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25 Geo. Wash. J. Int'l L. & Econ. 841 (1991-1992)
Trademarks and Gray Market Goods: Why U.S. Trademark Holders Should Be Held Strictly Liable for Fefective Gray Market Imports

handle is hein.journals/gwilr25 and id is 849 raw text is: NOTE TRADEMARKS AND GRAY MARKET GOODS: WHY U.S. TRADEMARK HOLDERS SHOULD BE HELD STRICTLY LIABLE FOR DEFECTIVE GRAY MARKET IMPORTS I. INTRODUCTION Luke, an American consumer, purchases a television set from a discount store in New York City. The television has a U.S. trademark but was produced by the trademark holder's manufacturing partner in Asia. The discount store purchased the television from an importer, who shipped it into the United States without the U.S. trademark holder's consent. Two months after Luke purchased the television, it exploded due to a manufacturing defect. The blast injured Luke and caused a fire in his living room. Luke has decided to sue. Unfortunately, personal jurisdiction cannot be obtained over either the foreign manufacturer or the importer.' To make matters worse, the store where Luke purchased the television went out of business and appears judgment proof.2 There- fore, the only potential defendant that Luke can sue in the United States is the U.S. trademark holder.3 Question: Is the U.S. trademark holder susceptible to an action in strict liability for a defectively manufactured good even though he never authorized the importation of the product?4 United States law has yet to address this issue. During the 1980s, the United States witnessed notable growth in the importation of gray market goods:5 foreign-manufactured goods, bearing valid U.S. trademarks, imported without the con- 1. See infra note 62 and accompanying text. 2. See infra note 63 and accompanying text. 3. See infra note 61 and accompanying text. 4. Although products liability actions can also be based on defects in design or warning, this Note assumes that the defects at issue are caused by manufacturing errors. 5. See SETH E. LIPNER, THE LEGAL AND ECONOMIC ASPECTS OF GRAY MARKET GOODs 3-4 (1990). While there are indications that the rate of gray market importation may have subsided during the late 1980s, the gray market remains a vibrant source of products. Id.; see also A. Paul Victor, Preventing Importation of Products in Violation of Property Rights, 53 ANTrTRuST LJ. 783, 795-96 (1984) (stating that as the gray market grew, U.S. trademark owners began to feel their effect and sought to take measures to combat these imports).

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