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Many brand owners face a difficult problem when their products are sold through unauthorized channels. Unfortunately, this is a familiar problem for many brands worldwide. Sometimes dubbed “diversion” or the “gray market,” this issue differs from the sale of traditional “gray market goods” or “parallel imports,” which refers to the unauthorized importation or sale in the U.S. of products originally intended for and used in foreign markets that are materially different from the products intended for the domestic market. Of course, this problem also differs from “black markets” in which contraband products—counterfeit or genuine—are sold illegally. The concern over product diversion, however, is well-founded.

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