Research Handbooks in Intellectual Property series
Edited by Irene Calboli and Edward Lee
Chapter 11: Parallel imports and the principle of exhaustion of rights in Latin America
Based on the principle of exhaustion of rights in Article 6 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS),1 members of the World Trade Organization (WTO) may admit parallel imports of products legitimately put on the market in a foreign market, thereby allowing consumers to get access to products protected under national intellectual property rights at prices lower than the products that are distributed locally by the right owners or licensees. Such imports may also be important when the local market is not adequately supplied by the right owners, for instance, when the quantity of the protected product is insufficient to meet the demand. The very general provision of Article 6 of TRIPS, as examined elsewhere in this book,2 leaves WTO members considerable policy space to define the geographical origin and source of parallel imports for all categories of intellectual property, as defined in Article 1.2 of TRIPS.3 WTO members may determine whether such imports are admissible on an international basis, or only when originating from a country belonging to a particular grouping of countries, such as a regional common market, as in the case of the European Union (EU). In addition, national laws may decide whether the legality of parallel imports is conditional upon the right holder having consented to the commercialization of the protected products in the exporting country, or whether products commercialized without such consent by a person otherwise authorized (for instance, a compulsory licensee) may also be admissible under the principle of exhaustion. 4 Finally, parallel imports may be admitted for certain categories of intellectual property rights and not for others.
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