Recent Indian court cases have clarified the rules on parallel imports, but there are still some grey areas, says Himanshu Bagai.
A parallel imported product is a non-counterfeit product purchased in country A and imported to country B for subsequent sale. Such noncounterfeit products are authorised for sale by the owner of intellectual property (trademark, copyright, patent) in country A, but may not be intended for sale in country B.
Parallel importation or parallel trade represents another form of arbitrage wherein a legitimate product is shipped from an authorised (by the IP owner) market to another market where it commands a higher price. Parallel imports are also driven by price differences in various countries that may result from retailer price discrimination, vertical pricing restraints or national differences in government price controls.
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