The legal rules of intellectual property rights are national or territorial. This contrasts with the global nature of trade in intellectual property and in the goods and services to which intellectual property relates.
“Territorial” has many meanings and effects in intellectual property law. First, it means that the rights are limited to the territory in which they are granted. A trademark or patent registered in one country, gives protection in that country and not in other countries. Protection in other countries for registered rights (patents, trademarks and sometimes designs) requires registration in those other countries. The territoriality principle applies even where rights, most significantly copyright, are not subject to mandatory registration. Copyright owners own a different copyright in each jurisdiction. What instruments like the Berne and Paris Conventions and the TRIPS Agreement have done is to impose minimum substantive standards, which each country can implement in different ways. When minimum standards and voluntary exceptions are combined with territoriality, significant variations are found between national laws.
The territoriality of intellectual property also allows owners to segment markets. This segmentation enables the charging of different prices and separate markets may have products of differing quality in each of those markets if the intellectual property owner so wishes. As we discuss further below, this market segmentation is preserved in countries that do not not allow parallel imports, while other countries which do allow parallel imports treat the world as one market, at least for some purposes.
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