What is a Parallel Import?

Malcolm Tatum

A parallel import is a product that is created at an international location and imported into a nation without the express permission of the intellectual property owner. Sometimes known as a gray product, imports of this type often involve software, print and electronic publications and even music. The increasing frequency of offering products of this type has led to some issues regarding international trade laws as well as the proper use of intellectual property.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

It is important to note that a parallel import is not a knock-off or some type of copycat product that attempts to pass as the original product. Often, the owner of the intellectual property will issue products that are intended for sale in a given country or countries only, issuing alternative versions for other nations. When a product intended for sale in one nation is secured and sold in a different country, that is considered a parallel product.

One example of a parallel product is a magazine that has an international presence. The publisher may prepare one version of the publication that is aimed at readers in the United States and a different version that is customized for readers in France. Both products are non-counterfeit products, since the same publisher produces them. Should the French version be sold in the United States, or the US version be sold in France, then each of these legitimate products would be considered a parallel import.

In situations involving software, a parallel import situation may arise due to differences in cost for programs sold in different nations. For example, if some type of sales database software is manufactured with versions for different nations, and an importer notices that the cost of one of those versions is less than the version sold in his or her country, the importer may choose to purchase copies of that less expensive version and resell them domestically. The end result is that the two versions compete with each other in the same market, something that the manufacturer never intended to happen.

Laws regarding the legality of parallel import activity vary. In some nations, trade regulations prohibit this type of activity for specific products, such as video games, but allow the import of foreign versions of a periodical. Other nations have no laws to govern the acquisition and sale of parallel imports within their borders. Thanks to the advent of shopping online and the ease of ordering large lots of goods for sale in various nations, attention to this type of importing activity is increasing, with expectation that many nations will develop specific regulations regarding parallel import acquisitions and sales, either by placing limits on the activity or levying tariffs that either encourage or inhibit this type of business transaction.

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Discussion Comments


it is a good article, but it has not covered the legal issues regarding PI.

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