Edited by Irene Calboli and Edward Lee
Chapter 21: New developments in trademark exhaustion in Korea
The “exhaustion of rights” doctrine1 is one of the most fundamental limitations to intellectual property rights.2 Under the theory of the exhaustion of rights, when an intellectual property right owner sells an article embodying those rights, they are exhausted with respect to that article. Thus, a purchaser can resell the article without being liable for infringement. Likewise, the owner of the intellectual property right cannot control the resale of a legally purchased good. Unless otherwise specified by law, subsequent acts of resale, rental, lending, or other forms of commercial use by third parties can no longer be controlled or opposed by the owner of the intellectual property or its licensee(s). There is a fairly broad consensus that this exhaustion principle applies at least within the context of the domestic market in most jurisdictions. The exhaustion of rights doctrine takes on its greatest significance when goods embodying intellectual property rights are traded internationally. When rights are held for the same intellectual property right in multiple countries, the question that arises is whether, when, and which of, these rights are exhausted by sale of the products in a given national market with respect to other national markets.3 In other words, one of the key issues associated with intellectual property protection is whether an intellectual property right owner can use intellectual property rights against the (re)importation of the protected products from another country, when these products have been first put onto the market in that country by the intellectual property owner herself or her licensees. At the present time, there is not a consensus as to whether this importation is lawful—in other words whether countries should adopt “international exhaustion” instead of national exhaustion regarding intellectual property rights.
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