Table of Contents

Research Handbook on Intellectual Property Exhaustion and Parallel Imports

Research Handbook on Intellectual Property Exhaustion and Parallel Imports

Research Handbooks in Intellectual Property series

Edited by Irene Calboli and Edward Lee

From the Americas to the European Union, Asia-Pacific and Africa, countries around the world are facing increased pressure to clarify the application of intellectual property exhaustion. This wide-ranging Research Handbook explores the questions that pose themselves as a result. Should exhaustion apply at the national, regional, or international level? Should parallel imports be considered lawful imports? Should copyright, patent, and trademark laws follow the same regime? Should countries attempt to harmonize their approaches? To what extent should living matters and self-replicating technologies be subject to the principle of exhaustion? To what extent have the rise of digital goods and the “Internet of things” redefined the concept of exhaustion in cyberspace? The Handbook offers insights to the challenges surrounding these questions and highlights how one answer does not fit all.

Chapter 1: Incentives, contracts, and intellectual property exhaustion

Shubha Ghosh

Subjects: law - academic, intellectual property law, international economic law, trade law


This chapter examines the claim that the exhaustion doctrine reduces incentives for the creation of new works and inventions. In order to make the strongest argument in favor of intellectual property exhaustion, I will be working solely within the incentives-based justification for intellectual property. Since the claims for evisceration of incentives are ost often made for copyright and patent, I will focus on copyright and patent exhaustion in the last section of this chapter. The positive conclusion is that intellectual property exhaustion is consistent with incentives-based justifications for intellectual property rights. For the purposes of this chapter, I define incentives-based rationale for intellectual property rights1 as the view that rights of exclusivity are needed in order to promote creativity and invention and their dissemination. This exclusivity allows the creator to sell rights of access or use to he work. With this ability to commercialize rights in a creative work, the creator can develop a market, and possibly an industry, within which the works can propagate under the control and management of the rights holder. Through these mechanisms, exclusivity creates incentives for the creative person (who harnesses the legally provided exclusivity to exploit the work) and the public (who can benefit from the work through market exchange).