Parallel import

A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, and intellectual property.

Parallel importing is based on concept of exhaustion of intellectual property rights: according to this concept, when the product is first launched on the market in a particular jurisdiction, parallel importation is authorized to all residents in the state in question. Some countries allow it but others do not.

Parallel importing of pharmaceuticals reduces price of pharmaceuticals by introducing competition; TRIPS agreement in Article 6 states that this practice cannot be challenged under the WTO dispute settlement system and so is effectively a matter of national discretion.

The practice of parallel importing is often advocated in the case of software, music, printed texts and electronic products, and occurs for several reasons:

Parallel importing is regulated differently in different jurisdictions; there is no consistency in laws dealing with parallel imports between countries. Neither the Berne Convention nor the Paris Convention explicitly prohibit parallel importation.

The Australian market is an example of a relatively small consumer market which does not benefit from the economies of scale and competition available in the larger global economies. Australia tends to have lower levels of competition in many industries and oligopolies are common in industries like Banking, Supermarkets, Mobile Telecoms.

Private Enterprise will use product segmentation strategies to legally maximise profit. This often includes varying the service levels, pricing and product features to improve so called "fit" to the local marketplace. However this segmentation may mean an identical products at often higher prices. This can be termed "Price Discrimination". With the advent of the Internet, Australian consumers can readily compare prices globally and have been able to identify products exhibiting Price Discrimination.

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Wikipedia