Parallel trade offers entrepreneurs opportunities, but also brings legal challenges. A key doctrine here is exhaustion: after marketing the product within the EEA, the trademark owner cannot restrict resale.
What is parallel trade?
Parallel trade, also known as parallel import, involves the sale of trademarked products outside official distribution channels, without the explicit consent of the trademark owner. This can be advantageous for entrepreneurs who purchase products cheaper abroad and offer them in the Netherlands.
Exhaustion: the legal limit
Trademark owners have the exclusive right to use their mark and regulate the sale of products bearing that mark. However, once a product has been put on the market within the European Economic Area (EEA) with the consent of the trademark owner, he cannot prohibit further sales. This principle is called exhaustion. Outside the EEA, this does not apply, and the trademark owner can take legal action against parallel imports.
When can a trademark owner intervene anyway?
There are exceptions. For example, if a product is packaged differently or the quality changes, the trademark owner can act against parallel trade. This prevents damage to the trademark's reputation.
Thus, parallel trade can be lucrative, but entrepreneurs should be aware of the legal limits to avoid conflicts.
