Justifiability of parallel import and trademark infringement by imports produced in breach of a licensing agreement in Japan
The present decision stipulates three requirements for justifying parallel importation of genuine goods due to lack of impairment of the trademark functions. They are: the genuineness of the import goods; the identity of the right holders in the exporting country and the uniformity of the quality of the import goods and the domestic goods. Certain cases in which a licensee conducts in breach of the licensing agreement should be justified as parallel importation of genuine goods. In order to evaluate the legal effects of breaching a license agreement in the context of parallel importation and infringement of trademark rights, it is vital to examine the meaning of the relevant clauses in the license agreement against the functions of trademarks. The theory states that if the functions of the trademark in indicating the source of goods and guaranteeing quality are not impaired, the importation of genuine goods would not infringe trademark rights.