. "An Economic Theory of Vertical Restraints," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 27-38, Spring.
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Cited by:
  1. Yeh-ning Chen & Ivan Png, 2004. "Parallel Imports and Music CD Prices," International Trade, EconWPA 0402001, EconWPA.
  2. Raff, Horst & Schmitt, Nicolas, 2007. "Why parallel trade may raise producers' profits," Journal of International Economics, Elsevier, vol. 71(2), pages 434-447, April.
  3. Mueller-Langer, Frank, 2009. "Does parallel trade freedom harm consumers in small markets?," MPRA Paper 40194, University Library of Munich, Germany.
  4. Knox, Daniel & Richardson, Martin, 2003. "Trade policy and parallel imports," European Journal of Political Economy, Elsevier, vol. 19(1), pages 133-151, March.
  5. Teodora Cosac, 2004. "Vertical Restraints and Parallel Imports with Differentiated Products," Industrial Organization, EconWPA 0401006, EconWPA.
  6. Horst Raff & Nicolas Schmitt, 2000. "Endogenous Vertical Restraints in International Trade," Discussion Papers dp00-04, Department of Economics, Simon Fraser University, revised Feb 2000.
  7. Mueller-Langer, Frank, 2010. "An analysis of the ambiguous welfare effects of parallel trade freedom," MPRA Paper 35704, University Library of Munich, Germany.
  8. Soomro, Yasir & Hameed, Irfan & Hameed, Imran, 2012. "A Functional Approach to Understand Consumer Behavior while Selecting Coffee Parlor," MPRA Paper 57241, University Library of Munich, Germany.
  9. Hsiu-Li Chen, 2009. "Gray Marketing: Does It Hurt the Manufacturers?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 37(1), pages 23-35, March.
  10. Richardson, Martin, 2002. "An elementary proposition concerning parallel imports," Journal of International Economics, Elsevier, vol. 56(1), pages 233-245, January.
  11. Valletti, Tommaso M., 2006. "Differential pricing, parallel trade, and the incentive to invest," Journal of International Economics, Elsevier, vol. 70(1), pages 314-324, September.
  12. Braouezec, Yann, 2012. "Customer-class pricing, parallel trade and the optimal number of market segments," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 605-614.

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