There continues to be a lot of press about the impact of Kirtsaeng v John Wiley & Sons, 133 S. Ct. 1351 (2013),  in which the U.S. Supreme Court recognized the validity of grey market goods being imported into the U.S. The thrust of the decision was recognition of a first sale doctrine, meaning once the copyright holder sold the goods, he could no longer control their disposition. While this is a big plus when it comes to domestic sales, international traders are reminded Customs and Border Protection (CBP) will still require the importer be able to prove the goods are grey market and not counterfeit.  Similarly, if you are exporting grey market goods, you will also be faced with proving they are legitimate goods.

To satisfy CBP, your suppliers will have to provide you with the documentation to show the source of the goods being sold to you is an authorized licensee. This could take the form of purchase orders, license agreements and other documents from the brand holder to the manufacturer, but that is only the first step. You still need to be able to trace the goods from the manufacturer to your supplier and then to you. Often style numbers get changed, so make sure you have a good paper trail before trying to import or export grey market goods of any sort.

It is also worth keeping in mind that just because you are shown a license agreement, that does not mean it is a valid document. You want to check the brand holder’s website and see if its supply chain is public so you know whether or not the seller is an authorized licensee. If the information is not public, you would do well to speak with counsel for the brand holder and make sure you are getting legitimate goods. Who to contact can be found on the CBP website, if the mark is recorded with CBP.  If not, you can check the listing with the Copyright Office.

There is no point to paying for the goods, and then having them seized by CBP because you cannot prove they are real. Remember, not only do you lose the goods in that circumstance, but you are also assessed a penalty for trading in counterfeit goods and the size of that penalty is tied to the manufacturer’s suggested retail price for the real goods!