AMITY LAW SCHOOL, NOIDA

PATENT LAW – I – SEMESTER

PROJECT ON:

EXHAUSTING PATENTS: UNDERSTANDING THE CONFLICTING NOTIONS.

SUBMITTED TO:

Prof.Dr. Roksana H Varashti

Professor in IP Laws

SUBMITTED BY:

PRASHANT VERMA
ENROLLEMT NO. A03104421085
LL.M (IP LAWS)
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my professor Dr. Roksana H Varashti who
gave me the golden opportunity to do this wonderful project on the topic “EXHAUSTING PATENTS:
UNDERSTANDING THE CONFLICTING NOTIONS.”, which also helped me in a lot of Research
and knowing so many new things in relation to it. I am really thankful to her. Also I would also like to
thank my parents and friends who helped me a lot in finishing this project within the limited time.
 
Contents
AKNOWLEDGEMENT………………………………………………………………………………………….2

LITERATURE REVIEW…………………………………………………………………………………………3

STATMENT OF PROBLEM…………………………………………………………………………………….3

HYPOTHESIS……………………………………………………………………………………………………3

OBJECTIVE OF STUDY………………………………………………………………………………………...4

INTROUCTION………………………………………………………………………………………………….5

THE EXHAUSTION DOCTRINE………………………………………………………………………………7

PATENT EXHAUSTION………………………………………………………………………………………..7

LEVEL OF APPLICATION……………………………………………………………………………………..9

UNDERSTANGING THE CONFLICT OF NOTION………………………………………………………….12

MOVING FROM UNDERSTANDING TO RESOLUTION…………………………………………………...15

CONCLUSION………………………………………………………………………………………………….16

BIBLOGRAPHY………………………………………………………………………………………………..17
 LITERATURE REVIEW

The researcher shall be majorly relying on the below listed scholarly articles for gaining an understanding
of the topic

 JOURNAL OF INTELLECTUAL PROPERTY STUDIES :

K.M. WAZIRI & O.F. AWOMOLO : Volume1 , Issue 1

 Oxford Intellectual Property Research Centre, UK

Shamnad Basheer, Journal of Intellectual Property Rights Vol 13, September 2008, pp 486-497

STATEMENT OF PROBLEM

Although there has long been a "fairly broad consensus" around the world that patent exhaustion "applies
at least within the context of the domestic market," there is less agreement on the extent to which the sale
of an IP-protected product abroad can exhaust the IP rights over that product under domestic law. The
ambiguity surrounding the patent exhaustion theory has had a significant impact on patent licencing
procedures in today's economy and has become a hot topic among academics.

HYPOTHESIS

Patent exhaustion is a hypothesis that limits the scope of a patent holder's monopoly on proprietary goods. 
The exclusive privilege lasts only as long as it retains ownership of the things in issue; if it sells or authori
ses someone else to sell them, it loses the capacity to impose further control over them. 
Lately, patent holders have regulated the delivery of their products in order to obtain additional royalties / 
rents from downstream consumers, or to eliminate competition against their products, restrictions have be
en placed on the selling / licencing of their goods for sale in an attempt to boycott this restriction of their 
monopoly.
 OBJECTIVE OF STUDY

This Article seeks to present a clear, comprehensible discussion of the exhaustion doctrine as well as its
conflicting notions with a view to assist nations codify their laws in ways which may eventually resolve
the seeming conflict of notions.

RESEARCH QUESTION
 What is Exhaustion of patent ?
 What is conflicts in exhaustion?
 How o deal with such conflict?
 Understanding the doctrine of Patent exhaustion
 INTRODUCTION

One of the most common intellectual property classifications is patent law. It directs patents that cover
technologies and methods that have met those requirements-that is, they must satisfy the novelty /
newness, innovative phase and industrial innovation for defence patentability requirements that are
legally necessary. A monopoly on proprietary products is granted to holders of such patents, so those
holders are entitled to prohibit them from making, buying , selling or importing any patent-infringing
commodity.

The patent exhaustion doctrine restricts the rights of an owner of intellectual property ('IP'), usually until
the owner has exercised several of more of his rights. It limits the privilege of the holder of proprietary
goods to the possession of control of the said goods. Thus, if the holder sells or authorises the sale for
consideration of the proprietary goods, he / she loses his / her right to exert more power of those goods
(which now belong to the new owner in the eyes of the law). The doctrine 's principle is that the patent
holder, having already earned value for his / her invention, is powerless to place any limitations on the
purchaser's access to copyrighted products , in particular on his / her access to use, restore and even resell
the products to someone of his / her choosing. It embodies the notion that legitimate consumers and
downstream uses of a copyrighted product can "use or resell the product free of the control or conditions
imposed by the proprietor of the patent."

If the doctrine of exhaustion was as clear as it appears above, patent legislation will forbid patent holders
from keeping their monopoly, restricting the sale of their inventions, extracting further royalties / rents
from downstream customers. Reduction of rivalry against their products and terms applied to the sale /
licence for the selling of their products. However, procedural law, case law and academic discussions
have created two contradictory definitions of patent exhaustion, one that considers patent exhaustion to be
obligatory, regardless of whether the transaction is subject to express limitations, rather than explicitly
refusing to impose certain post-sale restrictions imposed by patent holders, and the other that considers
patent exhaustion to be conditional

Owing to a lack of standardised implementation of the law, this controversy has spanned many years.
While the compulsory definition has been codified by several countries, others have codified the
mandatory notion. The remainder have no clear constitutional requirement for the doctrine but derive the
same from other laws or from case law, typically applied on a "case-to - case basis." This, combined with
the lack of an generally recognised interpretation of the doctrine, has given rise to an uncertainty on
which of these principles should be the governing theory as to which or to what extent contractual
restraint can be implemented.
This confusion about the doctrine of patent exhaustion influenced patent licencing activities profoundly in
today's economy and became a key topic throughout academic discussions. This Article reflects not on
the historical or legal jurisprudence of the controversy nor on the need to unify the principles or establish
a favoured principle for the interpretation of the doctrine of patent exhaustion-it merely addresses the
doctrine of patent exhaustion and attempts to address the competing definitions in a concise and
straightforward way. The goal is to provide an interpretation of the principles that will eventually
demystify them and help adapt the theory to different nations. Future, the Essay proposes constitutional
changes in patent exhaustion legislation so that nations can find a balance to prevent future duplication of
positions under the patent exhaustion doctrine.

THE EXHAUSTION DOCTRINE

The doctrine on exhaustion states that if an IP owner first buys a commodity that includes his IP the
right to avoid the sale / distribution of that object.

The ideology, it is said, emanated from the normal frustration of the statute of personal property
limitations and servitudes. Apparently, the Judges in Traditional Legal Relations have always been
wary of the alienation after sale and did not understand the notion that a buyer could be treated as
merely a licensor at any time without property interest in the product being bought solely because the
IP owner is contractually dictated .. In countries with civil law, the situation was not uncommon, in
particular those that were in line with German Law – as fatigue was embedded in a tacit permit
provided to purchasers with goods to enter into contracts in respect of the property without burden –
i.e. land without any burden.

The doctrine of exhaustion is very problematic , particularly when it breaches the rights of customers,
users, and consumers. The general rights of IP owners are generally believed to be entitled to royalties
from the authorization, development, use and resale of their covered products. If they were to be
prohibited from utilising these rights, then these benefits will erode creation / invention, which represents
the basic justification for defending IP. Meanwhile permitting exhaustion guarantees the exploitation of
products on the market, conforming to the rights of legal buyers of goods without constraints and
intervention to use and resell them, bringing value to the goods to the IP owner.

This, considering the variations in implementation between the various fields of intellectual property such
as copyright, marks and patents, has persisted over the years to survive the instruction, although there are
improvements and limitations.
 PATENT EXHAUSTION

Exhaustion of a patent is a result of the broader doctrine of exhaustion that deals with patents in
particular. For some years it is accepted by purchasers as a means of defence because it prevents them
against post-Sell restrictions imposed on patented products by patent holders. It has also been recognised
as a means of testing patent holders, ensuring that they have not earned concurrent reimbursement or
overcompense for their invention.

In practise, the patent exhaustion doctrine aimed to avoid circumstances in which a patent proprietor
could bring patents into the commercial network, due to the use and re-selling of the patent, the payment
of additional profits or due to some other rights of review which would then be enforced at the discretion
of the patent proprietor.

In the decision of Adams v. Burke,1 the US Supreme Court put it thus:

"When the patent holder is selling a product or instrument, or an individual has rights, whose
primary benefit is used in its use, the patent holder gets a consideration for its use and is entitled ...
In other words, having received all the copyright or deduction he claims in favour to his use of an
invention, the patent proprietor or his client has been available to the consumer without further
constraint in acts of sale ...." "..

Nevertheless, patent holders actively tried to exert their restraints on the doctrine of exhaustion by relying
on certain post-sell restrictions / conditions, as the doctrine usually forbids. In the acknowledgement of
such post-sales limits agreed and permitted in most cases by the consumer, the topic of patents is now
becoming colourful. That also contributed to an entirely opposing perspective or to an interpretation of
patent exhaustion as a doctrine.

The primary determinant of whether this coloured version of the doctrine exhausts a patent is whether the
patent proprietor has sold the licenced products in full or has imposed valid selling limits. The first,
though, will not be entirely exhausted, provided that the patent holder holds certain protection in favour to

1
See Adams v. Burke, 84 U.S. 453-456 (1873).
products subject to post-sale limitations on the products. The latter is not totally exhausted. In order to
adequately prohibit the application of the exhaustion doctrine under this notion, however, post-sale
conditions on the possession or the use of an item that contains a patented invention must be simple,
transparent and otherwise This extends also for licences where the rights of the proprietor are equal to the
rights of the patent holder under conditional licence.

The policy justifications for the doctrine on patent exhaustion will then go farther than the truth, which
impedes the free use and alienation of the patentible property by implementation of resale and use
restrictions. That will therefore go beyond the general drawback of personal property servitudes to take
freedom of contract to consent into account. The justification for the doctrine of conditional patent
exhaustion is to allow consumers of licenced products who do not know of any constraint to make
unrestricted use of the goods.

Whether or not a patent improvement becomes compulsory, once the patent has been practically
exhausted, the result is the same – the patent holder shall cease ownership of the patented goods and the
customer can use the goods as he sees fit, fix as appropriate, and resell the goods without further
intervention from the patent.

Exhaustion of patents provides huge advantages for customers, the patent industry, the government and
even the general public. It supports IP-enhanced aftermarkets such as service and repair markets which
can support customers through reasonable rates of used models. The programme encourages innovation
by encouraging new distribution networks to join and offers a competitive supply of products which can
in turn encourage new companies to enter businesses, thereby reducing the dominance of existing
companies. In certain cases, it relates to innovations that make up the economy and the requirement for
such essential technologies is driven by a relentless
desire for repair and restoration of the same by customers, thus increasing the labour market and
producing revenue for the country.
Therefore, the patent depletion has a wide-ranging impact on economic growth as it gives customers, the
general public and secondary markets for the patent system itself, available products. It also offers
customer protection and confidentiality when buying, using, and exchanging patent goods, as well as
relentless encouragement of consumer-driven innovation and competition, both of which are important
for economic growth.
 Levels of Application
Currently, the doctrine of patent exhaustion may be applied at three possible levels − national, regional
and international. Each nation determines the scope of its patent exhaustion with regard to these territorial
levels considering the likely benefits for their economy and their citizens.

 NATIONAL EXHAUSTION

The principle of national compression prohibits the IP owner from regulating or influencing the economic
production of products sold on the domestic market. The IP owner or its licensee allowed to exercise its
rights to object still to the importation of the original products sold abroad. If the patent holder then sells
the patented products outside the boundaries of the country, his patent rights are not exhausted inside the
boundaries.

The practical effect of national comprehension is that if a person wants to import a patent item into such a
community, the permission of the patent holder whose rights remain unaffected in the region, even though
the items have been sold elsewhere, will be required. Such a country will favour the proprietors of other
nations at the detriment of customers. The Most Favored Nation's (MFN) gain is one.

Curiously, there is no explicit provision for national fatigue under the Indian patent system. Contrast it
with other IP statutes such as the Trademarks Act of 19992, where the concept seems to be accepted. The
appropriate section of Article 30(3) of the Act provides that “'Where a person legitimately acquires
products bearing a registered trademark, it is not permissible that that entity or a person claiming under
or through the person to sell or otherwise deal with the goods on the market infringement only on
grounds that -(a) ... or (b) the items were put on the market by or with the proprietor of the registered
trademark; His acceptance.”

Even if the term "exhaustion" is never included in this section, it is clear from the use of words like "sales
on the market of merchandise" or "otherwise selling items" that what is being expected is "exhaustion."
Section 30(3) is, in relation to Section 107A(b), not limited to imports, which makes all local and regional
complications. This is evident from a recent ruling by the Delhi High Court.
“In Xerox Corporation v Puneet Suri3 the plaintiff owned the trademark ‘Xerox’ and claimed that the
defendant’s act of importing and selling second hand Xerox machines constituted trademark

2
Act No. 47 of Year 1999 dated 30th December 1999. The Trademarks Act, 1999 came into force in September 2003.
3 CS(OS) No. 2285/2006; Unreported Order dated 20.02.2007.
3
infringement.”
The accused claimed that their activities have been protected Within the theory of universal acceptance,
Section 30(3) Exhaustion. “The Delhi High Court Justice Sanjay Kishen Kaul agreed with the
accused that, under the statute on trade marks, 'importing [second-hand] Xerox machines having
proper paperwork' is allowable, as long as 'items in the machene are not altered or damaged."
Provided that national and international exhaustion in the Trademark Act is allowed by statute, might one
claim that the omission of a comparable provision in the Patents Act allowing for 'national exhaust'
implies that Parliament does not wish to allow for such a doctrine?
As 'universal exhaustion' is expressly provided for in the Patents Act, which is more liberal than breach
security (as detailed in the following paragraphs), the Indian Court would certainly refuse to accept a
narrow 'national exhaustion' exception in India.
It seems like the existence of a particular national fatigue concept is transparency rather than Parliament's
concerted effort to narrow its application
(b) of paragraph 107(A). More specifically, if the Court demands that the law for national exhaustion be
purely legally read, the patent proprietor might sue the purchaser of a proprietary commodity for
breaching the exclusive right of 'use.' Surely, such an absurd result was not intended by Parliament.

Therefore, a court is likely to eschew a strictly literal reading in favour of a more purpose driven
interpretation to enable subsequent sales or distribution of patented products within India.4

 Regional Exhaustion
Some countries restrict their patent exhaustion to a region. Regional exhaustion generally is based on
deals between the countries that make up the region, such that the patent exhausts in each of those nations
are sold by a patent holder of the patented products. In other words, the sale within the region of the
patented products supplements the patent in all the countries in the area because the sale of patented
products outside the region does not exhaust the rights of the patent holder in any country outside the
area. A strategy of geographical extension has been adopted by the European Union.

Though India is a member of alliances and trade blocs, none of them wants 'regional exhaustion' to be
absorbed into the respective domestic patent regimen (such as SAARC and the Commonwealth). India
therefore has no clause of that sort in its legislation.

 International Exhaustion
If a country were to follow international exhaustion, so a patent holder who licenced or approved the
selling of his patented products everywhere on earth would forfeit their patent rights on those goods and

4
State Bank of Travancore v Mohammad, AIR 1981 SC 1744
no longer practise the claim to them. In such a situation the claim for patented goods would be exhausting
if it was a country who was granted international exhaustion.

The vision of universal free trade is a foundation for the world fatigue. It greatly favours buyers by
helping retailers to find the cheapest items on the world market and to sell them domestically at a lower
cost.

Only a few nations recognise worldwide patent rights fatigue. In their intellectual property rules , for
example, India, Egypt and other other eastern African countries introduced universal fatigue clauses. In
the case of
Lexmark Int'l, Inc. v. Impression Prods, the United States5 has also recently upheld foreign fatigue.
Inc. Inc. Japan has followed the so-called foreign default exhaustion, but the legislation requires the
patent proprietor to opt out and his proprietary items as though they were in a region of exhaustion.
As already mentioned earlier, the Indian Patents Act explicitly recognizes the principle of international
exhaustion.
The first statutory provision on parallel imports was introduced by the Patents (Amendment) Act, 2002.
This section provided that the “….importation of patented products by any person from a person who is
duly authorized by the patentee to sell or distribute the product, shall not be considered as an
infringement of patent rights.”
In certain rules, the theory of compression is an exception to imports in parallel. With the exception of
these, the importation into a country of a copyrighted product after being imported from the patent holder
or an authorised individual in another country is not a patent infringement. In parallel imports, the Indian
regulations read as follows:
“Section 107A in The Patents Act, 1970
196
 [ 107A Certain acts not to be considered as infringement. -For the purposes of this Act,-
(a) any act of making, constructing, 197 [using, selling or importing] a patented invention solely for uses
reasonably related to the development and submission of information required under any law for the time
being in force, in India, or in a country other than India, that regulates the manufacture,
construction, 198 [use, sale or import] of any product;
(b) importation of patented products by any person from a person 199 [who is duly authorised under the
law to produce and sell or distribute the product],
shall not be considered as a infringement of patent rights.]”

“As per the section, any person can import patented products into India after acquiring them from a
person authorized to produce and sell or distribute the product under the law without infringement
5
 581 U.S. ___ (2017), is a decision of the Supreme Court of the United States on the exhaustion doctrine 
liability. The phrase “authorized under the law” has been the subject of discussion and debate among
many groups. While some liberal groups argue that authorization under the law includes both explicit and
implicit authorization under any law, conservative groups have been arguing that the authorization is
limited to authorization by the patent holder under the patent law in India.”

“Though both arguments may have logical and philosophical grounding, I dont think neither
interpretation would serve the ends of patent law in India. The liberal interpretation provides unfettered
right to violate patent rights by simply setting up a manufacturing unit in a country where patent
protection is not sought or does not exist and the conservative interpretation narrows the scope of parallel
imports to such an extent that it becomes meaningless. A middle path that takes into consideration the
rights of the patent holder and the rights of the public to carry out activities with respect to a patented
product after its first sale would be most suited for the ends of patent law. Interpreting the meaning of
“authorized under the law” to mean authorization under the patent law of the country from which the
product is being imported would achieve the aforesaid balance. Under such an interpretation, a person
will not be liable for patent infringement if he imports a patented product after purchasing the same from
a person authorized under the patent law of another country. Such authorization may come from the
patent holder or the patent office or government. If a patent or patent protection does not exist, there
cannot be authorization and parallel import exhaustion will not apply”.”
“For example, if Neo acquires a patent over a massage chair in India and China, Trinity can import the
said chair into India from China without infringement liability after purchasing it under any of the
following conditions:
a. Direct purchase from Neo;
b. Purchase from Neo’s licensee or assignee.
c. Purchase from a compulsory licensee or government under certain circumstances; or
d. purchase from any person, who acquires in any of the aforesaid mechanisms.
If China does not grant the patent or does not have patent protection, Trinity cannot import into India
because parallel import exception will not apply.
This interpretation ensures that rights of the patent holder are exhausted after an authorized sale in a
country where patent protection exists. It gives to the public the right to use the specific product that is
the subject of sale in any way without hurdles from the patent holder. The patent holder’s interests are
also safe-guarded because he gets the right to control authorization to some extent and prevent
importation into India from a country without patent protection.”
 UNDERSTANDING THE CONFLICTING NOTIONS
As has already been stated, various nations follow different ideas when applying patent exhaustion,
leading to a persistent state of uncertainty about the true existence of the teaching and its former
existence, and a continuing misunderstanding about the exhaustion of the patent is commonly defined as
obligatory. The point of departure for seeking to overcome this confusion is to grasp the two contrasting
theories.

 Mandatory Exhaustion
The original principle of patent exhaustion may be considered to be compulsory exhaustion and, of
general, the theory of patent Exhaustion invalidates the patent limitations placed on buyers. It
obligatoryly extinguishes the sale of patents and treats all patent limitations on consumers unfairly.
regardless of whether a purchaser has agreed to them.
In the case of the use of mandatory exhaustion, it would not be appropriate to decide if, at the time of
sale, there were any limitations or requirements, or whether such requirements or constraints were
specifically made, brought to the purchaser's attention and/or agreed upon by that purchaser. It would
therefore not be appropriate to take into account the essence of any limitation levied, whether it be for
resale or use, whether for additional royalties, or to decide whether it is legal or not, for all limitations are
absolutely forbidden. On a transfer, the interests of patent holders would be absolutely depleted and
breaches of any limitations would not have recourse under patent law.6
Whether the real selling or transition amounting to the selling of the patented products has taken place,
and whether the patent is exhausted internationally , regionally or only in the area where the transaction
takes place, are the only considerations to be weighed in deciding whether a patent is exhausted under
mandatory exhaustion.
This principle benefits consumers and thus entitles copyright holders to credit for the selling of the
products in the course of payment. In the context of weakened patent regulation or limited patent awards,
this is seen as leading to poor IP protection, which may encourage little creativity and trigger
development to end. This is primarily because the purpose of IP is to promote ingenuity by preserving
rights that act as an encouragement for innovators. This argument, however, is countered by the belief
that compulsory frustration leads to more competitive markets and competition for commodities because
it gives consumers more freedom and thereby enables the free movement of goods.

6
See  Kapil Wadhwa and Ors. Vs. Samsung Electronics Co. Ltd.
Several cases, such as Quanta Machine Inc. v. LG Electronics Inc7.; Bloomer v. McQuewan; Adams
v. Burke8; Keeler v. Standard Folding Bed Co.9; Motion Picture Patents Co. v. Universal Film
Processing Co.; Ethyl Fuel Corp. v. United States;  and United States v. Univis Lens Co., have
addressed and upheld mandatory fatigue. These situations underline that the patent holder is powerless to
apply or limit provisions to the licence or selling of the patented goods in order to regulate the actions of
the licensee or purchaser of the patented goods after the goods have been sold.
Similarly, in the German 'Fullplastverfahren' case, the parties cannot explicitly restrain exhaustion by
statutory means, because the legal concept of exhaustion is not at the discretion of the parties to a licence
agreement.
Therefore, if patent expiration is mandatory, after the patented goods are registered, there is little left for
the patent holder, and any efforts to further retain ownership over the patented goods are prohibited.

 Conditional Exhaustion
It was the recognition of the crippling consequences of mandatory exhaustion by patent holders that
contributed to the contractual principle of patent exhaustion. Patent holders continued to look for
ingenious ways to prevent exhausting their patents, and one of these strategies was to market or authorise
licenced products with varying limits on their future use by supply chain corporations at different stages.
This was achieved by merely adding a clause in every selling or licencing arrangement where consumers
or consumers of the supplier are not permitted to either sell or sell at a certain amount, or purchase or use
the subcomponent beyond such times or process the subcomponent further or combine the component
with other parts to manufacture finished goods beyond certain jurisdictions.
Post-sale limitations are known through conditional exhaustion and patent exhaustion is only applied
where there is no "limited sale" or "conditional sale." If the transaction is seen to be unconditional, patent
exhaustion applies fully, but if there is any condition, patent exhaustion only extends to parts that were
not affected by such requirements or limitations. For instance, if the right to repair the patented goods
were limited, then all the rights of the patent holder will be lost upon selling, except for his right to repair
the goods.
A caveat that normally applies is that the post-sale conditions on the sale should be enforced in order for
the conditional exhaustion to apply and must be legitimate and necessarily in the patent rights of the
patent holder. They must also have been expressly made and expressly agreed by the purchaser to.
Conditional exhaustion is criticised for having an effect on the production, consumption and market
morale of the supply of commodities. Because it helps patent holders to escape depletion by express post-
7
Quanta Computer Inc. v. LG Elec. Inc., supra note 62 at 2122.
8
Bloomer v. McQuewan, supra note 62.
9
Keeler v. Standard Folding Bed Co., supra note 62, at 666.
sale limitations and thereby retain their monopoly, it is said to stifle competition. But, as it increases the
rewards of patent holders, it is also said to foster research and development ( R&D) and innovation.
“As with mandatory exhaustion, several cases have upheld conditional exhaustion such as “Henry v.
A.B. Dick”10; “ Monsanto Co. v. Scruggs; Mitchell v. Hawley”11; “General Talking Pictures Corp. v.
Western Electric Co”12; “Mallinckrodt, Inc. v. Medipart, Inc”. These cases effectively state that
patent exhaustion would only apply where the sale is an unconditional one. Thus, it can be concluded that
where exhaustion is conditional, the restrictions placed on patented goods are valid.”

Moving from Understanding to Resolution

An interpretation of the notions of patent exhaustion discussed above implies that patent exhaustion
applies after an unconditional sale happens. The only distinction of the two notions is the absolute
inability, by way of the notion of compulsory exhaustion, to take into account post-sale limitations and
the acceptance of the notion of contractual exhaustion. This differentiation in which courts continue to
contend can entail a solution that is not simply a one-size-fits-all solution.

Many scholars have come up with answers to the contrasting ideas or approaches to balance this
distinction. For eg, the "default-plus" rule that incorporates conditional exhaustion with a patent misuse
measure, independent of the exhaustion study, is one alternative. In order to justify restricting patent
relief, rhinehart suggested the use of the Pliability Law rhetoric where a sale happens with licence
limitations, be they constraints on the field of use, resale price, binding and jurisdiction. Many writers
have mentioned balancing the two definitions or have expressed a preference for one or the other.

The authors claim that these various definitions have been established because of the lack of codification
of the patent exhaustion doctrine in several nations, which has over the years exposed it to many
interpretations. Therefore, the first move is for countries that have yet to codify their theory of patent
exhaustion to enact legislation that complies with the terms of the TRIPS Agreement.

The next step is the desire to move on from the disagreement. The theory explicitly emerges from its
simple mandatory model of making space for the optional model, raising concerns about the compulsory
value of such arrangements and the fear of limitations on separation by facilitating the life of patent rights
as servitudes. Nations must therefore recognise this issue of patent exhaustion at different governmental

See Henry v. A. B. Dick, 224 U.S. 1, 49 (1912), at 23-30 (Was however later overruled in the case of Motion Picture Patents
10

Co. v. Universal Film Mfg. Co., supra note 28 at 506-518.).

“Only when each nation determines its position can there be some form of discussion for an
internationally unified position on the subject. This is the necessary next step which nations must take to
achieve the unification of the notions and to further fortify the doctrine of patent exhaustion.”

CONCLUSION AND SUGGESTIONS

For a stable intellectual property environment, patent exhaustion, whether applied mandatorily or
conditionally, is appropriate. The disparities can be resolved and clarified by pro-active policy steps,
considering notional gaps in the implementation of the doctrine in various nations. One of the most
possible ways to step on from the dispute towards a settlement is to codify the same. More foreign and
unified guidelines for the implementation of the doctrine is also required. With some effort and time,
possibly, the concept can become widely uniform, just as it has now become the intellectual property
from which it is derived.
 BIBLIOGRAPHY

WEBSITES

 https://en.wikipedia.org/wiki/Exhaustion_of_intellectual_property_rights

 https://www.mondaq.com/india/international-trade-investment/703104/parallel-imports-and-
international-exhaustion

 https://ip.com/blog/protecting-profits-patent-exhaustion/

REFRENCES

ARTICLES
JOURNAL OF INTELLECTUAL PROPERTY STUDIES -

K.M. WAZIRI* & O.F. AWOMOLO

 Shamnad Basheer

Oxford Intellectual Property Research Centre, UK

 Mrinalini Kochupillai

International Technology Park ,Whitefield