Edited by Irene Calboli and Edward Lee
Chapter 17: The hermeneutics of the patent exhaustion doctrine in India
The law on exhaustion of rights (or “first sale” doctrine) is a highly contested area of intellectual property. In many ways, the development of this doctrine that traditionally only applied to property (land and chattels), has had a checkered history in the context of intellectual property. This is due, in part, to the changes regarding the law on servitudes governing tangibles over the last several centuries. With the growth of intellectual property-based markets, there are questions concerning the application of such doctrine in a distinct market for intellectual property due to the limited nature and scope of intellectual property rights.1 For the most part, the law on intellectual property exhaustion has developed in adversarial proceedings in different courts across various jurisdictions.2 Hence, there is rich jurisprudence for countries to look to and it continues to grow in different jurisdictions through legislative measures, executive guidance, and caselaw jurisprudence where new questions pertaining to the extent and scope of the law, policy, and its doctrinal aspects are addressed. India is not untouched by these developments. The doctrine of exhaustion in India has developed through several judicial decisions and legislative amendments that have shaped the evolving legal and policy landscape. However, unlike in other jurisdictions where exhaustion issues have moved beyond definitional ambiguities to those cases questioning the limits of the law and doctrine in new situations, cases on exhaustion in India have primarily revolved around the nature of the exhaustion regime: whether exhaustion is national or international.3 Very few judicial cases have tested the limits of exhaustion in dealing with different kinds of intellectual property protected works.4 It may be noted that the question of intellectual property exhaustion is no longer viewed as a pure policy issue. Although policy-makers are divided over which regime to adopt, it is generally accepted that an international exhaustion regime that allows parallel imports benefits consumers (despite the question of whether or not firms adopt global price discrimination). An international exhaustion regime facilitates trade and leads to competitive pricing. In fact, some have suggested that it must be “imposed” on all World Trade Organization (WTO) members.5 Contrastingly, it is also argued that it is because of international exhaustion that firms are not incentivized enough to follow global price discrimination.
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