Opinion of Mr advocate-general Mayras

Mr President,

Members of the Court,

The problem caused by conflicts arising from the co-existence within the common market of the principle of free movement of goods with the territorial nature of the national tides protecting industrial and commercial property in one or more Member States, and in particular the trade-mark right, has appeared only gradually with the interpenetration of markets. All the authorities, anxious to abolish distortions so caused, have found themselves sooner or later confronted with this problem. They have attempted to resolve it in different ways either by means of provisions of positive law or leaving it to the courts to do so.

At the Community level work has been going on for some years to create a European system of patents and trade-marks. This shows that the establishment of such a system is inseparable from the achievement of the objectives of the Treaty. But unlike the concept of public policy and public health that of the protection of industrial and commercial property, apart from the very important sphere of patents, has not been the subject of any implementing rules at the Community level although there have been numerous learned conferences devoted to it and it has received close attention in the work of the International League against Unfair Competition.

This means that the scope which the legislature and the Community court have is particularly vast.

It is this problem which the present reference for a preliminary ruling raises once again. The interest which it presents is likewise shown by the fact that all the governments of the Member States except for those of Italy and Luxembourg have made written observations although only the Government of the Federal Republic of Germany was represented at the oral proceedings.

The question which the Bundesgerichtshof has submitted to you in accordance with the last paragraph of Article 177 of the EEC Treaty has been raised in the context of an appeal brought by the British company Terrapin (Overseas) Ltd. of Bletchley against the decision given by the Court of Appeal Munich in favour of the German company Terranova Industrie C. A. Kapferer & Co. of Freihung prohibiting on pain of sanctions the British company from using in the Federal Republic of Germany, including West Berlin, for commercial purposes the name Terrapin (Overseas) Ltd. and that of its subsidiary Terrapin Systembau Nordeuropa GmbH on prefabricated components assembled on site and capable of being dismantled, or huts erected from component parts.

It appears from the documents on the file, as analysed in the report for the hearing, that Terrapin, a British manufacturer of prefabricated wooden houses and construction components for this purpose has been trying for several years to penetrate the German market. The abolition of customs duties as a result of the accession can only help it in its attempts. But it has encountered opposition on this market from a German manufacturer of diverse building materials, Terranova, which a long time ago under the German law on trade-marks protected not only its commercial name but also the generic description Terra and a series of derived words including this stem.

At issue in particular are the word-mark Terra No 151654, the word/device mark Terranova No 359464 containing a symbol and covering the following products: paints, varnishes, colours, resins, adhesives, artificial stone in the form of slabs, building materials, dry and decorative plastering, plastering for façades, and the Terranova mark No 431118 with a particular arrangement of letters covering the same products and in addition rough rendering for walls and façades.

Terranova which has been in existence more than 75 years no more seems to have a dominant position in its own field than Terrapin appears to have a dominant position in the export of prefabricated wooden houses into the Federal Republic of Germany although it is a relatively larger undertaking. Both companies sell their products in several Member States.

Although no conflict appears to have arisen between these two companies in these States the one which exists between them in the Federal Republic has given rise to a whole series of actions which have met with various fates.

After Terrapin had lodged an application for registration of its mark in the register kept by the Patents Office the latter by decision of 28 December 1961 dismissed an objection by Terranova. But on the latter's appeal the Federal Patents Court by order dated 3 February 1967 annulled the decision of the Patents Office and prohibited the registration of the mark Terrapin.

The British company however continued to market the products it manufactures under the marks Terrapin or Tarapin through various licensees and it is thus that the case came before the Bundesgerichtshof.

In the judgment contested before the Bundesgerichtshof the Oberlandesgericht München had found that the products sold by the two companies were similar, that there was similarity between their marks and as a result there was a risk of confusion between their respective products. On this point the German Bundesgerichtshof adopted in toto the findings of the Oberlandesgericht without enlarging upon its point of view. It concluded that from the point of view of the national law the judgment of the Oberlandesgericht, which issued a prohibition affecting the British company could only be confirmed.

But this court asks whether it is not possible to transpose your case-law with regard to the free movement of goods subject to a trade-mark distinguished in particular by your judgments of 18 February 1971 (Case 40/70, Sirena [1971] ECR), 8 June 1971 (Case 78/70, Deutsche Grammophon, [1971] ECR), 3 July 1974 (Case 192/73, Hag, [1974] ECR 731) and lastly 31 October 1974 (Case 16/74, Winthrop, [1974] ECR 1183) to the case with which it is concerned.

The court seems to me to require more than an answer to an abstract question and to seek confirmation that its view is correct.

In these circumstances it asks you a single question which is basically whether the protection resulting from the national law on trade-marks and commercial names may be used to prevent the importation of a product marketed under a trade-mark or commercial name legally acquired in another Member State and likely to cause confusion if there are no relations between the two undertakings concerned and if their rights arose independently in different Member States.

This latter qualification refers directly to your decision in Hag. You will recall that the interpretation which you gave on that occasion was based on the fact — some interpreters regarded it as decisive — that the homonymy of the trade-marks then in question had a common origin — although there was no longer any connexion of any kind at the time between the two companies which were using these trade-marks — and that in such a case it was proper that the principle of the unity of the market should prevail over the interest of the proprietors of forcibly severed trade-marks: according to some, only the unlawful use of a trade-mark by someone who has no tide thereto would be an infringement justifying a restriction on free movement.

Although the question before you today relates both to trade-marks and commercial names, I shall limit my remarks to the first, for I agree with the Commission in thinking that this should suffice to resolve the question in the present case; moreover I think that the same answer must apply to the trade-mark and the commercial name when they are, as in the present case, almost the same.

This question disregards any restrictive agreement on competition between the holders of the two trade-marks and likewise any abuse of a dominant position by one of the companies. Moreover the bona fides of each of the companies cannot be doubted and in these circumstances there cannot be said to be infringement in the true sense. But whereas the Hag case was concerned with a prohibition on marketing in a Member State a product legally bearing a trade-mark in another Member State on the basis that an identical trade-mark having the same origin existed in the first State, the present case differs in that it is concerned with products and trade-marks which are not identical and which, by definition, do not have the same origin.

I —. The first element, the fact that the products and trade-marks are not identical should, prima facie, lead one to think that such a prohibition is incompatible with the provisions of the Treaty. The second element, the fact that there is no common origin, which appears necessarily to be implied in the case of foreign trade-marks which are not identical and products which are not the same, does not, at first sight at least, appear to be an obstacle to recognizing such a prohibition as being incompatible with the provisions of the Treaty. On the contrary it could be maintained that although you have recognized in the Hag case that trade-marks may co-exist because of their common origin and that although you have thus made an exception to the prohibition on co-existence, you would have decided otherwise in the case of similar products bearing trade-marks having a different origin and capable of giving rise to a risk of confusion. In any event you have not given an express ruling on such a case of similar trade-marks having a different origin.

II —. I do not think so.

III —. I thus come to the crux of the present case: in the absence of a Community system protecting consumers and guaranteeing fairness of competition, who are the authorities entrusted with applying the terms similarity of trade-marks, 'similarity of products and risk of confusion and how is it to be guaranteed that the criteria according to which they are adopted should be uniform?

IV —. I am not unaware of the unsatisfactory aspects of this state of affairs. The different conditions in regulations with regard to the protection against unfair competitors which is recognized by the courts, the different concepts with regard to criteria of confusion or protection of consumers, not to say the nationalism of trade-marks, can lead to diametrically conflicting decisions. The exceptions to free movement, justified on grounds of protecting commercial property, are capable of having a different scope and significance according to the Member State. But as Mr Justice Graham very pertinently says in his judgment of 13 March 1975 in the case of EMI v CBS, Community law is, as regards industrial and commercial property — and, let me add, protection of consumers and protection against unfair competition — in a formative stage; the resolution of the conflict between national territorial rights and the free movement of goods has not yet been completely worked out.

V —. However this situation is not completely irremediable. The answer may be sought at different levels.

In these circumstances my opinion is that you should rule that Articles 30 and 36 do not prevent a national court, founding itself on protection against unfair competition and protection of consumers, from ordering an undertaking not to market the product in a Member State under a trade-mark legally affixed to it in another Member State but capable of causing confusion with similar products sold under a similar trade-mark by another undertaking of the first of these States when there are no relations between the undertakings concerned and their trade-mark rights have arisen independently in different Member States, unless this constitutes arbitrary discrimination or a disguised restriction on trade between Member States.

1 Translated from the French.