There is no uniform international definition of parallel imports, although they are usually considered genuine goods initially placed on the market in one country by a trademark owner, or with the owner's consent, that subsequently find their way into another country for sale there without the trademark owner's authorization. In a simple example, a manufacturer sells its products through different distributors in the United States and in Mexico. However, due to various factors in each country, the products are sold in the United States at a higher price. Enterprising parties in the United States learn of this incongruity, arrange to obtain the products in Mexico, and resell them in the United States at a price that undercuts the authorized US distributors. After the US distributors complain that they are being undersold, the manufacturer wants to stop these parallel imports and the problem begins.

National legal systems are remarkably inconsistent about whether, and under what circumstances, parallel imports violate trademark laws. The national view depends largely upon how a trademark's function is defined and also upon whether the legislators or judiciary have sided with consumers or with manufacturers and distributors.

Consumers desire genuine products at lower prices. Free trade and market competition advocates generally regard parallel imports as beneficial, otherwise trademark owners partition markets and impede free and fair trade.

Trademark owners, licensees and their authorized distributors usually disagree. Parallel imports undermine normal distribution channels and frustrate authorized dealers who challenge the premiums paid to the trademark owner for genuine goods when competitors are underselling them. Moreover, varied pricing structures may be justified on grounds that are not related to blatant price-fixing; costs for local marketing, promotion, advertising, regulatory compliance, product liability and research should be passed along to local consumers. Therefore, trademark owners, their licensees and authorized distributors understandably believe that unauthorized distributors benefit unfairly by escaping these financial burdens.

Other legitimate reasons may render parallel imports undesirable, such as consumer protection. Consumers purchasing genuine products expect that they are sold through authorized distribution channels overseen by the trademark owners or their licensees. Unwary consumers are surprised that their "genuine" products do not carry the warranties and service guarantees that accompany authorized sales, and that rebates offered to purchasers of authorized products will not be extended for their "genuine" purchases.

Public health and safety concerns also drive trademark owners to prevent parallel imports. Products destined for sale in one country that do not comply with the safety standards of another country may harm unwitting purchasers. Improper handling or storage by unauthorized distributors may lead to spoilage or damage. Consumers receiving foreign language instructions may, without proper instructions, misuse the products and cause injury. Also, manufacturers have difficulty recalling parallel imports.

These consequences cause negative consumer experiences that damage the goodwill and reputation of the trademarks, their owners, and their licensees and authorized distributors.