UK government opens consultation on the exhaustion of IP rights

By Emmanuel Legrand

The British government has launched a consultation on the UK’s future regime for the exhaustion of intellectual property rights "which will underpin the UK’s system of parallel trade." This consultation closes at 11:45pm on 31 August 2021. 

  “The UK now has the regulatory freedom to choose our own exhaustion of IP rights regime and it is right to examine carefully whether the current arrangements best serve UK interests,” said Secretary of state for business Kwasi Kwarteng, announcing the consultation. 

  By opening this consultation, the government said the UK "has an opportunity to decide its future regime for the exhaustion of intellectual property rights. This decision is vitally important for the UK as it will govern future rules on parallel imports into the UK." 

Impact on parallel trade

  The principle of exhaustion of IP rights puts some limits on how far control over copyrighted material extends. "Exhaustion of IP rights underpins parallel trade. Parallel trade is the cross-border movement of genuine physical goods that have already been put on the market," according to the consultation paper. 

  "This is the import and export of IP-protected goods that have already been first sold in a specific market, for example moving a good that has been sold in another country and importing that good into the UK." 

  In the European Economic Area (EEA), IP rights are considered “exhausted” once goods have been placed on the market by the IP owner or with the owner’s consent anywhere within the EEA, noted Lexology. 

Potentially devastating consequences

  The Publishers Association and Society of Authors, supported by the Association of Authors’ Agents and the Authors’ Licensing & Collecting Society (ALCS), have launched the Save Our Books campaign, to oppose the “potentially devastating” impact of a change to the exhaustion rule.

  “This is a critical moment and the biggest threat to our industry post-Brexit. The strength of the UK’s copyright laws is key to ensuring authors and publishers are paid for their work. Weakening these laws would be devastating to authors’ income and the wider UK book industry, resulting in fewer books, by fewer authors, for fewer readers,” said Stephen Lotinga, Chief Executive of the Publishers Association.