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Post-sale Restrictions & Exhaustion of Intellectual Property Rights. An Analysis of Post-Sale Restrictions in the EU: Their Effects on Exhaustion and Enforceability between the Contracting Parties

Lindgren, Marielle LU (2014) JURM02 20141
Department of Law
Abstract (Swedish)
Konsumtion av rättigheter är en mycket viktig princip för den fria rörligheten för varor och även för en fungerande marknadsekonomi. Konsumtion innebär att immateriella rättigheter i ett fysiskt exemplar konsumeras vid en överlåtelse av äganderätten till exemplaret som innehåller eller bär på rättigheten. I många jurisdiktioner är principens olika rekvisit ännu inte klarlagda. Amerikanska Federal Circuit resonerade i ett rättsfall 1992 kring en alternativ grund för konsumtion där domstolen även avgjorde fallet till förmån för förbehåll som begränsade konsumtionen av rättigheter. Rättsfallet har inte blivit uttryckligen emotsagt av Supreme Court och som en följd finns nu två alternativa grunder till den amerikanska konsumtionsprincipen.... (More)
Konsumtion av rättigheter är en mycket viktig princip för den fria rörligheten för varor och även för en fungerande marknadsekonomi. Konsumtion innebär att immateriella rättigheter i ett fysiskt exemplar konsumeras vid en överlåtelse av äganderätten till exemplaret som innehåller eller bär på rättigheten. I många jurisdiktioner är principens olika rekvisit ännu inte klarlagda. Amerikanska Federal Circuit resonerade i ett rättsfall 1992 kring en alternativ grund för konsumtion där domstolen även avgjorde fallet till förmån för förbehåll som begränsade konsumtionen av rättigheter. Rättsfallet har inte blivit uttryckligen emotsagt av Supreme Court och som en följd finns nu två alternativa grunder till den amerikanska konsumtionsprincipen. Delar av uppsatsen behandlar EUs inställning till denna alternativa grund.

Syftet med uppsatsen är att undersöka förbehålls giltighet och effekt i relation till konsumtion av immaterialrättigheter och konkurrensrätt i EU utifrån ett rättsekonomiskt perspektiv. Fokus har legat på att utreda huruvida en innehavare av en immaterialrätt kan kontrollera vid vilken tidpunkt konsumtion inträffar och, om inte, huruvida en sådan innehavare kan använda sig av avtalsrätt för att få den andra avtalsparten att agera på ett visst vis. Analysen innefattar resultatet av framställningen avseende EU–rätt och amerikansk rätt. De båda jurisdiktionerna jämförs med fokus på argument underliggande den amerikanska ”the conditional sale doctrine” som tillåter en innehavare av immaterialrätt att behålla vissa rättigheter genom förbehåll och hur dessa argument skulle mottas i EU. De två jurisdiktionernas olika inställning till huruvida en licenstagare kan göra en rättighetsutsläckande försäljning är också föremål för jämförelse. Slutligen har ett rättsekonomiskt perspektiv anlagts vid analysen av den EU–rättsliga regleringen. Perspektivet har särskilt fokus på uppbyggnaden av konsumtionsprincipen och vilka följder som kan anas i det fall man skulle tillåta förbehåll av nämnt slag.

Analysen tolkar framställningen av konsumtionsprincipens rekvisit och i vilken utsträckning innehavaren av immaterialrätten kan utöva kontroll över när konsumtion ska ske, eller, över det sålda föremålet. Slutsatsen är att det finns små möjligheter för innehavaren att utöva kontroll över när konsumtion ska ske, och att innehavaren eventuellt kan nå större framgång med kontroll genom ett avtalsförhållande förutsatt att inga ogiltighetsgrunder föreligger. En jämförelse visar att EU–domstolen troligtvis inte skulle godta den alternativa grunden för konsumtionsprincipen som förespråkas av amerikanska Federal Circuit. I min mening är EU:s attityd mot att en licenstagare gör konsumtionsgrundande akter att föredra eftersom den inte uppmuntrar till komplexa avtalsförhållanden endast för att kringgå konsumtion. Slutligen främjas ekonomisk effektivitet av immaterialrätter enligt den dynamiska effektivitetsteorin, men endast om rättigheterna begränsas så att deras negativa effekter minimeras. Konsumtion är ett viktigt instrument för denna begränsning och dess verkan skulle kunna minskas eller sättas ur spel ifall förbehåll tilläts att förfoga över konsumtionen. (Less)
Abstract
Exhaustion of rights is of critical importance for the free transfer of goods and as such, the functioning of any market economy. Exhaustion of rights is the consumption of rights in intellectual property subject matter as a consequence of the legitimate transfer of title in the tangible article that incorporates or bears the intellectual property in question. The principles of the exhaustion doctrine are still unsettled in many jurisdictions, including the EU. In the U.S., the Federal Circuit decided a case in 1992 where it argued an alternative rationale to the doctrine and upheld post–sale restrictions as preserving patent rights. The case has not been explicitly overruled and there are, as a result, two competing rationales behind the... (More)
Exhaustion of rights is of critical importance for the free transfer of goods and as such, the functioning of any market economy. Exhaustion of rights is the consumption of rights in intellectual property subject matter as a consequence of the legitimate transfer of title in the tangible article that incorporates or bears the intellectual property in question. The principles of the exhaustion doctrine are still unsettled in many jurisdictions, including the EU. In the U.S., the Federal Circuit decided a case in 1992 where it argued an alternative rationale to the doctrine and upheld post–sale restrictions as preserving patent rights. The case has not been explicitly overruled and there are, as a result, two competing rationales behind the U.S. exhaustion doctrine. Part of the thesis is dedicated to the EU view on this alternative rationale.

The purpose of this thesis has been to examine the enforceability and effect of post–sale restrictions in relation to exhaustion of intellectual property rights and competition law in the EU, applying a law and economics perspective. The main focus has been to find whether a holder of an intellectual property right, by using post–sale restrictions, may control when exhaustion occurs, and also if post–sale restrictions preserve control over the sold goods by means of contract law. The analysis has included the application of traditional deductive legal method to construe current law in the EU and the U.S.. A comparison between the two territories focuses on the underlying rationale of the U.S. conditional sale doctrine that allows the intellectual property holder to preserve rights by post–sale restrictions and how this doctrine would be met if it surfaced in the EU. Another comparative issue discussed is the two jurisdictions’ different views on the capability of a licensee to make an exhausting sale. In addition, a law and economics perspective has been added to the analysis of EU law, with a critical view of the design of the exhaustion doctrine and what implications would arise in relation to the use of post–sale restrictions.

The analysis construes the examination of the exhaustion doctrine elements and to what extend the proprietor may assert control over exhaustion or, following exhaustion, the good. The conclusion is that the proprietor has limited possibilities to control the occurrence of exhaustion but that he is more likely to succeed asserting control under contract law, although at risk of unenforceability defenses. Furthermore, the comparison finds that the CJEU is not likely to accept the alternative exhaustion rationale offered in the U.S. by the Federal Circuit, and that the EU attitude towards licensees making exhausting sales is better balanced than the U.S.’ view because this attitude does not give incentive to structure transactions with intermediaries (to contract around exhaustion), which is also more economically efficient. Economic efficiency is found to benefit from intellectual property rights under the dynamic efficiency theory but only if they are properly limited so that their negative effects on the market, as market failures, are minimized. Exhaustion is an important instrument in promoting economic efficiency by limiting these negative consequences. This effect of exhaustion could be diminished if post–sale restrictions were allowed to dispose of it. (Less)
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author
Lindgren, Marielle LU
supervisor
organization
course
JURM02 20141
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
förmögenhetsrätt, EU-rätt, avtalsrätt, civilrätt, immaterialrätt, komparativ rätt, konkurrensrätt, rättsekonomi, konsumtion, contract law, civil law, EU law, intellectual property law, comparative law, competition law, law and economics, exhaustion, first-sale doctrine, conditional sale doctrine, post-sale restrictions
language
English
id
4449859
date added to LUP
2014-07-11 11:39:25
date last changed
2014-09-10 11:31:12
@misc{4449859,
  abstract     = {Exhaustion of rights is of critical importance for the free transfer of goods and as such, the functioning of any market economy. Exhaustion of rights is the consumption of rights in intellectual property subject matter as a consequence of the legitimate transfer of title in the tangible article that incorporates or bears the intellectual property in question. The principles of the exhaustion doctrine are still unsettled in many jurisdictions, including the EU. In the U.S., the Federal Circuit decided a case in 1992 where it argued an alternative rationale to the doctrine and upheld post–sale restrictions as preserving patent rights. The case has not been explicitly overruled and there are, as a result, two competing rationales behind the U.S. exhaustion doctrine. Part of the thesis is dedicated to the EU view on this alternative rationale.

The purpose of this thesis has been to examine the enforceability and effect of post–sale restrictions in relation to exhaustion of intellectual property rights and competition law in the EU, applying a law and economics perspective. The main focus has been to find whether a holder of an intellectual property right, by using post–sale restrictions, may control when exhaustion occurs, and also if post–sale restrictions preserve control over the sold goods by means of contract law. The analysis has included the application of traditional deductive legal method to construe current law in the EU and the U.S.. A comparison between the two territories focuses on the underlying rationale of the U.S. conditional sale doctrine that allows the intellectual property holder to preserve rights by post–sale restrictions and how this doctrine would be met if it surfaced in the EU. Another comparative issue discussed is the two jurisdictions’ different views on the capability of a licensee to make an exhausting sale. In addition, a law and economics perspective has been added to the analysis of EU law, with a critical view of the design of the exhaustion doctrine and what implications would arise in relation to the use of post–sale restrictions.

The analysis construes the examination of the exhaustion doctrine elements and to what extend the proprietor may assert control over exhaustion or, following exhaustion, the good. The conclusion is that the proprietor has limited possibilities to control the occurrence of exhaustion but that he is more likely to succeed asserting control under contract law, although at risk of unenforceability defenses. Furthermore, the comparison finds that the CJEU is not likely to accept the alternative exhaustion rationale offered in the U.S. by the Federal Circuit, and that the EU attitude towards licensees making exhausting sales is better balanced than the U.S.’ view because this attitude does not give incentive to structure transactions with intermediaries (to contract around exhaustion), which is also more economically efficient. Economic efficiency is found to benefit from intellectual property rights under the dynamic efficiency theory but only if they are properly limited so that their negative effects on the market, as market failures, are minimized. Exhaustion is an important instrument in promoting economic efficiency by limiting these negative consequences. This effect of exhaustion could be diminished if post–sale restrictions were allowed to dispose of it.},
  author       = {Lindgren, Marielle},
  keyword      = {förmögenhetsrätt,EU-rätt,avtalsrätt,civilrätt,immaterialrätt,komparativ rätt,konkurrensrätt,rättsekonomi,konsumtion,contract law,civil law,EU law,intellectual property law,comparative law,competition law,law and economics,exhaustion,first-sale doctrine,conditional sale doctrine,post-sale restrictions},
  language     = {eng},
  note         = {Student Paper},
  title        = {Post-sale Restrictions & Exhaustion of Intellectual Property Rights. An Analysis of Post-Sale Restrictions in the EU: Their Effects on Exhaustion and Enforceability between the Contracting Parties},
  year         = {2014},
}