MIP COHORT 3

STATE AND EXPLAIN CATEGORICALLY WHY A

BUSINESS ENTITY MUST CRITICALLY CONSIDER
INTERNATIONAL EXHAUSTION AND PARALLEL
IMPORTATION IN ENHANCING THEIR EXPORT
OPPORTUNITIES THROUGH INTELLECTUAL PROPERTY
MEMBERS

 EUNICE N. AMOAH
 MICHAEL WABUGO
 KENNETH AWUKU
 DONALD MALANGA
OUTLINE
 INTRODUCTION
 PRINCIPLE OF EXHUASTION
 PRINCIPLE OF PARALLEL
IMPORTATION
 ENHANCING EXPORT
OPPORTUNITY
 CONCLUSION
INTRODUCTION

 The principles of exhaustion and parallel

importation are some of the basic limitations to
IP. Therefore, the current presentation provides a
critical analysis of the two principles by looking at
their concepts and applicability to export
market/trade opportunities.
 PRINCIPLE OF EXHAUSTION
 The principle of exhaustion establishes that IP right holders with respect to the property stand
exhausted when the property is legally sold in the market (Clugston, 2012).
 Public policy objectives for Exhaustion:
 Achieve balance appropriate balance of rights (USA)
 Provide balance between IP owner and consumers (Bhutan)
 Establish the limits of IP rights with aim of achieving balance and promote completion (Chile)
 The interest to allow free movement of goods and trade (Romania)
 Three dimension exist
 National exhaustion (certain IP rights are extinguished after a domestic sale of a product)
 Regional exhaustion ( both national and regional is covered)
 International exhaustion
PRINCIPLE OF INTERNATIONAL EXHUSTION
  States that once the goods have been legally sold by the
trademark owner or his authorized person in
any international market, such sale leads to
an exhaustion of the rights of the trademark owner to
prevent further sale of such goods
anywhere internationally.
 Examples of countries: (Egypt, South Africa, China)
ADVANTAGES & DISADVANTES OF
INTERNATIONAL EXHUSTION

ADVANTAGES DISADVANTAGES
 Strengthens the trade between  Discourages price
countries
discrimination
 Injects competition into
international markets  Discourages post-sale
 Satisfy consumers demand and services by local vendors
interest
 Increase distribution and
availability of goods with
beneficial effects on prices
 Advantages to LCDs which have
weak production capacity and
rely on import activities
 PRINCIPLE OF PARALLEL IMPORTATION
 Parallelimportation as ‘When a product made legally (i.e.
not pirated) abroad is imported without the permission of
the intellectual property right-holder (e.g. the trademark or
patent owner)
 Categories:
 Passive parallel importation –occurs when a third party buy IPR
protected goods in one and resell in another
 Active parallel importation- occurs when a foreign distributor/licensee
sell the goods in the right holders country.
ADVANTAGES OF PARALLEL IMPORTATION
 IPR owners able to set price discrimination
 Increase availability of IPR protected goods at low
price in importing country
 Parallel
importers exploit investment in marketing
and promotion campaigns set by IPR holders.
 IPR holders are able to divide markets
 Parallel import goods are subject to government
price regulation which leads to subsidies.
ENHANCING EXPORT OPPORTUNITY

 The two principles are critical in enhancing export

opportunities. Some considerations:
 IP rights are territorial
 International exhaustion can lead to loss of revenue (in
the form of royalties from licenses or assignments or even
sales)
 Parallel importation may result in dilutions which may
lead to loss of market share
Continue..
 Identify an appropriate export market (geographical scope of the market)
 Determine a market demand ( size of the buyer, consumers, etc)
 Use international exhaustions to set price discrimination (Bonadio,2011:8).
 To know how to protect your IP rights when selling your products.
 Determine the type of parallel importation to use in your products
 To maximise returns on your IP rights.
 To know whether a buyer can resell your IP protected product in another
market without seeking consent from the owner.
 To ascertain whether you would need the formal agreement of the IP
owner(s) to sell those goods abroad, that is, in another market(s).
CONCLUSION

NCLUSION

 International exhaustion and parallel

importation are very important factors to
consider in determining a strategy for
enhancing export opportunity since the
absence of such consideration may lead to
huge losses to the business
 References
 Health, C (1996). Parallel Imports and International Trade. https://
www.wipo.int/edocs/mdocs/sme/en/atrip_gva_99/atrip_gva_99_6.pdf
 Standing Committee of Law of Patents (2014). Exceptions and limitations to patent
rights: exhaustion of patent rights. https://
www.wipo.int/edocs/mdocs/scp/en/scp_21/scp_21_7.pdf
 WIPO (2012). Regional Seminar on the Effective Implementation and Use of Several
Patent-Related Flexibilities: Exhaustion of rights. https://
www.wipo.int/edocs/mdocs/patent_policy/en/wipo_ip_bkk_11/wipo_ip_bkk_11_ref
_topic14.pdf
 Clugston, C. (2012). International Exhaustion, Parallel Imports, and the Conflict
between. the Patent and Copyright Laws of the United States. https://
www.researchgate.net/publication/276493877_International_Exhaustion_Parallel_I
mports_and_the_Conflict_between_the_Patent_and_Copyright_Laws_of_the_United
_States

 *Bonadio, E. (2011). Parallel Imports in a Global Market: Should a Generalised

International Exhaustion be the Next Step?. European Intellectual Property Review,
33(3), pp. 153-161. https://
openaccess.city.ac.uk/id/eprint/4106/1/Parallel%20Imports%20in%20a%20Global%20
Market.pdf;Exhaustion