Exhaustion of rights (also called the first sale doctrine) is the principle that once a product protected by intellectual property has been legitimately sold by or with the consent of the IP owner, the owner's right to control further distribution of that specific product is "exhausted." Under Indian law, the doctrine applies across patents (Section 107A(b)), copyright (Section 14), and trademarks (implied), with India generally following international exhaustion — meaning rights exhaust upon first legitimate sale anywhere in the world.
Legal definition
Different IP statutes address exhaustion through different provisions:
Patents Act, 1970, Section 107A(b): Importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product is not considered infringement. This provision effectively adopts the principle of international exhaustion for patents — a patented product sold anywhere in the world by or with the consent of the patent holder can be imported into India without infringing the Indian patent.
Copyright Act, 1957, Section 14: The owner's exclusive right to "issue copies of the work to the public" has been interpreted (following the 1994 amendment) as applying only to copies "not already in circulation." This means that once a legitimate copy of a copyrighted work is sold, the copyright owner cannot control its further resale or distribution.
Trade Marks Act, 1999: The Act does not contain an explicit exhaustion provision, but the principle is implied through the common law and the distinction between genuine goods (which the trademark owner has placed on the market) and counterfeit goods. Indian courts have generally applied international exhaustion, allowing parallel imports of genuine trademarked goods.
The key policy question is whether India follows national exhaustion (rights exhaust only upon first sale in India) or international exhaustion (rights exhaust upon first sale anywhere in the world). The prevailing position favours international exhaustion, permitting parallel imports.
How courts have interpreted this term
Samsung Electronics Co. Ltd. v. G. Manzoor & Ors. [(2013) Delhi HC]
Samsung sought to restrain the importation of Samsung printers from Korea and their resale in India. The Delhi High Court applied the principle of international exhaustion, holding that once Samsung had legitimately sold the printers in Korea, its trademark rights were exhausted and the defendant could import and sell those genuine printers in India. The Court noted that the doctrine prevents trademark owners from partitioning markets and controlling downstream distribution of genuine goods.
Kapil Wadhwa v. Samsung Electronics Co. Ltd. [(2013) Delhi HC, Division Bench]
In the appeal from the single-judge order, the Delhi High Court Division Bench affirmed the application of international exhaustion. The Court held that Section 30(3) of the Trade Marks Act (which permits use of a registered trademark in relation to goods adapted by the registered proprietor to be dealt with in the market) supports the principle that genuine goods placed on the market by the trademark owner cannot be restricted from entering India.
John Deere Ltd. v. Shri Gurudatta Enterprises [(2019)]
The court examined patent exhaustion in the context of patented replacement parts. The court held that the legitimate purchase of a patented product carries with it an implied licence to use and repair the product, including by replacing worn parts. This extends the exhaustion principle from distribution to use and repair.
Why this matters
The exhaustion doctrine directly enables parallel imports — the importation of genuine branded products through channels not authorised by the IP owner. This has significant implications for pricing, competition, and consumer welfare in India.
For consumers, international exhaustion means lower prices. If a pharmaceutical company sells a drug at a lower price in one country, parallel importers can purchase it there and import it into India at a price lower than the local retail price. This prevents IP owners from charging discriminatory prices across markets.
For IP owners, the doctrine limits their ability to control distribution channels and maintain different pricing structures in different markets. A pharmaceutical patent holder who sells a drug cheaply in Africa cannot prevent the parallel import of those drugs into India, where the price may be higher.
For businesses engaged in international trade, the exhaustion doctrine clarifies that the import and resale of genuine goods (not counterfeits) is lawful. However, the doctrine does not apply to counterfeit or pirated goods — only to genuine products placed on the market by or with the consent of the IP owner. The doctrine also does not apply where the goods have been materially altered after the first sale.
Related terms
Related IP concepts:
Related concepts:
Frequently asked questions
Does India follow national or international exhaustion?
India generally follows international exhaustion. For patents, Section 107A(b) permits importation from authorised sellers worldwide. For copyright, the 1994 amendment to Section 14 limits the distribution right to copies "not already in circulation." For trademarks, courts have applied international exhaustion in Samsung v. Manzoor (2013) and Kapil Wadhwa v. Samsung (2013).
Are parallel imports legal in India?
Generally, yes. Parallel imports of genuine products placed on the market by or with the consent of the IP owner are legal under the principle of international exhaustion. This applies to patented goods, copyrighted works, and trademarked products. However, the imported goods must be genuine — counterfeit goods are not protected by the exhaustion doctrine.
Does exhaustion apply to digital goods?
The application of exhaustion to digital goods (software licences, e-books, digital music) is unsettled in Indian law. Traditional exhaustion applies to the resale of physical copies. Whether it extends to digital copies — which can be reproduced infinitely without degradation — is an open question. International jurisdictions are divided on this issue, and Indian courts have not definitively addressed it.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.