24
Sep/02

Smokers Without Borders


The NY Times and the Wall Street Journal reports today that Phillip Morris has filed 8 lawsuits in NY and California against websites which are, allegedly, illegally importing Phillip Morris cigarettes into the U.S.  The sites include cheapmarlboro.com,  discount-marlboro-cigarettes.com and europecigarettes.com. 

Cheapmarlboro.com and europecigarettes.com appear to do business in Europe. Hard to say where discount-marlboro-cigarettes.com does business.  Cheapmarlboro.com indicates that it will ship anywhere.  Europecigarettes.com actively identifies the U.S. as a potential market.  Interestingly, these sites have legal FAQs regarding the legality of shipping cigarettes across borders.  All these sites are multi-brand sites, so expect other cigarette producers to get involved.

Although the Internet, in theory, could exacerbate the problem of grey goods if a distributor can promote goods outside its normal market more easily, I would say we have not seen an overwhelming flood of reported decisions dealing with this fact pattern, perhaps because as a practical matter, shipping costs and tariffs can eat away at the cost differentials which encourage grey good importation in the first place.  Be that as it may, I don’t think we have an accurate idea of how much grey good traffic has been created by the Web.  I think that after reading about the Phillip Morris filings today, various GCs, in anticipation of being asked by their CEOs, are sending their trademark counsel emails today saying “Pls rev. Issue for us?”

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