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No Prohibition on Imports Where Common Ownership Exists Between U.S. Trademark Holder and Foreign Service The U.S. courts have also developed an exception to Katzel where there is a parent-subsidiary relationship between the U.S. trademark holder and the foreign manufacturer. The rationale generally relied on for this exception is that the trademark owner, as part of the corporate entity, has already benefited from the profits it received from the foreign sales, and should not be able to use the U.S. trademark laws to set up discriminatory pricing schemes which prejudice U.S. consumers. In Weil Ceramics and Glass, Inc. v. Dash, the Third Circuit distinguished Katzel and extended the Supreme Court’s interpretation of the Tariff Act in K-Mart Corp. v. Cartier, Inc. to deny trademark protection as a means of preventing parallel imports. Weil, the plaintiff trademark holder, was the wholly owned subsidiary and exclusive U.S. distributor of Lladro, a Spanish company. The defendant purchased Lladro porcelain from the Spanish manufacturer and imported it into the United States without Weil’s permission. The Third Circuit denied trademark protection to prevent the importation because of the common ownership between Weil and the Spanish manufacturer: Weil is not independent of the foreign manufacturer … Thus, even if Weil loses some share of its United States market to [the defendant], it nonetheless benefits from the profits it received as part of the corporate entity from which [the defendant] purchased the goods abroad … the Lanham Act … [does not] protect a foreign manufacturer — that either owns or is owned by a domestic trademark holder — from compensation … in the United States by a domestic importer that it has supplied. Similarly, in NEC Electronics v. CAL Circuit Abco, the Ninth Circuit focused on the corporate affiliation between the U.S. trademark holder and the Japanese manufacturer to deny Lanham Act protection to NEC—USA: If NEC-Japan chooses to sell abroad at lower prices than those it would obtain for the identical products here, that is its business. In doing so, however, it cannot look to United States trademark law to insulate the American market or to vitiate the effects of international trade. This country’s trademark law does not offer NEC-Japan a vehicle for establishing a worldwide discriminatory pricing scheme simply through the expedient of setting up an American subsidiary with nominal title to its mark. Thus there is no Lanham Act or Tariff Act violation when there is importation into the United States of genuine trade marked goods sold abroad by the patent or subsidiary of the U.S. trademark holder.