Lessons From The Comparative Study Of The Problems Concerning Parallel Import Of Patented Goods

With the increasing development of international trade, there have been more and more problems concerning parallel import of patented goods. China has got to be an important role in the international trade, and so, China should find a successful resolution to the problems concerning parallel import of patented goods. The purpose of this paper is to find the successful resolution or some suggestions for it, so, this paper begins with the basic principles. And it is necessary to study how the problems were resolved in other countries and regions, for , we can take better measures concerning the parallel import of patented goods.Chapter One consists of two sections. Section One focuses on the concept of parallel import of patented goods. Section Two deals with how parallel import of patented goods happens. The existence of parallel import of patent is due to the differences in price between different countries mainly, which is inevitable as the result of several factors: different price policy in different market, different levels of tariff, fluctuation of exchange rate, and different price-control measures on patented goods in different countries, all of these can result in the differences in price. The existence of the differences in price has made the parallel import of patented goods be profitable. And then the men who import patented goods get the reason to do so. The origin of parallel import of patented goods has been found out then.Chapter Two discusses the basic theoretical issues and the influences of parallel importation of patented goods. Section One has found out the exhaustion of intellectual rights theory the most fundamental. Generally speaking, Exhaustion of patent rights includes national exhaustion, international exhaustion and regional exhaustion. The theory of international exhaustion of patent rights means that the patent rights will be exhausted all over the world as the goods got sold off by the holder of the patent or his agent. Paris Convention for The Protection of Industrial Property and Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have never forbidden the parallel import of patented goods. Because patented rights are recognized on a territorial basis, each nation has established its own policy covering parallel imports. Article Six of TRIPS simply states that: 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. This language implies that no violation or limitation of a TRIPS obligation beyond national treatment (Article Three) and most favored nation (Article Four) may be invoked to challenge the treatment of parallel imports. Section Two discusses the principle of territoriality of patent rights, which means that patents in different countries shall be independent of patents obtained for the same invention in other countries. The patent right in one country will not be effected by the exhaustion of patent rights in other countries. The principle of territoriality holds that patent right is acquired according to the laws of the country of origin on intellectual property, and has no force in other countries outside the country of origin. If an unauthorized importer bought the goods protected by intellectual property right and sold them in the importing country, the owner of intellectual property right shall prohibit the importation according to the right of importation. But the ability of a right-holder to exclude parallel importation of patented goods legally from a particular market depends on the importing nation's treatment of exhaustion of intellectual property rights. But the territoriality of patent rights does not mean that the parallel importation of patented goods must be forbidden. Section Three discusses the influences of parallel importation of patented goods. This section deals mainly with the advantages of parallel import of patented goods. The parallel importation of patented goods will benefit the public and the development of the world, and the parallel importation of patented goods will not be harmful to the patent rights.Chapter Three studies the practices of the United States and the European Union and Japanese. In the United States, the parallel import of patented goods, also called gray market import, has been a serious problem as it is the most developed country in the world. The exhaustion of intellectual rights theory has been practised many times through the cases of Boesch and Holiday and Dickerson. But the Exhaustion policies vary widely in the area of parallel import of patented goods. Within its territory the United States employs the first-sale doctrine, under which rights are exhausted when purchased outside the vertical distribution chain. Thus, companies cannot prevent customers from re-selling goods anywhere within the country. This policy is seen as a useful restraint against market power arising from privately contracted exclusive territories. The European Union pursues regional exhaustion but excludes parallel import of patented goods coming from nonmembers. The European Court of Justice (ECJ) consistently has upheld the view that free circulation of goods takes precedence over patent rights. An important exception is that if products are placed on the market under a compulsory license, they may not be parallel imported. Japan allows parallel import of patented goods unless the goods are explicitly barred from parallel trade by contract provisions.Chapter Four is concerning the current provisions of our country and some suggestions of legislation. As Chinese market is becoming a part of world economic and China is playing a more and more important role in international trade, the problems concerning parallel import of patented goods in China has been a serious one. The reason why here we discuss parallel importation of patented goods, is learning from other countries to handle parallel importation and to give some useful references to China's manipulation of international rules. From the legislated aspect, there are not any specific regulations about parallel import. Only in the law of patent, there are regulations of"the right of import", which cannot be used as the basis of forbidding parallel import. This chapter discusses the economic status of our country and the parallel importation's possible influences to China. Given China still a low price market now, as the result of drawing lessons from the developed countries, China should give limited permission to the parallel import of patented goods.