[Hague-jur-commercial-law] First sale doctrince, parallel trade, exchaustion of IP rights
James Love
james.love@cptech.org
Tue, 30 Mar 2004 11:27:45 -0500
From: James Love, CPTech
Date: 30 March 2004
To: Members of Study Group on Enforcement of Judgments,
Secretary of State Advisory Committee on Private
International Law
Re: First Sale Doctrine (parallel trade, exhaustion of
intellectual property rights).
CPTech seeks to ensure that US consumers will benefit when
it is appropriate to apply the “first sale doctrine,” to
goods, including intellectual property goods. We are hoping
the US Department of State will support the inclusion of the
new section Article 1, Paragraph 3, n), that reads as
follows:
3. The Convention shall not apply to proceedings that have
as their main object any of the following matters -
... n) parallel trade or the exhaustion of intellectual
property rights.
As you know, the first sale doctrine is essential for a
variety of things, including lending rights in libraries,
rental rights in video stores, second hand sales of books
and other items, and the re-importation (parallel trade) of
medicines or other items where firms charge different prices
in different countries.
Firms often try use contracts to limit the resale of goods,
and national policies vary and vary over time on the
enforceability of these provisions. However, under the
proposed Convention, the exclusive choice of court provision
in these contracts would be generally be mandatory, unless
excluded specifically by the Convention. The current
exclusions in Article 1.3 now include 13 categories, such as
wills and succession, nuclear liability, patent validity and
other items. We propose a new category, to ensure that the
convention does not change global policy on parallel trade
or the first sale doctrine. This would make the convention
similar to the TRIPS, which in Article 6, specifically
allows broad national discretion on matters involving
exhaustion of rights. Since some courts may interpret the
restrictions on parallel trade as a matter of contract, I
have included in the proposal both the terms "parallel
trade" and "exhaustion of rights," which would cover all
relevant cases.
ATTACHMENTS - ARTICLES 6, 3 and 4 of the TRIPS
ANNEX 1C
AGREEMENT ON TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS
Article 6
Exhaustion
For the purposes of dispute settlement under this
Agreement, subject to the provisions of Articles 3 and 4
nothing in this Agreement shall be used to address the issue
of the exhaustion of intellectual property rights.
-------------------------------------
Article 3
National Treatment
1. Each Member shall accord to the nationals of other
Members treatment no less favourable than that it accords to
its own nationals with regard to the protection3 of
intellectual property, subject to the exceptions already
provided in, respectively, the Paris Convention (1967), the
Berne Convention (1971), the Rome Convention or the Treaty
on Intellectual Property in Respect of Integrated Circuits.
In respect of performers, producers of phonograms and
broadcasting organizations, this obligation only applies in
respect of the rights provided under this Agreement. Any
Member availing itself of the possibilities provided in
Article 6 of the Berne Convention (1971) or paragraph 1(b)
of Article 16 of the Rome Convention shall make a
notification as foreseen in those provisions to the Council
for TRIPS.
2. Members may avail themselves of the exceptions
permitted under paragraph 1 in relation to judicial and
administrative procedures, including the designation of an
address for service or the appointment of an agent within
the jurisdiction of a Member, only where such exceptions are
necessary to secure compliance with laws and regulations
which are not inconsistent with the provisions of this
Agreement and where such practices are not applied in a
manner which would constitute a disguised restriction on
trade.
Article 4
Most-Favoured-Nation Treatment
With regard to the protection of intellectual property,
any advantage, favour, privilege or immunity granted by a
Member to the nationals of any other country shall be
accorded immediately and unconditionally to the nationals of
all other Members. Exempted from this obligation are any
advantage, favour, privilege or immunity accorded by a
Member:
(a) deriving from international agreements on
judicial assistance or law enforcement of a
general nature and not particularly confined to
the protection of intellectual property;
(b) granted in accordance with the provisions of
the Berne Convention (1971) or the Rome Convention
authorizing that the treatment accorded be a
function not of national treatment but of the
treatment accorded in another country;
(c) in respect of the rights of performers,
producers of phonograms and broadcasting
organizations not provided under this Agreement;
(d) deriving from international agreements
related to the protection of intellectual property
which entered into force prior to the entry into
force of the WTO Agreement, provided that such
agreements are notified to the Council for TRIPS
and do not constitute an arbitrary or
unjustifiable discrimination against nationals of
other Members.
_______________________________
3 For the purposes of Articles 3 and 4, "protection" shall
include matters affecting the availability, acquisition,
scope, maintenance and enforcement of intellectual property
rights as well as those matters affecting the use of
intellectual property rights specifically addressed in this
Agreement.
--
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040