As global trade continues to expand, it repeatedly challenges the national legal frameworks, particularly where intellectual property (IP) meets market liberalization. Central to this debate is the issue of parallel imports, which involves importing genuine IP-protected goods into a country without the rightsholder’s explicit consent. Whether such imports are lawful depends on which exhaustion of rights regime a specific state follows.
Exhaustion of rights means that after the first lawful sale of an IP-protected good, the rightsholder cannot control subsequent resale of that particular product. That is, the rights over the physical product itself are “exhausted”, while the exclusive rights of the person who owns the intangible object are preserved. This approach corresponds to the First Sale Doctrine, a principle of free disposal of property.
There are three main exhaustion regimes. Under international exhaustion, IP rights are exhausted after the first authorized sale in any country, legalizing parallel imports. Ukraine and Uzbekistan follow this model, promoting market competition and price accessibility.
Regional exhaustion applies within economic unions and allows free circulation of goods within the economic bloc, but restricts imports from third countries without rightsholder’s consent. Armenia, Kazakhstan, and Kyrgyzstan are member states of the Eurasian Economic Union. Thus, they apply a regional exhaustion regime. Crucially, the IP object’s rights should be held by a single owner across all countries within the economic bloc. Otherwise, if different entities own the rights across the region, each holder retains the right to prohibit circulation within their specific territory.
Under national exhaustion, rights are exhausted only after the first sale within the local market. Moldova, Tajikistan, and Turkmenistan adhere to this stricter approach, effectively prohibiting parallel imports without rightholder’s consent. Azerbaijan maintains a national regime through customs mechanisms, despite the absence of a clearly defined legislative principle.
The diversity of approaches across Eastern Europe and Central Asia creates legal uncertainty for international businesses. Judicial practice is often inconsistent, and customs enforcement varies significantly between jurisdictions. Consequently, companies should carefully assess the regulatory landscape of each country of business interest.
An essential protective instrument is the customs recordal of IP objects in the relevant country. This enables customs authorities to detect potentially infringing goods at the border, verify documentation, and initiate enforcement measures. Also, in countries where international exhaustion applies, customs mechanisms allow rightsholders to protect against counterfeit goods and comply with national standards. Successful lawsuits focus not on banning the parallel imports themselves, but on issues of consumer protection, quality control, and brand reputation.
The foregoing indicates that exhaustion of rights and the regulation of parallel imports are complex and multifaceted processes that demand clear legislative regulation. At the same time, it’s evident that the type of exhaustion regime directly influences parallel imports, business strategies and brand protection across countries in Eastern Europe and Central Asia.
In conclusion, more detailed information on the methods of registration and protection of intellectual property rights can be found on the websites of local patent attorneys, such as MSP, where practical aspects of enforcement and current national legal requirements are covered.
