Exhaustion of rights - a simple concept with important consequences
Exhaustion of rights is a concept which applies to all IP rights in Europe. Basically it means that if a product is sold ("put onto the market") in the European Economic Area (EEA), the owner of the IP rights in that product can’t prevent its resale elsewhere in the EEA.
EEA = all EU member states + Iceland + Norway + Liechtenstein.
E.g. if I buy one a scarf in Italy, the owner of the intellectual property rights in that scarf can’t stop me reselling it in Germany because their rights were "exhausted" (i.e. they used up their IP rights in the scarf) when they first offered it for sale in the EEA.
A parallel import is a non-counterfeit product which is imported into a country where the intellectual property rights in that product have already been exhausted. Parallel imports can be frustrating for the owners of IP rights (rightsholders) as they lose control of the way in which their products are advertised, marketed and sold. [NB A rightsholder can stop resale if the quality of the goods are changed e.g. the packaging is swapped out but this is very fact specific.]
When the UK leaves the EU, it will no longer be part of the EEA. Therefore, it will be outside the EEA's exhaustion regime. The UK government has said that it will treat goods which are imported from the EEA to the UK as exhausted but it is unclear how the EEA will treat UK goods.
#Brexit #Exhaustion #IPR #IPrights #EEA