Opinion of Mr Advocate General
Mr President,
Members of the Court,
I — Introduction
Bv a judgment of 11 December 1980 the Gerechtshof [Regional Court of Appeal], The Hague, requested the Court:
With that question a national court is for the first time confronting the Court with the problem of how the general rule against precise or unauthorized imitation is to be treated under Community law. In the authoritative comparative legal study by Ulmer and others of the law of unfair competition in the Member States of the EEC the rule is described as belonging to one of the most difficult branches of the law óf unfair competition (Ulmer and Reimer, Das Recht des unlauteren Wettbewerbs in den Mitgliedstaaten der EWG, Volume III: Germany, Munich 1968, p. 190). An up-to-date comparative legal study shows that the rule exists in all the present ten Member States and that the conclusion drawn by Ulmer and Reimer in regard to German law that the rule is a difficult one is probably true of most other Member States.
Only Italy expressly prohibits precise imitation by statute, namely in Article 2598 of its Civil Code. All other Member States infer such a prohibition either from specific legislation on unfair competition in genera! or from general principles of tortious liability. The concept of precise imitation prevailing in academic writing appears, admittedly not without some confusion, to be this: (1) even the exact imitation of someone else's product is not caught per se by the prohibition and (2) all the legal systems of the Member States are based on the principle that in the absence of a specific industrial property right like a patent anyone may freely draw inspiration in his industrial or trading activities from what others have done. In principle that freedom also comprises the right to imitate a competitor's product. Only if such imitation may create confusion in the mind of purchasers as to the identity or origin of the product do all the legal systems of the Member States regard imitation as prohibited. The nature of the product, the characteristic features or components imitated, the necessity for or functionality of the imitation as well as the degree of technical expertise of the persons who usually buy it makes for an abundance of casuistry in the results of legal analysis. The criteria applied in such analysis vary to a greater or lesser extent from Member State to Member State. Such different approaches could help to explain inter alia why in the case of the cable ducts at issue here an action has never been brought in the Federal Republic of Germany concerning the Swedish product imitated by a German manufacturer. It may be seen from the file on the case that just the reverse happened and that the imitator successfully sued the Swedish manufacturer for unfair competition on the ground that in its advertisements it purported to own a patent which had already expired when the advertisements appeared. In pan (e) of its question the Gerechtshof, The Hague, therefore expressly assumes that the product in question was lawfully marketed in another Member State — in this case the Federal Republic of Germany. I shall later return to the question of the relevance of this point for the Court's ruling.
The criterion of the risk of confusion used in all the Member States to determine whether there is a case of precise imitation also finds support in Article 10 bis of the International Convention revising the Paris Convention for the Protection of Industrial Property of 20 March 1883, done in Stockholm on 14 July 1967 (Tractatenblad [collection of treaties and conventions] of the Kingdom of the Netherlands, 1970, No 187).
According to Article 1 (2) of that convention the protection of industrial property also has as its object the repression of unfair competition. Whether that must also be assumed in the case of the similar term appearing in Article 36 of the EEC Treaty is not certain. I shall also return to that question and its possible relevance for the Court's judgment.
More important for meeting the justification based on reasons of public interest required by Article 36 and the Court's decisions on Article 30 for breaches of the principle of the free movement of goods I consider to be Article 10 bis of the International Convention, as previously mentioned. In paragraph 3 of that article it is stated that (at art of the general obligation imposed o y paragraphs 1 and 2 on the countries of the Union to assure effective protection against unfair competition) the following in particular are to be prohibited:
...
The criterion of th- risk of confusion also plays a major pr in trademark law. That is clear not or.iv from the Court's case-law but also from Article 6 bis of the International Convention. To that extent it might be possible to say that the design of a product functions almost like a trademark which is then protected by the general rule against precise or unauthorized imitation.
Again I shall later return to the question of how far this can be taken to mean that the Court's case-law on the risk of confusion in trademark law is also relevant to the question raised in this case.
It is much more difficult to answer the question how far the rule against precise or unauthorized imitation acts like a patent besides having a function like a trademark. The facts of the case before the national court show that this question is also relevant to the questions submitted for a preliminary ruling. This question has arisen not only in this case but also in many other cases which national courts have had. to decide. After a patent has expired its original owner will naturally quite readily consider that there is a risk of confusion as soon as others start to use the subject of his patent. Generally speaking it can only be stated in this regard that the rule against precise or unauthorized imitation may not interfere with the right freely to use the subject of an expired patent. To some extent the case-law of many Member States corresponds to that principle by drawing a distinction between the elements technically necessary for a product, or at any rate its functional elements which a competing product may incorporate, and technically unnecessary or functional external features which a competing product may not incorporate. In principle patent protection will be available only in respect of the first-mentioned elements and then only on specific conditions laid down by the relevant patent legislation. The correspondence is not an absolute one, however, because the rule against precise imitation may also be applied outside the patent field. The factual question whether the SVT product at issue incorporates only technically necessary elements of the MCT product imitated, or technically unnecessary, external features as well, is of no concern to the Court in the context of proceedings for a preliminar) ruling. Nor is it of concern to the Court that according to the leading German judgment of 3 May 1968 in Pulverbehälter (an instructive summary of the case-law of the Bundesgerichtshof is given by Droste in Gewerblicher Rechtsschutz und Urheberrecht 1968 I, p. 591, et seq.) the facts of this case would presumably be approached in the Federal Republic of Germany by using criteria different from those formulated in paragraph (a) of the question posed by the Gerechtshof, The Hague. In its judgment of 11 February 1977 (Gewerblicher Rechtsschutz und Urheberrecht 1977, p. 642) the Bundesgerichtshof had to deal with facts (concerning built-in lamps) very much akin to those in this case. Judging by inter alia a judgment of the Cour de Cassation of 25 January 1977 (Annuaire 1977, p. 63) French courts also give the imitator considerably more freedom than Netherlands courts in their decisions. As the Court has indicated earlier in the Terrapin v Terranova judgment in Case 119/75 [1976] ECR 1039, it is no pan of the Court's duty to attempt to harmonize the concept of risk of confusion in the context of the interpretation of Articles 30 and 36 of the Treaty. It is as well to mention in this connection that the absence of any compelling reason for the product in issue to be virtually identical to the product imitated and the needless confusion thereby caused referred to in the question submitted allude to the construction of the concepts of compelling reason, needlessly and confusion occurring in a long line of judgments of the Hoge Raad [Hoge Raad 26 June 1953, Nederlandse Jurisprudentie 1954, p. 90; Hoge Raad 21 December 1956, Nederlandse Jurisprudentie 1960, p. 414; Hoge Raad, 8 Februar 1960, Nederlandse Jurisprudentie 1960, p. 415; Hoge Raad, 14 March 1968, Nederlandse Jurisprudentie 1968, p. 268; Hoge Raad, 12 June 1970, Nederlandse Jurisprudentie 1970, p. 434 and Hoge Raad, 24 November 1974, Nederlandse Jurisprudentie 1975, p. 176]. Naturally those authorities cannot bind this Court in so far as the concepts of compelling reason or justification or similar concepts occur in Article 36 of the Treaty and in the Court's decisions on Article 30. In construing the relevant Community law considerations wholly different from those which are material in national law in the field of unfair competition come into play. In other branches of the law of unfair competition or the law of industrial property the balancing of the interests protected by the law of unfair competition or the law of industrial propeny against the interests of the free movement of goods has always been crucial as far as this Court is concerned. In respecting the existence, the object or the essential aims of the national laws concerned, this Court has never hesitated from examining the application of those laws in the light of the aims of Community law. In this regard I consider it unnecessary to refer the Court to its numerous decisions on this matter. Where they are of more direct concern to the question submitted I shall return to them later.
Following those general introductor) remarki I shall deal with the following matters in turn.
In the second part of this opinion I shall make some further supplementary observations on the question posed by the Gerechtshof, The Hague. In so doing I shall examine more closely the question how far Articles 85 and 86 of the EEC Treaty mentioned at the beginning of the question submitted may be relevant for the purposes of the Court's answer.
In the third part of this opinion I shall examine more closely the question crucial to the Court's answer as to whether that answer must be based on Article 30 alone, or on Article 36 of the EEC Treaty as well, which the Gerechtshof, the Commission and the Government of the United Kingdom all appear'to assume. However, the United Kingdom does so only should the Court, contrary to its submission, take the viewthat the branch of the law of unfair competition in question does come under Article 30. In the third part of this opinion I shall also return to the point which I have already touched upon of relevant similarities and differences in the complex problem of distinguishing from Community law on the one hand and various branches of national industrial property in the narrow sense, national law on precise imitation and the law of unfair competition in more general terms on the other.
In the same part of this opinion I shall then examine the question as to which conclusions should follow from, first, the assumption that Article 36 also applies and, secondly, the assumption that only Article 30 applies. At the same time I shall indicate how far relevant differences may occur in practice and how far any differences may be overcome in practice. Finally, in the same part of this opinion, I shall indicate the reasons for which one of the two assumptions might eventually be chosen.
In the last pan of this opinion I shall set out and give reasons for my final conclusion.
As may appear from the outline I have given, I shall not devote any separate paragraph to the facts forming the basis of the case.
The dispute concerns cable ducts of a type which were originally manufactured under a patent in Sweden alone but after the patent expired were copied by a German manufacturer. Besides being marketed in Germany the German SVT product is marketed in the Netherlands and elsewhere. For the further developments in the case I can where the facts are concerned as usual mainly refer to the Report for the Hearing. I should moreover supplement the Report for the Hearing on one point of fact because it arose only at the end of oral procedure. Besides being used in buildings the cable ducts are also used in ships. Unlike a building a ship is movable. The question therefore arises as to how far the judgment at first instance, against which appeal has been made to the Gerechtshof, The Hague, also applies to the supply of components of the SVT product at issue for use in ships which are being repaired in a Netherlands port and in which a lawfully-sold SVT cable duct has been installed elsewhere in the Community. The judgment of the Arrondissementsrechtbank, The Hague, against which the appeal has been made to the Gerechtshof, The Hague, is not clear on this point as it restrains the defendant from marketing or causing to be marketed in the Netherlands the cable ducts referred to in the proceedinr; and described above and orderir.. the defendant to pay the plaintiff a tine of ... for each cable duct unit or pan thereof which the defendant markets or causes to be marketed contran to this injunction ... and so on. What did become clear during the brief discussion of this point is that the acceptability in Community law of restricting trade in components, accessories or, in some cases, accessories such as paint, is not immediately self-evident from the answer applying in the case of the end products for which they are used. The trade in components or accessories is in fact only a relatively minor point in this case. In other cases, such as trade in car parts, or trade in parts for cash registers, as in the Court's judgment in Case 22/78 Hugin v Commission [1979] ECR 1869, an assessment of the restrictions on trade may be much more important. In the application of Articles 85 and 86 it appears then that an important question arises as to the extent to which there is a separate relevant market for trade in components. In the cases cited as examples the same question might be relevant as regards the application of Articles 30 or 36 if upon the importation of products into a country they are barred in that country on the ground of the national law against precise or unauthorized imitation. Certainly, where there is a separate relevant market in components, it does not appear to be self-evident that, if a restriction of imports of the end product is regarded as permissible, imports of components may be automatically prohibited as well. In the present case it seems improbable that there is a separate relevant market in cable duct components. Trade in components is probably carried out by the same persons who trade in the end product. However, even then it does not appear to be self-evident that if a prohibition of trade in the end product is regarded as permissible it should automatically justify a prohibition of trade in components as well. I shall therefore briefly return to this point in the last part of this opinion.
II — Observations on the question raised
The question raised gives in exemplary fashion an abstract summary of the facts in terms appropriate to Netherlands law (assumption (a)), the legal position under Netherlands law (parts (b) and (c)), and of the facts which the Gerechtshof, The Hague, considers to be particularly relevant from the point of view of Community law (assumptions (b) and (e)).
The ultimate question submitted is also exemplary in so far as its clear, abstract wording makes reformulation on the part of the Court unnecessary to avoid the Court's ruling on the actual circumstances of the case in point. The fact that in view of that wording the Gerechtshof clearly assumes that Article 36 of the EEC Treaty may be relied upon in this case should not, in view of the further wording of the question, prevent the Court from examining the question whether it might be possible successfully to rely on the exceptions which the Court, when construing Article 30, has accepted in its previous judgments on the strict footing of the Dassonville judgment (Case 8/74 [1974] ECR 837). On the other hand the significance which the Court must attach in its answer to the beginning of the question in which an interpretation of Articles 85 and 86 is also sought is unclear.
It appears from the judgment making the reference that the plaintiff in the main action is the sole imponer of the Swedish MCT product the imitation of which is challenged. It also appears from paragraph 16 of the judgment making the reference that the Gerechtshof rejected the defence argument of BV Industrie Diensten Groep, the defendant in the main action at first instance, that the action of Beele, the plaintiff, was contrary to Articles 85 and 86 of the EEC Treaty on the ground that IDG has not submitted and the facts do not disclose any question or the possibility of their being any question of an agreement between undertakings, a decision by an association of undertakings or concerted practices referred to in Article 85 or of a dominant position within the common market or in a substantial part of it as referred to in Article 86. Since at the beginning of its question the Gerechtshof nevertheless seeks an interpretation of Articles 85 and 86 of the EEC Treaty with reference to its ultimate question, it seems to me to be useful here briefly to examine this aspect as well.
It is not claimed, nor is it likely on the basis of the facts, that the sole importer status of the plaintiff in the main action, presumably based on an exclusive dealing agreement, is not covered by Regulation No 67/67/EEC of the Commission on the application of Article 85 (3) to certain categories of exclusive dealing agreements (Official Journal, English Special Edition 1967, p. 10). In particular, the exceptions set out in Article 3 to the exemption granted in Article 1 of the regulation appear to have no application in this case. It therefore appears that, in the absence of any other conclusion to which facts not apparent from the file might lead, a national court may assume that the relevant exclusive dealing agreement is a valid one. Thus although, contrary to the Gerechtshof's assumption, there is presumably an agreement of the kind referred to in Article 85, none of the known facts therefore indicate that there is an agreement which is prohibited by Article 85. The fact that the Commission may pursuant to Article 7 of Regulation No 19/65/EEC of the Council (Official Journal, English Special Edition 1965-1966, p. 35) terminate the validity of an exclusive dealing agreement falling under the relevant regulation granting exemptions where the conditions of Article 85 (3) do not appear to be fulfilled in practice does not militate against that conclusion. That could happen, for example, if, in conjunction with the exercise of the right to protection against unfair competition, the exclusive dealing agreement in question afforded an undertaking the possibility of eliminating competition in respect of a substantial pan of the products in question on the relevant product market (Article 85 (3) (b)). Since there is nothing to indicate such market control exists and the right to apply Article 85 (3) and Article 7 of Regulation No 19/65 of the Council is reserved to the Commission, the Gerechtshof does not in my opinion need to concern itself with that possibility.
However, the literal text of the question posed by the Gerechtshof with reference to Anieles 85 and 86 includes this question in the interpretation sought of the provisions concerning the free movement of goods. The question then arises whether the Coun's judgment in Case 13/77 INNO v ATAB [1977] ECR 2115 may be relevant in this case.
In that judgment the Court ruled, after first stating that the abuse of a dominant position encouraged by a national legislative provision is also prohibited by
By analogy with that judgment the question ought to be examined in this case whether a prohibition of imitation such as the one at issue here might encourage abuse of a dominant position within the meaning of Article 86 or whether in a case such as this the application of a prohibition of imitation imposes conduct on the pan of an undertaking which as such is contran to Anieles 85 and 86. As I argued earlier, there is nothing to indicate the imposition of any conduct on the pan of an undertaking which as such would de jure be contrary to Article 85. The exclusive dealing agreement in question could have been declared prohibited by the Commission on the basis of Regulation No 19/65 at most. As regards Article 86, a prohibition of imitation might well encourage the creation of a dominant position on the pan of the plaintiff undertaking in the main action. However, Article 86 does not prohibit the creation of a dominant position but only the abuse of one and then only when the abuse may affect trade between Member States. Since, unlike that in the INNO v ATAB case, the reference does not assume any possible specific abuse of a dominant position within the meaning of Article 86 which may be encouraged or imposed by the application of a prohibition of imitation, I think that on balance in its actual interpretative ruling the Court does not need to give any consideration to the application in this case of the INNO v ATAB authority.
III — Examination in the light of Articles 30 and 36 of the EEC Treaty of a prohibition of imitation such as the one under consideration
IV — Summing-up and conclusion
I do not consider the difference in outcome in the case of the two assumptions under discussion to be wholly satisfactory. In particular I do not consider it to be wholly satisfactory that in the case of the second assumption no account is taken of the guidance which mav be drawn from an examination of the similarities and differences between on the one hand the law of imitation and on the other the law of patents and trademarks and the Court's case-law thereon. Although the law of imitation is a branch of the law against unfair competition, despite the differences which I have indicated and still other differences, it exhibits such similarity with trademark law in particular that an approach somewhat less rigid than that which might be inferred from the judgment in the Dansk Supermarked case in particular can be justified in this case. As 1 have shown, this case after all concerns a branch of the law against unfair competition bordering very closely on trademark law. A synthesis of both assumptions might then be found by adding the following passage to the answer based on the assumption — for which I ultimately opt — that only Article 30 applies: The grant of an injunction is not prevented either if another design may be reasonably demanded of the foreign manufacturer bearing in mind not only the technical feasibility but also the economic feasibility inherent in that manufacturer's product range. In so far as parts of the product at issue are marketed separately they should be considered separately in the light of the aforesaid criteria. Particularly pans intended for products lawfully obtained elsewhere in the Community ought not to be made subject to conditions which make it vinually impossible to trade in them.
I have already pointed out that owing to the judgment in Dansk Supermarked the compatibility of this final passage with that judgment may be doubted. However, I aiso indicated the grounds on which it may ultimately be argued in the light of the Coun's earlier decisions that the passage is nevertheless acceptable. I think that it can withstand tne test of the principle of proportionalitv which is regularly applied by the Court in its decisions on cases concerning rules of public interest considered in principle to be reasonable and the principle of alternative means also applied in those decisions. I think that it is compatible with the second sentence of Article 36 too which, judging by the Court's Dassonville judgment, the Court also applies in the context of Article 30.
1 Translated from the Duuh