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NEC Electronics v Cal Circuit, 810 F.2d 1506 (9th Cir. 1987)

A Japanese manufacturer of computer chips, NEC Corporation (NEC-Japan), assigned its United States trademark rights to its California subsidiary, NEC Electronics (NEC-USA). Defendant, CAL Circuit Abco (Abco), engages in "parallel importation" of NEC-Japan's chips: it buys them abroad at the lower prices there prevalent, and then imports and sells them here. NEC-USA sued for trademark infringement under the Lanham Act.

NEC-Japan continues to market its computer chips outside the United States, evidently at prices substantially lower than those charged here by NEC-USA. Defendant Abco buys these so-called "grey market" chips from a foreign source, imports them, and sells them here in direct competition with NEC-USA. The parties have stipulated that Abco's chips are genuine NEC products.

On pre-trial motions, the district court held for plaintiff and enjoined defendant from selling any more of the foreign-purchased chips. On expidited appeal the 9th circuit reversed because the products were identical.

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