CELEX: 62003CJ0347
External relations
EC-Hungary Agreement on the reciprocal protection and control of wine names
Protection in the Community of a name relating to certain wines originating in Hungary
Geographical indication "Tokaj"
Exchange of letters
Possibility of using the word "Tocai" in the term "Tocai friulano" or "Tocai italico" for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions ("quality wines psr"), during a transitional period expiring on 31 March 2007
Exclusion of that possibility at the end of the transitional period
Validity
Legal basis
Article 133 EC
Principles of international law relating to treaties
Articles 22 to 24 of the TRIPs Agreement
Protection of fundamental rights
Right to property

1       The reference for a preliminary ruling concerns the validity and interpretation of Council Decision 93/724/EC of 23 November
1993 concerning the conclusion of an Agreement between the European Community and the Republic of Hungary on the reciprocal
protection and control of wine names (OJ 1993 L 337, p. 93, ‘the EC‑Hungary Agreement on wines’) and of Commission Regulation
(EC) No 753/2002 of 29 April 2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 as regards the
description, designation, presentation and protection of certain wine sector products (OJ 2002 L 118, p. 1).
2       That reference was made in proceedings between the Regione autonoma Friuli‑Venezia Giulia (Autonomous region of Friuli-Venezia
Giulia) and the Agenzia regionale per lo sviluppo rurale (Regional Agency for Rural Development, ERSA) (together, ‘the Region
and ERSA’) and the Ministero della Politiche Agricole e Forestali (Italian Ministry of Agricultural and Forestry Policy).
3       Those proceedings concern an application for annulment of the Ministerial Decree of 26 September 2002 laying down national
conditions for the use, in derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of the names of vine varieties
and their synonyms including a geographical indication, listed in Annex II to that regulation, which may appear on the labelling
of Italian [quality wines produced in specified regions] and [typical geographical indications] (GURI No 247 of 21 October
2002, p. 3, ‘the Decree of 26 September 2002’), in so far as it precludes the use of the word ‘Tocai’ in the term ‘Tocai friulano’
or its synonym ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines
produced in specified regions (‘quality wines psr’), at the end of a transitional period expiring on 31 March 2007.

Legal framework

International law
The Vienna Convention on the Law of Treaties
4       Article 48(1) of the Vienna Convention on the Law of Treaties of 23 May 1969 provides:
‘A State may invoke an error in a treaty as invalidating its consent to be bound by the treaty if the error relates to a fact
or situation which was assumed by that State to exist at the time when the treaty was concluded and formed an essential basis
of its consent to be bound by the treaty.’
5       Under Article 59 of that Convention:
‘1.      A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter
and:
(a)      it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed
by that treaty; or
(b)      the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable
of being applied at the same time.
…’
The European Convention for the Protection of Human Rights and Fundamental Freedoms
6       Article 1 of Protocol No 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’)
signed at Rome on 4 November 1950 provides:
‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions
except in the public interest and subject to the conditions provided for by law and by the general principles of international
law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary
to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions
or penalties.’
Law arising from the Agreement establishing the World Trade Organisation
7       The Agreement on Trade-Related Aspects of Intellectual Property Rights (‘the TRIPs Agreement’), which is set out in Annex
1 C to the Agreement establishing the World Trade Organisation (‘the WTO Agreement’), was approved on behalf of the European
Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994 (OJ 1994 L 336, p. 1).
8       Article 1 of the TRIPs Agreement, headed ‘Nature and Scope of Obligations’, provides in paragraph 2:
‘For the purposes of this Agreement, the term “intellectual property” refers to all categories of intellectual property that
are the subject of Sections 1 through 7 of Part II.’
9       Articles 22 to 24 of that agreement are in Part II thereof, which deals with ‘Standards concerning the Availability, Scope
and Use of Intellectual Property Rights’, and specifically in Section 3 of that part, relating to ‘Geographical Indications’.
10     Under Article 22 of that agreement, headed ‘Protection of Geographical Indications’:
‘1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in
the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic
of the good is essentially attributable to its geographical origin.
…’
11     Article 23 of the TRIPs Agreement, headed ‘Additional Protection for Geographical Indications for Wines and Spirits’, stipulates:
‘1.      Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines
for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits
not originating in the place indicated by the geographical indication in question … .
…
3.      In the case of homonymous geographical indications for wines, protection shall be accorded to each indication … Each Member
shall determine the practical conditions under which the homonymous indications in question will be differentiated from each
other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.
…’
12     Article 24 of that agreement, headed ‘International Negotiations; Exceptions’, provides:
‘1.      Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article
23. …
…
3.      In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that
Member immediately prior to the date of entry into force of the WTO Agreement.
4.      Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication
of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries
who have used that geographical indication in a continuous manner with regard to the same or related goods or services in
the territory of that Member either (a) for at least 10 years preceding 15 April 1994 or (b) in good faith preceding that
date.
…
6.      … Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other
Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape
variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement.
…’
The EC-Hungary Association Agreement
13     The Europe Agreement establishing an association between the European Communities and their Member States, of the one part,
and the Republic of Hungary, of the other part, concluded and approved on behalf of the Community by Decision 93/742/Euratom,
ECSC, EC of the Council and the Commission of 13 December 1993 (OJ 1993 L 347, p. 1, ‘the EC-Hungary Association Agreement’),
was signed in Brussels on 16 December 1991 and, in accordance with the second paragraph of Article 123, entered into force
on 1 February 1994.
14     Pending the entry into force of the EC-Hungary Association Agreement, the Interim Agreement between the European Economic
Community and the European Coal and Steel Community, of the one part, and the Republic of Hungary, of the other part, on trade
and trade-related matters was concluded and approved on behalf of the Community by Council Decision 92/230/EEC of 25 February
1992 (OJ 1992 L 116, p. 1, ‘the EC-Hungary Interim Agreement’). That agreement was signed in Brussels on 16 December 1991
and entered into force on 25 February 1992.
The EC-Hungary Agreement on wines
15     The EC-Hungary Agreement on wines, signed at Brussels on 29 November 1993, was concluded and approved on behalf of the Community
by Decision 93/724 and entered into force on 1 April 1994.
16     The first citation in the preamble to Decision 93/724 states:
‘Having regard to the Treaty establishing the European Community, and in particular Article [133] thereof’.
17     The first and third recitals in the preamble to that decision are worded as follows:
‘Whereas the Agreement negotiated between the European Community and the Republic of Hungary on the reciprocal protection
and control of wine names will help make measures to eliminate unfair competition in trade more effective, ensure a greater
degree of consumer protection and promote trade in wine between the Contracting Parties; whereas it is therefore desirable
to approve the said Agreement;
…
Whereas, since the provisions of the Agreement are directly linked to measures covered by the common commercial and agricultural
policy [in this case the Community rules in the wine sector], the said Agreement must be established at Community level’.
18     Under Article 1 of that decision:
‘The Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine
names, the Protocol, exchanges of letters and declarations annexed thereto are hereby approved on behalf of the Community.
The text of the acts referred to in the first paragraph are attached to this Decision.’
19     The first citation in the preamble to the EC-Hungary Agreement on wines states:
‘Having regard to the Europe Agreement establishing an association between the European Communities and their Member States
and the Republic of Hungary, signed in Brussels on 16 December 1991’.
20     Article 1 of the EC-Hungary Agreement on wines stipulates:
‘The Contracting Parties agree, on the basis of reciprocity, to protect and control names of wines originating in the Community
and in Hungary on the conditions provided for in this Agreement.’
21     Article 2(2) of that agreement provides:
‘For the purposes of this Agreement, unless the contrary intention appears:
…
–      “geographical indication” shall mean an indication, including an “Appellation of origin”, which is recognised in the laws
and regulations of a Contracting Party for the purpose of the description and presentation of a wine originating in the territory
of a Contracting Party, or in a region or locality in that territory, where a given quality, reputation or other characteristic
of the wine is essentially attributable to its geographical origin,
…’
22     Under Article 4 of that agreement:
‘1.      The following names are protected:
(a)      as regards wines originating in the Community:
…
–      the geographical indications and traditional expressions referred to in the Annex;
(b)      as regards wines originating in Hungary:
…
–      the geographical indications and traditional expressions referred to in the Annex, as they appear in the Hungarian wine legislation,
…
…
3.      In the Community, the protected Hungarian names:
–      are reserved exclusively to the wines originating in Hungary to which they apply, and
–      may not be used otherwise than under the conditions provided for by the laws and regulations of Hungary.
…
5.      In the case of homonymous or identical geographical indications:
(a)      where two indications, protected by virtue of this Agreement, are homonymous or identical, protection shall be accorded to
each indication, provided that:
–      the geographical name in question has been used traditionally and consistently to describe and present a wine produced in
the geographical area to which it refers,
–      the wine is not falsely represented to consumers as originating in the territory of the other Contracting Party;
…
In such cases, the Contracting Parties shall determine the practical conditions under which the homonymous or identical indications
in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers
concerned and that consumers are not misled.’
23     Part B (‘Wines originating in the Republic of Hungary’), section I (‘Geographical indications’), point 3.4 (‘Wine-growing
region Tokaj-Hegyalja’) of the Annex to the EC-Hungary Agreement on wines, headed ‘List of protected names for wines referred
to in Article 4’, includes the name ‘Tokaj’. Part A (‘Wines originating in the European Community’) of that annex does not
include either of the terms ‘Tocai friulano’ or ‘Tocai italico’.
24     The exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on
the reciprocal protection and control of wine names (OJ 1993 L 337, p. 169, ‘the exchange of letters on Tocai’), which is
one of the acts referred to in the first paragraph of Article 1 of Decision 93/724, also entered into force on 1 April 1994.
25     After referring inter alia to Article 4(3) of the EC-Hungary Agreement on wines, the signatories of those letters confirm
that:
‘1.      For a transitional period of thirteen years from the entry into force of that Agreement, the application of the latter will
not preclude the lawful use of the name “Tocai” to designate and present certain Italian quality wines psr under the following
conditions.
Without prejudice to particular Community provisions and, where applicable, any more restrictive national provisions, the
wine must be:
–      obtained from the “Tocai friulano” vine variety;
–      produced from grapes totally harvested in the Italian regions Veneto and Friuli;
–      designated and presented solely by the name of the variety “Tocai friulano” or by its synonym “Tocai italico”, the two words
making up those names appearing together without any intervening words, in characters of the same type and size on a single
line and separate from the name of the geographical unit in which the wine originates. In addition, the size of the characters
used for those words may not exceed that of the characters giving the name of that geographical unit;
–      marketed outside the territory of Hungary.
…
4.      Without prejudice to the provisions referred to in point 3, the possibility of using the name “Tocai” in accordance with the
conditions set out in point 1 will expire at the end of the transitional period referred to therein.
…’
26     Under the Joint Declaration concerning Article 4(5) of the [EC-Hungary] Agreement [on wines] (OJ 1993 L 337, p. 171, ‘the
Joint Declaration on homonymous indications’), which is also one of the acts referred to in the first paragraph of Article
1 of Decision 93/724:
‘In respect of Article 4(5)(a) the Contracting Parties noted that at the time of the negotiations they were not aware of any
specific case to which the provisions of this article could be applicable.
…’

Community legislation on the common organisation of the market in wine (‘the COM in wine’)
The COM in wine in force at the time of the conclusion of the EC-Hungary Agreement on wines
27     Under Article 63 of Council Regulation (EEC) No 822/87 of 16 March 1987 on the common organisation of the market in wine (OJ
1987 L 84, p. 1):
‘1.      For the purposes of marketing within the Community, imported wines intended for direct human consumption and bearing a geographical
ascription may, where reciprocal arrangements can be established, be controlled and protected as provided for in [Article
15 of Regulation No 823/87] in respect of quality wines psr.
2.      Paragraph 1 shall be implemented by agreements with the relevant third countries to be negotiated and concluded in accordance
with the procedure laid down in Article [133 EC].
3.      Detailed rules for the application of this article shall be adopted in accordance with the procedure laid down in Article
83.’
28     Under Article 1(3) of Council Regulation (EEC) N 823/87 of 16 March 1987 laying down special provisions relating to quality
wines produced in specified regions (OJ 1987 L 84, p. 59), as amended by Council Regulation (EEC) No 2043/89 of 19 June 1989
(OJ 1989 L 202, p. 1, ‘Regulation No 823/87’):
‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each
of these quality wines psr, details of the national provisions governing the production and manufacture of these quality wines
psr.
The Commission shall have the said list published in the “C” series of the
Official Journal of the European Communities
.’
29     Article 4(1) of Regulation No 823/87 provides:
‘Each Member State shall draw up a list of vine varieties suitable for producing each of the quality wines psr produced in
its territory, … varieties [which] must belong to the recommended or authorised categories referred to in Article 13 of Regulation
(EEC) No 822/87.’
30     Under Article 15(4) of Regulation No 823/87:
‘…
Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may … authorise
the name of a specified region to be accompanied by details relating to the method of manufacture or the type of product or
by the name of a vine variety or a synonym thereof.
…’
31     The term ‘Tocai friulano’ appears in Title I of the Annex to Commission Regulation (EEC) No 3800/81 of 16 December 1981 determining
the classification of vine varieties (OJ 1981 L 381, p. 1), in particular in Part V of sub-title I, as a vine variety recommended
or authorised in certain Italian provinces.
32     Article 14(1) of Council Regulation (EEC) No 2392/89 of 24 July 1989 laying down general rules for the description and presentation
of wines and grape musts (OJ 1989 L 232, p. 13) provides:
‘The name of a vine variety as referred to in Article 11(2)(n) to describe a quality wine psr may be used on the labelling
only if:
(a)      that variety is on the list drawn up by the Member States pursuant to Article 4(1) of Regulation (EEC) No 823/87 designating
the vine varieties which are suitable for producing each of the quality wines psr produced in their territory;
(b)      the name of the variety appears:
–      as one of the recommended or authorised varieties in the classification of vine varieties for the administrative unit concerned,
–      where appropriate, on a list of synonyms to be adopted; this list may provide that a given synonym may be used only to describe
a quality wine psr produced in the areas of production in which such use is traditional and customary;
…
(e)      the name of that variety does not cause confusion with the name of a specified region or geographical unit used to describe
another quality wine psr or an imported wine.’
33     Article 26(1) of that regulation provides:
‘The description on the labelling of imported wines intended for direct human consumption, described by reference to a geographical
area and appearing on a list to be adopted, shall include the following information:
(a)      the name of a geographical unit situated in the third country concerned, in accordance with the conditions laid down in Article
29;
…
This list may include only imported wines for which, in each case, the conditions of production are recognised as being equivalent
to those for a quality wine psr or for a table wine bearing an indication of geographical origin.’
34     Article 11(2) of Commission Regulation (EEC) No 3201/90 of 16 October 1990 laying down detailed rules for the description
and presentation of wines and grape musts (OJ 1990 L 309, p. 1) provides:
‘The list of imported wines described by reference to a geographical area referred to in Article 26(1) of Regulation (EEC)
No 2392/89 is set out in Annex II hereto.
The names on that list shall be shown in such a way that they are clearly distinguishable from other information on the label
of the imported wine concerned, particularly with regard to the geographical names referred to in Article 26(2)(b) of Regulation
(EEC) No 2392/89.’
35     Hungarian wines bearing the name ‘Tokaj’ or ‘Tokaji’ are included under Title 11, point 5, of Annex II to Regulation No 3201/90,
headed ‘List … of imported wines described by reference to a geographical area’.
36     Under Article 12(1) of that regulation:
‘The list of the synonyms of names of the vine varieties which may be used to describe table wines and quality wines psr in
accordance with Articles 5(1)(b) and 14(1)(b) of Regulation (EEC) No 2392/89 is set out in Annex III hereto.’
37     The variety ‘Tocai friulano’ and its synonym ‘Tocai italico’ are included in point 5 of Annex III, headed ‘List … of the synonyms
of names of wine varieties that may be used to describe table wines and quality wines psr’.
The COM in wine in force on the date of the main proceedings
38     Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine (OJ 1999 L 179, p. 1)
was rendered applicable from 1 August 2000.
39     Article 19(1) of that regulation provides:
‘Member States shall classify vine varieties for the production of wine. …’
40     Rules relating to the description, designation and presentation of certain wine products and to the protection of certain
particulars and terms are set out in Articles 47 to 53 and in Annexes VII and VIII of that regulation.
41     Article 50 of Regulation No 1493/1999 provides:
‘1.      Member States shall take all necessary measures to enable interested parties to prevent, on the terms set out in Articles
23 and 24 of the [TRIPs] Agreement, the use in the Community of a geographical indication attached to the products referred
to in Article 1(2)(b) for products not originating in the place indicated by the geographical indication in question … .
2.      For the purposes of this article, “geographical indications” is taken to mean indications which identify a product as originating
in the territory of a third country which is a member of the World Trade Organisation or in a region or locality within that
territory, in cases where a certain quality, reputation or other given characteristic of the product may be attributed essentially
to that geographical place of origin.
…’
42     Under Article 52(1) of that regulation:
‘If a Member State uses the name of a specified region to designate a quality wine psr or, where appropriate, a wine intended
for processing into such a quality wine psr, that name may not be used to designate products of the wine sector not produced
in that region and/or products not designated by the name in accordance with the provisions of the relevant Community and
national rules. …
Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may, in the case
of certain conditions of production which they shall determine, authorise the name of a specified region to be accompanied
by details relating to the method of manufacture or the type or by the name of a vine variety or a synonym thereof.
…’
43     Annex VII(A), points 1 and 2, of Regulation No 1493/1999 indicates that the labelling of quality wines psr and wines originating
in third countries is to include certain compulsory references, including the sales description which is to consist, in the
case of quality wines psr, of inter alia the name of the production area and, in the case of imported wines, of the word ‘wine’,
which must be supplemented by the name of the country of origin, and, when they are designated with a geographical indication,
by the name of the geographical area in question.
44     Annex VII(B), points 1 and 4, provides:
‘1.      The labelling of the products obtained in the Community may be supplemented by the following particulars, under conditions
to be determined:
…
(b)      in the case of table wines with geographical indication and quality wines psr:
…
–      the name of one or more vine varieties,
…
4.      Member States of production may make certain particulars in paragraphs 1 and 2 compulsory, prohibit them or restrict their
use in respect of wines produced in their territory.’
45     Article 54(4) of Regulation No 1493/1999 provides:
‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each
of these quality wines psr, details of the national provisions governing the production and manufacture of those quality wines
psr.’
46     Regulation No 1493/1999 was implemented by Regulation No 753/2002.
47     Article 19 of Regulation No 753/2002, headed ‘Indication of vine variety’, provides:
‘1.      The names of the vine varieties used for the production of a table wine with a geographical indication or a quality wine psr
or their synonyms may be given on the label of the wine concerned provided that:
…
(c)      the variety name or one of its synonyms does not include a geographical indication used to describe a quality wine psr, a
table wine or an imported wine listed in the agreements concluded between the Community and third countries, and, where it
is accompanied by another geographical term, is given on the label without that geographical term;
…
2.      By way of derogation from paragraph 1(c):
(a)      the variety name or one of its synonyms that includes a geographical indication may be shown on the label of a wine with that
geographical indication;
(b)      the variety names and their synonyms listed in Annex II may be used under the national and Community rules in force on the
date of entry into force of this Regulation.
3.      The Member States concerned shall notify the Commission, by 1 October 2002, of the measures referred to in point (b) of paragraph
2. The Commission shall take all appropriate steps to ensure that these measures are publicised.’
48     Annex II to that regulation, headed ‘List of vine varieties and their synonyms that include a geographical indication and
that may appear on the labelling of wines in accordance with Article 19(2)’, lists inter alia, in relation to Italy, the term
‘Tocai Friulano, Tocai Italico’. A footnote relating to that term states that ‘the name “Tocai friulano” and its synonym “Tocai
italico” may be used during a transitional period until 31 March 2007’.
49     In that respect, that annex did not undergo any amendment as a result of the adoption of Commission Regulation (EC) No 1429/2004
of 9 August 2004 amending Regulation No 753/2002 (OJ 2004 L 263, p. 11).

The Italian legislation
50     Article 1(1) of the Decree of 26 September 2002 provides:
‘The national conditions for the use, by way of derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of names
of vine varieties and their synonyms including a geographical indication which may appear on the labelling of [quality wines
psr] and of Italian wines with a typical geographical indication are laid down in Annex I which forms an integral part of
this Decree, in which for Italy the names of vine varieties and their synonyms including a geographical indication which are
mentioned in Annex II to Regulation (EC) No 753/2002 are listed.’
51     Annex I to the Decree of 26 September 2002 mentions inter alia, under the heading ‘Names of vine varieties or their synonyms’,
‘Tocai friulano or Tocai italico’, to which the following notice headed ‘Extent of the derogation (administrative territory
and/or specific [quality wine psr] and/or [wines with typical geographical indication]’) relates:
‘For some [quality wines psr] of the regions Frioul-Venezia Giulia and Venezia for a transitional period ending on 31 March
2007 in accordance with the Agreement between the [European Union] and the Republic of Hungary.’

The facts in the main proceedings and the questions referred for a preliminary ruling
52     In its decision, the referring court points out that the Region and ERSA criticise the unfairness arising from the fact that,
of the 106 wine names to which the derogation from Article 19(1)(c) of Regulation No 753/2002 applies, only in the case of
Tocai friulano or Tocai italico and the French name Tokay Pinot gris is that derogation limited in time.
53     That court then refers to the argument put forward by the Region and ERSA, intended to demonstrate the importance attached
to the historical origins of the name Tocai friulano.
54     It is, they maintain, a vine variety which is native to the area of Collio goriziano (region of Friuli-Venezia Giulia) and
has been grown there since ancient times. It is used for the production of a dry white wine which is not suitable for laying
down.
55     The referring court notes that, in the light of those explanations, the Region and ERSA have submitted the following pleas
in law:
–      misuse of powers on grounds of an insufficient statement of reasons and inconsistency arising from the fact that the Italian
authorities applied to the Commission for a derogation unlimited in time, but subsequently approved the decree of 26 September
2002 with the temporal limitation for which it provides;
–      misuse of powers on grounds of manifest unfairness and breach of the principle of equal dignity of all Community citizens
arising from the fact that the discrimination against the Italian wine producers is completely unjustified;
–      unlawfulness deriving from the unlawfulness of the EC-Hungary Agreement on wines, since the act on which the unlawful limitation
is based, namely that agreement as approved by Decision 93/724, is itself unlawful in that:
–      the two homonymous products are completely different, the Hungarian wine being a sweet wine;
–      the two communities have used the same name since time immemorial;
–      it is legitimate to remedy the homonymity by adding the name of the region or vine variety in question; which is also possible
under the EC-Hungary Agreement and the Madrid Agreement of 1891;
–      given that the Republic of Hungary is due to accede to the European Community, the EC-Hungary Agreement on wines, in order
to remain valid, must be consistent with the principles contained in the WTO Agreement, in particular Articles 22 to 24 of
the TRIPs Agreement, which govern misleading geographical indications;
–      the EC-Hungary Agreement on wines is contrary to principles of international law in that the limitation in time of use of
the name in question arises from an exchange of letters (namely the exchange of letters on Tocai) and not from the text of
the agreement, violates the principle of customary international law and is based on a false representation of reality so
far as the homonymity in question is concerned;
–      breach of Article 1 of the Protocol to the ECHR and of Article 17 of the Charter of fundamental rights of the European Union
proclaimed at Nice on 7 December 2000 (OJ 2000 C 364, p. 1,‘the Charter of fundamental rights’) in that it follows from those
provisions that intellectual property is protected, that no one is to be deprived of his or her possessions except in the
public interest, that the principles of proportionality and fair compensation must be observed and that restrictions of the
right to property must in any event be effected in accordance with law.
56     The referring court further observes that, by the Decree of 26 September 2002, the national authorities merely transposed
the provision of Regulation No 753/2002 and Annex II thereto limiting in time the use of the name ‘Tocai friulano’ and that
those authorities have simply pointed out that that limitation arises from an agreement between the Community and the Republic
of Hungary.
57     It is therefore plain, in that court’s view, that the harm alleged in the main action, namely the fact that the name Tocai
friulano or Tocai italico cannot be used after 31 March 2007, arises directly from two sources of Community law, namely Decision
93/724 and Regulation No 753/2002.
58     In those circumstances, the Tribunale amministrativo regionale del Lazio, taking the view that the outcome of the main proceedings
hinged on the answers to certain questions of Community law, decided to stay the proceedings and to refer the following questions
to the Court for a preliminary ruling:
‘1.      Can the Europe Agreement establishing an association between the European Communities and their Member States, of the one
part, and the Republic of Hungary, of the other part, concluded on 16 December 1991 … , provide a proper and sufficient legal
basis for conferring on the European Community power to conclude the Agreement between the European Community and the Republic
of Hungary on the reciprocal protection and control of wine names of 29 November 1993 … , with particular reference to the
provisions of Article 65(1), to Joint Declaration No 13 and to Annex XIII (points 3, 4 and 5) of the Europe Agreement of 1991
on the possible reservation of the sovereignty and jurisdiction of the Member States in the matter of national geographical
names used with reference to food and wine and restraint of any transfer of jurisdiction or competence in that matter to the
European Community?
2.      In view of, inter alia, what is said in Opinion 1/94 of the Court of Justice of the European Communities concerning the exclusive
competence of the European Community, should the Agreement between the European Community and the Republic of Hungary on the
reciprocal protection and control of wine names … , which specifies the protection of geographical names which have intellectual
and commercial property significance, be declared invalid and of no effect within the Community legal order because the agreement
itself has not been ratified by the individual Member States of the European Community?
3.      In the event that the Community Agreement of 1993 … is to be regarded as lawful and applicable in its entirety, should the
prohibition of the use in Italy after 2007 of the name “Tocai”, which arises from the exchange of letters between the parties
to the agreement, annexed to the agreement, be regarded as invalid and of no effect because it is inconsistent with the rules
governing geographical homonyms established in the agreement itself (see Article 4(5) of and the Protocol to the Agreement)?
4.      Should the second Joint Declaration annexed to the 1993 Agreement … , which implies that the Contracting Parties were unaware,
at the time of their negotiations, of the existence of homonyms connected with European and Hungarian wines, be regarded as
a clear misrepresentation of reality (given that the Italian and Hungarian names used to refer to “Tocai” wines have existed
alongside each other for centuries, were officially recognised in 1948 in an agreement between Italy and Hungary and were
recently brought within the scope of Community law) such as to render null and void that part of the 1993 Agreement which
prohibits the use in Italy of the name Tocai, on the basis of Article 48 of the Vienna Convention on the Law of Treaties?
5.      In the light of Article 59 of the Vienna Convention on the Law of Treaties, is the Agreement on Trade-Related Aspects of Intellectual
Property Rights (the TRIPs Agreement) … , which was concluded within the context of the World Trade Organisation (WTO) and
entered into force on 1 January 1996, thus after the Community Agreement of 1993 … entered into force, to be interpreted as
meaning that its provisions governing homonyms in wine names apply in place of those of the Community Agreement of 1993 where
there is inconsistency between the two, given that the parties to both agreements are the same?
6.      In the case of two names that are homonyms and refer to wines produced in two different countries both party to the TRIPs
Agreement (and both where the homonym relates to two geographical names used in both the countries party to TRIPs and where
it relates to a geographical name in one country and the like name relates to a vine traditionally cultivated in another country
party to TRIPs), must Articles 22 to 24 in [Part II, Section 3 of Annex 1 C] to the Agreement establishing the World Trade
Organisation, which contains the TRIPs Agreement… , which entered into force on 1 January 1996, be interpreted as meaning
that both the names may continue to be used provided that they have been used in the past by the respective producers either
in good faith or for at least 10 years prior to 15 April 1994 (Article 24(4) [of the TRIPs Agreement] and each name clearly
indicates the country or region or area of origin of the wine to which it refers in such a way as not to mislead consumers?
7      Does the right of ownership set out in Article 1 of Protocol No 1 to the European Convention on Human Rights and Fundamental
Freedoms … and taken up in Article 17 of the Charter of fundamental rights of the European Union proclaimed in Nice on 7 [December]
2000 also cover intellectual property in the names of the places of origin of wines and the exploitation thereof, and, consequently,
does the protection of that right preclude application of the agreement set out in the exchange of letters annexed to the
Agreement between the European Community and the Republic of Hungary on reciprocal protection and control of wine names …
, but not included in the body of that agreement, under which wine producers of the Friuli region will not be permitted to
use the name “Tocai friulano”, particularly in view of the total lack of any compensation to the wine producers of the Friuli
region thus dispossessed, the lack of any general public interest justifying their dispossession and the disregard for the
principle of proportionality?
8.      In the event that it is held that the Community provisions contained in the Agreement between the European Community and the
Republic of Hungary on the reciprocal protection and control of wine names … and/or the exchange of letters annexed thereto
are unlawful to the extent described in the preceding questions, must the provisions of Regulation … No 753/2002, under which
use of the name “Tocai friulano” is to be prohibited after 31 March 2007 (Article 19(2)), be regarded as invalid or in any
event of no effect?’
59     By application of 11 March 2005, received at the Court Registry on 15 March 2005, the Region and ERSA requested the Court
to allow all the parties involved in this case to submit observations on certain new facts set out in that application before
the Court gives judgment. Those new facts concern the imminent conclusion by the Community of new agreements with Australia
and the United States which, under Article 24(6) of the TRIPs Agreement, would allow producers in those countries to continue
using the name ‘Tokay’ on their national markets and on third-country markets.
60     In that regard, it should be recalled that the Court may of its own motion, on a proposal from the Advocate General or at
the request of the parties, order that the oral procedure be reopened, in accordance with Article 61 of the Rules of Procedure,
if it considers that it lacks sufficient information, or that the case must be dealt with on the basis of an argument which
has not been debated between the parties (see, inter alia, Case C‑299/99
Philips
[2002] ECR I‑5475, paragraph 20).
61     The Court considers that there is no need in this case to order the reopening of the oral procedure, which was closed on 16
December 2004, since it has before it all the material necessary for it to answer the questions raised in the main proceedings.
62     The application of the Region and ERSA must therefore be rejected.

The questions referred for a preliminary ruling

The first question
63     By its first question, the referring court seeks in essence to ascertain whether the EC-Hungary Association Agreement provided
an appropriate legal basis for the adoption of Decision 93/724 by which the Community concluded the EC-Hungary Agreement on
wines.
64     That question is founded on the premiss that the legal basis conferring on the Community power to conclude the EC-Hungary
Agreement on wines is the EC‑Hungary Association Agreement. That premiss apparently derives from the reference, in the first
citation in the preamble to the EC-Hungary Agreement on wines, to the EC-Hungary Association Agreement.
65     However, as the Council and the Commission correctly pointed out, that premiss cannot be accepted.
66     The purpose of the reference to the EC-Hungary Association Agreement is to place the EC-Hungary Agreement on wines in its
political context. It must not be construed as identifying the provisions of Community law on the basis of which the Community
concluded the latter agreement.
67     The legal basis conferring on the Community power to conclude the EC-Hungary Agreement on wines is however mentioned in the
first citation in the preamble to Decision 93/724 by which that agreement was concluded and approved on behalf of the Community.
68     It is clear from that citation that the legal basis in question is Article 133 EC, which confers on the Community competence
in the field of the common commercial policy.
69     The question as to whether the legal basis thus adopted by the Council is appropriate is the subject‑matter of the second
question referred for a preliminary ruling and will therefore be examined in the context of that question.
70     In the light of the foregoing, the answer to the first question must be that the EC‑Hungary Association Agreement is not the
legal basis of Decision 93/724 by which the EC-Hungary Agreement on wines was concluded.

The second question
71     By its second question, the referring court seeks in essence to ascertain whether Article 133 EC, which confers on the Community
exclusive competence in the field of the common commercial policy, is an appropriate legal basis for the conclusion by the
Community alone of the EC-Hungary Agreement on wines, in view of the fact that that agreement contains rules governing the
protection of geographical names which have intellectual and commercial property significance.
72     According to the settled case-law of the Court, the choice of the legal basis for a Community measure must rest on objective
factors which are amenable to judicial review, including in particular the aim and the content of the measure (see, inter
alia, Case C-336/00
Huber
[2002] ECR I-7699, paragraph 30).
73     It follows from the first citation in the preamble to Decision 93/724 that the Council specifically chose Article 133 EC as
the legal basis for the conclusion of the EC-Hungary Agreement on wines.
74     It is also apparent from the third recital in the preamble to that decision that, since the provisions of the Agreement were
directly linked to measures covered by the common commercial and agricultural policy, in this instance the Community legislation
on wine, the Council took the view that the Agreement had to be established at Community level.
75     According to the case-law of the Court, a Community act falls within the exclusive competence in the field of the common commercial
policy provided for in Article 133 EC only if it relates specifically to international trade in that it is essentially intended
to promote, facilitate or govern trade and has direct and immediate effects on trade in the products concerned (see Opinion
1/94 [1994] ECR I-5267, paragraph 57, Opinion 2/00 [2001] ECR I-9713, paragraph 40, and Case C-281/01
Commission
v
Council
[2002] ECR I-12049, paragraphs 40 and 41).
76     In particular, in this case, the question arises as to whether the EC-Hungary Agreement on wines falls within the Community’s
exclusive competence in the field of the common commercial policy or whether, as the Region and ERSA and the Italian Government
maintain, it forms part of the protection of intellectual property rights, a field in which the Community and the Member States
are jointly competent.
77     In that regard, it is appropriate to recall the Community legislation which was applicable
ratione temporis
, namely the COM in wine in force when the EC‑Hungary Agreement on wines was concluded.
78     Article 63 of Regulation No 822/87 provides that, for the purposes of marketing within the Community, imported wines intended
for direct human consumption and bearing a geographical ascription may, where reciprocal arrangements can be established,
be controlled and protected as provided for in respect of quality wines psr and that that provision is to be implemented by
agreements with the relevant third countries to be negotiated and concluded in accordance with the procedure laid down in
Article 133 EC.
79     The EC-Hungary Agreement on wines is clearly an agreement referred to in Article 63 of Regulation No 822/87.
80     The principal objective of such agreements is to promote trade between the Contracting Parties by facilitating on a reciprocal
basis, on the one hand, the marketing of wines originating in the third countries concerned by guaranteeing those wines the
same protection as that provided for in respect of quality wines psr of Community origin and, on the other, the marketing
in those third countries of wines originating in the Community.
81     Those agreements guarantee, in particular, reciprocal protection for certain geographical indications mentioned on the labelling
used to market the wines concerned in the Community and in the third country concerned. They are therefore an instrument directly
affecting trade in wines (see, to that effect,
Commission
v
Council
, cited above, paragraph 40).
82     In the light of those considerations, it must be concluded that such agreements satisfy the criteria which, according to the
case‑law cited in paragraph 75 of the present judgment, must be fulfilled in order for a Community measure to fall within
the scope of the exclusive competence in the field of the common commercial policy provided for in Article 133 EC.
83     It follows that the answer to the second question must be that Article 133 EC, as referred to in the preamble to Decision
93/724, is an appropriate legal basis for the conclusion by the Community alone of the EC-Hungary Agreement on wines.

The third question
84     By its third question, the referring court seeks in essence to ascertain whether, in the event that the EC-Hungary Agreement
on wines is to be regarded as lawful and applicable in its entirety, the prohibition of the use of the name ‘Tocai’ in Italy
after 31 March 2007 which arises from the exchange of letters on Tocai is invalid and of no effect because it is inconsistent
with the rules governing homonyms laid down in Article 4(5) of that agreement.
85     This question must be understood by reference to the argument of the Region and ERSA to the effect that there is a contradiction
between the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement on wines and the prohibition arising
from the exchange of letters on using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description
and presentation of certain Italian quality wines psr at the end of the transitional period expiring on 31 March 1997.
86     That contradiction arises from the fact that, in the exchange of letters on Tocai, priority was given to the Hungarian name
‘Tokaj’ to the detriment of the Italian homonym ‘Tocai’, whereas the rules governing homonyms laid down in Article 4(5) of
the EC-Hungary Agreement, the main agreement, from which an act annexed thereto, such as the exchange of letters on Tocai,
may not derogate, are based on a rule guaranteeing the coexistence of both names provided that they are not likely to give
rise to confusion.
87     In that regard, it must be pointed out that such a conflict can exist only if each of the names deemed to be homonymous within
the meaning of Article 4(5) of the EC-Hungary Agreement constitutes a geographical indication protected by virtue of that
agreement.
88     It follows from Article 4(1)(a) of that agreement that, as regards wines originating in the Community, the geographical indications
protected by virtue of that agreement are listed in the Annex thereto, in part A, headed ‘Wines originating in the Community’.
89     Unlike the Hungarian name ‘Tokaj’, which appears in part B of that annex, which mentions the geographical indications relating
to wines originating in the Republic of Hungary which are protected under Article 4(1)(b) of the EC-Hungary Agreement on wines,
the terms ‘Tocai friulano’ and ‘Tocai italico’ do not appear in part A of that annex, which concerns wines originating in
the Community.
90     In addition and in any event, the latter names cannot be classed as geographical indications within the meaning of the EC-Hungary
Agreement on wines.
91     Under Article 2(2) of that agreement, a ‘geographical indication’ is ‘an indication, including an “Appellation of origin”,
which is recognised in the laws and regulations of a Contracting Party for the purpose of the description and presentation
of a wine originating in its territory, or in a region or locality in that territory, where a given quality, reputation or
other characteristic of the wine is essentially attributable to its geographical origin’.
92     Under the relevant legislation in force in the Community on the date when the EC-Hungary Agreement on wines was concluded,
the names ‘Tocai friulano’ and ‘Tocai italico’ were not a geographical indication but the name of a vine or vine variety recognised
in Italy as being suitable for the production of certain quality wines psr produced in that Member State.
93     It is common ground that the term ‘Tocai friulano’ appeared in Title I of the Annex to Regulation No 3800/81 as a vine variety
recommended, and even authorised, in certain Italian provinces, and in point 5 of Annex III to Regulation No 3201/90 as a
synonym of the vine variety ‘Tocai italico’ which could be used to describe certain Italian quality wines psr.
94     By contrast, the Hungarian wines known as ‘Tokaj’ or ‘Tokaji’ appeared in point 5 of Title 11 of Annex II to Regulation No
3201/90 under the heading ‘List … of imported wines described by reference to a geographical area’.
95     The Region and ERSA and the Italian Government maintain that the Community legislation provided and still provides that, in
Italy, for the purpose of describing and presenting certain Italian quality wines psr, if certain conditions laid down in
specifications are complied with, the geographical indications concerned, such as ‘Collio goriziano’, ‘Collio’, ‘Isonzo del
Friuli’ and ‘Isonzo’, may be combined with an indication of the vine variety ‘Tocai friulano’ or its synonym ‘Tocai italico’
from which the wines are made.
96     However, no evidence produced before the Court indicates that the choice thus made by that Member State to allow such a combination
has led to the wording resulting from that combination constituting a geographical indication in such a way that the terms
‘Tocai friulano’ and ‘Tocai italico’ which form part of it no longer denote a vine variety but a geographical indication.
97     It is, on the contrary, apparent from the reference to the terms ‘Tocai friulano’ and ‘Tocai italico’ in Annex II to Regulation
No 753/2002 that, even in the Community legislation applicable at the time of the main proceedings, those terms still related
to a vine variety which could, under Article 19(2)(b) and (3) of that regulation, be used on the label of the Italian quality
wines psr concerned. They are therefore not the name of a vine variety or one of its synonyms that includes a geographical
indication for the purposes of Article 19(2)(a) of that regulation.
98     In the light of the foregoing, the answer to the third question must be that the prohibition of use of the name ‘Tocai’ in
Italy after 31 March 2007 resulting from the exchange of letters on Tocai is not contrary to the rules governing homonyms
laid down in Article 4(5) of the EC-Hungary Agreement on wines.

The fourth question
99     By its fourth question, the referring court seeks in essence to ascertain whether the Joint Declaration on homonyms, in so
far as it states in the first paragraph that in respect of Article 4(5)(a) of the EC‑Hungary Agreement on wines the Contracting
Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred
to could be applicable, is a clear misrepresentation of reality, invalidating, under Article 48 of the Vienna Convention on
the Law of Treaties, that agreement in so far as it prohibits the use of the name ‘Tocai’ in Italy after 31 March 2007.
100   This question must be understood in the light of the argument of the Region and ERSA that a number of factors showed beyond
doubt the erroneous nature of the Joint Declaration on homonyms, since the Commission and the Republic of Hungary could not
have been unaware of the existence of homonymity between the names ‘Tocai’ referring to an Italian dry wine and ‘Tokaj’ referring
to a Hungarian dessert wine.
101   However, as paragraphs 88 to 97 of the present judgment make clear, the Italian name ‘Tocai friulano’ and its synonym ‘Tocai
italico’ are not a protected geographical indication within the meaning of the EC-Hungary Agreement on wines, so that the
provisions of Article 4(5)(a) of that agreement concerning homonyms do not apply for the purpose of resolving a possible case
of homonymity or identity between that name and the Hungarian name ‘Tokaj’ which, as was held in paragraph 89 of the present
judgment, is a geographical indication protected by virtue of the same agreement.
102   Consequently, the answer to the fourth question must be that the Joint Declaration on homonyms, in so far as it states in
the first paragraph that in respect of Article 4(5)(a) of the EC-Hungary Agreement on wines the Contracting Parties noted
that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be
applicable, is not a clear misrepresentation of reality.

The sixth question
103   By its sixth question, which must be answered before the fifth, the referring court asks in essence whether Articles 22 to
24 of the TRIPs Agreement are to be interpreted as meaning that, in the case of homonymity between geographical names or between
a geographical indication and a name including the name of a vine variety, each of the names may continue to be used in the
future provided that it has been used in the past by the respective producers either in good faith or for at least 10 years
prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such
a way as not to mislead the consumer.
104   The Region and ERSA and the Italian Government maintain that Articles 22 to 24 of the TRIPs Agreement require the Community,
as a member of the WTO, to protect each of the homonymous geographical indications, including in the case of homonymity between
a geographical indication and the name of a vine variety, and that, consequently, those articles preclude removal of the protection
from the name ‘Tocai friulano’.
105   That argument cannot be accepted in view of the actual wording of the relevant provisions of those articles of the TRIPs Agreement.
106   In the first place, Article 23(3) of the TRIPs Agreement stipulates inter alia that, in the case of homonymous geographical
indications for wines, protection is to be accorded to each indication and that each WTO Member is to determine the practical
conditions under which the homonymous indications in question will be differentiated from each other, taking into account
the need to ensure equitable treatment of the producers concerned and that consumers are not misled.
107   Under Article 22(1) of the TRIPs Agreement, ‘geographical indications’ means indications which identify a good as originating
in the territory of a Member of the WTO, or a region or locality in that territory, where a given quality, reputation or other
characteristic of the good is essentially attributable to its geographical origin.
108   As has already been held in paragraphs 88 to 97 of the present judgment, unlike the Hungarian name ‘Tokaj’, the Italian names
‘Tocai friulano’ and ‘Tocai italico’ relate to the name of a vine or vine variety but are not a geographical indication within
the meaning of the EC-Hungary Agreement on wines. In view of the fact that the meaning of ‘geographical indication’ as defined
in the latter agreement is in essence the same as that adopted in Article 22(1) of the TRIPs Agreement, the same finding is
dictated in the context of the TRIPs Agreement.
109   Consequently, Article 23(3) of the TRIPs Agreement is not applicable in the main proceedings since that case does not concern
homonymity between two geographical indications.
110   In the second place, Article 24(4) of the TRIPs Agreement provides that nothing in Section 3 of that agreement is to require
a Member of the WTO to prevent continued and similar use of a particular geographical indication of another Member identifying
wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical
indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either
for at least 10 years prior to 15 April 1994 or in good faith prior to that date.
111   It follows clearly from that provision that, although the Community is not required to prohibit continued and similar use
of a particular geographical indication of another Member of the WTO identifying wines or spirits by a national or domiciliary
of a Member State in the territory of a Member State, as referred to in Article 24(4) of the TRIPs Agreement, that provision
does not preclude such a prohibition.
112   In other words, Article 24(4) of the TRIPs Agreement must be interpreted as establishing, under the conditions which it lays
down, a right and not an obligation to grant protection to any homonym.
113   As regards, in the third place, Article 24(6) of the TRIPs Agreement, that provision permits inter alia the Community, as
a Member of the WTO, to apply the provisions of that agreement in respect of a geographical indication of any other Member
of the WTO with respect to products of the vine for which the relevant indication is identical with the customary name of
a grape variety existing in the territory of a Member State as of the date of entry into force of the WTO Agreement.
114   That provision therefore also establishes a right and not an obligation for the Community to grant protection to a Community
grape or vine variety if that variety is the homonym of a geographical indication relating to a wine originating in a third
country.
115   In those circumstances, the answer to the sixth question must be that Articles 22 to 24 of the TRIPs Agreement are to be interpreted
as meaning that, in a case such as that in the main proceedings, which concerns homonymity between a geographical indication
of a third country and a name including the name of a vine variety used for the description and presentation of certain Community
wines made from it, those provisions do not require that that name may continue to be used in the future notwithstanding the
twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10
years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in
such a way as not to mislead the consumer.
116   In the light of that answer, there is no longer any need to answer the fifth question since it was asked on the assumption
that the EC-Hungary Agreement on wines, in so far as it has the effect of precluding use of the word ‘Tocai’ for the description
and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, is incompatible
with the provisions of Articles 22 to 24 of the TRIPs Agreement since the latter require that, where there is homonymity,
each of the names may continue to be used in the future.
117   It follows from the answer given to the sixth question that that assumption does not apply in the main proceedings, which
concern homonymity between a geographical indication of a third country and a name including the name of a vine variety used
for the description and presentation of certain Community wines.

The seventh question
118   By its seventh question, the referring court seeks in essence to ascertain whether the right to property set out in Article
1 of Protocol No 1 to the ECHR and incorporated in Article 17 of the Charter of fundamental rights includes intellectual property
in designations of origin of wines and its exercise and, if so, whether protection of the latter precludes the operators concerned
in the autonomous region of Friuli-Venezia Giulia from being deprived of the possibility of using the word ‘Tocai’ in the
term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the
end of a transitional period expiring on 31 March 2007, as arises from the exchange of letters on Tocai annexed to the EC-Hungary
Agreement on wines but not from the body of that agreement, particularly in view of the lack of any form of compensation for
the dispossessed wine producers of Friuli, the lack of any general interest justifying that dispossession and the disregard
for the principle of proportionality.
119   According to settled case-law, the right to property is one of the general principles of Community law. However, it is not
absolute but must be viewed in relation to its social function. Consequently, the exercise of the right to property may be
restricted, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community
and do not constitute in relation to the aim pursued a disproportionate and intolerable interference, impairing the very substance
of the rights guaranteed (see, to that effect, inter alia, Case C-306/93
SMW Winzersekt
[1994] ECR I-5555, paragraph 22, and Joined Cases C-37/02 and C-38/02
Di Lenardo and Dilexport
[2004] ECR I‑0000, paragraph 82 and the case-law cited).
120   In order to determine the scope of the fundamental right to property, a general principle of Community law, account must be
taken inter alia of Article 1 of Protocol No 1 to the ECHR establishing that right.
121   It is therefore necessary to examine whether the prohibition of the use of the word ‘Tocai’ for the description and presentation
of certain Italian quality wines psr from 1 April 2007, resulting from the exchange of letters on Tocai, constitutes disproportionate
and intolerable interference, impairing the very substance of the fundamental right to property of the economic operators
concerned.
122   That prohibition, in so far as it does not exclude any reasonable method of marketing the Italian wines concerned, does not
constitute a deprivation of possessions as referred to in the first paragraph of Article 1 of Protocol No 1 to the ECHR.
123   Consequently, the lack of any compensation for the dispossessed wine producers of Friuli, to which attention is drawn by the
referring court, does not in itself constitute a circumstance demonstrating incompatibility between the prohibition at issue
in the main proceedings and the right to property.
124   In addition, without there being any need to determine whether that measure, as a measure controlling the use of property,
constitutes interference with the right to respect for property which may fall within the scope of the second paragraph of
Article 1 of Protocol No 1 to the ECHR and therefore entail a restriction of the fundamental right to property, it must be
stated that a restriction of that right, if established, may be justified.
125   The case-law of the European Court of Human Rights shows that, in order to be justified, a measure controlling the use of
property must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to that
aim (see, inter alia, Eur. Court HR,
Jokela v Finland
judgment of 21 May 2002,
Reports of Judgments and Decisions
2002-IV, § 48).
126   As regards, first, the lawfulness of the prohibition at issue in the main proceedings, it is common ground that the exchange
of letters on Tocai annexed to the EC-Hungary Agreement on wines expressly imposes that prohibition and that, by Decision
93/724, that act was approved on behalf of the Community. It is therefore a measure introduced by a lawful provision adopted,
as was observed in paragraphs 77 to 81 of the present judgment, in the context of the COM in wine in force at the time of
the conclusion of that agreement.
127   With regard, next, to the aim of general interest pursued by the measure at issue in the main proceedings, it has already
been observed, in paragraphs 80 and 81 of the present judgment, that the EC-Hungary Agreement on wines, of which that measure
forms part, seeks to implement a policy within the framework of the COM in wine, the main objective of which is to promote
trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating
in third countries which are described or presented using a geographical indication, by guaranteeing the same protection for
those wines as that provided for in respect of quality wines psr of Community origin, and, on the other, the marketing in
those third countries of wines originating in the Community.
128   It is clear from inter alia the third and fifth recitals in the preamble to Regulation No 2392/89 that the objective of the
Community rules on the description and presentation of wines is to reconcile the need to provide the final consumer with clear
and accurate information on the products concerned with the need to protect producers on their territory against distortions
of competition.
129   The objective thus pursued by the measure at issue in the main proceedings is a legitimate aim of general interest (see
SMW Winzersekt
, cited above, paragraph 25).
130   Finally, it is necessary to examine whether that measure is proportionate to the aim of general interest referred to.
131   In a case concerning a Community measure adopted within the framework of the COM in wine, prohibiting, on the expiry of a
transitional period of five years, the use of the term ‘
méthode champenoise
’ for wines not entitled to the registered designation ‘Champagne’, the Court recalled that, according to settled case‑law,
the Community legislature has a broad discretion in matters concerning the common agricultural policy, which corresponds to
the political responsibilities given to it by Articles 34 EC and 37 EC, and that the lawfulness of a measure adopted in that
sphere can be affected only if the measure is manifestly inappropriate, having regard to the objective which the competent
institution is seeking to pursue (see
SMW Winzersekt
, cited above, paragraph 21).
132   It is important to note in this regard that, at the end of the transitional period, the Italian quality wines psr in question
will be able to continue to be produced from the vine variety ‘Tocai friulano’ and to be marketed under their respective geographical
names, although without the addition of the name of the vine variety from which they are produced.
133   In this case, the proportionality of the measure at issue in the main proceedings cannot be disputed since a transitional
period of 13 years was provided for in the exchange of letters on Tocai and, as the Commission observed at the hearing, alternative
terms are available to replace the name ‘Tocai friulano’ and its synonym ‘Tocai italico’, namely, inter alia, ‘Trebbianello’
and ‘Sauvignonasse’.
134   In those circumstances, the answer to the seventh question must be that the right to property does not preclude the prohibition
on use by the operators concerned in the autonomous region of Friuli-Venezia Giulia of the word ‘Tocai’ in the term ‘Tocai
friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of a transitional
period expiring on 31 March 2007, resulting from the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines
but not referred to in the latter.

The eighth question
135   By its eighth question, the referring court seeks to ascertain whether, in the event that it is held that the EC-Hungary Agreement
on wines and/or the exchange of letters on Tocai are unlawful to the extent described in the preceding questions, the provisions
of Article 19(2) of Regulation No 753/2002, which abolish the use of the name ‘Tocai friulano’ after 31 March 2007, are invalid
or in any event of no effect.
136   Since this question is asked only in the event that examination of the first seven questions referred for a preliminary ruling
shows the EC-Hungary Agreement on wines and/or the exchange of letters on Tocai to be unlawful to the extent described in
those questions, and since it follows from the answers given to those questions by the present judgment that that is not the
case, there is no need to answer it.
137   It should also be pointed out that, in principle, it is for the referring court alone to define the scope of the questions
which it finds necessary to refer to the Court for a preliminary ruling.
138   It follows, as the Commission rightly observed at the hearing, that certain questions, raised inter alia at the hearing by
the Region and ERSA and by the Italian Government with regard to the eighth question referred for a preliminary ruling, that
is to say, those seeking to ascertain whether the validity of the EC-Hungary Agreement on wines is affected as the result
of an alleged breach of the duty to state reasons, or even of the principle of proportionality and of the principle of equal
treatment as enshrined in Article 34(2) EC, cannot be examined by the Court since they clearly exceed the scope of the eighth
question as worded by the referring court.

Costs
139   Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs
of those parties, are not recoverable.
On those grounds, the Court (Second Chamber) hereby rules:
1.
The European Agreement establishing an association between the European Communities and their Member States, of the one part,
and the Republic of Hungary, of the other part, is not the legal basis of Council Decision 93/724/EC of 23 November 1993 concerning
the conclusion of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and
control of wine names.
2.
Article 133 EC, as referred to in the preamble to Decision 93/724, is an appropriate legal basis for the conclusion by the
Community alone of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and
control of wine names.
3.
The prohibition of use of the name ‘Tocai’ in Italy after 31 March 2007 resulting from the exchange of letters concerning
Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control
of wine names is not contrary to the rules governing homonyms laid down in Article 4(5) of that agreement.
4.
The Joint Declaration concerning Article 4(5) of the Agreement between the European Community and the Republic of Hungary
on the reciprocal protection and control of wine names, in so far as it states in the first paragraph that in respect of Article
4(5)(a) of that agreement the Contracting Parties noted that at the time of the negotiations they were not aware of any specific
case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality.
5.
Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1 C to the Agreement
establishing the World Trade Organisation, approved on behalf of the Community, as regards matters within its competence,
by Council Decision 94/800/EC of 22 December 1994, are to be interpreted as meaning that, in a case such as that in the main
proceedings, which concerns homonymity between a geographical indication of a third country and a name including the name
of a vine variety used for the description and presentation of certain Community wines made from it, those provisions do not
require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used
in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly
identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.
6.
The right to property does not preclude the prohibition on use by the operators concerned in the autonomous region of Friuli‑Venezia
Giulia (Italy) of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of
certain Italian quality wines produced in specified regions at the end of a transitional period expiring on 31 March 2007,
resulting from the exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic
of Hungary on the reciprocal protection and control of wine names annexed to that agreement but not referred to in the latter.
[Signatures]
*
Language of the case: Italian.