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Exhaustion of rights

By Luis C. Schmidt, Partner
Managing Intellectual Property, February 1999
Exhaustion of rights, as an exception to the rights afforded by IP laws, has been recognized in the laws of many countries in the world. In general terms, it implies that the owner of intellectual property rights cannot oppose the further trading of products embodying its rights, if and to the extent that such products have been marketed by or with its consent. Exhaustion of rights marks the border between intellectual property rights and those of the buyer of a product or copy embodying the IP rights.
As to trade marks, it appears that Mexican law allows parallel importation in blank, without restriction or control. There are cases in which trade mark holders have claimed trade mark infringement and unfair practices, from importers who are not respectful of warranty policies and the standards imposed by manufacturers. However, all of those cases have been decided allowing the parallel imported products to enter Mexican territory.
Accordingly, Mexican trade mark Law has been interpreted to recognize an international exhaustion of trademark rights. The case of patents is different as the Patent Law does not allow international exhaustion of rights, exhaustion having effects on a national level only.
As to copyright, the Mexican copyright Law of 1996 seems to allow international exhaustion of rights and, as is the case with trade marks, it is also questionable if it would provide the tools or mechanisms necessary to stop indiscriminatory practices. The Copyright Law considers a right of distribution as well as a first-sale exception. It also grants a right of importation of illegitimate copies as part of the bundle of patrimonial rights. However, as the Copyright Law does not specifically grant to the holder a right to prevent importation of legitimate copies of works of authorship, it can be concluded, contrario sensus, that Copyright Law is in favor of international exhaustion, and consequently parallel imports.