Regional exhaustion introduced

01 March 2010

In the summer of 2009, the principle of regional exhaustion for goods released into circulation in the European Economic Area (EEA) was introduced into the Swiss Patent Act. Thus, the patent owner's exclusive right is deemed exhausted when patented products have been released on to the market by the owner or with his consent within the EEA or Switzerland. Such products can accordingly be imported into and sold in Switzerland notwithstanding the patent in Switzerland covering these products.

The same principle applies to devices by means of which a patented method is executed. When such a device has been released on to the market within the EEA or Switzerland by the patent owner or with the owner's consent, the first and any subsequent owner of this device is entitled to use the patented method by using the device. Switzerland has introduced this principle of regional exhaustion unilaterally. No treaty has been signed with other countries or the European Union establishing reciprocity.

Exceptions to the rule of regional exhaustion apply on the one hand to patented goods for which the price is fixed by the state either in Switzerland or abroad (and thus in particular for pharmaceuticals) for which only national exhaustion applies, as was the case before. On the other hand international exhaustion applies to means of production and investment goods in the agricultural sector. This special provision was previously introduced as an exception to national exhaustion, which was the rule at the time.

Another case where international exhaustion applies concerns goods where the patented invention is of only minor significance in the functionality. This minor significance is even presumed by the law unless the patent owner produces prima facie evidence to the contrary. It remains to be seen whether this exception will play a role in parallel import cases and how the courts will interpret it.