Dissolving of Intellectual Property Rights

Many brands and companies protect their products with copyright, trademark or other intellectual property rights, the recent one being the Taj Mahal hotels. It is now protected with Trademark under private construction category. But, many of us are not aware of the twist to the law wherein once the property is sold, wherein the rights that it had prior to the sale are nullified.

Intellectual Property Rights

Here is a simple example to explain the law. For example a well known company sells house paints. Once the cans of the paint are purchased by customers, used and discarded, there’s this other company that collects to cans, refills them with a low quality of paint and resells them at a much lower rate. Now, the inventor of the paint or the authentic owner faces competition and is likely to come up with attractive offers and discount to fight the competition back as he cannot do anything about it. There are no repercussion on what happens once the product is sold. The patent rights extends only through production, creation, manufacture to sale. Once someone purchases the product, the patent is exhausted.

There has been a lot of misconception or confusion with the law of intellectual property rights and due to the same a lot of infringement cases wherein the exhaustion principle applied to products once they were sold become invalid. The supreme court has even re-explained the whole exhaustion principle in a short format that clearly states that the exhaustion principle is applicable to products that are purchased and resold later. But, they have to get into a contract with the customer under refill to do the same and comes with restrictions like one time use and no resell of container or sharing of the ink container, but to name a few.

To combat this issue many companies have adopted various methods like return policy’s around used products. In case of ink as a product, some companies have gone to the extent of installing a chip to track the location of the refilled ink container.

To fight an infringement case in a way that the outcome is positive the company or person filing the infringement needs to keep the design or the item and prove to the court that the design or the process was stolen, copied or reproduced. A legal counsel needs to be hired to litigate. The claim only proceeds after the litigation is attempted through a legal counsel and shows signs of clear violation of intellectual rights. Otherwise if is against to what the Supreme court has explained and re-explained, the case is rejected.

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