Author:
Santanu Mukherjee
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The General Agreement on Tariffs and Trade (gatt) 1994 reinforced a comprehensive trade liberalisation agenda under the World Trade Organisation (wto) covering trade in goods, services as well as intellectual property (ip). The Agreement on Trade Related aspects of Intellectual Property Rights (trips) aims not only at restricting trade in counterfeits and pirated goods but also harmonises the minimum level of protection of intellectual property rights (iprs) within the wto membership. The fundamental goal was to remove illegitimate barriers to trade and create a level playing field where iprs were protected as well as could be used for dissemination of knowledge through technology transfers. In such a scenario it would have been ideal to address the issue of exhaustion of iprs under the wto regime and install an appropriate mode of exhaustion of iprs for its different forms. The members negotiated on the exhaustion issue but could not come to any conclusion resulting in a status-quo where each member retained their practice of exhaustion. It was an agreement to disagree and leave the matter to policy space of wto members.

With the introduction of trips Agreement within the wto regulatory regime, a uniform minimum level of ip standards was incorporated into the multilateral trading system. With a spill-over effect the ip standards were not only linked to different wto agreements by way of cross-reference but also stretched onto bilateral and plurilateral agreements. For this reason, parallel trade of goods protected by patents cannot be addressed just by analysing trips but need to be assessed from a broader framework in a wholesome manner under the wto regulatory regime. It is divided into three sections and a concluding part, each with different chapters that build up the research analysis and discussion of various aspects before suggesting an ideal mode and means to install an appropriate mode of exhaustion.

Part 1 of the book offers an introduction to patent rights, its history, rationale and special characteristics within the broader gamut of iprs leading to the unique characteristics of ubiquity in patents. Elaborating on how important it is to balance ubiquity, through exhaustion of patents. In this process, both the doctrines of exhaustion and implied licensing are extensively discussed, from conceptualisation of the doctrines, their expression in different forms to underlying economic reasoning. The next chapters in this part then addresses the economics of patents and the economic rationale for exhaustion in international trade elaborating the economic reasoning of each mode of exhaustion. Subsequent chapters of the book, then analyses the evolution of the doctrines in different jurisdictions of the world. Initiating in countries where the exhaustion doctrine developed in a distinct manner in some form or the other to some of the developing countries (with comparable iprs and trade interests). The last chapters of this part then establish the link between patent exhaustion and multilateral trade through the treatment of parallel imports and briefly discusses exhaustion in some other modes of iprs.

Part 2 elaborates patent exhaustion from the perspective of multilateral and regional trade regulations. It provides an in-depth analysis of the negotiating history of trips within gatt and the negotiation on exhaustion in particular within trips. This is followed by analysis of the Preamble and different Articles of the trips Agreement interpreting them from the perspective of patent exhaustion. The next chapter provides analysis of different relevant Articles of gatt and their interpretation by different panels and the Appellate Body of the wto and assessing the mode of exhaustion as per these interpretations. In the next chapter the interface between gats and exhaustion is analysed under different relevant Articles. Then the discussion shifts to regional trade regulations in relation with the wto regulatory regime analysing ftas, rtas and studies the exhaustion modes practiced in some of the prominent regional blocs.

Part 3 of the book expands on the policy dimensions of patent exhaustion with specific relevance to access to essential patented pharmaceutical drugs. It highlights how the debate dominated the wto global rule making scenario as well as some of the affected countries. This part also analyses the development of competition policy at the multilateral level and how the exhaustion doctrine fits into the dynamics and interface of ipr-Competition law/policy to determine treatment of parallel imports.

The book finally draws its conclusion and recommendations from the research undertaken and detailed analyses provided to determine the most appropriate mode of exhaustion. Assessing the purpose of patents, addressing ubiquity and studying the historical evolution of patent law as well as interpreting multilateral regulations under trips, gatt 1994 and other relevant wto Agreements, the book supports international exhaustion to be uniformly adopted in the wto. In the process while it analyses different regional blocs, it finds that adoption of international exhaustion within wto can be extended to the cus too. Further, from a competition policy perspective too, the analysis presents that international exhaustion is the most appropriate mode of exhaustion. With this recommendation, a draft text for amending Article 6 of the trips is proposed, expounding as to why the right time has come to negotiate the amendment effecting international exhaustion globally.

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