Exhaustion of intellectual property rights

One of the most topical discussions is taking place in the European Union where the European Commission is trying to determine whether the EU's current regime of regional exhaustion with respect to trademarks should be extended to embrace the concept of international exhaustion ie. sale in any jurisdiction with the consent of the trademark proprietor exhausts (or negates) his rights arising under any other jurisdiction.

In order to better ascertain the views and concerns of its members from various sectors and countries on this issue, ICC conducted a survey of its membership.

The issue of the exhaustion of rights is very complex. It affects businesses in different ways and to different degrees depending on their sector of activity, the market conditions in which they function, and the geographical region in which they operate.

The great majority of ICC members believe that, in the absence of a true single global market, a regime of international exhaustion would on balance be more harmful than beneficial to international trade and investment, and to innovation.

Businesses have a legitimate interest - for reasons relating to commercial strategy, quality control, brand reputation, safety etc - in controlling the distribution of their goods across different markets, to ensure that products tailored for one market are not sold in another. There are also strong arguments that consumers would not necessarily be better off under a regime of international exhaustion.