Parallel Trade in Europe

Christopher Stothers

Shortlisted for the 2008 Young Authors Inner Temple Book Prize

Are parallel importers the key to free trade, breaking down long-established national barriers for the benefit of all? Or do they instead just operate in a dubious ’grey market’ for their own profit, free-loading on the investment of innovators and brand owners to the ultimate detriment of everyone? Parallel trade is in turn lionised and demonised, both in legal commentary and in the mainstream press. As one might expect, the truth lies somewhere between these extremes.

Once goods have been manufactured they are put onto the market in one country by the manufacturer. Parallel trade occurs when the goods are subsequently transferred to a second country by another party (the parallel trader, who may be the end consumer). The distinguishing feature of parallel trade is that the manufacturer did not intend those particular goods to end up in the second country. The goods are normally described in that country as ’parallel imports’ or ’grey market goods’. The latter term is generally used to suggest that the trade, while not exactly ’black market’, is not entirely lawful either.

Understanding how European Community law operates to permit or restrict parallel trade involves exploring a complex matrix of rules from the fields of free movement, intellectual property, competition and regulatory law, including both private and public enforcement regimes. Where goods are parallel imported from outside the Community these rules change and new considerations come into play, such as obligations arising from the European Economic Area, the World Trade Organization and bilateral free trade agreements. The experience of Europe, which has grappled with the issues on a regional basis for more than four decades, provides a fertile source for examination of parallel trade in other jurisdictions.

Christopher Stothers’ comprehensive treatment successfully analyses this difficult topic, considering both Community and national decisions.

“There is an interesting account of these debates in Stothers, Parallel Trade in Europe (2007), at pp. 347-354” – Lord Sumption, in Oracle America Inc (Formerly Sun Microsystems Inc) (Appellant) v M-Tech Data Limited (Respondent) UK Supreme Court, June 2012

“Stothers’s valuable work untangles the web of rules affecting parallel trade in Europe. Free movement of goods, intellectual property, competition and the regulatory framework (including taxation) are all carefully explained, in a well-organised and thorough account. Basic material is always set out or referred to, and the reader is helpfully steered through to the finer points. The text is accessible without losing sharpness or depth. Stothers has a light touch with narrative, conveying a mass of detail without becoming boring...Throughout the book, Stothers’s approaches the policy issues with detachment, balance and careful excellent work, setting out thoroughly and lucidly what the law on parallel trade is. It will be of value both to those new to the subject, and to those needing a convenient and reliable reference source.” – Catherine Seville, European Intellectual Property Review, Vol 31, Issue 12

“The introduction exposes succinctly and clearly the policy context that is so important to understand the interaction between the different aspects of the regulation of parallel providing an exhaustive and clear mapping of the field, it enables the reader to reflect on the congruent and in some cases less harmonious interaction between these different areas of law and to envision more clearly the influence of policy choices in framing legal discourse. I...entirely adopt the conclusion of our regretted colleague Sir Hugh Laddie in his preface of the book, that "this is a major contribution to the learning in this area of law" and that the book will become a reference for all those interested to understand what the European law on parallel trade is.” – Ioannis Lianos, European Competition Journal, Vol 5, No 2

“This is a very good, thorough and well balanced book...The style is lucid, the coverage thorough and critical comments are made where appropriate. Unlike much writing in this field, the book is not partisan: it describes the development and current state of the law. The author has been advising on the problems and he provides much information and analysis. His work is most welcome.” – Valentine Korah, World Competition Law and Economics Review, Vol 32, No 2

“Christopher Stothers’ book is an exemplary piece of practical legal scholarship. Thoroughly researched, clearly written and full of insight, Stothers’ book is now THE essential reference work for anyone interested in the law and practice of parallel trade.” – Lionel Bently, Herchel Smith Professor of Intellectual Property, Centre for Intellectual Property and Information Law, University of Cambridge,

“...a treat to find an entire treatise devoted to the parallel market. The fact that it is both readable and intelligent is a plus...the book provides European practitioners with a great refresher and non-European practitioners with a very readable introduction...Overall, Parallel Trade in Europe will provide the casual reader with a great overview of the fascinating history and status of parallel market law in Europe and will provide the professional practitioner with an invaluable reference resource. I enjoyed the book and highly recommend it.” – The Gray Blog

“…an impressively comprehensive and thorough presentation and analysis of all relevant legal aspects of this subject...if this book is a major contribution to the never-ending debate on parallel trade this is due to its comprehensive scope, its thorough treatment of the various topics and to the parallel focus on the legal and economic side of the subject.” – Hannes Kraemer, Common Market Law Review

“This book, as its title indicates, offers comprehensive and coherent treatment of three aspects of free trade that are too rarely appreciated as belonging together. What is more, Stothers does not only contemplate the Community dimension of his topic, but also its international aspects. Given this, and the fact that he looks at the regulatory framework for a number of industries in detail, the view is truly panoramic...this books sets new standards in the breadth and depth of its treatment of parallel trade.” – Stefan Enchelmaier, IIC: International Review of Intellectual Property and Competition Law Volume 40

“...a timely and worthy addition to the existing literature...It is encyclopaedic, well organised, well written and well edited. It is indispensable as a non-partisan, comprehensive, complete and up-to-date source of information about all the law affecting parallel trade in Europe. It should, without doubt, be on the shelves of anybody with an interest in the subject.” – Eric Gippini Fournier, European Law Review, 33(1)