Parallel Imports and Principle of Exhaustion

Abstract

The principle of exhaustion has helped to limit the control that the owner of the trademark has on the product. This has enabled the removal of monopoly that the trademark owner had over the product and its distribution. The principle of exhaustion is very closely linked with parallel imports. Through parallel imports, the importer buys the product from the market in which the trademark owner or his consent has distributed the product and then sell the product in another market where the product has not been launched. This purchase of the product is without the consent of the owner. The main reason for parallel import is price strategy is price discrimination. Therefore, both parallel imports and the principle of exhaustion encourage and facilitate international trade and the removal of regional as well as supranational trade barriers.

Abstracti

Introduction1

Discussion1

Doctrine or Principle Of exhaustion1

Types of exhaustion2

National Exhaustion2

Regional Exhaustion3

International Exhaustion3

Approach to Exhaustion at International Level3

Parallel Imports4

Process of Parallel Imports5

Factors affecting Parallel Imports7

Impact of Parallel Importation9

Parallel imports and Developing Countries10

Restriction of Parallel Imports11

Internet and Parallel Imports12

Parallel Imports in England14

Advertising, Rebranding, Repackaging and Relabeling15

Advertising15

Rebranding15

Repackaging16

Relabeling16

Parallel Imports in NAFTA17

Parallel Imports in Andean Community17

Parallel Imports in Mercosur18

Conclusion18

Bibliography21

Parallel Imports and Principle of Exhaustion

Introduction

The intellectual property rights have enabled the trademark's owner to protect their product and prohibit its sales in other countries without his consent. This created hindrance to the encouragement of free trade between countries. Therefore, the principle of exhaustion was introduced which created a limitation to the time period of the owner of trademark. This research paper is focused on providing an assessment regarding parallel imports and the principle of exhaustion and how these two facilitate international trade and the removal of free trade at regional and supranational level.

Discussion

Doctrine or Principle Of exhaustion

The people who own a trademark have the right to use it on their own and they can also prohibit its use by third party or person. But according to the principle of moving goods freely, the rights of owner of trademark should not be without any type of limitation. The question that arises is that what is the time period of the owner of trademark? The principle of exhaustion focuses on restricting these rights of the trademark owner.

According to the principle of exhaustion, when a product or a set of goods have been launched in the market by the owner of trademark or with his agreement by his agent, distributor, affiliate or licensee, the rights related to the product are considered to be exhausted. According to the American Doctrine, the exclusive rights worn out when the first sale is made. Whereas in European Commission Doctrine, when a product that bears the trademark is placed in the market, the right of the owner is exhausted in terms of the control of product's subsequent distribution and the owner cannot restrict product's resale by his consent of himself.

Therefore the principle of exhaustion focuses on the important issue of extension of control of owner over the product's ...