ON THE ISSUE OF THE PRINCIPLE OF EXHAUSTION OF THE EXCLUSIVE RIGHT

ON THE ISSUE OF THE PRINCIPLE OF EXHAUSTION OF THE EXCLUSIVE RIGHT

Inna Zhukova

Candidate of Economics, Associate Professor of Economics, associate Professor of public and private law law chair, the Far-Eastern Institute of management - Branch of Russian Presidential Academy of National Economy and Public Administration, Russia, Khabarovsk

Tatiana Korobeinikova

Candidate of law, Associate Professor of Law (12.00.03), associate Professor of public and private law law chair, the Far-Eastern Institute of management - Branch of Russian Presidential Academy of National Economy and Public Administration, Russia, Khabarovsk

ABSTRACT

The article discusses the legal issues of the principle of exhaustion of exclusive law and the basis for changing the conditions for implementation of this principle. Exclusive right represents a kind of corridor within which the right-holder of particular result of intellectual activity has the right to use this result or dispose of such right in any other legal way. There are a number of restrictions on implementation of this rule of exclusive law. One of these restrictions is the need to ensure the completeness of property rights in relation to the objects of intellectual activity, in which case this restriction is associated with exhaustion of the right. In this article the authors give different points of view on interpretation of the concept of "parallel import" and also draw conclusions about how such concepts are related - "the principle of exhaustion of law" and "parallel import (parallel trade)" among themselves. As a result of an analysis of changes in the Russian legislation regarding the regulation of parallel import, it was found that principle of exhaustion of the law in Russia changed quite often. The authors conclude that the Federal Law No. 213-FL of June 2, 2022 came into force. Adoption of such law became necessary due to the need to ensure completeness of the ownership of intellectual property due to the introduction of economic sanctions against the Russian Federation, its citizens and legal entities and the need to establish rules for import of goods into Russia in parallel imports. Application of this law will allow entrepreneurs selling parallel imports, after the import of goods without the permission of the copyright holder, not to be brought to administrative and civil liability. Nevertheless, legal measures taken are not enough to implement it as effectively as the prevailing economic conditions require. The authors offer their vision of understanding the principle of exhaustion of law.

Keywords: parallel import, parallel trade, principle of exhaustion of law, doctrine of exhaustion of law, protected results of intellectual activity, retorsia, exclusive rights, patent holder, means of individualization.

For several decades, Russia has adopted relatively stable at one time or another, but different in its orientation, the norms of law governing relations in the field of legal protection of the results of work of intellectual activity (hereinafter RIA). First of all, these are norms related to the possibilities of protecting copyright holders from various illegal actions, for example, production and distribution of counterfeit products. Since there will be no exhaustion of law in relation to the counterfeit products, there will be no legal uncertainty here, but such uncertainty is present when it comes to the so-called parallel import or import of goods into the territory of Russia without permission of the trademark holders. For a number of reasons, foreign companies have suspended their investment and production activities in Russia or stopped it altogether. In the current economic conditions, one of the primary tasks is to saturate the goods of domestic market and replace the departed foreign companies for their production. One way to solve this problem is to legalize parallel imports.

In Russia, the ban on parallel imports was justified by a desire to attract investments and manufacturers to its territory. However, with the cessation of investment in the Russian economy, the ban on parallel imports has lost its importance. In this regard, it is extremely important to consider the issues of legal regulation of the exhaustion of rights, including in the historical aspect.

The degree of study of this problem indicates that the legal regime of exhaustion of intellectual property rights is one of the most discussed and unresolved issues in international trade. Both in Russia and abroad, works are distinguished that are devoted to certain issues in the field of study, namely, not only the concept of exhaustion of law as a phenomenon, boundaries of such exhaustion, but exhaustion of the law is considered as a system. A number of works are devoted directly to the parallel imports and the problems of legal regulation. Of interest are the studies of such authors as V.V. Pirogova [1], P.N. Brovkin [2], A.S. Vorozhevich [3] and a number of others, who considered the principles of exhaustion of rights, including in comparison with the norms of foreign law. Among the foreign researchers, F.M. Abbott [5] and I. Kalboli [6] are very actively involved in the exhaustion of law.

The expediency of this study is due to the need to consider the causes of the crisis of legitimacy of certain restrictions of exclusive rights to RIA. Scientific novelty of the study consists in justification that the doctrine of exhaustion of law, being one of the foundations of the system of restricting intellectual rights, performs an important function of providing legal protection to the objects of intellectual rights. The purpose of the study is to analyze legal regulation in the field of exhaustion of law to identify ways to increase the effectiveness of use of trademarks and the other means of identification in relation to the goods of foreign manufacturers, which allows ensure a balance of private and public interests. The subject of this study is the norms of law, doctrine and the law enforcement analysis of public relations in the field of exhaustion of the law and parallel imports.

To achieve the goal, it is necessary to solve the problems associated with the analysis of existing models of exhaustion of trademark rights in the Russian Federation, foreign countries and the interstate associations.

The practical significance is that the study made it possible to identify a weak theoretical study of the issues under consideration at the level of domestic doctrine, as well as the presence in foreign countries of approaches to the introduction of international principle of exhaustion of the exclusive right to a trademark, already implemented at the legislative level, as well as within the framework of the law enforcement practice. Methodological basis of the study was analysis of the works of domestic and foreign scientists on the exhaustion of law; analysis of the system of exhaustion of law, as well as analysis of the approaches to understanding parallel imports, as well as a review of regulations on the regulation of exhaustion of law in relation to intellectual property.

Parallel import means commission of an action related to the import into the country of original (genuine) goods (genuine - this is important) without permission of the copyright holder of trademark (or patent holder). I.e. in parallel imports, goods are purchased not directly from the manufacturer, but from intermediary companies. In this case, the importer is considered the one who imported branded products, and not the official distributors, vendors and dealers. Products that are imported in this way are considered "gray," but not "counterfeit" - they are original, they have a license and quality certificates. Abroad, parallel imports mean "trade in goods that are identical or substantially similar to the goods that are brought to the market through the official distribution networks of manufacturers or original suppliers, but are sold outside such networks, often in parallel with them" [7]. One of the Russian researchers, V.V. Pirogova, believed that "parallel imports, i.e. re-import, when exported goods are delivered back to the country of origin, is possible when the trademark owner himself or the third sides acting with his consent produce and supply goods to the foreign markets, and then resellers buy them abroad and re-import them to the country of origin" [8 p. 10-11]. Abroad, the common notion of parallel imports is "the import of genuine products imported into the country from unauthorized third-party importers after their first authorized sale by intellectual property owners abroad" [6, p. 5]. There is another definition. For example, O.V. Sipols, when compiling the English-Russian dictionary-reference book, gives the following definition: "Type of arbitration operations. The importing company buys goods at a low price in one country and resells them at a higher price to another "[9 p. 464]. Young Russian researchers A.A. Anishin and A.V. Khromov gave a very concise, but clear definition of "parallel import - a legal rule limiting the monopoly of the copyright holder in the interests of a wide range of third sides" [10]. Parallel imports are associated with the principle of exhaustion of law and restriction of monopoly of the copyright holder. The anti-competitive mechanism of parallel imports is connected with the fact that the copyright holder cannot prohibit the import into the country of products that can be identified in any way, including on the basis of a registered trademark or the other means of individualization. Exhaustion of the right in such situation means that the right-holder cannot prevent the mark use in relation to the same goods that he entered into civil circulation himself or with his consent, i.e. he cannot exercise his right twice in relation to the same goods [11]. Thus, the rules existing since the 19^th century, according to which the regime of exhaustion of law is established, are associated with the territory of particular state (or states). This is how this rule sounded more than 100 years ago - "the doctrine of exhaustion of law is connected with the need to balance the rights of IP owners and prevent the use of their IP rights to the detriment of the legal rights of retailers, sellers of used goods and the consumers freely demonstrate, advertise and resell goods, which they legally acquired on the market, even if these actions directly compete with the business of intellectual property owners activities in the same market "[6, p. 6].

There are three principles for the exhaustion of exclusive rights - international, regional and national. The difference between them is only in the location of border at the intersection of which the goods can be distributed without any restrictions, provided that it is put into circulation with the consent of the copyright holder.

The article 1487 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code) contains the following definition of exhaustion of the right to the trademark "does not violate exclusive right to using of this trademark by other persons in relation to the goods, under the following conditions: 1) the goods were introduced into the civil circulation; 2) goods entered into the civil circulation on the territory of the Russian Federation; 3) goods entered into the civil circulation by the copyright holder or with his consent "[12].

In the most countries, the legal regulation of the principle of exhaustion of law involves the use of complex system of criteria that allow ensure a balance between the interests of national producers and copyright holders in controlling the system of distribution channels and the level of prices (price discrimination) when exporting their products to the foreign countries and the principle of protecting competition and free movement of goods on the national market, including protecting the interests of importing companies. For example, in the USA and India, parallel imports are allowed, but taking into account the certain features [15, 16].

In the Russian Federation, establishment of the rules for law exhaustion was regulated by the trademark legislation [17], which just established the international principle of exhaustion of law. The 1992 law No. 3520-1 "On trademarks, service marks and the names of places of the origin of goods" [17] did not refer at all to the nature of the principle of exhaustion of law, which characterizes the rule of exhaustion of law as international in nature. In 2014, the article 23 of the Law No. 3520-1 was amended due to the partnership and cooperation agreement signed by Russia and the EU. The result of such agreements was the possibility of legalizing parallel imports between the Russian Federation and the EU countries [18]. Thus, for a number of years, the principle of exhaustion of law in Russia has changed from national to international and vice versa.

Since 2009, the Federal Antimonopoly Service of Russia (FAS) has actively initiated introduction of the international principle of exhaustion of rights, repeatedly introducing the relevant bills (the latter was introduced in 2021) for consideration by the relevant committees of the State Duma of Russia and the Government of the Russian Federation. It became possible to the partially implement legalization of parallel imports only in the spring of 2022. It should be noted that the mechanisms currently proposed to empower the Government of the Russian Federation to change the norms of civil law are not, according to the authors, the measure by which the problems of parallel imports can be solved [27]. In Russia, since 2012, the principle of exhaustion of law from the national has practically become regional and applies to the territory of the EAEU countries. But this principle is established only in relation to the trademarks. In addition, with the regard to such means of individualization as the place of origin of the product, the principle of exhaustion of law is not established at all.

Conclusion. First of all, it is necessary to change the principle of exhaustion of law in the Russian Federation through amendments to the Civil Code. It is necessary to change it from the regional to international in relation to trademarks, and from the national to international in relation to the other results of intellectual activity.

Foreign authors also support the rule of international exhaustion in all areas of IPR. Multilateral adoption of such rule would contribute to the effective distribution of production resources in the global trading system, rules that allow parallel imports prevent anti-competitive behavior of copyright holders [6, 15]. However, in Russia at present, the establishment of international principle of exhaustion of law in the Treaty on the Eurasian Economic Union of 29.05.2014 is not possible. Since only the will of the Russian legislator is not enough for this, a decision of all states that are members of the economic union is necessary.

Based on the results of the study, the authors conclude that Russia has established the national and regional regimes for exhausting the right to trademarks. The Civil Code contains characteristics of the national principle, and the Treaty on the Eurasian Economic Union establishes the regional principle of right exhaustion to a trademark. But within the same territorial jurisdiction, there can be no simultaneous establishment of different principles of exhaustion of law in relation to one trademark. Therefore, only legalization of parallel imports will eliminate the dualism of exhaustion of the law since the legality of parallel imports will indicate the establishment of international principle of exhaustion of the right to a trademark. Relations over the parallel imports are civil relations. Since the parallel imports are more of a commercial issue. Figuratively speaking, this is a violation (or change) of logistics schemes for the goods supplying.

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