Controlling a Distribution Channel Without Violating Exhaustion: A Practitioner's Guide to Authorized Sales, Material Differences, and Customs
By Casey Scott McKay ·
This guide sets out how to build and defend a distribution channel once exhaustion is assumed. It starts from the design decisions - product differentiation, warranty structure, serialization, and authorized dealer criteria - that determine whether any enforcement route exists at all. It then works the contract layer, including territory and customer restrictions, audit rights, traceability obligations, and the antitrust boundaries that constrain them. It sets out the Customs programme in detail, including recordation, Lever-rule applications, and what an exclusion request actually has to contain. It covers investigation and enforcement, from test buys through marketplace claims to litigation, and closes with the operating cadence and metrics that keep a channel programme working.
IP and Technology > General IP | Guide | Published 11 October 2025 - Updated 27 January 2026 | Casey Scott McKay - marksy.us
Summary. This guide sets out how to build and defend a distribution channel once exhaustion is assumed. It starts from the design decisions — product differentiation, warranty structure, serialization, and authorized dealer criteria — that determine whether any enforcement route exists at all. It then works the contract layer, including territory and customer restrictions, audit rights, traceability obligations, and the antitrust boundaries that constrain them. It sets out the Customs programme in detail, including recordation, Lever-rule applications, and what an exclusion request actually has to contain. It covers investigation and enforcement, from test buys through marketplace claims to litigation, and closes with the operating cadence and metrics that keep a channel programme working.
Keywords: distribution channel control · authorized distributor agreement · exhaustion planning · material differences program · warranty differentiation · serialization and traceability · customs recordation · Lever rule application · gray market enforcement · parallel imports · marketplace enforcement · minimum advertised price · unilateral policy · antitrust rule of reason · test buys · diversion investigation · selective distribution · channel audit · false advertising claims · terminating a diverting distributor
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