Trademark Exhaustion in the European Union: Community-Wide or International? The Saga Continues

Abstract:     
This Article analyzes the principle of "trademark exhaustion" or "first-sale rule" in the European Union (EU), with particular attention to the language and different interpretations of Article 7(1) of the First Council Directive 89 104 EEC of December 21, 1988. Traditionally, most jurisdictions define the extent of trademark exhaustion as either "national" or "international" exhaustion, depending on whether the rights granted by a mark are considered exhausted only in the domestic territory or also in foreign jurisdictions. Because of its nature as a regional integration of sovereign countries, the EU has historically favored a compromising approach toward the issue, and has adopted the so called principle of Community-wide exhaustion. According to this principle, trademark rights are exhausted throughout the territory of the whole EU once a product has been put on the market in any Member State. This principle was originally developed by the European Court of Justice (ECJ), and was incorporated into Article 7(1) of the Trademark Directive in 1988. Yet, the wording of the provision is unclear as to whether Community-wide exhaustion represents a minimum standard that leaves Member States free to apply more generous rules - such as international exhaustion - or whether it applies to all trade within the EU. Unsurprisingly, this uncertainty has created many ambiguities, which have required the intervention of the ECJ in multiple instances. As a result, the ECJ has repeatedly clarified that the principle of Community-wide exhaustion is to be considered not as a minimum, but as the general standard for all trade within the EU. Still, despite these decisions, the pressure for a shift toward a regime of international exhaustion has not diminished, and considerable confusion continues to characterize the issue. Starting from the principle that consumer protection is still the major focus of trademark laws and policy in the EU, this Article explores whether, and under what conditions, a regime of international exhaustion could still be possible in the EU in the aftermath of the recent ECJ''s decisions.

Number of Pages in PDF File: 40

Keywords: Intellectual property, trademark, trademark rights, first sale rule

JEL Classification: K8 K33, K39

Accepted Paper Series