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international trade, as there is an inherent tension between the enforcement of national
IP rights, the principle of IP exhaustion, and the principle of free movement of goods

in relation to cross-border trade.
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More precisely, the adoption of one approach on exhaustion versus another—
notably international versus national versus regional exhaustion—directly impacts the
ability for importation/exportation of genuine goods across national border by third
parties. Hence, the objective of free trade areas or customs unions is to promote the free

movement of goods within their specific territory. As I have elaborated at length in my
previous scholarship, it was precisely for this reason that the EU adopted as a matter
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of EU law a common approach on IP exhaustion, lest a fragmented approach in this
area would run against the principle of free movement of goods, which represents one
of the fundamental freedoms that the EU aims at achieving and safeguarding.
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In particular, nation states generally adopt one of three approaches: international,
national, or regional exhaustion. Under the principle of international exhaustion, the

rights of IP owners to control the further distribution of a good, or a batch of goods,
exhaust after the first sale of the goods regardless of the country where this first sale
has occurred. Therefore, unauthorized imports in the jurisdictions following this
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principle are considered to be lawful. In contrast, under the principle of national
exhaustion, the rights of IP owners are exhausted after the first sale of a good, or a batch
of goods, only if this first sale has occurred in the national territory. In this approach,

unauthorized imports can be stopped at the border or legitimately seized after importation
on the basis of infringement, even though these goods are genuine goods. Finally,
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under the principle of regional exhaustion, the rights of IP owners are exhausted after

23 See, e.g., the various contributions in Irene Calboli & Edward Lee (eds.), handbook on Intellectual
Property Exhaustion and Parallel Imports (2016).
24 See, e.g., Irene Calboli, Market Integration and (the Limits of) the First Sale Rule in North American
and European Trademark Law, 51 Santa Clara L. Rev. 1241 (2011) [hereinafter Calboli, Market Integration].
25 See, e.g., Irene Calboli, Reviewing the (Shrinking) Principle of Trademark Exhaustion in the European
Union (Ten Years Later), 16 Marq. Intell. Prop. L. Rev. 257 (2012) [hereinafter Calboli, Reviewing Trademark
Exhaustion].
26 See, e.g., Calboli, Market Integration, supra note 24, at 1252-56.
27 Id.

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