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Ban on parallel imports upheld

The pharmaceutical sector would be hard hit by parallel imports Keystone

Campaigners for cheaper import products, including pharmaceuticals and electronic equipment, have suffered a setback in parliament.

This content was published on June 5, 2008 - 20:58

The House of Representatives voted for a legal amendment aimed at banning so-called parallel imports of goods which benefit from patent protection.

A majority of the rightwing Swiss People's Party and the centre-right Radical Party said it was crucial for the country to ensure inventions, research and jobs.

The other main parties, the centre-right Christian Democrats, the Greens and the centre-left Social Democrats failed in their attempt to allow the import of patent-protected goods, including machinery, from European Union countries or from overseas.

They argued in vain that more competition would lead to lower consumer prices.

"The outcome of the debate is disappointing. Parliament gave away an opportunity to tackle high prices in Switzerland," said Sara Stalder of the Consumer Protection Foundation.

She says moves are underway to force lower import prices through a nationwide vote.

Innovation

For its part, the Swiss Business Federation welcomed the decision by the politicians.

"The House of Representatives has come out strongly in support of protecting innovation. The proposed changes in the legislation – no protection for minor patents – and the competition law allow the authorities to combat abuse efficiently," said the federation's Thomas Pletscher.

He added that Switzerland's policy was in line with regulations in other countries.

Thursday's debate in the house was technical and was marked by what appeared to be paradoxical statements and mutual accusations of a contradictory policies.

The centre-left flew the flag of free market values and increasing competition, while the Radicals, which are close to the business community, and the People's Party with its roots in rural areas and small business circles argued for protectionist measures.

Entrepreneurs Peter Spuhler of the People's Party and Johann Schneider-Ammann, a member of the Radical Party, vehemently defended patent protection and proprietary rights.

"Protecting innovation is more important than reducing prices. We must not endanger Switzerland's position in research," said Ammann, who is also president of the umbrella body of the engineering sector.

Prices

However, Social Democrat Hildegard Fässler highlighted the fight against high prices.

"We are against market protection in general. We believe that more competition will lead to lower prices for consumers and small and medium-sized businesses."

As the discussions dragged on amid tactical manoeuvres over voting procedures and proposed exemptions for the pharmaceutical industries, Green parliamentarian Daniel Vischer voiced his disillusion.

"No new insights have been presented compared with the debate in 2006," he said.

Justice Minister Eveline Widmer-Schlumpf pointed out that the current ban on parallel imports did not block competition and prices would not necessarily go down if the restrictions were lifted.

"We must not jeopardise the economic basis of Switzerland by easing the protection of patents," she said.

swissinfo, Urs Geiser

In brief

Bans on parallel imports are in force notably for pharmaceutical products, electronic equipment, kitchen appliances, machinery and vehicles.

The debate over parallel imports dates back to 1999 when the Federal Court ruled against the company Kodak, which attempted to sell film manufactured abroad at a price lower than on the Swiss market.

The current amendment, still to be debated in the Senate, is aimed at enshrining the ban in law.

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Patent protection and parallel imports

A patent is a protective right for a technical invention which solves a technical problem.

Inventions include products and processes and can be commercially applied if novel and non-obvious.

A patent gives the exclusive right to commercially use an invention for up to 20 years. During this period the owner of the patent can prohibit others from using it.

It makes it possible to recoup the money invested in the development and to make a profit.

A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property right owner.

Companies set different price points for their products in different markets.

Parallel importers normally buy products in one country at a price which is cheaper than the price at which they are sold in a second country.

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