Legal landscape is fuzzy for gray market goods

WASHINGTON — The law on gray-market goods is not settled.

The U.S. Supreme Court split 4-4 several years ago over Costco Wholesale's overseas purchase of Omega watches that bore a copyrighted logo without permission. But it ruled against a U.S. shampoo maker that sought copyright protection against a distributor that imported products made for sale in Europe back to the U.S.

The current test appears to be whether there is a material difference between the products sold overseas and domestically, according to legal experts.

In 2009, Kia Motors America prevailed against Autoworks Distributing when Minnesota's federal court determined that a different warranty for a gray-market part meant the product could not be represented for sale as identical. The case also was influenced by the fact that the instruction manual was in a different language and serial numbers were altered or defaced, said Leslie Glick, a customs attorney at Butzel Long in Washington.

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