Following a Call for Views on the Exhaustion Regime, post Brexit, the Government has made an announcement (see here). The original responses can be viewed here.

Dids Macdonald, OBE CEO of ACID said, “The good news is that for the moment they will not make any immediate change to the regime. Leaving the status quo means that businesses will not face uncertainty in the current economic climate when businesses are recovering post-pandemic and facing other challenges.  We understand that further talks will take place at how the regime interacts with economic interests, for example in relation to innovation, small businesses and exports. However, we are firm that we do not want to change to an international regime and look forward to being part of further talks.”

When the UK left the EU, the UK had an opportunity to decide its future regime for the exhaustion of intellectual property rights. The decision is vitally important for the UK as it governs future rules on parallel imports into the UK. One mechanism to provide this balance is the principle of ‘exhaustion of IP rights.’ While owners of IP can control distribution of their creation in terms of the first sale of their product, the principle of exhaustion of IP rights puts some limits on how far that control extends. A basic example is that once you have bought a book, the owner of the copyright in that book can’t then stop you from selling that book to another person in the same territory.

Exhaustion of IP rights underpins parallel trade. Parallel trade is the cross-border movement of genuine physical goods that have already been put on the market. This is the import and export of IP-protected goods that have already been first sold in a specific market, for example moving a good that has been sold in another country and importing that good into the UK.

The question of what our future exhaustion regime is now going to be subject to much more research analysis considering all perspectives/rules on parallel trade of goods into the UK.