Licence and Assignment Arrangements of Patents: Effective or Ineffective in Blocking Parallel Imports of Patented Products—Thoughts of Euro-Excellence v Kraft

Abstract:

Parallel imports of products protected by intellectual property rights are always controversial. In Euro-Excellence Inc v Kraft Canada Inc, the Supreme Court of Canada prevented the exclusive licensee of the Canadian copyright from blocking parallel imports of copyrighted products, but suggested that the assignee of the copyright could have blocked parallel imports. Notably, even though the exclusive licensee was a subsidiary of the copyright owner, the parent–subsidiary relationship was not an issue for parallel imports. The same situations that were involved in Euro-Excellence v Kraft may arise in respect of other kinds of intellectual property rights. Because the Supreme Court has not dealt, in particular, with parallel imports of patented products, it is an open question whether such imports of patented products can be blocked. One question that arises regarding parallel imports of patented products is whether the importation of foreign-sold patented products infringes on the Canadian patent. To answer this question, purchasers’ rights to patented products must be clarified. This article discusses purchasers’ rights to patented products in Canada with reference to relevant Canadian and UK jurisprudence. Furthermore, taking into consideration purchasers’ rights, this article discusses whether parallel imports of patented products can be blocked in various scenarios. Specifically, it discusses whether licence and assignment arrangements of Canadian or foreign patents are effective in blocking parallel imports of patented products. This article also discusses whether Canadian subsidiaries can block parallel imports into Canada and whether establishing foreign subsidiaries as licensees or assignees for the marketing of patented products in the foreign countries is an effective strategy in blocking parallel imports of patented products.