International Exhaustion of the TRIPS Agreement provides that for the purpose of dispute settlement, the provisions of the TRIPS Agreement must not be applied to address the issue of international exhaustion (permission of parallel imports), except for the most-favored-nation and national treatment provisions. However, in the US-Australia FTA, for example, provisions to restrict the parallel import of patented pharmaceuticals are set forth.
International Exhaustion. The proposed amendment of Section 72.1 of the IP Code under the Xxxxx Xxxx seeks to adopt the matter of "international exhaustion" as it relates to drugs and medicine. Under the amendment, one who has obtained a drug or medicine subject to a patent can use the product in the Philippines as long as the patent owner has put the product in the market - or exhausted the product - anywhere in the world. The Doha Declaration allows States the discretion to use the principle of exhaustion for the protection of public health. The discretion 22 Cuno Engineering Corp. v. Automatic Devices Corp., 314 US 84, 10 November 1941. 23 Lincoln Engineering Co. x. Xxxxxxx-Xxxxxx, 303 US 545, 28 March 1938, cited in Xxxxxx, Patents under the Intellectual Property Code 44, 2001. 24 Xxxxxxxx'x- Xxxxx Rock, Inc. v. Pavement Salvage Co., Inc., 396 US 57, 8 December 1969. 25 www.steporgkatharak, 2nd_pharmaceutica_usc.doc, accessed on November 6, 2005 is broadly given, such that the term "public health" is not limited to pharmaceuticals, but could involve other health-related patents.26 The right to use the product is consistent with the principle that the patent right is separate from the product that embodies the right. A buyer of the product can therefore obtain title to the product without owning the patent to the product. The proposed language appears to be based on Section 72.1 of the IP Code, which provides that it is not considered patent infringement to use "a patented product which has been put on the market in the Philippines by the owner of the product or with his express consent, insofar as such use is performed after that product has been so put in the said market." However, the proposed amendment, as with the present law, leaves unclear the rights of third persons to use a patented product upon the exhaustion by a patent owner of his right to import the patented product. Although the term "use" is a right enumerated separately from manufacture, sale, or importation, the term "use" as a principle of exhaustion under TRIPS relates to "consumption" of the product.27 But since the patent holder has other exclusive rights aside from "use," including the exclusive right to "make, sell, offer for sale or import" the patented product, a regime of exhaustion that rights only to the right to "use" means that the buyer of the patented product has the right to "condone" only, but does not have the right to sell, offer for sale and much less import the patented product. This result...
International Exhaustion. For clarity, the licenses granted under this Section 2 include an immunity granted to each Party’s or its Affiliates’ customers with respect to (a) in the case of Section 2.1, the products and services in the Spansion Field of Use that are used, made, have made, offered to sell, sold, leased, distributed, exported, imported or otherwise disposed of by Spansion or its Affiliates pursuant to Section 2.1, or (b) in the case of Section 2.3, the products and services in the FSL Field of Use that are used, made, have made, offered to sell, sold, leased, distributed, exported, imported or otherwise disposed of by FSL, its Affiliates, Fujitsu or Fujitsu’s Affiliates pursuant to Section 2.3, in each case, either alone or as a component of another device, and worldwide, regardless of the jurisdiction in which such products and services were first sold or manufactured, to the same extent that (i) Spansion Licensed Patents, in the case of a license granted by Spansion, or (ii) FSL Licensed Patents, in the case of a license granted by FSL, covering such products and services would be deemed to have been exhausted under United States law if such products and services were first sold in the United States, under Japanese law if such products and services were first sold in Japan, or under the Applicable Laws of any other jurisdiction if such products or services were first sold in such other jurisdiction; provided, however, that the Parties intend that the license granted herein extends only to products manufactured or sold or services provided pursuant to Sections 2.1 or 2.3, as applicable, themselves in the form manufactured or sold (without any unauthorized modification by Third Parties) and not to any Patent claims infringed by combination of such products with other products or Technology, which infringement would not have occurred but for such modification or combination.
