In the case of K Mart Corporation v. Cartier, Inc., et al., 1987, the U.S. Supreme Court was asked to determine whether federal trademark law allowed for the importation and sale of "gray market" goods - items that were produced abroad under a valid foreign trademark but imported without permission from the U.S. trademark holder. The court held in favor of Cartier by ruling that such imports could be restricted if they interfered with a domestic company's ability to control its own brand image and reputation within its home market. The decision hinged on an interpretation of section 526(a) of Tariff Act which prohibits importation into United States any merchandise bearing American trademarks owned by US citizens or corporations unless written consent is obtained from owner. K-Mart had been importing watches made overseas under license from companies like Seiko and Bulova who also sold their products domestically through authorized retailers including Cartier; these imports were cheaper than those available through official channels due to lower production costs abroad. This ruling affirmed rights of US-based businesses to maintain quality control over their brands while also protecting consumers against potentially inferior products being sold at lower prices under same brand name.

In the dissenting opinion for K Mart Corporation v. Cartier, Inc., Justice Blackmun argued that the majority misinterpreted both legislative intent and statutory language of the Tariff Act of 1930. He contended that Congress intended to allow parallel imports (goods produced abroad under a valid foreign trademark) as long as they did not deceive consumers about their origin or quality. The majority's decision, he believed, would lead to higher prices by allowing U.S companies with foreign trademarks to eliminate competition from parallel imports. Moreover, he disagreed with the majority’s interpretation of "physically and materially different" standard applied by Customs Service in determining whether imported goods infringe on domestic trademarks rights; instead arguing it should be based on consumer confusion over source or quality rather than physical differences between products.