Encumbered Industrial Property Rights

• Published date: 01 March 1976
• Date: 01 March 1976
• DOI: http://doi.org/10.1177/0003603X7602100101
• Subject Matter: Article

ENCUMBERED

INDUSTRIAL

PROPERTY

RIGHTS

by

Personal

property

rights

are

considered to transcend

territorial

limitations. This means

that

personal property, if

unlawfully taken within his own jurisdiction, can be recovered

outside the country

and

jurisdiction of the owner if it is

moved into another jurisdiction; also, personal

property

is

protected and respected outside the

proprietor's

domicile,

and

the

proprietor

can take steps to recover this personal prop-

erty

if he is deprived thereof outside his own country. These

aspects of personal

property

are

taken

for

granted;

other-

wise, travel to foreign countries

and

business relations be-

tween countries would become too hazardous and, more likely,

impossible.

Industrial

property

rights, such as patents, copyright

and

trademarks have also been regarded

and

treated by most

writers as personal property,

at

least in the

last

few decades.

All these

property

rights, if they existed

at

all, extended

originally only within

part

or the whole of jurisdictions of

grantor. This may be explained by the fact

that

industrial

property

rights were not considered rights which by

their

nature

accrued to a person by his

very

existence, like

rights

to life, liberty,

marriage

and the like.

Patent

rights which claim

their

origin from usage in

European

countries were initially

granted

as a sign of grace,

and not as a

matter

of right, by the rulers of a given

state

or

city.

Furthermore,

patent

rights were

granted

in

order

to

introduce into the locality of the

grantor

new industries

not

in existence hitherto,

or

improvement of such industries by

new methods,

and

were referred to as "inventions," Since

the

grant

of the

patent

did not,

and

could not, extend beyond

• Member of the New York Patent

Bar;

also, of the English Bar.

1

2

THE

ANTITRUST

BULLETIN

the jurisdiction of the grantor, the concept grew up

and

it was

generally assumed

that

patents

are

strictly limited to the

political boundaries of the

grantor.

Similarly, trademarks were originally an appurtenance to

an establishment either of production or of trade. The de-

mand

for

the goods

and

the

market

for

the goods was also

mainly local. Trademarks were therefore considered to have

territorial

limitations.

The expansion of international commerce

at

the

turn

of

the century led to a number of decisions according

at

least

trademarks

extraterritorial

rights. The nationalistic feelings

created by the depression of the 1920s

and

1930s reversed this

trend, and the industrial

property

rights,

particularly

patents

and

trademarks, were considered to have strictly

territorial

limitations.

At

about the same time a proposal was made to

sever or,

at

least, loosen the nexus between trademarks and

the establishment of the

proprietor

and

treat

trademarks

legally as personal

property

of the owner of the establishment

and, therefore, freely transferable.

The explosive resurgence of international commerce led

to a

reappraisal

of

territorial

concepts of industrial

property

rights,

and

the proposal to

treat

at

least trademarks as per-

sonal

property

rights was accepted and received

statutory

sanction in a number of jurisdictions.

The

territorial

extent of industrial

property

rights may be

considered in connection with the concept of "exhaustion."

Exhaustion in this respect means the inability of the pro-

prietor

or his successor in title to enforce the industrial prop-

erty

rights in

any

jurisdiction

if

the goods have been placed

in the channel of

trade

with his permission.

Another concept in relation to trademarks is the image

projected by those who deal with the trademarked goods

and

the concept of implied license termed

"related

companies."

Astill

further

concept to be considered is the difference

between original industrial

property

rights

and

derivative

rights. Derivative industrial

property

rights

are

those which

ENCUMBERED

INDUSTRIAL

PROPERTY

RIGHTS

3

accrued to the

present

proprietor

due to

transfer

or license

derived from the original

proprietor

or came into existence

with the permission

or

consent of the

proprietor

of the re-

spective industrial

property

rights in the same

or

another

jurisdiction.

The concept of original

and

derivative industrial

property

has

lately been extended to cover

not

only trademarks,

but

also copyrights

and

patents.

UNITED

STATES

OF

AMERICA

A decision

after

the enactment of the -Trademark Act of

19051held in Gretsch Mfg. Co. v. Schoening

that

the importa-

tion of genuine goods,

that

is, goods which emanate

from

the

proprietor

of the

trademark

could

not

be prevented,"

The

Court of Appeal

for

the Second Circuit decided likewise in

the case Bourjois v. Katzel,3 holding

that

the assignment of

the U.S.

trademark

from the

French

company Bourjois to a

U.S. corporation, the plaintiff Bourjois cannot prevent im-

ports

of genuine goods. The assignment itself

and

the rela-

tionship of the original

French

trademark

owner

and

its as-

signee, the U.S. Bourjois corporation, were not discussed in

the judgment. The Supreme Court reversed- on

January

21,

1923, holding

that

the assignee, the U.S. corporation, has ac-

quired independent

trademark

rights

and

could

prevent

im-

portation

and marketing of goods emanating from the

French

manufacturer, the original

trademark

owner.

The United

States

filed suit

against

three

French

manu-

facturers

of perfumes, Guerlain, Ine.,"

Parfums

Corday, Inc."

1United States Trademark Act of 1905, 33 Stat. 730, 33 USC

§1051 et seq.

2

Fred

Gretsch Mfg. Co. v. Schoening, 238 F. 780 (CA2-1916).

3275 F. 539 (CA2-1921).

4Bourjois v. Katzel, 260 US 689 (1923).

SUnited States v. Guerlain Inc., 155 F.Supp. 77 (SDNY 1957),

114 USPQ 223.

6United States v. Parfums Corday, 155 F.Supp. 77 (SDNY

1957), 114 USPQ 223.