Chile Forum

I'm currently researching whether it's legal to import gizmos from abroad and sell them in Chile regardless of whether there's an "official" representation in Chile (whether subsidiary or licensed distributor) for that gizmo's brands. Though I have quite specific gizmos in mind for which I already have a potential buyer, I don't want to get into the details of that specific market, what I'm interested in is the general legal framework. Basically in the US you start from the first-sale doctrine (which tends to be pro-competition and pro-consumer) whereas the EU has a pro-manufacturer stance which tends to favor monopolies, price fixing, and reduces retail competition at the expense of the consumer.

I've started researching this and at a first glance Chile has pro-competition laws. However these issues tend to be a work-in-progress worldwide and there's been a lot of recent jurisprudence both in the US and EU, especially on software (e.g. Autodesk, Microsoft cases) but also on retailing physical goods, e.g. Costco vs. Omega, Tesco vs. Levi Strauss, those two latter examples being very close to what I'm trying to assess is the state of the law and jurisprudence in Chile. Manufacturers have had some success in twisting IP law being recognition to restrain trade and competition.

In other words, what I'm interested in is the legality of importing trademarked goods from legit sources outside of Chile (i.e. we're not talking about black market counterfeits!) vs. using the established Chilean channel, which, though anointed by the foreign brand to sell their goods here, might not be terribly competitive for all sorts of reasons - being granted a de facto monopoly would be one of them. This is what people informally refer to as the "grey market" or "parallel imports," based on pricing arbitrage and smart sourcing:
http://en.wikipedia.org/wiki/Grey_market

I insist that the intent is to remain 100% within the boundaries of the law - that it might piss off some manufacturers in the process (or most likely their complacent local representation), I don't care as long as I'm on a rock-solid legal foundation. If you're not getting flak, you're not on the target! If anyone has done their homework on this and can offer an educated opinion, please post below. I'm asking from a business perspective, we have other threads where we can bitch about high prices in Chile! My question here is, can I do something about it? I'm getting antsy about starting a couple business experiments here, especially in a high peso environment. If there is price gouging on some product categories, well that creates an opportunity to compete, as long as the law has my back.

Hey OT, good subject. I would think that as long as it was a gizmo of sorts for consumers and not for medical use, that it wouldn't be a problem. The govt would collect their % from you when you import it. They'd be happy.

Charles and Zandra would probably know.

Whilst not much of an answer, it would never even have occurred to me that there might be any problem selling something you had legally bought abroad and paid tax on (especially given how widespread blatant counterfeiting is). The problem is just that paying the shipping and tax usually makes it uncompetitive (actually, as a one-off for an individual, it tends to put the price right around what you normally pay in Chile). It would be pretty sad if a private, foreign commercial enterprise could singlehandedly bestow a legal monopoly on some random importer. But I suppose that's what you're saying happens in Europe and I it would indeed explain a thing or two about the UK market. I'm still skeptical that such a thing would fly in Chile, but I suppose that's just speculation... Good luck -- sounds like a healthy bit of competition.

Cheers,

James.

The case law is fascinating, and for those interested in the intersection of law and commerce, I found a good blog on the topic (around the world, not specific to Chile) at thegrayblog.com

It might sound arcane but the core issue is really property rights. Some companies, with the help of misguided (or complicit?) courts, are trying to empty out the meaning of property. You pay for it, yet you don't get to decide what you do with it!

Edit - See also: Doctrine of exhaustion of intellectual property rights
http://michaeldizon.wordpress.com/2009/ ... ty-rights/

"The different forms of exhaustion with respect to their scope are: international, regional and national. International exhaustion is the one with the largest scope. If a good or service is first sold or placed on the market of any country, then the IPRs as embodied in the good or service is deemed exhausted with regard to all the other countries in the world. The good or service first sold or placed can thereafter be more or less freely transferred and traded within and across the national borders of all countries worldwide. [...] Japan, Switzerland, South Africa, countries in Latin America, Australia, United States, in general adhere to international exhaustion (subject to certain qualifications) and the European Union follows the rule of regional exhaustion." (emphasis mine)

The law was revised last year:
http://www.fne.cl/?content=marco_juridico

it states in its Section I Article 4: "No concessions, authorizations or acts that imply the awarding of monopolies for exercising economic activities may be granted, except where the law so permits."

I have to read the whole law and seek what these exceptions might be, but by default, it looks like it can be interpreted that parallel imports are legal (provided the product can be legally imported and sold in Chile in the first place, of course). In the same spirit of preventing certain economic actors from dictating their terms to others, Chile just enacted net neutrality legislation.

Edit: it looks like product/service-specific jurisprudence in free competition cases are listed here:
http://www.fne.cl/?content=faq_mercados#anchor7

According to a branch of the US Dept of Commerce:
http://web.ita.doc.gov/tacgi/overseasnew.nsf/country/Chile

"Chile allows parallel imports for all intellectual property rights and, as a result, provides for international exhaustion of rights. The Industrial Property Law provides that patents do not give the right to prevent third parties from marketing the product covered by the patent if they acquired it lawfully after the product was legally introduced into trade in any country by the owner of the patent or by a third party, with the owner's consent. Likewise, the registration of a trademark does not authorize the owner to prohibit third parties from using it on products legally marketed in any country by the owner or with his express authorization."

Well, I think I have my answers, this is encouraging as a EU-like environment would have been a huge hurdle (for the record, trade arbitrage situations in the EU exist mostly *within* the EU, see for instance car reimports).

If anyone has practical experience with parallel importing in Chile, or legal refinements to the material I pointed to in this thread, feel free to chime in.

I never thought of this at all, glad it turns out to be legal, i import alot of stuff already available here for work, and for resale,why?, because 1. its cheaper, and 2. people in other places in the world acturally return emails!

Just found the seminal paper answering quite decisively my question. It's all good, now moving on to the next phase of my research...
http://papers.ssrn.com/sol3/papers.cfm? ... id=1485744