Parallel Imports and the First Sale Doctrine


Reprinted and/or posted with the permission of Daily Journal Corp. (2011).

Under the “first sale” or “exhaustion” doctrine in intellectual property law, a lawful purchaser of a copyrighted, patented or trademarked product may generally use or resell the product without fear of being subject to an infringement lawsuit. The owner of the intellectual property rights is said to have “exhausted” her rights to the work with the first sale and generally cannot prevent further use or sale of the work. When the first sale of a work, like a book or DVD, occurs in the U.S. the purchaser may generally resell the product to whomever she wishes without fear that the owner of the copyright will pursue her for infringement.

What if the first sale of the work occurs overseas, which is then imported into the U.S.? May a purchaser of such a work raise the first sale doctrine as a defense to an infringement action? Recent decisions involving “gray market goods” or “parallel imports” indicate that the defense will not be available under those circumstances, particularly for copyrighted and patented goods.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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