Prohibition of Restrictive Trade Practices (Germany) Case

CourtFederal Cartel Office (Germany)
Date03 a 1959
Federal Republic of Germany, Federal Cartel Office.
Prohibition of Restrictive Trade Practices (Germany) Case.

International law Relation to municipal law Treaties Operation as part of municipal law European Economic Community (Common Market) Treaty of March 25, 1957 Provisions of Treaty prohibiting restrictive trade practices The law of Germany.

Treaties Operation and enforcement of Applicability of treaty as part of municipal law European Economic Community (Common Market) Treaty of March 25, 1957 Provisions of Treaty prohibiting restrictive trade practices The law of Germany.

Treaties Special kinds of Treaty establishing European Economic Community, 1957 Articles 8590 Provisions prohibiting restrictive trade practices Whether requiring further legislative elaboration Whether binding on German courts The law of Germany.

The Facts.A French firm (hereafter referred to as the licensor) was the owner of patents granted in respect of certain machines. A German firm (hereafter referred to as the licensee) was granted an exclusive licence under these patents to manufacture and sell these machines in Germany. The licensing agreement also contained a restrictive covenant whereby the licensee undertook not to manufacture or sell certain types of these machines for a period of three years after the termination of the agreement. The licensee requested the Federal Cartel Office to give its consent to the operation of the agreement, as required by the German Law against Restrictions of Competition of July 27, 1957. The Cartel Office found the agreement to be in accordance with the Law against Restrictions of Competition. Having so found, it proceeded to consider the question whether the provisions of the Treaty of March 25, 1957, establishing the European Economic Community, which had been ratified by the Federal Republic of Germany, were directly applicable in Germany and binding on the German courts and, if so, whether the licensing agreement complied with the provisions of the Treaty prohibiting restrictive trade practices (Articles 85 et seq. of the Treaty).

Held: that Articles 85 et seq. of the Treaty constituted law which was directly applicable in Germany and binding on the German courts, and that the licensing agreement did not contain restrictive provisions contrary to the terms of the Treaty and should accordingly be allowed to operate.

The Court said in part: The licensing agreement can be freed from the prohibition contained in Article 85 (1) of the...

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