journal - University of Maryland School of Law

40 MD. JOURNAL OF INTERNATIONAL LAW & TRADE [Vol. 14
competition with their products."' 24
IV.
By allowing the exception for commonly controlled or owned companies
to stand, one majority of the Supreme Court encourages international
competition and free trade across borders. Without the protection
of § 526, some companies will not receive a monopoly in the sale of
trademarked goods in the United States which could be used to fix
higher prices for American consumers. Whatever harm the United
States owners of trademarks may claim due to the Court's holding can
be mitigated by alternatives to § 526 such as various statutes and tort
theories.
The second majority in K Mart struck down the authorized use
exception to § 526. The effect of this holding is to protect American
businessmen from competition in the American companies' own trademarked
goods. The same activity of a gray market importer, if done by
a domestic firm authorized to use a trademark for manufacturing,
would constitute a trademark infringement. The Supreme Court has
simply provided analogous protection in the case of a foreign manufacturer
authorized to use the trademark. Additionally, this majority prevents
a gray market importer from being unjustly enriched by the
American trademark holder's advertising expenses, good will, and entrepreneurial
skill. Protecting the exclusive rights of an owner of a
United States trademark also benefits American consumers by giving
them the assurance that the trademarked goods they purchase have a
consistent source and quality. This protection, however, if abused, is
limited by antitrust and contract law.
The approaches of the two majorities, in terms of trade policy and
the effect on international commerce, are inconsistent. The Court's
overall holding, however, is consistent with modern statutory construction
jurisprudence. 125 Perhaps the actual disagreement between the two
majorities goes not to ambiguities and statutory construction so much
as to where the line should be drawn between international free trade
on one side, and protection of American business investments on the
other. 126 If this is true, the Court's compromise, even though difficult to
124. Id. at 235.
125. See K Mart Corp. v. Cartier, 486 U.S. 281, 284 (1988) (Part II A of Justice
Kennedy's majority opinion discusses the standard of review for agency regulations and
supra notes 62-63 and text).
126. This conclusion is supported by the fact that Justice Kennedy's terse opinion
for the majorities, focusing only on the language and intent of the statute and regula-