Exhaustion of rights

The free movement of goods within the European Economic Area is a key principle of the European Union.

Article 7 Trade Mark Directive 2008/95 facilitates the exhaustion of rights in relation to a trade mark.

Once goods have been lawfully marketed in the European Economic Area the proprietor of the trade mark cannot use the intellectual property rights to object to the further commercialisation of the goods.

The rights are said to be exhausted when the goods have been put on the market for the first time.

This allows parallel imports to take place within the European Economic Area. Parallel imports allow people such as Tesco to buy cheap Levis jeans from places such as Bulgaria and sell them in their shops in the European Economic Area. This means cheap Levis jeans for the consumers, good news for the consumer, not so good news for Levi.

However this is only in relation to goods that have been marketed in the EU. This is confirmed by the case of Zino Davidoff v A&G Imports Ltd where parallel imports were not allowed from America.

David Cameron is set to hold the EU referendum in 2017. Potentially ending the UK’s enjoyment of the free movement of goods within the EU. This would mean the end of parallel imports, good news for Levis, not so good news for the UK consumer.

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