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Grey Markets

October 9, 2017

You may be wondering what are these ‘grey markets’ and why am I, a 17-year-old aspiring law student writing about a complex economic area of study? Well simply, from exorbitantly £999 priced Canon EOS 80D Camera on John Lewis to it being sold for £709 at Portus Digital, or an Apple iPad Pro being sold at about £800 when it is £650 elsewhere – these are the tempting offers placed by some online companies or essentially markets, who notoriously sell products without the original manufacturers authorisation. These are the ‘grey products’ sold on grey markets. 

 

Now, how could these grey products potentially affect you, me and everybody else? The answer is that due to the materialistic world we live in, everybody aspires to have high-priced commodities that they can brag about to their friends, relatives and loved ones. And by seeing these bargain prices, it is very easy to fall into the trap of financially investing into these grey products. It may seem like an amazing deal at first, however, the issue arises when it is the counterfeit products being sold without our knowledge and which could potentially be made in unethical environments. Therefore, making it very problematic and actually deceiving for young people who especially do not want to spend extortionate amounts on a piece of clothing, but do still fall into the pressures of society and our peers around us to wear designer clothes due to the extensive consumer culture that is celebrated in our generation today. 

 

The International Trademark Association (INT) states these parallel imports are authentic and genuine products; and that the discount arises not because these products are faulty by nature or fraud of any sort, but it is simply because they are imported from a different country and are not bought from the original seller. Jim Boff, a partner at law firm Phillips & Leigh states that consumers should not have an issue regarding this:

 

 Except in those cases where markedly different products are sold under the same trademark in different countries such that the consumer could be misled”. 

 

But, if these grey markets deal with such decency and ethical manner, then why would the UK Supreme Court in August 2017 even be looking at these so-called affordable markets and whether trading them should be regarded as a criminal offence?

 

The UK Supreme Court Decision

 

The Trade Marks Act 1994 in Section 92(1) states that:

“ (a)applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or

(b)sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears, such a sign, or

(c)has in his possession, custody or control in the course of a business any such goods with a view to the doing of anything, by himself or another, which would be an offence under paragraph (b).”

 

Due to the large amounts of bulk importation of luxurious items of brands such as: Apple, Ralph Lauren, Jack Wills, Creed Aventis; these goods may identify as ‘counterfeit goods’. Gavin Terry explains that the problem then arises when criminals “seek to pass off counterfeit goods as grey market” and this is where consumers then need to read the reviews and do research before attempting to buy that product because this market can be very misleading. 

Personally, me and my friends shop very frequently from Jack Wills, and due to this prevalent issue, the company specifically warns against this problem on their website under the counterfeit section, and it particularly lists the store links where we can buy the original products. It is not only Jack Wills, other famous brands like Gucci have even gone to file law suits to ban these counterfeit products which are sold to customers for lower prices. Therefore, it is essential for us to discern that whether these alluring products are actually worth the discounted prices that we buy them at. Simply, nobody wants to wear fake designer clothes as it is unethical, wouldn’t be wearable for long and could potentially be dangerous to our skin due to the cheap material used in its manufacturing. 

 

The Supreme Court decided that it was unnecessary to declare grey markets a criminal offence as the reasons illustrated by Lord Hughes in Section 92 in the Trade Marks Act (as mentioned above) were separate reasons/offences and therefore, it would be irrational to "strain the language of section 92(1)(b) to exclude the sale of "grey market" goods".

 

In conclusion, it is safe to say that without these grey markets, we would not have the luxury of these discounted and possibly even authentic products, but at the same time, it saves us from the fake counterfeits which may be very cheap but are unethical. Either way, whether you agree with grey markets or not, personally, for me and many 17 year olds my age it makes it easier for us to buy a branded product that we would normally not be able to afford from our weekend jobs or pocket money, and so it is a blessing in a way. However, it still comes at an expense at the possibility of the product being a counterfeit. But not to worry, as this would not be the last time that this issue is raised as brand owners still have their eye out to combat this threat and perhaps in the future, would continue to fight for their products to stay exclusive to their name. 

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