Utilizing TRIPS Flexibilities for Public Health Protection Through South-South Regional Frameworks
(2004; 110 pages) [Spanish] View the PDF document
Table of Contents
View the documentTHE SOUTH CENTRE
View the documentPREFACE
View the documentABBREVIATIONS
View the documentEXECUTIVE SUMMARY
Open this folder and view contentsI. INTRODUCTION
Close this folderII. INTELLECTUAL PROPERTY AND ACCESS TO ESSENTIAL MEDICINES IN DEVELOPING COUNTRIES
Close this folderII.1. An Overview of Public Health-related TRIPS Flexibilities
View the documentII.1.1 Compulsory Licensing
View the documentII.1.2 Parallel Imports and Exhaustion of Rights
View the documentII.1.3 Limitation on the Grant of New Use Pharmaceutical Patents
View the documentII.1.4 Research and the Early Working Exceptions
View the documentII.1.5 Limiting the Extent of Test Data Protection
View the documentII.1.6 Control of Anti-Competitive Practices and Abuse of Intellectual Property Rights
Open this folder and view contentsIII. CONSTRAINTS ON NATIONAL EFFORTS TO IMPLEMENT TRIPS FLEXIBILITIES FOR PUBLIC HEALTH PURPOSES
Open this folder and view contentsIV. OVERCOMING CONSTRAINTS IN THE USE OF TRIPS FLEXIBILITIES THROUGH SOUTH-SOUTH REGIONAL FRAMEWORKS
Open this folder and view contentsV. CONCLUSIONS AND RECOMMENDATIONS
View the documentBIBLIOGRAPHY
View the documentBACK COVER
 

II.1.2 Parallel Imports and Exhaustion of Rights

Parallel importation refers to a situation where a third party, without the authorization of the patent holder, imports a foreign manufactured product put on the market abroad by the patent holder, his licensee or in another legitimate manner in competition with imports or locally manufactured products by the patent holder or his licen-see.14 The practice is based on the principle that the patent holder has been remunerated through the first sale of the product and his further control over the resale of the product would unreasonably restrain trade and stifle competition. In other words, having been remunerated the right holders are said to have exhausted their rights. Under article 6 of the TRIPS Agreement, as confirmed by the Doha Declaration, WTO Members are free to choose their own regime of exhaustion of rights without challenge.15

14 For further discussion on parallel imports, see Correa (2000). See also Lettington and Musungu (2000) and Abbott (1998).

15 See para. 5(d) of the Declaration.


Parallel importation is used as a measure to prevent market division and price discrimination on a regional or international scale.16 Since pharmaceutical companies set prices for the same products at different levels in different countries, parallel importation enables consumers to gain access to the product without affecting the right of the patent holder to receive remuneration in the country where the product is first sold. While allowing parallel importation in developed countries could be seen as undermining efforts to provide lower prices in developing countries, the same argument can not be made where it is developing countries allowing parallel imports. Even in cases where importation takes place from markets where medicine prices are regulated, it remains true that patent holders will be compensated albeit at a lower rate than where price regulation does not exist.

16 Correa (2000), p. 72.

to previous section
to next section
 
 
The WHO Essential Medicines and Health Products Information Portal was designed and is maintained by Human Info NGO. Last updated: October 7, 2014