WILL THE ISSUE
EVER BE SOLVED?
u noted uuomey on parul/t>l imports.
objections of the copyright owner. Other cases, like that against
Elcon O\er Donke; Kong, point the other w·.ty l11is leaves
n the August 19H7 Play ~leter ("A question about parallel operators uncertain of their rights, which is unfortunate. at
imports", p S2 ), you point out the conflicting legal positions le;l!)t for operators.
of federal courts abom \\hether parallel importation of
Take a case of printed circuit boards sold in japan by the
genuine products in,olves illegal trademark infringement. A 0\\1ler of the copyright on a \ideo game; these are genuine
com mental') b} the AAMA Board in the same issue (p.Ill) boards. sold \\ithout restriction at a time when the seUer owns
indicates that parallel importation can raise cop} right l .S. and japane e rights alike. Once the game has run its course
infringement problems as weU as trademark infringement in japan. the used printed circuit boards pass into the hands
problems, and smuggling violations as well.
of brokers or other rescUers. Some time after the first sale,
TI1ere C'dn also be problems under other federal laws in the Japanese copyright 0\\11er assigns aU U.S. copyrights to a
some cases. For example, there have heen game products on l.S. company, w1lich you can be sure wJ.rlls to be the only
\\1lich design or utility patents were issued, so parallel one selling the printed circuit boards to U.S. operators. At about
importation of the products could result in patent infringement the same time, the U.S. printed circuit boards may be going
and violation of section 337 of the Tariff Act. There can he for $600 while the used Japanese board!. can be had for $200.
f(•deral mail and wire frdud violations, also. since some courts You C'tl.n readily figure out \\hat happens next.
have ruled that intentional Yiolation of copyright law by acts
But what is harder to figure out is whether the parallel
such as tape pir.tC}' can he a scheme to defraud cop} right importation into the l'.S. of these used, genuine printed circuit
0\\11ers. This type of scheme could also be prosecuted under boards, originally sold in Japan \\ithout any restrictions by the
RICO (Racketeering Influenced and Corrupt Organization Act). Japanese 0\\11er of the L.S. copyright, becomes a copyright
'11w real problem for operators is the great uncertaint} over infringement simply because the cop) right 0\\1ler subsequently
\\hen pamllel 1mportation is legal and when it is illegal. l11b assigned the l .S. copyright to another company. I think that
causes a conflict hrl\\een entrepreneurial desire to make a the ans\\er is definitely "no," hut there are other people \\110
profit and fear of be111g charged with civil or criminal violations think the answer is "yes." IIO\\ docs an operator knO\\ wtlo
of law. And the haze of confusion, uncertainty, threats of to believe? The decided video games, such as the Elcon case
prosecution. and sometimes deliberate obfusc-Jtion [not clear!} mentioned hy the ~lA. do not help us because they do not
e\pressed I b not about to clear aw·.ty.
deal with that kind of fact situation . ( Elcon was. contra~ry to
Even if the Supreme Court clarifies the law on trademark ''11at ~lA says, a case where a Japanese video game licensee
infringemrnt and pamllel importation, in revie\ving the validity did not comply with a contract that said the games were not
of the Custom Service's regulations, operators will still be left to be shipped from Japan to the U.S. The licensee sold the
in doubt about copyright infringement issues; wtlcther Customs hoards to a trading company in Japan, wtlich shipped them
is right or \\Tong in refusing to bar parallel imports on to its affiliate in the U.S., \\hich then sold them to U.S.
trJdemark grounds will not tell us the righb and wrongs of operators.)
parallel importation of copyrighted produm.
Smart video game manufacturers short-circuit the wflole
Despite \\flat you might gather from the ~lA Board problem by assigning their U.S. copyrights on video games to
statement in the Augu~t Play \1eter, it is b} no means clear a l .S. compan} before the} sell the first printed circuit board
that all parallel importation of genuine video games is copyright in Japan. But there are plenty of boards around for which this
mfnngement. In at least one case, involving genuine "Polo" precaution was not taken in time. In addition. even in cases
products carl')ing a cop}righted picture \\1lere the products had where the l .S. copyright was immediately assigned to a L.S.
been C\ported abroad and \\ere then reimportcd, the court held subsidial) of the Japanese copyright 0\\11er, there is still another
that "e,hau~tion" of copyright (\\1lich occurs \\11enever the issue. l11at is the argument suggested b} the unnamed operator
copyright 0\\1ler of a legitimate user of the cop} nght sells the \\ho \\Tote to Play Meter--that the copyright laws were never
cop} righted product) made it legal for a buyer to reimport intended to be used to permit divisions of world marketing
the genuine "Polo" product~ into the L.S., despite the territorie~ between different parts of a foreign manufacturer's
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