1. Introductory concepts
Doctrine of exhaustion
Typical types of exhaustion
Factors to balance
Singapore’s balance of access and protection for
patented pharmaceutical products
Lam Pak Nian, 2013/2014

2. What is exhaustion?
• An intellectual property right is the negative
right to exclude
– A patent, inter alia, allows the owner to exclude
others from making or selling an invention
• Right to exclude is limited by ‘exhaustion’
– IPR owner’s control over the physical product
ends once the product is first sold
– Purchaser is free to use or resell that product
without further restraint from patent law
Lam Pak Nian, 2013/2014

3. Parallel imports
• Exhaustion of rights provides the legal basis
for parallel imports
– Parallel imports are goods produced and sold
legally but subsequently exported into another
jurisdiction
• Take advantage of pricing differences, etc
• Parallel imports take advantage of the
purchaser’s right to resell
– Genuine goods, unauthorised resale
Lam Pak Nian, 2013/2014

4. Typical types of exhaustion
International Regional National
IPRs in good
exhausted once
sold in any
country
IPRs in good
exhausted once
sold within the
region
IPRs in good
exhausted once
sold within the
country
Parallel imports
allowed once
sold in any
country
Parallel imports
only allowed
from countries
within the region
Parallel imports
not allowed from
any other
country
Least protection
Most access
Most protection
Least access
Lam Pak Nian, 2013/2014

5. International exhaustion
Pill image: D Dinneen
IPRs in good exhausted once it is sold in any country
Exhausted when sold in
any country
Position in country:
International exhaustion
Lam Pak Nian, 2013/2014

6. Regional exhaustion
Pill image: D Dinneen
IPRs in good exhausted only when it is sold within the region
Position in country/region:
Regional exhaustion
Exhausted when
sold in region
Not exhausted
when sold
outside region
Lam Pak Nian, 2013/2014

7. National exhaustion
Pill image: D Dinneen
IPRs in good exhausted only when product is sold within the country
Position in country:
National exhaustion
Exhausted when
sold in country
Not exhausted when
sold anywhere
outside country
Lam Pak Nian, 2013/2014

8. Typical types of exhaustion
International Regional National
IPRs in good
exhausted once
sold in any
country
IPRs in good
exhausted once
sold within the
region
IPRs in good
exhausted once
sold within the
country
Parallel imports
allowed once
sold in any
country
Parallel imports
only allowed
from countries
within the region
Parallel imports
not allowed from
any other
country
Least protection
Most access
Most protection
Least access
Lam Pak Nian, 2013/2014

9. Balance?
More access
(allow parallel imports)
More protection
(block parallel imports)
Consumers and
governments want to be
able to get pharmaceutical
products
Pharmaceutical companies
want to be able to
segregate the world and
price discriminate
Public health
considerations
Incentive and reward
Features of chosen exhaustion regime have an important
impact on the parallel trade of pharmaceuticals
Lam Pak Nian, 2013/2014

10. S 66(2)(g): General parallel import defence (i.e. international exhaustion)
Singapore’s hybrid approach
Pill image: D Dinneen
Before first sale in SG:
National exhaustion
S 66(3)
1st mover
adv
S 66(2)(i)
Specific
patient use
S 66(2)(h)
Marketing
approval
After first sale in SG:
International exhaustion
S 66(3)
1st mover
adv taken
S 66(2)(g)
General international exhaustion
for all patented products
Specific to pharmaceutical pdts
Singapore’s
balance of
access and
protection for
patented
pharmaceutical
products
Exhausted
Exhausted
Exhausted
Not exhausted
Lam Pak Nian, 2013/2014