Research Handbook on Intellectual Property Exhaustion and Parallel Imports
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Research Handbook on Intellectual Property Exhaustion and Parallel Imports

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.
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Chapter 16: Development of patent exhaustion in Mainland China

Xiang Yu and Conghui Yin


There are currently three different approaches regarding parallel importation throughout the world. One approach permits parallel imports, another prohibits them, and a third approach places conditional restricts on parallel importation. Theoretically speaking, these different approaches reflect the differing principles on exhaustion of intellectual property in the different countries and regions, i.e., national exhaustion, international exhaustion, and regional exhaustion (in the European Economic Area, for example). In fact, the attitudes taken by the different countries and regions on the principle of exhaustion directly relate to the applicable intellectual property laws of those countries, which generally reflects economic and even political considerations. While at the same time these laws have to comply with international agreements like the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) under the World Trade Organization (WTO).1 As a developing country, the cost of labor in China is still relatively low compared to developed countries, thus, Chinese enterprises are typically exporters of intellectual property goods, especially patented goods, in international trade practice. Cases involving the parallel importation of patented goods into China are scarce and this problem will inevitably become prominent with the increasing labor cost in China. Additionally, China must also bring its intellectual property laws into harmony with its international trade partners regarding trade-related intellectual property rights. Based on the current Chinese Patent Law, which has been amended three times and went into effect in 2009, this chapter examines the laws and practices related to parallel imports of patented goods in China. This chapter also analyzes the effects and problems with regard to economic considerations, and, based on previous research, offers suggestions on how to apply the principle of exhaustion and parallel imports in China.

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