Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Intellectual Property StrategistKickerFeaturesSectionsNewsLJN Newsletters

Nonphysical Differences Are Enough to Create Material Differences with Gray Market Goods

By G. Brian Busey and Rory J. Radding
January 04, 2006

Under U.S. law, the resale of imported genuine goods bearing a valid U.S. trademark generally does not constitute trademark infringement. This is in part because, under the first sale doctrine, the trademark protections under U.S. law can be exhausted after the trademark owner's first authorized sale anywhere of the product bearing the trademark. Thus, U.S. law does not generally preclude the sale of identical genuine goods bearing a legitimate trademark even if the sale in the United States is unauthorized by the trademark owner.

However, there is an exception: the sale of imported gray market goods in the United States if such goods are “materially different” from authentic goods authorized for sale in the United States. A number of the circuit courts of appeals have adopted the “material difference” standard: Societe Des Produits Nestle S.A. v. Casa Helvetia, Inc. 982 F.2d 633, 644 (1st Cir. 1992); Original Appalachian Artworks, Inc. v. Granada Elecs., Inc., 816 F.2d 68, 73 (2d Cir. 1987); Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302-03 (3d Cir. 1998); Martin's Herend Imports v. Diamond & Gem Trading USA, 112 F.3d 1296, 1302 (5th Cir. 1997); Gamut Trading Co. v. United States ITC, 200 F.3d 775, 781 (Fed. Cir. 1999). A recent decision by the U.S. Court of Appeals for Federal Circuit, SKF USA, Inc. v. International Trade Commission, 423 F.3d 1037 (Fed. Cir. 2005), clarified what constitutes a “material difference.”

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office Image

A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Bit Parts Image

Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights

Risks of “Baseball Arbitration” in Resolving Real Estate Disputes Image

“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.

Disconnect Between In-House and Outside Counsel Image

'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.