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The EU Principle of Exhaustion of Rights

Written by Michael Coyle on 03 April 2014

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Intellectual property rights provide the proprietor with the exclusive rights to control and prohibit acts in relation to his intellectual property. This protection relates to all forms of intellectual property, including of course trade marks.

 In terms of European Union Law, these rights extend only in as far as to provide the proprietor, the right of first sale of his protected product. This is to ensure that consumers are aware of the origin of the products, thus satisfying the main function of intellectual property. Where this first sale has occurred, the doctrine of exhaustion of rights may then be applied.

 

The doctrine of exhaustion of rights originates from Article 7(1) of the Trade Mark Directive 2008/95, which states that 'a trade mark shall not entitle the proprietor to prohibit its use in relation to goods, which have been put on the market in the Community under that trade mark by the proprietor or with his consent.'

 This means under this principle, once protected goods have been placed on the market within the European Union, the proprietor of the trade mark right no longer has the right to restrict the further movement of the goods anywhere inside the European Union. 

In other words, once the proprietor has placed the goods up for sale either himself or has given consent for another to sell his products within the EU, he cannot prevent others from importing the products and re-selling them in any other EU Member State. This is because under EU law, after the first sale, the intellectual property owner’s rights are said to be exhausted.

 

It must be noted that the provision set out in Article 7 (1) relating to the exhaustion of rights, applies only to countries, which fall within the EU and EEA. This principle does not extend to countries, which are not either EU or EEA members. This would mean that a trade mark owner within the UK would still have the right to oppose the parallel importation of products, which have been imported from outside the EU for the purposes of sale within the EU.

 

Gcobisa Bonani is a work experience student at Lawdit and is currently in her second year at Southampton Solent University.

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