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A Contractual Approach to the Gray Market

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Author Info
Nancy T. Gallini
Aidan Hollis

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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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File URL: http://repec.economics.utoronto.ca/files/UT-ECIPA-GALLINI-96-01.ps
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Publisher Info
Paper provided by University of Toronto, Department of Economics in its series Working Papers with number gallini-96-01.

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Length: 27 pages
Date of creation: 26 Jan 1996
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Handle: RePEc:tor:tecipa:gallini-96-01

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Find related papers by JEL classification:
K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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  1. Raff, Horst & Schmitt, Nicolas, 2005. "Why Parallel Trade May Raise Producers' Profits," Economics Working Papers 2005,07, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
    Other versions:
  2. Horst Raff & Nicolas Schmitt, 2000. "Endogenous Vertical Restraints in International Trade," Discussion Papers dp00-04, Department of Economics, Simon Fraser University, revised Feb 2000. [Downloadable!]
    Other versions:
  3. Yeh-ning Chen & Ivan Png, 2004. "Parallel Imports and Music CD Prices," International Trade 0402001, EconWPA. [Downloadable!]
    Other versions:
  4. 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. [Downloadable!] (restricted)
  5. Teodora Cosac, 2004. "Vertical Restraints and Parallel Imports with Differentiated Products," Industrial Organization 0401006, EconWPA. [Downloadable!]
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