Facts
Nintendo Co. Ltd. is the holder of the copyrights to the video game "Donkey Kong Land", which can be played on a "Game Boy". It assigned its copyrights, limited in geographical scope to the USA, Canada, Mexico, and Latin America, to its American subsidiary Nintendo of America Inc. This company brought the Game Boy version of the game to the US market. In Switzerland, Waldmeier AG has the exclusive distribution rights for Nintendo video games and introduced the Game Boy game "Donkey Kong Land" to the Swiss market at the official sales price as of July 1995.
According to a price list from December 1995, Wahl Eximpo AG (now Imprafot AG) offered the American Game Boy version of the game "Donkey Kong Land" with an English instruction manual at a lower price. On November 15, 1995, it sold such a video game to Zihlmann AG in Rheinfelden.
Nintendo Co. Ltd. and Waldmeier AG then obtained a preliminary injunction against Wahl Eximpo AG to prohibit the parallel import and further distribution of these video games in Switzerland. In the subsequent main action, they demanded a court ruling that the defendant had infringed the copyrights of the first plaintiff and also committed unfair competition against the second plaintiff through its parallel imports.
Considerations
According to the Federal Supreme Court, the principle of international exhaustion continues to apply in Swiss copyright law. Accordingly, copies of a work that the author or with his consent have been put into circulation abroad can be freely resold in Switzerland. The importation of such products cannot be prevented by copyright means.
The Federal Supreme Court rejects the argument of the Commercial Court that exhaustion is limited due to contractual restrictions on the distribution…