On the subject of exhaustion of rights, the Swedish Government, currently the EU President, and the UK Government have launched a campaign to reform the EC Trade Mark Directive by introducing international exhaustion.
The two Governments, suspecting that goods are priced unduly, perhaps artificially, high in their countries, commissioned a survey (available on the DTI's website: www.dti.gov.uk) comparing prices charged for branded goods in the UK and Sweden. It apparently showed that certain branded goods, particularly CDs, DVDs, videos, computer games and some electrical and household goods, were significantly more expensive in Sweden and the UK than elsewhere in the Community. Both Governments advocate changes to the EC Trade Marks Directive to permit retailers to import products from anywhere in the world. They believe that this would increase competition in retail markets, encourage innovation, meet consumer needs and put downward pressure on the prices of many branded goods.
The European Parliament has already been considering this issue, and is expected to support the change, albeit in a less strongly worded form. However, the EC Commission does not share this view. Having analysed the position last year, it concluded that price differences for branded goods between Member States are not in fact caused by Community exhaustion of rights but by a number of other, largely domestic, factors, eg chains of distribution, levels of competition, indirect taxation and consumer preferences. In its view, therefore, a move to international exhaustion would only have a minimal impact on consumer prices. This view is shared by the EU's Economic and Social Committee, which concluded that it would be inadvisable to introduce international exhaustion.
This debate, therefore, is likely to run and run.
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