Exhaustion Revisited: And Reconstructed?

In view and support of Prof. Hilty’s statement that the legal concept of exhaustion in IP law is exhausted, at least outside the world of physical goods, this contribution discusses the possible reconstruction of the exhaustion term. It is argued that “exhaustion” should not be considered as a legal concept that carries specific legal consequences on certain conditions. Instead the term may have two functions: either as a mere terminological requisite describing the traditional exhaustion rules (primarily related to tangible copies) or as (part of the) justification of the delineation of rights. Discussing the latter, a line is drawn from the so-called “general exhaustion doctrine” found in German (BGH) case law of the 1980s to the recent case law of the Court of Justice of the European Union (CJEU) concerning different types of exploitation of copyright works. Whereas the former rightly was criticized for not having sufficient basis as a legal principle, the arguments put forward by the BGH resemble the CJEU’s justification of various legal solutions in cases concerning re-licensing of computer programs, cross-border TV transmission, linking on the Internet and retransmissions. Thus, it is claimed that CJEU case law gives sufficient support for a “reconstruction” of the exhaustion term from a legal concept to designating (part of) the justification of delineation (or non-delineation) of IP rights.