1.

Is there international exhaustion of (i) patents; (ii) trade marks; and (iii) other industrial property rights? That is, can an industrial property right owner use industrial property rights against parallel imports from another country, when the imported products have been put on the market in that country by the industrial property right owner or with his consent?

Since Portugal is one of the European Union Member States, Portuguese legislation regarding the exhaustion of industrial property rights is harmonised with Community rules. That harmonisation is meant to enable the free circulation of goods and merchandise within the Community, which is a condition for the effective establishment of a common market.

As regards patents, trade marks and other industrial property rights, the exhaustion system in force in Portugal is therefore the Community exhaustion system, i.e. a regional exhaustion system regarding the territory of the Economic European Area.

Regarding patents, the Industrial Property Code (Decree-law nº. 16/95, of January 24) renders that system concrete through the following rule:

Article 99 (Effectiveness of Law)

"The rights provided by a patent, do not cover acts concerning the products protected by that patent, after such products are introduced in the Community by the patent's owner or with his express consent."

As concerns trade marks:

Article 208 (Effectiveness of Law)

The rights provided by a trade mark's registration do not allow his owner to prevent its use to cover products commercialised in the Community under such trade mark by the owner or with his consent.

The provision in the previous paragraph is not applicable when there are legitimate grounds justifying the owner's opposition to the subsequent commercialisation of the products, namely when the condition of such products is changed or altered after their introduction onto the market."

As for the other rights, such as utility models, industrial models and designs, the rule in Article 99 regarding patents is applicable.

According to these rules, exhaustion only functions as regards imports between member States of products introduced by the industrial property right (IPR) owner or with the latter's consent. However, such rules do not function as regards the imports into Portugal of products coming from third States, even if such products have been introduced on the source markets by the IPR owner or with the latter's consent.

2(a)

Can contractual restrictions imposed by an industrial property right owner be used to limit the effect of international exhaustion? (b) What is the effect of breach of contractual restriction by a purchaser - does exhaustion occur?

Within the European Community, such contractual restrictions are considered to be covered by the Community rules inhibiting the establishment of measures producing an effect equivalent to any quantitative restrictions to the imports between Member States.

However, as regards contractual restrictions established by the (IPR) owner in non Member States, and although the exhaustion system in force in Portugal is a (regional) Community system, one may conclude that in Portugal such restrictions re-enforce the opposability of such rights to imports of products coming from such States, since the lack of consent regarding such imports is unmistakable.

Nevertheless, this is a matter to be studied case by case.

Considering what was mentioned in the previous answer, one may conclude that the violation of such restrictions may facilitate the rights' opposability in Portugal, on the terms that such a violation may be considered as involving an unmistakable intention to obtain benefits from the performed parallel imports, to the prejudice of the owner of the rights.

However, this is a matter which must always be studied case by case.

3(a)

If contractual restrictions can be used to limit importation, does it matter whether they are express or implied?

As above mentioned, this question may only occur as regards imports of products coming from countries not belonging to the European Community.

Therefore, in a situation of extra-Community imports into Portugal, the relevance of the restrictions to imports and to the way they are imposed, either express or implied, will always be evaluated on the terms of a higher or lesser degree of the feasibility of the rights' opposability in Portugal, since the exhaustion system is a (regional) Community one, and the rights are in principle always opposable to any parallel imports coming from Sates not belonging to the Economic European Union.

(b)

If contractual limitations are express, are there any particular marking requirements?

As mentioned above, this matter is not covered by Portuguese legislation, since the exhaustion system is a (regional) Community system, where such contractual limitations are not allowed.

(c)

If protected products are marked to indicate some marketing restriction, what are the consequences of removal or loss of any marking?

Given the exhaustion system currently in force in Portugal (Community), and given the Community rules inhibiting the restrictions to the free circulation of goods and merchandise between Member States, the products introduced on the internal market cannot bear inscriptions restricting the circulation in that market, unless such restrictions are compulsory and imposed by national or Community rules which aim at a specific purpose, such as health, safety or others.

4

Does international exhaustion of industrial property rights apply where a product has been put on the market under a compulsory licence (if applicable)?

Although national legislation does not establish any rule on this question, within the exhaustion system in force in Portugal - (regional) Community exhaustion - one may conclude that there is consent within the intra-Community scope, although such license is compulsory.

5

Is "consent" which gives rise to exhaustion limited to specific arrangements, (for example a relationship with a subsidiary or affiliated company, or an agreement with a licensee), or a question of fact in each case?

Although Portuguese legislation is also lacking as regards this matter, one may conclude that the relevant "consent" is a de facto question, determined case by case, and not limited to any certain kind of agreement or special relationship between companies.

6

Can an IPR owner object to parallel importation where (a) goods or (b) their packaging have been modified?

As regards trade marks, Portuguese legislation establishes that (Community) exhaustion does not function every time there are legitimate grounds to justify the owner's opposition to subsequent commercialisation of the products, namely every time the condition of such products is changed or altered after their introduction onto the market.

7

Given the integration of Portugal in the European Community, and since the exhaustion of Industrial Property Rights influences not only the Internal Market's legal dynamics, but also the pursuit of economic and social approaching and balance among Member States, it should be determined by the EC in a homogeneous manner, aiming to achieve the correspondent common purposes.

An isolated option for an exhaustion system, either general or through a bilateral or multilateral contracting with non Member States, will always inevitably have repercussions on the order of the Internal Market's functioning.