Paper Makes Recommendations For Exhaustion Of IP Rights

A recent paper issued by the International Centre for Trade and Sustainable Development (ICTSD) compares existing exhaustion policies and makes recommendations for countries in the process of adopting their own regimes in this area. These have the potential to contribute to economic and social development, innovation and the protection of user rights globally, it said.

The paper was written for ICTSD by Professor Shubha Ghosh of the University of Wisconsin Law School.

Exhaustion of intellectual property rights limits the control that intellectual property holders continue to have over the use or distribution of their protected articles once they have exercised a particular right, such as its first sale. This allows freer transfer of goods and services and increases competition, said ICTSD.

Article 6 of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) leaves it to WTO members to adopt their own exhaustion regulations.

However, bilateral trade agreements, such as those initiated by the United States, increasingly place limitations on exhaustion regimes of negotiating partners.

Discussions at this year’s World Intellectual Property Organization Standing Committee on the Law of Patents raised the possibility of a study comparing the different exhaustion policies of member states, specifically in the area of patents and health. The ICTSD paper may contribute toward a greater understanding of the issues in this area.

The paper, which can be found here, collected and summarised the experiences of five regions (the US, Europe, Brazil, China and India) and found variations of exhaustion doctrines across different types of intellectual property, jurisdictions and industries. The analysis of the successes and failures of policies in these countries aims to provide guidance and examples for states in the process of developing their own national exhaustion policy.

The dimensions to be considered in policy formation include whether to recognise exhaustion, at what point exhaustion is triggered, and the implications and geographical scope of its effect.

Recommendations include that: an exhaustion policy should be industry specific; its potential to create grey markets in developing countries may be limited by US led treaties; and it should be supplemented by other measures that would safeguard the protection of user interests.

Julia Fraser is an intern at Intellectual Property Watch. She is currently training to be a solicitor and will start work at an international law firm in London in 2015. She has a BSc Honours in Biology from Edinburgh University where she developed an interest in public health related intellectual property issues.