'No Deal Brexit' - What Does This Mean for Parallel Trade?
The UK government has disclosed its plans for the exhaustion of intellectual property rights if there is a no deal Brexit.
The government has announced that if the UK leaves the European Union without a deal, the UK will, at least in the short term, continue to recognise the current European exhaustion regime. However, it remains unclear how the European Union will treat products sold in the United Kingdom and exported to the European Economic Area (EEA) following a no deal Brexit.
The UK is currently part of a regional EEA exhaustion scheme. This means that the brand owner's intellectual property rights are exhausted in any products which are put onto the market in the EEA by the owner, with its consent or by a sufficiently closely related entity. Therefore, parallel traders can purchase such pharmaceuticals (and other products) in one part of the EEA and sell into another, provided they comply with the relevant rules on repackaging.
Comment
The government's announcement is, of course, good news in the short term for traders who are importing pharmaceuticals into the UK. The announcement does not address how such imports will be treated in the long term if there is no deal. Furthermore, there may well be restrictions on the export of pharmaceuticals (and other products) from the UK to the EEA after a no deal Brexit.