With respect to patents, exhaustion has been newly regulated by Art. 13b of the Patent Act (Act No. 116/1990 Coll.), introduced by the Act No. 116/2000 Coll. By virtue of this provision, "the patent owner is not entitled to prevent third persons from using the product which is the subject-matter of a protected invention if such product has been introduced into market in the Czech Republic by the patent owner or with his consent, unless there are grounds to extend the patent rights to such activities". This means that the Czech legislator has basically adopted the principle of national exhaustion, i.e. exhaustion of patent rights occurs only if the product concerned has been launched into market in the Czech Republic (and not in other countries) by the patent owner or with his consent. The fact that such product has been put on the market in another country with the patent owner´s consent does not imply an exhaustion of patentee´s rights in the Czech Republic. However, a certain space has been left for an interpretation even more favourable for the patent owner, i.e. the patent owner may invoke his rights towards third persons using the product protected by the patent and put on the market in the Czech Republic by the patent owner or with his consent provided there are some (substantial) grounds to extend the patent protection even to such use.

Art. 17 of the Trademark Act (Act No. 137/1995 Coll., as amended) provides that "the trademark does not entitle its owner to prohibit the use of the trademark on products designated by the trademark which have been introduced into market by the trademark owner or with his consent unless after their being launched into the market the products have been substantially altered or their quality or characteristics have been deteriorated." This provision does not expressly state whether the exhaustion of rights occurs at a national, or at an international level. Considering the principle of territoriality of trademark protection and using some further arguments it can be deduced that also in this case a national exhaustion is concerned. It may be in particular argued that by the market the Czech market is meant because the trademark subject to the Trademark Act has effects only in this market. However, a literal interpretation of the provision could lead to the opposite conclusion, i.e. that launching products designated by the trademark anywhere in the world results in the exhaustion of trademark rights. We do not believe such an interpretation would and should prevail; however, there has so far been no established case-law in this respect.

With respect to utility models, the same régime as that governing patents should apply (Art. 21 par. 2 of the Act on Utility Models - No. 478/1992 Coll., as amended).

With respect to industrial designs, the exhaustion of rights is expressly regulated by Art. 24 of the new Act on Industrial Designs (No. 207/2000 Coll., in force as from October 1, 2000), as follows: " (1) The rights resulting from a registered industrial design do not cover the use of the product in which an industrial design falling within the scope of protection is incorporated or on which it is applied, if such product has been put on the market in the Czech Republic by the owner of the registered industrial deisgn or with his consent. (2) The rights resulting from a registered industrial deisgn do not cover the use of the product in which an industrial design falling within the scope of protection is incorporated or on which it is applied, if such product has been put on the market in the European Communities by the owner of the registered industrial design or with his consent." Paragraph 1 of this provision clearly introduces the principle of national exhaustion while paragraph 2 extends the exhaustion to the territory of the European Communities, anticipating the expected access of the Czech Republic to the EU.

To the extent that the principle of international exhaustion is at all applicable in the Czech Republic, contractual restrictions limiting the effects of international exhaustion are basically admissible. In each individual case, it is to be examined whether such restrictions are not contrary to mandatory provisions of the Czech legal system, in particular provisions of the Act for the Protection of Economic Competition (Act No. 63/1991 Coll., as amended).

Contractual restrictions may be binding only upon the contractual parties, they have no effects towards third persons. Therefore basically a breach of a contractual restriction does not result in an exhaustion. Such a breach could also constitute a breach of contractual obligations of the infringing third party towards their contractual partner (who is in turn the contractual partner of the owner of an IP right) and depending on circumstances it could constitute an unfair competitive activity.

If the contract is governed by the Czech law (which must not necessarily be the case), Art. 739 of the Commercial Code is applicable, by virtue of which the contract prohibiting re-export must be concluded in writing, otherwise it is invalid.

There are no particular marking requirements set forth by statutory law. Such requirements may be agreed upon in the contract. The absence of marking requirements in the contract does not affect its validity, but may render the position of the parties more difficult with respect to the burden of proof.

See under (b).

The circumstance that the product has been put on the market under a compulsory licence has in principle no impact on the exhaustion.

The consent does not be expressed in any particular form. It is a question of fact to examine whether the consent has been given. The fact that the user is a subsidiary or an affiliated company of the IP right owner may be one of the circumstances to be considered when determining whether an implicit consent has been given.

As far as patents are concerned, the wording of Art. 13b of the Patent Act has left space for such an interpretation. One of the "grounds for extending the patent rights to such activities" could be a modification of the product concerned.

In the Trademark Act, this issue is expressly regulated in the statutory text (see above under 1 (ii) ).

The régime applicable to patents applies also to utility models. Regarding industrial designs, this question is unclear, but presumably it is to be answered in the affirmative (by analogic interpretation of the respective provision of the Act on Industrial Designs).

It is worth considering whether the principle of national exhaustion (with an exception taking into account the anticipated accession of the Czech Republic to the EU) should not be expressly confirmed also in relation to trademarks by an amendment of the provision of Art. 17 of the Trademark Act.

Summary

With respect to patents, exhaustion is regulated by Art. 13b of the Patent Act.: "The patent owner is not entitled to prevent third persons from using the product which is subject-matter of a protected invention if such product has been introduced into market in the Czech Republic by the patent owner or with his consent, ...". The same regime is applied to the utility models and to the industrial designs and also to the trade marks.

To the extent that the principle of international exhaustion is at all applicable in the Czech Republic, contractual restrictions limiting the effect of international exhaustion are basically admissible.

Résumé

Concernant les brevets, l´épuisement international des droits de propriété industrielle est arrangé par l´Art. 13b de la Loi de brevets : "le détenteur du brevet n´est pas autorisé à empêcher tierces personnes d´utiliser un produit qui est l´objet d´un brevet protégé au cas que ce produit aie mis par détenteur du brevet ou avec son l´accord sur le marché dans la République Tchèque..." Le même procédé s´applique dans le domaine des modèles d´utilité, des dessins industriels et marques protégées.

Procédure de l´épuisement internationale des droits de propriété industriel est appliqué dans la République Tchèque dans toute son étendue mentionnée et les restrictions contractuelles limitant l´effet de l´epuisement international sont en principe acceptables.

Zusammenfassung

Was die Patente betrifft, ist die Erschöpfung der Rechte durch den Art. 13b des Patentgesetzes geregelt: "Der Patentinhaber hat kein Recht, dritten Personen zu verbieten, mit dem Artikel umzugehen, wenn der Artikel auf den Markt in der Tschechischen Rebublik mittels dem Patentinhaber oder unter seiner Zustimung gebracht wurde.."

Dasselbe gilt für die Gebrauchmuster und für die Gewerblichen Muster und auch für die Warenzeichen.

Zu dem Umfang, dass das Prinzip der internationalen Erschöpfung in der Tschechischen Rebublik vollkommen anwendbar ist, sind die vertraglichen Einschränkungen grundsätzlich zulässig, welche die Wirkung der internationalen Erschöpfung begrenzen.