Indian Judiciary and the Exhaustion Doctrine: Losing the Plot?

Intellectual property rights refer to a bundle of legally sanctioned rights granted to inventors and creators over their inventions or creative content (primarily for accruing economic benefits from the commercial exploitation of these inventions/creations). These rights are similar to those rights enjoyed by the owners/legal holders of a physical property in using, non-using, destroying, disposing, or otherwise alienating that property. The exhaustion doctrine refers to the situation wherein the inventor/creator of an IP product loses her right of distribution over it once it is sold. This is vital to ensure robust market economics and practices. It is equally vital as a public policy tool for countries to gain access to IP based products and creations at reasonable rates and quantities. The TRIPS Agreement establishes minimum standards of IP protection for its members. Interestingly it has left the question of the choice of an exhaustion regime open - to be determined by each member nation according to its domestic requirements. India follows the international exhaustion regime – once an IP based product/creation is sold legally anywhere in the world, the inventor/creator loses her right to control distribution over it. This article attempts to unravel the judicial understanding of India’s declared exhaustion regime by analysing the reported cases.