A Japanese firm, Omega Company, manufactures cassette tapes with the trademark TXX. Omega licensed Alpha Company to distribute and sell the tapes in Australia and Sigma Company to do the same in South Africa. The license with Sigma expired after 3 years, and Omega refused to renew the license. Sigma then began buying cassettes from Alpha in Australia in bulk quantities and importing them in South Africa.

These tapes had no individual wrappers or labels, and Sigma affixed both wrappers and labels with the TXX trademark on the cassettes, which it then sold throughout South Africa. Omega, which owns the TXX trademark in South Africa, has brought suit to enjoin Sigma from importing the cassettes into South Africa.

7) Will Omega succeed? Would it make any difference if Omega’s license with Alpha forbade Alpha from selling tapes for export to South Africa? 

8) Comment on: “Preventing the importation of gray goods legitimately manufactured outside the country is, in reality, injurious to consumers and contrary to basic principles of unfair competition laws.”

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