This dissertation aims to define an appropriate international legal standard for the exhaustion doctrine as it pertains to parallel imports, being the importation of genuine goods but without authorization from intellectual property owners. The clarification of this issue is needed because developed and developing countries have different perspectives on the application of the exhaustion doctrine. Under the exhaustion doctrine, once an intellectual property owner deliberately releases or authorizes others to release goods into the stream of commerce, his exclusive right to further control the goods is no longer valid. However, there are three diverse aspects in the application of exhaustion doctrine: national, regional, and international. Developed countries advocate the national exhaustion, whereas developing countries support the international exhaustion and strongly oppose the national exhaustion. Indeed, an exclusive right to exercise control over the first sale should serve as sufficient financial incentive to ensure investment in the creative process. Hence, extending exclusive rights to control goods beyond the first sale by allowing an intellectual property owner to bar parallel imports is unnecessary to accomplish the incentive function and may unduly interfere with competition and the free movement of goods in the marketplace. Allowing parallel imports through adoption of an international exhaustion doctrine would support the dissemination of intellectual property works and the free movement of goods and free competition by eliminating a non-tariff barrier, thereby benefiting consumers in terms of lower prices and more selection. With respect to consumers' benefit, as a result of international price differential, parallel imports can play an important role in neutralizing price discrimination by providing beneficial price competition that may lead to lower prices. In addition, parallel imports may help in allocating international resource among nations and reducing the anti-competitive acts of intellectual property owner through price fixing or licensing agreements. In this light, the anti-competitive act via infringement proceedings to block parallel imports should be considered as a misuse of intellectual property rights and a non-tariff barrier. Moreover, parallel imports can prevent or reduce the counterfeit market because they satisfy and fulfill low-end market demand. Therefore, in this dissertation, the international exhaustion doctrine with some specific exceptions is considered to be the appropriate approach for harmonizing global laws regarding the exhaustion doctrine. This approach could capably balance the concepts of intellectual property rights protection with the free movement of goods principle. The exercise of intellectual property rights should not thwart the notion of free trade and free movement of goods or vice versa.
Boonfueng K. A Non-Harmonized Perspective on Parallel Imports: The Protection of Intellectual Property Rights and the Free Movement of Goods in International Trade [S.J.D. dissertation]. United States -- District of Columbia: The American University; 2003. Available from: Dissertations & Theses @ American University - WRLC. Accessed [Date], Publication Number: AAT 3351145.