{"id":4532,"date":"2024-02-25T22:47:58","date_gmt":"2024-02-25T22:47:58","guid":{"rendered":"https:\/\/blogs.luc.edu\/ipbytes\/?p=4532"},"modified":"2024-08-20T03:11:22","modified_gmt":"2024-08-20T03:11:22","slug":"importing-pez-dispensing-trademark-infringement","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/ipbytes\/importing-pez-dispensing-trademark-infringement\/","title":{"rendered":"Importing Pez, Dispensing Trademark Infringement"},"content":{"rendered":"
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Photo by Jose Antonio Gallego V\u00e1zquez via Unsplash.<\/em><\/figcaption><\/figure>\n

In 2022, Netflix released a quirky true crime documentary, called The Pez Outlaw<\/a>, detailing the passionate rivalry between the president of PEZ USA (\u201cthe Pezident\u201d) and Steve Glew, a Pez collector who brought thousands of Pez dispensers into the US illegally. The film follows the heartfelt story of Glew, aka the \u201cPez Outlaw,\u201d whose candy smuggling adventures introduce its audience to issues of IP liability, protection, and enforcement. Before we talk about Glew\u2019s \u201cPezscapades,\u201d let\u2019s define some IP topics that show up in the story.<\/p>\n

Trademark Infringement <\/u><\/p>\n

The film focuses predominately on trademark issues that arise when smuggling contraband into the US. A trademark is a word, symbol or logo that indicates the source of a good or service. Pez USA has registered trademarks for the name PEZ<\/a>. Companies like Pez want to protect their trademark for a variety of reasons, including safeguarding against counterfeit items. Trademark infringement is when someone uses someone else\u2019s trademark in an unauthorized manner.<\/p>\n

To protect against infringing items entering the US, trademark holders can record<\/a> their trademark with the US Customs and Border Control<\/a>. Recording with Customs gives trademark owners peace of mind knowing that Customs officers are searching for potentially infringing items. It is not required for trademark owners to record their trademark with Customs, but it\u2019s a good idea if they want to use Customs as a first line of defense against trademark infringement at the border.<\/p>\n

Trademark owners may<\/a> have a claim of trademark infringement against people who sell trademarked goods on the \u201cgray market<\/a>\u201d when they do not have permission from the trademark owner. Basically, if you bring in a legitimate product in the US without the permission to import the product and then you decide to sell the product in the US, you can be liable for trademark infringement.<\/p>\n

Pez for Pennies on the Dollar <\/u><\/p>\n

Now to the details of Glew\u2019s story\u2026<\/p>\n

Pez\u2019s international headquarters<\/a> in Austria houses the creative artists who create new Pez designs. PEZ USA is the sole importer for Pez in the US. If the \u201cPezident\u201d doesn\u2019t like a particular Pez design created in Austria, he has the ability to decide that design won\u2019t be sold in the US market.<\/p>\n

There is a large community<\/a> of Pez collectors around the world, particularly in the US. Since the US Pez market does not have access to all the Pez designs from the Austrian factories, Pez designs not sold in the US are widely coveted by US collectors. As it turns out, the Pez collector market is quite profitable. Some collectors are willing to spend thousands of dollars<\/a> for a single Pez dispenser.<\/p>\n

Upon discovering the Pez collector community and the limited number of Pez designs available in the U.S., Steve Glew concocted a brilliant plan to make a profit. He and his son flew to Europe and befriended a few of the employees at the local Pez factories. Glew filled duffle bags with thousands of Pez dispensers not available in the US. Glew smuggled the dispensers back into the US, but not without a little pressure from US Customs and Border Patrol<\/a>.<\/p>\n

In the film, Glew recounts his reentry into the US with pride. He knew smuggling the Pez into the US was technically illegal because as I mentioned before, Pez USA was the sole importer for Pez in the US. Nevertheless, he thought if he \u201cplayed dumb\u201d he could bypass Customs with ease. On the contrary, customs flagged Glew and his multiple duffle bags for closer investigation.<\/p>\n

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Photo by Jason Leung via Unsplash.<\/em><\/figcaption><\/figure>\n

Trademark Troubles <\/u><\/p>\n

When Customs realized Glew had brought thousands of Pez into the US, they knew something was wrong and consulted the list of trademarks recorded with Customs. Surprisingly, Pez did not record its trademarks with Customs, even though it had valid trademarks registered with the US Patent and Trademark Office<\/a>. Due to this grave oversight, Customs let Glew bring the Pez dispensers into the US.<\/p>\n

A few fans<\/a> of the documentary have incorrectly concluded that since Glew made it past customs, what he was doing was legal. This is far from the truth. Glew may still be infringing the trademarks owned by PEZ USA by importing the Pez dispensers for the purpose of unauthorized sales.<\/p>\n

To have a claim of trademark infringement, the trademark owner must have a valid trademark, the alleged trademark infringer must use the trademark on goods or services in commerce, and the alleged infringing use of the trademark must be likely to confuse consumers as to the source of the goods or services. Since this is an international setting, there are additional considerations when determining the likelihood of infringement. When someone purchases an item abroad, they typically can resell it in the U.S. under the principle of international exhaustion. International exhaustion only applies if the product an individual is reselling is materially the same as the products of the trademark owner. In this case, Glew\u2019s Pez were not identical to the Pez sold by PEZ USA. Glew\u2019s Pez contained entirely different designs and it is likely that the packaging would have contained languages other than English because the Pez were being sent to an international market that did not include America. If the Pez Glew imported were materially different than the Pez sold by Pez USA, international exhaustion may not apply and Glew may be liable for trademark infringement.<\/p>\n

Because Pez registered its trademarks with the US Patent and Trademark Office, there is a legal presumption that Pez owns the trademarks and has an exclusive right to use the trademarks in commerce. Further, Glew used the trademarks on goods in commerce because he brought the Pez into the US and sold them to US Pez collectors. Lastly, Glew selling the smuggled Pez in the US would likely cause confusion as to the products\u2019 source. Consumers would probably assume these products were limited edition Pez authorized by Pez USA.<\/p>\n

You may be asking yourself \u201cBut Glew wasn\u2019t making counterfeit Pez! He was bringing ACTUAL Pez products into the US! How is this violating Pez\u2019s trademark if these are legitimate Pez products?!\u201d Remember that Glew brought the Pez into the US without the authorization of PEZ, the sole importer of Pez for the US market. Since Glew was not authorized to resell the Pez he brought to the US from Europe, the smuggled Pez were considered \u201cgray market\u201d<\/a> products.<\/p>\n

Pez USA could have filed suit against Glew for trademark infringement, but instead of pursuing litigation, they decided to solve the problem in a creative way. They chose to flood the US market with more of Glew\u2019s smuggled models to decrease their novelty and value. Pez USA\u2019s plan worked, and Glew was left with thousands of Pez dispensers worth the same or less than what he had paid for them in Europe. The Pez Bandit is an endearing story that presents interesting aspects of trademark law.<\/p>\n

\"\"<\/p>\n

Bailey Hammond<\/em>
\nAssociate Blogger<\/em>
\nLoyola University Chicago School of Law, Class of 2025<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In 2022, Netflix released a quirky true crime documentary, called The Pez Outlaw, detailing the passionate rivalry between the president of PEZ USA (\u201cthe Pezident\u201d) and Steve Glew, a Pez collector who brought thousands of Pez dispensers into the US illegally. The film follows the heartfelt story of Glew, aka the \u201cPez Outlaw,\u201d whose candy smuggling adventures introduce its audience to issues of IP liability, … Continue reading Importing Pez, Dispensing Trademark Infringement<\/span><\/a><\/p>\n","protected":false},"author":59,"featured_media":4527,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-4532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trademarks"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/posts\/4532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/comments?post=4532"}],"version-history":[{"count":5,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/posts\/4532\/revisions"}],"predecessor-version":[{"id":4537,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/posts\/4532\/revisions\/4537"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/media\/4527"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/media?parent=4532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/categories?post=4532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/ipbytes\/wp-json\/wp\/v2\/tags?post=4532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}