“Can we buy abroad without going through the authorised distributor and sell in Japan?” — a question about parallel imports. The short answer is that it is lawful if the conditions are met, but those conditions have been clearly set out in case law, and failing even one constitutes trademark infringement.

The three requirements set out by the Supreme Court

On parallel imports of genuine goods, the Supreme Court gave its first ruling on 27 February 2003 (the Fred Perry case). The requirements for lawfulness are these three.

  1. Genuineness — the trademark must have been lawfully applied by the foreign trademark holder or a licensee
  2. Substantive identity of the trademark holders — the foreign and Japanese trademark holders must be the same person, or in a relationship where they can be regarded as legally or economically the same, indicating the same source
  3. Position to control quality — the Japanese trademark holder must be in a position to exercise quality control, and the goods must be assessed as having no substantive difference in quality from goods bearing the registered trademark in Japan

Meeting all three means there is no substantive illegality. Put the other way, failing even one makes it unlawful.

Requirements 2 and 3 are what cause problems in practice

Requirement 1, genuineness, is relatively easy to establish as long as authentic goods are being purchased. The other two are where difficulties arise.

For some brands the trademark holder differs by region, held by separate legal entities with no capital relationship. In that case requirement 2 is not met. And the same brand name may carry different specifications or quality standards by destination market; where that is assessed as a substantive difference, requirement 3 fails.

“We bought the real thing, so there is no problem” — a view that looks only at the first of the three requirements.

What to establish

  • Who holds the trademark in Japan (searchable on the Japan Platform for Patent Information)
  • The relationship between that holder and the holder in the country of purchase
  • Whether specifications, ingredients or volumes differ by destination market
  • Differences in labelling against the authorised Japanese product

Confirming these directly with the brand is the most reliable route. Not infrequently, the option of concluding an authorised distributorship turns out to lead to safer and more stable supply.

We also act on clients’ behalf in negotiating exclusive distribution rights and authorised distributor agreements. Whether to proceed by parallel import or to aim for a formal agreement, we can advise from the stage of structuring the terms.

Reference

※ This article summarises the outline of a court decision and is not legal advice. For individual matters, please consult a lawyer or patent attorney.