Bosshard Partners Intertrading AG v Sunlight AG

CourtFederal Tribunal (Switzerland)
Switzerland, Federal Tribunal.

(Chatelain, Presiding; Castella, Stoffel, Messmer and Weyermann, Judges)

Bosshard Partners Intertrading AG
Sunlight AG

Treaties Effect in municipal law Agreements between the European Community and third States Conditions for direct applicability EEC-Switzerland Free Trade Agreement, 1972 Articles 13 and 20 Whether creating directly enforceable rights for individuals

Relationship of international law and municipal law Treaties Effect in municipal law EEC-Switzerland Free Trade Agreement, 1972 Whether provisions of Agreement satisfying conditions for direct applicability

Treaties Interpretation Principles of interpretation Clear text Ordinary meaning Reference to other treaties Comparison with analogous provisions contained in another treaty Whether legitimate method of interpretation where purpose of treaties is different

International organizations EEC Relationship with third States Free Trade Agreement with Switzerland Purpose Whether requiring Switzerland to harmonize economic policy and legislation with that of the Community Institutions Court of Justice of the European Communities Powers Interpretation of Community agreements with third States Whether interpretation by Court of Justice of analogous provisions of other Community agreements is binding upon courts of third State

Economics, trade and finance Trade between European Community and third States Industrial property International group of companies holding same trademark in several countries Prevention of parallel imports by exercise of trademark rights Whether constituting measures with equivalent effect to quantitative restrictions Whether violating EEC-Switzerland Free Trade Agreement, 1972 The law of Switzerland

Summary: The facts:Sunlight AG (Sunlight), a subsidiary of Unilever, held the Swiss trademark for OMO for use on soaps and detergents. In 1976 Sunlight discovered that Bosshard Partners Intertrading (Bosshard) was supplying various Swiss wholesalers with similar products bearing the OMO trademark and originating from another Unilever subsidiary in the Federal Republic of Germany. Bosshard was able to obtain and sell its OMO products at a lower price than that payable for OMO products of Swiss origin. Sunlight obtained from a Swiss court an injunction to prevent these parallel imports, relying upon its trademark rights in Switzerland. Bosshard appealed to the Federal Tribunal, arguing that the exercise of trademark rights to prevent parallel imports constituted measures with equivalent effect to quantitative restrictions on imports which were not justified for the protection of industrial property and therefore violated Articles 13 and 20 of the Free Trade Agreement between Switzerland and the European Economic Community.

Held:The appeal was dismissed.

(1) A treaty, once ratified, could be binding not only on the national authorities but also on individuals, provided its provisions were directly applicable because they were sufficiently clear and precise to provide a basis for a decision in a particular case. Provisions which merely laid down a programme or regulated their subject-matter only in outline, leaving the contracting States a measure of discretion in fulfilling their obligations, were not directly applicable (pp. 5978).

(2) The genesis of the Free Trade Agreement showed that it was a purely commercial agreement with the sole purpose of creating a free trade area, in contrast to the EEC Treaty which created a uniform internal market with supranational competition rules. Neither did the Agreement designate any organ which, in the same way as the Court of Justice of the European Communities, could hold particular provisions to be directly applicable under municipal law. These differences affected the interpretation of some provisions of the Agreement. The jurisprudence of the Court of Justice of the European Communities concerning analogous provisions of the EEC Treaty was not binding on the Swiss courts since the Agreement did not require Switzerland to harmonize its economic policy or legislation with that of the EEC (pp. 599600).

(3) International treaties were to be interpreted in the first instance in accordance with their text. If the text was clear and its meaning, as it appeared from the ordinary sense of the terms as well as from the object and purpose of the treaty, was not clearly absurd, another interpretation did not come into question. A different intepretation would only be possible if it could be deduced with certainty from the context or the genesis of the treaty that the text did not correspond to the intention of the parties (p. 600).

(4) The meaning of Articles 13 and 20 of the Free Trade Agreement was clear and those provisions did not create rights for individuals which could be relied upon to restrict the application of Swiss trademark legislation by the municipal courts. Whilst Article 13 prohibited measures with equivalent effect to quantitative restrictions, in trade between the Community and Switzerland, Article 20 expressly reserved restrictions justified for the protection of industrial property. The lawful exercise of rights under Swiss trademark law could not therefore constitute a violation of the Agreement (pp. 6012).

The following is the text of the relevant parts of the judgment of the Court:

The Facts

Sunlight AG, of Olten, markets, in addition to soaps and cleaning agents, a detergent which it manufactures in Switzerland only and sells, again only in Switzerland, under the trade mark OMO. This trade mark has been on the Swiss Register since 1919 and was last renewed by Sunlight AG 27 March 1975 with no. 276,322. It is intended for soaps of all kinds, detergents, perfumery articles and cosmetic preparations, starch as well as cleaning agents, disinfectants and polishes.

Sunlight AG belongs to the Unilever group, which consists of a parent company with registered office in Holland and subsidiary companies in almost all West European countries. These companies use the name OMO as a manufacturer's name and trade mark for detergents.

In July 1976...

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