A recent Japanese High Court decision provides a useful example of parallel importing. In BBS Kraftfahrzeugtechnik AG v. Racimex Japan Corp. and Jap Auto Products Co., BBS was the holder of both Japanese and German patent rights to an invention entitled ‘A Wheel of an Automotive’. BBS sold and licensed aluminium wheels made under their patents in both countries. As the products sold in Germany were considerably cheaper than in Japan, a middleman, Jap Auto, bought the wheels in Germany, imported them into Japan and sold them to Racimex, a Japanese wheel distributor.

Such importation is known as ‘parallel importation’ because the goods are imported outside the distribution channels that have been contractually negotiated by the intellectual property owner. As the intellectual property owner has no contractual connection with the parallel importer, the imported goods are sometimes referred to as ‘grey market goods’.

Parallel importing therefore occurs when goods that are manufactured legally in Country A are imported into Country B without the consent of the intellectual property owner in Country B. Strictly speaking, the same person would own the intellectual property right in both Country A and Country B, but the terminology is commonly extended to cases where the owners are different (especially where they are members of the same corporate group). In BBS the parallel import market existed because of international price differences that were taken advantage of by a middle man.