Exhaustion of IP rights in the UK – the past and the future

4 minute read
20 September 2021

The UK Government is considering the shape of the UK's future regime for the 'exhaustion' of intellectual property rights. The regime settled upon will govern future rules on parallel imports of genuine goods into the UK.

For this purpose, the Government has sought views on the possibilities for the UK's future regime.

However, the Government's description of the present regime is an oversimplification of the law as it currently stands and probably not fully accurate in respect of patents. Nor does it explore the historical legal position in the UK. So at Gowling WLG, we decided to explain all this, for patents and for trademarks.

The result is the attached paper titled "The emergence of patent law and trademark law in the UK and how this resulted in the courts addressing the application of such law in the context of parallel imports".

The paper explains that historically, the approach in the UK was more international than the regime presently continued in the UK (following Brexit) of EEA-regional exhaustion. It also explains how concepts developed in the Court of Justice of the EU came to be incorporated into the law in the UK and the extent to which they have been incorporated, without going into the detail developed in respect of particular categories of parallel imports (in particular, the repackaging of pharmaceuticals).

In short, the following broad points of principle define the historical position in the UK:

  • Patents, and patent law, and trademarks, and trademark law, came into existence in the UK for different purposes and by the operation of different legal concepts. They conferred different legal rights on the proprietor, which operated in different ways. Therefore in the context of parallel imports, the application of patent law and trademark law has entailed different analysis and different lines of authority for these different types of intellectual property; and
  • From the earliest case law, it is clear that the law in the UK developed by applying fundamental principles of intellectual property law without discriminating according to where goods were first placed on the market (i.e. within the UK or outside the UK). Therefore, outside EU law, the UK's approach to 'exhaustion' has been international, broadly speaking. Exceptions to this exist in the case law but the most developed lines of authority support the approach in the UK as being international.

The term 'exhaustion' has entered the jurisprudence in the UK through EU law; it has different origins and a different meaning to the approach taken under the common law in the UK, but is used in places in this note as a generic term useful (for its succinctness) for describing the approach taken in the application of intellectual property law in respect of parallel imports.

'Parallel imports' in this context means genuine goods first placed on the market outside the UK and subsequently imported into the UK. For present purposes, there is an important distinction between parallel imports and goods which are first manufactured and placed on the market (somewhere) by an unrelated person or entity and without the consent of the 'owner' (in a broad sense) of the relevant intellectual property, but which use or impinge upon that intellectual property - such goods are 'infringing goods' whether they are placed on the market in the UK directly by the manufacturer or following import.

For more, please read on here: The emergence of patent law and trademark law in the UK and how this resulted in the courts addressing the application of such law in the context of parallel imports.

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