Judgment — ECLI:EU:C:2017:798
Date: 2017-10-25
Language of the case: English
Court formation: Grand Chamber
Subject matter: Provisions governing the Institutions
Procedure: Action for annulment - successful

summary of existing multilateral international obligations and, secondly, bilateral commitments, had as its basic aim, as stated in Article 11.1.1(b) of the envisaged agreement, to guarantee entrepreneurs of the European Union and Singapore an ‘adequate … level’ of protection of their intellectual property rights. (26) 63. In the Court’s view, the provisions of Chapter 11 of the envisaged agreement enabled entrepreneurs of the European Union and Singapore to enjoy, in the territory of the other party, standards of protection of intellectual property rights displaying a degree of homogeneity and thus contributed to their participation on an equal footing in the free trade of goods and services between the European Union and the Republic of Singapore. (27) 64. From the above, the Court concluded in its Opinion, first, that the provisions of Chapter 11 of the envisaged agreement did seek, as Article 11.1 of the agreement stated, to ‘facilitate the production and commercialisation of innovative and creative products and the provision of services between the Parties’ and to ‘increase the benefits from trade and investment’. (28) 65. The Court also concluded that Chapter 11 of the envisaged agreement in no way fell within the scope of harmonisation of the laws of the Member States of the European Union, but was intended to govern the liberalisation of trade between the European Union and the Republic of Singapore. (29) 66. Lastly, the Court pointed out that, in the light of the key role that the protection of intellectual property rights played in trade in goods and services in general, and in combating unlawful trade in particular, the provisions of Chapter 11 of the envisaged agreement were such as to have direct and immediate effects on trade between the European Union and the Republic of Singapore. (30) 67. It followed, according to the Court, that, in accordance with the criteria explained in paragraphs 36 and 112 of its Opinion, Chapter 11 of the envisaged agreement concerned ‘commercial aspects of intellectual property’ within the meaning of Article 207(1) TFEU. (31) Chapter 11 was essentially intended to facilitate and govern trade between the European Union and the Republic of Singapore, and its provisions were such as to have direct and immediate effects thereon, within the meaning of the case-law mentioned in paragraphs 36 and 112 of the Opinion. The Court concluded that Chapter 11 fell within the exclusive competence of the European Union pursuant to Article 3(1)(e) TFEU. (32) 68. It seems to me that the reasoning followed by the Court in Opinion 2/15 may largely be applied in the present case. 69. Indeed, it is clear from the rules contained in the draft revised agreement that appellations of origin and the geographical indications that have been registered at the WIPO International Bureau of Intellectual Property are to be protected by each contracting party in such a way that the entrepreneurs concerned can prevent third parties from misleading the public or carrying out other acts of unfair competition. 70. As the Commission and the Parliament rightly argue, it is clear upon examining the content of the draft revised agreement and the context in which it arose that, although it has no preamble expressly stating its aim, its purpose and effect is to provide for the appellations of origin and geographical indications of each contracting party a system of international registration which ensures their legal protection, on the territory of all the other contracting parties, against the risk that they might be appropriated or used in such a way as to undermine their integrity and thus jeopardise the foreign marketing of those appellations of origin. By so doing, the draft revised agreement is capable of improving the protection of European Union exports to third countries, which would otherwise be reliant on country-by-country registration and thus enjoy only variable guarantees. 71. Thus, the provisions of the draft revised agreement enable entrepreneurs in each of the States party to the Lisbon Agreement to enjoy, in the territory of the other parties, standards of protection of appellations of origin and geographical indications that have a degree of homogeneity. Those provisions thus contribute to their participation on an equal footing in the free trade of goods between the States party to the Lisbon Agreement. Therefore, by means of the implementation of a system for the international registration and reciprocal protection of appellations of origin and geographical indications, the draft revised agreement is thus capable of directly affecting the goods protected by such intellectual property rights. (33) 72. Furthermore, the provisions of the draft revised agreement in no way fall within the scope of harmonisation of the laws of the Member States of the European Union. 73. I would add that the existence of an international agreement such as the Lisbon Agreement is an integral part of the existence of trade between the States party to that agreement. In other words, there would be no point in any such agreement if there were no trade between the States party to it. 74. It follows from the foregoing that, in light of the key role that the protection of intellectual property rights plays in trade in goods and services in general, and in combating unlawful trade in particular, the provisions of the draft revised agreement are essentially intended to facilitate and govern trade between the States party to the Lisbon Agreement and are therefore such as to have direct and immediate effects on that trade. 75. By contrast with the draft revised agreement to which the contested decision relates, the envisaged free trade agreement between the European Union and the Republic of Singapore that was the subject of Opinion 2/15 was an agreement the subject matter and objectives of which were to ‘establish a free trade area’ and to ‘liberalise and facilitate trade and investment between the parties’. (34) However, that fact does not, in my view, preclude the application of the Court’s reasoning regarding the provisions of that agreement concerning geographical indications from being applied, by analogy, in the present case. 76. First of all, it seems to me that, in the parts of its reasoning which I have mentioned, the Court did not accord decisive importance to the fact that the provisions relating to geographical indications were part of a free trade agreement. Secondly, and in any event, the inclusion in that type of agreement of provisions intended to ensure the reciprocal protection of geographical indications clearly demonstrates, in and of itself and whatever the nature of the international agreement in question or title given to it, the existence of a fundamental link between such protection and the development of international trade. 77. Moreover, I do not dispute that it is the role of intellectual property to encourage creativity by protecting skill and expertise. More specifically, as the Council rightly explains in its observations, the purpose of geographical indications is to preserve traditional knowledge, cultural expressions and specific manufacturing skills, and to ensure that consumers are given reliable information about the quality of the goods in question. 78. However, where the protection of such intellectual property rights is put into effect by means of the revision of an international agreement such as the Lisbon Agreement, the raison d’être of that protection is closely linked to the existence of trading relations between the parties to the agreement and their desire to develop those relations. 79. Accordingly, I believe that, from the point of view of each of the parties to the Lisbon Agreement, the implementation of a system for the protection of appellations of origin and geographical indications is first and foremost motivated by the desire to export skill and expertise and to ensure that the rights protected will not be abused. The primary aim of the protection which results from an international agreement such as the Lisbon Agreement or the draft revised agreement is therefore the development of trade between the contracting parties in a spirit of cooperation. The protection of skill and expertise is a prerequisite for such trade development, not an end in itself. 80. In my view, the Council is confusing the objective pursued by the substantive rules of EU law which govern the grant of appellations of origin and geographical indications with the objective pursued by the international system of reciprocal protection of appellations of origin and geographical indications put in place by the draft revised agreement. 81. The grant to a product of a geographical indication, linked to the product’s origin and method of manufacture, is a recognition of the particular qualities of that product. A geographical indication will increase the market value of a product by providing a guarantee that its particular characteristics distinguish it from other similar products. Such characteristics give products strong export potential. Putting in place an international system for the reciprocal protection of appellations of origin and geographical indications is a means of ensuring that the products which enjoy such protection can be marketed internationally without fear of their reputation being usurped. By ensuring that international trade does not undermine quality marks, the implementation of such a system is thus likely to promote trade in such products. Moreover, the protection afforded is likely to heighten the reputation of such products and thereby increase consumer demand for them and encourage the undertakings which produce them to export to the States party to the Lisbon Agreement. 82. Given that, the draft revised agreement may legitimately be regarded as relating specifically to trade, in that it is essentially intended to facilitate or govern trade and is such as to have direct and immediate effects on trade. 83. It matters little that neither the contested decision nor the draft revised agreement, nor indeed the Lisbon Agreement, expressly states that its purpose is to promote, facilitate or govern international trade. The absence of any such indication does not gainsay the existence of a specific relationship to trade, which is clear from an analysis of the draft revised agreement and of the context in which it arose, which included the implementation of an international system for the reciprocal protection of appellations of origin and geographical indications among the parties to the Lisbon Agreement and the development of international trade between those same contracting parties. 84. Contrary to what is implied by the substantive legal basis on which the contested decision was adopted, the purpose of implementing an international system for the reciprocal protection of appellations of origin and geographical indications within a group of States, such as that to which the contested decision relates, is not to harmonise the laws of the Member States with a view to the establishment and functioning of the internal market, as provided for in Article 114(1) TFEU. The focus is different, and it is the legal basis which governs the external aspects of the European Union’s action which is relevant, that being Article 207 TFEU. 85. It should also be mentioned that, in determining whether an international agreement concerns ‘commercial aspects of intellectual property’ within the meaning of Article 207(1) TFEU, and thus whether it falls within the sphere of the European Union’s common commercial policy, the institutional context in which the agreement is negotiated is not, it seems to me, decisive. In particular, and as is already clear from the case-law of the Court of Justice, (35) it is not necessary, in order for it to fall under that policy, for an agreement to be negotiated under the aegis of the WTO or, more generally, in any particular institutional context. Accordingly, alongside bilateral trade agreements negotiated by the European Union and multilateral agreements negotiated in the context of the WTO or under the aegis of other international organisations, the negotiation by the European Union of ‘commercial aspects of intellectual property’, within the meaning of Article 207(1) TFEU, such as those relating to the protection of appellations of origin and geographical indications, may be conducted in the context of WIPO. 86. I would also add that I disagree with the Council’s argument that the reference to Article 114 TFEU as the substantive legal basis would, if it were incorrect, be a purely formal defect incapable of resulting in the annulment of the contested decision. Indeed, the choice of Article 207 TFEU as the legal basis for a European Union measure has specific procedural consequences for the negotiation and conclusion of an agreement with one or more third countries or international organisations. Article 207(3) TFEU in fact specifies that, in such a situation, Article 218 TFEU applies, ‘subject to the special provisions’ of Article 207 TFEU. By way of example, the negotiations must be conducted by the Commission in consultation with a special committee as referred to in Article 207(3) TFEU, as indeed was expressly stipulated in Article 3 of the Commission’s Recommendation. The existence of such special provisions, which distinguish the procedure for the negotiation and conclusion of agreements falling within the sphere of the common commercial policy from that which applies, under Article 218 TFEU, to other types of international agreement, in itself renders the reference to the correct legal basis, in this case Article 207 TFEU, decisive. 87. It follows, in my view, from all the foregoing considerations that the contested decision pursues an objective which specifically relates to the common commercial policy, which calls, for the purpose of its adoption, for recourse to the legal basis that is Article 207 TFEU. That also means that, in accordance with Article 3(1)(e) TFEU, the contested decision falls within a field in which the European Union has exclusive competence. 88. Accordingly, the first part of the first plea put forward by the Commission is in my view well founded and the contested decision must consequently be annulled. As I have mentioned, it does not therefore appear necessary to me to examine the second part of the first plea or the second plea which the Commission puts forward in support of its application. 89. As regards that second plea, it seems all the more unnecessary for it to be examined since the procedural rules set out in the contested decision for the negotiation of the draft revised agreement must, in any event, be regarded as vitiated from the start, since the decision was not adopted on the basis of Article 207 TFEU and therefore does not follow the particular procedural rules provided for in that provision. 90. Lastly, I propose that the Court should maintain the effects of the contested decision until the entry into force of a new European Union measure intended to replace it. V. Costs 91. Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Council has been unsuccessful, the latter must be ordered to pay the costs. 92. In accordance with Article 140(1) of the Rules of Procedure, the Czech Republic, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Slovak Republic, the United Kingdom and the Parliament are to bear their own costs. VI. Conclusion 93. In light of all the foregoing reasoning, I propose that the Court should: 1. annul the decision of the Council of the European Union of 7 May 2015 authorising the opening of negotiations for a revised Lisbon agreement on appellations of origin and geographical indications, as regards matters falling within the competence of the European Union; 2. declare that the effects of that decision are to be maintained until the entry into force of a new European Union measure intended to replace it; 3. order the Council to pay the costs; 4. order the Czech Republic, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Slovak Republic, the United Kingdom of Great Britain and Northern Ireland and the European Parliament to bear their own costs. 1 Original language: French. 2 ‘The contested decision.’ 3 Opinion 3/15 (Marrakesh Treaty on access to published works), 14 February 2017 (EU:C:2017:114). 4 Opinion 2/15, 16 May 2017 (‘Opinion 2/15’, EU:C:2017:376). 5 OJ 2008 L 39, p. 16, and corrigendum OJ 2009 L 228, p. 47. 6 OJ 2012 L 343, p. 1, and corrigendum OJ 2013 L 55, p. 27. 7 OJ 2013 L 347, p. 671, and corrigenda OJ 2014 L 189, p. 261, and OJ 2016 L 130, p. 32. 8 OJ 2014 L 84, p. 14, and corrigenda OJ 2014 L 105, p. 12, and L 283, p. 77, and OJ 2016 L 227, p. 5. 9 Judgment of 18 July 2013, Daiichi Sankyo and Sanofi-Aventis Deutschland (C‑414/11, EU:C:2013:520, paragraphs 50 to 60 and the case-law cited). 10 Judgments of 12 May 2005, Regione autonoma Friuli-Venezia Giulia and ERSA (C‑347/03, EU:C:2005:285, paragraphs 71 to 83), and of 22 October 2013, Commission v Council (C‑137/12, EU:C:2013:675, paragraphs 56 to 67). 11 Opinion 2/91 (Convention No 170 of the ILO), of 19 March 1993 (EU:C:1993:106, paragraph 34). 12 Opinion 1/94 (Agreements annexed to the WTO Agreement) of 15 November 1994 (EU:C:1994:384, paragraph 29). 13 C‑414/11, EU:C:2013:520. 14 C‑137/12, EU:C:2013:675. 15 This agreement is set out at Annex 1C to the Agreement establishing the World Trade Organisation, signed in Marrakesh on 15 April 1994 and approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1). 16 C‑414/11, EU:C:2013:520, paragraphs 52 to 55. 17 C‑137/12, EU:C:2013:675. 18 C‑347/03, EU:C:2005:285. 19 In this connection, the Council cites, inter alia, the judgment of 10 September 2015, Parliament v Council (C‑363/14, EU:C:2015:579, paragraph 27 and the case-law cited). 20 Opinion 3/15 (Marrakesh Treaty on access to published works), 14 February 2017 (EU:C:2017:114). 21 See, in particular, Opinion 2/15 (paragraph 35 and the case-law cited). 22 See, in particular, Opinion 2/15 (paragraph 36 and the case-law cited). 23 See, in particular, Opinion 2/15 (paragraph 112 and the case-law cited). 24 See, inter alia, the judgment of 22 October 2013, Commission v Council (C‑137/12, EU:C:2013:675, paragraph 52 and the case-law cited). 25 See paragraph 116 of Opinion 2/15. 26 See paragraph 121 of Opinion 2/15. 27 See paragraph 122 of Opinion 2/15. The Court stated that ‘the same is true of Articles 11.36 to 11.47 of the envisaged agreement, which oblige each Party to provide for certain categories of procedures and of civil judicial measures enabling the persons concerned to rely on and enforce their intellectual property rights’ (paragraph 123) and ‘of Articles 11.48 to 11.50 of the agreement, which oblige each Party to establish methods for identification of counterfeit or pirated goods by the customs authorities and to provide for the possibility for holders of intellectual property rights to obtain suspension of the release of such goods if infringement or piracy is suspected’ (paragraph 124). Respectively, those provisions ensured ‘a degree of homogeneity between the levels of judicial protection available to holders of intellectual property rights in the European Union and Singapore respectively’ (paragraph 123) and ‘a degree of homogeneity between the tools available to protect holders of intellectual property rights against the entry of counterfeit or pirated goods into the European Union and Singapore respectively’ (paragraph 124). 28 See paragraph 125 of Opinion 2/15. 29 See paragraph 126 of Opinion 2/15. 30 See paragraph 127 of Opinion 2/15. 31 See paragraph 128 of Opinion 2/15. 32 See paragraph 130 of Opinion 2/15. 33 See in particular, by analogy, the judgment of 12 May 2005, Regione autonoma Friuli-Venezia Giulia and ERSA (C‑347/03, EU:C:2005:285, paragraph 81). 34 See paragraph 32 of Opinion 2/15. 35 See the judgments of 12 May 2005, Regione autonoma Friuli-Venezia Giulia and ERSA (C‑347/03, EU:C:2005:285), and of 22 October 2013, Commission v Council (C-137/12, EU:C:2013:675).