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Parallel imports

Switzerland has accepted parallel imports of goods protected by copyright which were put on the market abroad with the proprietor's consent. The Swiss Federal Supreme Court held in a recent judgment that Article 12 of the Swiss Federal Copyright Statute establishes a principle of international exhaustion of copyright.

Nintendo, the owner of the copyright for the videogame Donkey Kong Land for the Gameboy, assigned the copyright for several countries (excluding Switzerland) to its US affiliate Nintendo of America. The plaintiff is the exclusive Swiss distributor of Gameboy games which were sold at the official sale's price. The defendant bought games from Nintendo's US affiliate and imported them into Switzerland, selling them at a lower price than the official sale's price. Subsequently, the plaintiff submitted a claim requesting the prohibition of parallel imports of the goods.

A crucial issue of the case was how Article 12 of the Swiss Federal Copyright Statute should be properly interpreted. According to that Article, works which the author has disposed of or which have been disposed of with his consent, may be resold or put into circulation. But does Article 12 provide for national or international exhaustion? The principle of national exhaustion implies that the exhaustion is limited to the national territory where the product was put on the market. International exhaustion means that the copyright owner's rights cease to exist once the owner has put the protected product on the market or has consented to putting on the market. Therefore the place where the product is put on the market is not important. This also means that the copyright owner cannot stop the import of those goods into his country.

The plaintiff suggested that the legislator had intended to adopt the principle of national exhaustion to prevent parallel imports in particular from countries outside the EU.

The Swiss Federal Supreme Court did not agree with that interpretation of Article 12. Neither the preparatory works to the law nor the statute itself indicate the principle of national exhaustion. There are also no grounds to suppose that the legislator would support the prohibition of parallel imports of goods protected by copyright. The court held that there was no predominating public interest for a prohibition. On the contrary, the public is interested in an unhindered access to foreign cultural property. The plaintiff argued that the cultural property industry would leave Switzerland if the court permitted parallel imports . The court did not agree with that view. It emphasized that the Swiss trade mark law, which also protects intellectual efforts, has accepted the principle of international exhaustion and it would therefore not be justified to treat copyright in a different way.

In conclusion, the court held that Article 12 establishes the principle of international exhaustion. The author's (or owner of copyright's) exploitation rights are therefore exhausted for works which have been put on the market abroad with his or her consent. One assumes that the author or owner already had the possibility to skim off any financial benefits when putting the product on the market. It is therefore not possible to prohibit the importing of such products with the help of copyright.

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