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 23: How could the Taiwan Copyright Act follow the patent and trademark regime and adopt international copyright exhaustion?

Kung-Chung Liu


Since the 1980s, parallel imports of genuine goods protected by intellectual property rights, ranging from soft drinks, such as Coca-Cola, to automobiles, cosmetics, and consumer electronics and appliances, have become popular in Taiwan. This phenomenon has been driven by international price differentiation and, in turn, by parallel importers engaging in international arbitrage and importing lower priced products into Taiwan.1 However, even though the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) adopted under the framework of the World Trade Organization (WTO) expressly eschews the issue of exhaustion and leaves WTO members free to make their own decision pursuant to Article 6 of TRIPS,2 Taiwan’s intellectual property laws on parallel imports are not consistently in favor of these imports. To the contrary, Taiwan’s intellectual property laws have been increasingly more concerned with safeguarding the interests of intellectual property rights holders, which has led to reducing the admissibility of parallel imports into Taiwan. This chapter focuses on copyright exhaustion in the larger context of the disparity of treatment of parallel imports between copyright law and others areas of intellectual property in Taiwan. The chapter proceeds as follows. First, section II examines the application of the principle of exhaustion and the treatment of parallel imports under the Taiwan Integrated Circuit Layouts Act, the Trademark Act, the Patent Act, and the Plant Varieties Act. This section elaborates that these laws treat parallel imports differently, varying from accepting a system of international exhaustion to instead following national exhaustion. Second, section III reviews the Taiwan Copyright Act and highlights the strict approach against parallel imports that is currently adopted in the Act. The gist of this chapter culminates in section IV, which advocates for the adoption of the principle of international exhaustion also in copyright law, and in general across all areas of intellectual property law in Taiwan. In particular, this section explores how the Taiwan Copyright Act could follow the position adopted under the Taiwan Trademark Act and Patent Act, which currently follow the principle of international exhaustion.

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