The impact of the community doctrine of exhaustion of intellectual property rights on manufacturers of pharmaceutical products

Abstract

The aim of this thesis is to show how the doctrine of exhaustion of IPRs is affecting manufacturers of pharmaceutical products. As recognized by Articles 7 and 8 of the TRIPS Agreement, IPRs are neither conferred nor exercised in a social or political vacuum. Their regulation aims to achieve an appropriate equilibrium between the various interests of society and economy which is particularly true for the pharmaceutical sector. Pharmaceuticals have always been a key asset to the European economy. However for many years pharmaceutical products have proved fertile ground for litigation before the ECJ. This study will analyse pharmaceutical Trade Mark and Patent case law under EC law, putting special emphasis on how the ECJ has delivered and is still delivering judgments on the interaction between free movement and intellectual property. The introductory part of the thesis discusses the concept of free movement of goods and the doctrine of exhaustion of IPRs. It also discusses the manner in which EC Competition Law seeks to achieve the overriding objective of market integration. The first two chapters give an overview of the European Courts' judgments in pharmaceutical trade mark and patent case law. The aim of the chapters is also to analyse how the Courts are trying to strike the right balance between the free movement of goods and the preservation of intellectual property. Comments from various authors relating to whether the same judgments would ultimately help or hinder the growth of the pharmaceutical industry will be scrutinized in great detail. Any judgment on the efficacy of Community rules in their application to the European pharmaceutical sector must have as its foundation an appreciation of the regulatory and economic conditions for the marketing of pharmaceutical products in the EU. As a matter of fact, chapter three discusses the particular features of the European industry and the regulatory policies (adopted by the Member States). This chapter examines whether the doctrine of exhaustion should be applied uniformly for, on one hand drugs which are still under patent, and on the other for others whose patent has expired. Another very interesting examination would be what the economic implications of this doctrine are for the manufacturers of pharmaceutical products. Chapter four analyses what measures are being taken up by the pharmaceutical companies to curtail and prevent such trade and what was the response by both the Commission and the European Courts. The final section discusses policy options and recommendations in the light of the recent case law and a conclusion as to what is the best way forward for the adoption of a Single European Market in Pharmaceuticals.