61983C0177
OPINION OF MR ADVOCATE GENERAL LENZ
DELIVERED ON 19 SEPTEMBER 1984 (
1
)
Mr President,
Members of the Court,
This case concerns the limits in Community law on an action for an injunction, based on provisions regarding fair trading and consumer protection, against the use in a Member State of a company symbol lawfully used in trade in another Member State.
A —
According to the information supplied by the national court the facts are as follows:
The plaintiff in the main proceedings, Theodor Kohl KG, Regensburg, is a leading German manufacturer and distributor of pharmacy equipment. The first defendant, Ringelhan & Rennett SA of Annecy, was established in 1971 as a subsidiary of the German firm Ringelhan & Rennett GmbH & Co. KG of Oberhausen, which had been in business since the end of the 1950s. Until it was wound up for insolvency in 1982, the parent company was also one of the leading German manufacturers and installers of pharmacy equipment. Shortly before its winding-up it sold its French subsidiary to a third party.
The second defendant, Ringelhan Einrichtungs GmbH, is a German limited-liability company, founded after the winding-up, which became the commercial representative of the French firm. Originally the French subsidiary and the German parent company offered a single range of equipment under their respective business names and used as their trade symbol a white “r + r” on a contrasting background. After the winding-up of the German company the French undertaking and its commercial representative continued to use the trade symbol in question; in particular, they used an illuminated advertising sign incorporating that symbol on a stand at a trade fair.
The plaintiff, relying on Paragraphs 1 and 3 of the German Gesetz gegen den unlauteren Wettbewerb [Law on Unfair Competition], seeks an injunction restraining the defendants from referring in their business correspondence and advertisements concerning pharmacy equipment to the symbol described without clearly indicating that they have no legal or economic connection with the defunct German company.
The relèvent part of Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb reads as follows:
“Whosoever in the conduct of business for purposes of competition makes misleading statements regarding commercial matters, in particular regarding the quality, origin, method of manufacture or of calculating the price of specific goods or services or the whole range of his products or services, price lists, the manner in which supplies are obtained or their source ... may be sued for an injunction restraining him from making such statements.”
The plaintiff, which does not claim any superior right of its own to the trade symbol, bases its claim essentially on the allegation that the symbol in question gives the false impression that the economically insignificant French firm Ringelhan & Rennett SA is the same as the formerly substantial undertaking Ringelhan & Rennett, of Oberhausen, or at least has legal or economic links with that undertaking, which used to enjoy an excellent reputation.
In reply the defendants argue that the French firm is in no way an insignificant undertaking, but is one of the largest suppliers in France. Both firms, originally joined in a single group, inter alia shared the same managing director and carried on an integrated business. In particular, they had joint manufacturing and marketing programmes, used uniform advertising methods, exchanged personnel and switched orders from one firm to the other. Even before the winding-up the French firm had to some extent supplied equipment to pharmacies in the Federal Republic of Germany. The defendants argue that they are entitled to use the business name in question pursuant to Paragraph 12 of the German Bürgerliches Gesetzbuch [Civil Code] in conjunction with Article 8 of the Paris Convention. As a former member of a group the French firm has merely continued to use a symbol of common origin which it formerly used with the permission of the parent company. Furthermore, it obtained express permission from the liquidator of the German firm for the use in Germany of the trade symbol of the former parent company and therefore, alongside its own right, has a contractual right to its use. Article 30 of the EEC Treaty, in particular, permits the use of the trade symbol in question on the German market. It cannot be required to add information to that permissible designation other than the usual name of the firm, including its status as a company, and its French address.
By order of 9 June 1983 the Fourth Commercial Chamber of the Landgericht München I stayed the proceedings and referred the following question to the Court of Justice pursuant to Article 177 of the EEC Treaty:
“If a company symbol (in this case ‘r + r’ in white lettering on a constrasting background) has hitherto been lawfidly used by a foreign undertaking (in this case French) in its own country (France) to designate that undertaking in business or trade and that undertaking used to form a group with an undertaking in the Federal Republic of Germany which used the same company symbol to designate that (German) undertaking in the Federal Republic of Germany until the German undertaking went into liquidation and as a result ceased to exist and if under national (German) competition law the use of the company symbol in question by the foreign (French) undertaking in the Federal Republic of Germany is unlawful on the ground that persons seeing the symbol perceive it as designating the non-existent German undertaking or in any event the (likewise non-existent) group of undertakings and such use is therefore misleading (Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb [Law against Unfair Competition]), does Community law (in particular Article 30 of the EEC Treaty) prevent the foreign (French) undertaking from being prohibited from using the symbol in the Federal Republic of Germany?
Does the answer depend on the degree to which such usage is misleading?”
B —
My view of the matter is as follows:
The national court wishes essentially to know whether the provisions of Community law on the free movement of goods make inadmissible a national law according to which an undertaking from another Member State which originally formed a group with a domestic undertaking which has subsequently ceased to exist may be prohibited from using a trade symbol within the country concerned, on the ground that such use constitutes a reference to the defunct domestic undertaking or to the defunct group and is therefore misleading. The national court seems inclined to the view that on the basis of the provision of national law, which is designed to promote fair trading and to protect consumers against the use of misleading statements, the plaintiff is entitled to demand that the defendants cease to use the trade symbol in question.
1.
In considering this question it must first be pointed out that the Court of Justice has consistently held that the free movement of goods is one of the foundations of the Common Market. Accordingly, it has in every case weighed the interests protected by the law on unfair competition or by the law on industrial property against the interests secured by the free movement of goods. It has thus recognized that the implementation of such national protective provisions must in principle be measured against the objectives of Community law.
2.
The prohibition envisaged by the national court preventing the defendants from using in the Federal Republic of Germany their trade symbol, which is lawfully used in France, or at least preventing them from referring to the now defunct original owner of the mark in Germany, must, as all parties to the proceedings agree, be regarded as a measure capable of hindering intra-Community trade as referred to in the Dassonville formula (Case 8/74 (
2
)). That is because a prohibition on the use of the trade symbol in question, which contains a reference to the trade name of the first defendant, is likely to restrict the advertising and sales promotion possibilities of the French owner of the mark in Germany. As the Court of Justice held in Case 152/78 {Commission v France; (
3
) advertising of alcoholic beverages) and in Case 268/81 (Oosthoek (
4
)), even if such a regulation does not affect imports directly it may restrict the volume of imports since it influences sale possibilities for the imported products.
Finally, the restriction on trade which may result from such provisions is also expressly acknowledged by Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising. In the preamble to that directive it is stated inter alia that: “Since advertising reaches beyond the frontiers of individual Member States, it has a direct effect on the establishment and the functioning of the common market. ... The differences between the laws of the Member States not only lead, in many cases, to inadequate levels of consumer protection, but also hinder the execution of advertising campaigns beyond national boundaries and thus affect the free circulation of goods and provision of services.” The application of Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb in the manner envisaged by the national court must therefore in principle be regarded as a measure having an effect equivalent to a quantitative restriction on imports.
3.
The matter therefore depends essentially on the extent to which such an application of that provision can be justified in the interests of fair trading and consumer protection.
There are two possibilities: either the judicial prohibition of the use of the trade symbol in question might not be regarded as a measure having equivalent effect prohibited by Article 30 of the EEC Treaty, under the Cassis de Dijon doctrine, (
5
) or it might be justified under Article 36 of the EEC Treaty by reference to trade-mark rights and the judgments of the Court on the common origin of trade-mark rights. Consequently, both possible justifications are considered by the parties to the proceedings.
(a)
As regards the justification based on trade-mark rights, all parties to the proceedings correctly start from the proposition that the principles of Community law regarding the exhaustion of trade marks must also apply to company symbols. Company symbols and trade marks are to a large extent similar to each other as regards their nature, which is analogous to that of property, their function of guaranteeing to the consumer the origin of the goods, and the legal protection accorded to them, so that the judgments of the Court on the exhaustion in Community law of industrial and commercial property rights and in particular on the splitting of rights of common origin may also apply to company symbols. Accordingly, in the Terrapin v Terranova judgment (Case 119/75 (
6
)), the Court of Justice phrased the operative part of its judgment so as equally to cover rights to trade marks and commercial names protected by law.
In contrast to the Terrapin case, however, this case concerns the splitting of the right to the symbol, and it is irrelevant whether the splitting took place as a result of the alienation of the right or as a result of the liquidation of the German firm. According to the judgment in Van Znylen v Hag (Case 192/73 (
7
)), it is in any event a case of exhaustion of the right to the mark, since the identifying rôle of the mark has already been nullified by its splitting and can therefore no longer be protected. That means that even the German parent company, if it still existed, or a successor firm, could not, according to law on the use of trade symbols, prohibit the use of the identical company symbol, of common origin, in the territory where its right is valid. In the opinion of the defendants in the main proceedings, the French Government and the Commission, that fundamental principle of Community law must a fortiori apply also to actions for injunctions based not on industrial property rights but, as in this case, on considerations of fair trading and consumer protection.
(b)
Although that proposition is at first sight convincing, there are a number of reasons why the judgments on Article 36 referred to cannot, as the defendants in the main proceedings and the Commission concede, be applied to this case without further consideration.
In contrast to those cases, the plaintiff in the main proceedings is not in this case the owner of a symbol of common origin, and the claim is based not on the infringement of rights analogous to property rights but on the alleged deception of consumers. In Van Zuylen v Hag, (
7
) the Court made it clear that its decision related only to actions for injunctions based on legislation regarding trade-mark rights. In stating that it is contrary to the provisions on the free movement of goods that the sale of a product which in one Member State lawfully bears a trade mark should be forbidden in another Member State for the sole reason that in the latter State there exists an identical trade mark of common origin, it showed that where there are additonal elements of impropriety there remains room for the application of the provisions on unfair competition.
It must now be accepted, at least since the “Irish souvenir” case (Case 113/80, Commission v Ireland (
8
)), that consumer protection and fair trading may be taken into account only in the context of Article 30 and not under Article 36, since those interests are not included in the exceptions exhaustively listed in Article 36.
4.
As the Court of Justice has repeatedly pointed out in its judgments applying the Cassis de. Dijon doctrine (see in particular Case 6/81, Industrie Diensten Group v Beele, (
8
) Case 220/81 (
9
), Robertson, (
10
) and Case 286/81, Oosthoek (
11
)), in the absence of common rules relating to marketing, obstacles to intra-Community trade resulting from disparities between national legislation must be accepted in so far as such legislation is applicable to domestic products and imported products without distinction and is necessary in order to satisfy imperative requirements relating to consumer protection and fair trading.
It is therefore necessary to examine whether the application of Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb in the manner suggested by the national court meets those conditions.
(a)
Like the defendants in the main proceedings and the Commission, I am of the view the prohibition envisaged by the national court cannot be regarded as a measure applicable without distinciton. It is true that, according to its wording alone, Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb, unquestionably applies without distinction to the marketing of domestic as well as imported goods. If, however, that provision is interpreted in such a way that the use of a company symbol is prohibited solely on the ground that it misleads the consumer as to the domestic origin of the goods, and if no other evidence of unfair trading is required, it amounts to discriminatory application of the provision to domestic and imported products based not on any differences in the goods but essentially on the territorial limitation of national rights to the use -: of trade marks and other symbols. The judgments of the Court regarding the territorial exhaustion of trade marks and similar rights show, however, that the common market must be regarded as a single market for the purpose of those rights.
It follows that the application of the provision in question suggested by the national court could only be regarded as a measure applicable without discrimination if a corresponding domestic set of circumstances would be treated in the same way. That would in particular be the case if, to quote the example put forward by the Commission, an undertaking carrying on business in northern Germany which had been sold off before the liquidation of its parent company, formerly in business in southern Germany, could, after that liquidation, be prohibited on the basis of Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb from using in southern Germany for advertising purposes its company symbol, which was identical and of the same origin, and which made no reference to its geographic origin. In the course of the proceedings, however, neither side has been able to cite decisions of German courts applying Paragraph 3 in purely domestic circumstances of that kind. The fact that no such comparable cases involving purely domestic circumstances exist would tend to indicate that the application of Paragraph 3 envisaged by the national court discriminates between imported and domestic goods.
Such an application is implied not least by the wording of the question submitted, according to which the use of the company symbol in question in Germany by the foreign undertaking is not permissible since the use in Germany of that symbol might be regarded as a reference to the defunct German undertaking.
As the Dansk Supermarked (
12
) judgment in particular makes clear, legislation on fair trading or consumer protection which is applied in a discriminatory manner to domestic and imported goods and which restricts the free movement of goods is always to be regarded as a measure equivalent in effect to a quantitative restriction, prohibited by Article 30 of the EEC Treaty. In that case the Court first of all emphasized that Community law does not in principle have the effect of preventing the application in a Member State to goods imported from other Member States of the provisions on marketing in force in the State of importation. Referring to the Béguelin (
13
) judgment, however, it went on to stress that the actual fact of the importation of goods which have been lawfully marketed in another Member State cannot be considered an improper or unfair act since that description may be attached only to offer or exposure fotsale on the basis of circumstances distinct from the importation itself. The same must also apply in a case where goods are lawfully marketed in another Member State under a particular company symbol.
Finally, a prohibition on the use of a company symbol, based on national legislation and directed exclusively at the foreign origin of the symbol, must also be regarded as a measure which is not applicable without distinction and which favours domestic products under Article 2 (3) (s) of Commission Directive 70/50/EEC (Official Journal, English Special Edition 1970 (I), p. 17). According to that provision, measures which “confine namens which are not indicative of origin or source to domestic products only” fall within the category described.
5.
The Court has consistently held that provisions applicable in a discriminatory fashion cannot be justified under Article 30 of the EEC Treaty, but only under Article 36. Since, as has been shown, neither consumer protection nor fair trading can be invoked under Article 36, it must be concluded that national legislation which is intended to protect those interests and is not applied without distinction to domestic and imported products must be regarded as a measure equivalent in effect to a quantitative restriction on imports prohibited by Article 30 of the Treaty.
Thus the Court held in Schutzverband gegen Unwesen in der Wirtschaft v Weinvertriebs-GmbH (Case 59/82 (
14
)) that a national provision for the protection of consumers which concerned only imported products was discriminatory and could not be justified on the grounds mentioned in Article 36.
6.
However, even if we were to assume that Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb would also lead to a prohibition of the use of the company symbol in comparable cases with a purely domestic content and that the application of that provision in the manner envisaged by the national court therefore constituted a measure applicable without distinction to domestic and imported products, it would still be necessary under Article 30, according to previous judgments of the Court, to inquire whether the measure restricting trade could be justified on the basis that it was necessary in order to satisfy imperative requirements relating, inter alia, to consumer protection and fair trading. In the Cassis de Dijon judgment the Court thus recognized that in the absence of Community legislation appropriate national marketing provisions may in principle result in a limitation of the free movement of goods guaranteed by the Treaty.
(a)
Unquestionably, the protection of the public against misleading information regarding the manufacturer of a product, which is one of the aims of Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb, must in principle be counted amongst the imperative requirements of consumer protection. On the one hand, it prevents the consumer from being deceived into thinking that a product comes from a firm with which certain notions of quality may be associated, and on the other hand acts as a safeguard against the dishonest exploitation of the good reputation of another undertaking. As the Court pointed out in the Beele (
15
) case, that such a rule, does meet imperative requirements is borne out not least by the fact that it accords with the principle underlying Article 10 bis of the Paris Convention for the Protection of Industrial Property, as last revised in Stockholm on 14 July 1967, which prohibits all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities of a competitor.
(b)
The Court has however consistently emphasized that in according such protection the existence of the common market must be taken into account and regard must be had to the limits in Community law which flow from the basic principle requiring free movement of goods. Taking as a basis the criteria laid down in Article 36, it has always inquired, in the context of Article 30, whether national legislation or the manner in which it is applied is appropriate and necessary for the achievement of the objectives in question, or whether it goes beyond the bounds of what may be justified by those objectives.
(i)
In this regard, it follows from the “Irish souvenir”, (
16
)Dansk Supermarked (
17
) and Bégiielin (
18
) cases that from the point of view of the protection of public interests and the related marketing regulations the foreign origin of a product can play no role, since otherwise it would not be a question of a measure applicable without distinction.
(ii)
The Dansk Supennarked (
17
), Beele (
19
) and Oosthoek (
20
) cases show further that a prohibition on marketing founded on consumer protection and fair trading legislation which is applicable without distinction may only be justified where there are additional particular elements of impropriety. In the Dansk Super-marked (
17
) judgment it is stated in this regard that the marketing of imported goods may be prohibited “if the conditions on which they are sold constitute an infringement of the marketing usages considered proper and fair in the Member State of importation”. In the Beele * case the particular element of impropriety was seen in the fact “that in the provisional view of the national court the products which it intends to prohibit from being marketed are for no compelling reason practically identical to the products imitated and that the appellant in the main action thereby needlessly causes confusion”. In the Oosthoek (
20
) case the Court came to the conclusion that the prohibition of a marketing system involving free gifts was capable of contributing to consumer protection and fair trading since “the offering of free gifts as a means of sales promotion may mislead consumers as to the real prices of certain products and distort the conditions on which genuine competition is based.
7.
If, on the basis of those judgments, we now consider whether the prohibition of the use of the company symbol in question envisaged by the national court can be justified by imperative requirements of consumer protection and fair trading, it must be accepted, as the defendant in the main proceedings, the French Government and the Commission submitted, that an undertaking must in principle be able to use its business name and symbol throughout the common market and that that liberty may be restricted only on specific grounds, which must fulfil the requirements laid down in Article 36 of the EEC Treaty
(a)
From the point of view of the protection of competitors, the use of the company symbol in question for commercial purposes in Germany cannot in itself be regarded as improper, since, according to the judgment in Van Zuylen v Hag, (
21
) even a legal successor to the German firm, using an identical company symbol of common origin, could not bring an action for an injunction based on its right to that symbol. As the Court pointed out in the Terrapin (
22
) case, the basic function of a trade mark (which may in this regard be equated with a company symbol) is to guarantee the origin of the product and that function is already undermined by the subdivision of the original right. Such a view has all the more force where, after the division, one proprietor of the symbol is eliminated from the market and the symbol can therefore cause no confusion at all. The Commission is correct in submitting that the relevant criteria of Community law cannot in principle be less stringent where a plaintiff relies on provisions designed to prevent unfair competition rather than on his own right to a trade symbol.
(b)
As the defendant in the main proceedings and the Commission correctly submit, moreover, in determining to what extent the prohibition of the use of the symbol in question under national competition law is acceptable from the point of view of consumer protection on the ground that consumers may be misled as to the manufacturer of the goods, the existence of the common market and the principle of the free movement of goods must also be taken into account. In this regard the plaintiff in the main proceedings and the German Government correctly point out that the answer to the question whether there is a deception of the consumer likely to influence his economic behaviour depends in principle on the expectations of the commercial circles in question. It must be conceded that the risk of such deception cannot be assessed in the abstract but can only be ascertained on the basis of a review by the national court of the circumstances of the particular case. In assessing the legal relevance of those circumstances the national court must however observe the restraints imposed by Community law. In that regard, the degree of deception is — to answer the second question — also relevant.
(i)
As I have already shown, the question to what extent the consumer is misled, by the use of a company symbol, with regard only to the foreign origin of a product must be disregarded, since otherwise the application of national law would be discriminatory and could not be justified on grounds of consumer protection.
(ii)
As regards the consideration of other aspects of unfairness which, in the context of competition law, may justify restrictions on the free movement of goods, the Court has consistently held that under both Article 36 and Article 30 there must be a balancing of the two legal interests concerned, taking into account the necessity and the proportionality of the restrictive measure. A measure restrictive of trade is therefore only compatible with the provisions on the free movement of goods if (i) it corresponds to imperative requirements which are matters of public interest and (ii) it is not devised in such a way as to contravene the prohibition on excessive measures, the principle of minimum intervention and the principle laid down in the second sentence of Article 36, according to which the measure must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
(iii)
Having regard to those criteria, it must be stated, as the defendants in the main proceedings and the Commission submitted, that as a matter of general experience consumer expectations link a company symbol above all with particular claims of quality. Such consumer expectations could therefore merit protection if, for example, the goods or services offered by the surviving French firm differed substantially in quality from those of the defunct group. The national court has provided no information from which specific aspects of unfairness of that nature could be inferred. Where the products are identical, which does not seem to be disputed in this case, purchasers can hardly be deceived by the use of a symbol as to the particular nature of the goods and services offered under that symbol. At the hearing counsel for the plaintiff in the main proceedings conceded that point.
In weighing the different interests represented by the free movement of goods and consumer protection the national court must also take into account the fact that consumer expectations with regard to the characteristics of goods and the rights of industrialists may only in exceptional cases and in particular circumstances justify interference in the free movement of goods. In making that assessment it must also be borne in mind that purchasers of pharmacy equipment can hardly fail to have learned of the disappearance of the original group of firms and that those purchasers can deduce from the place of business of the firm (Annecy) and the company designation (SA), which accompany the symbol, that the firm which now uses the symbol “r + r” for its goods is a French undertaking.
C —
For those reasons, I therefore propose that the Court should answer the preliminary question as follows:
Articles 30 and 36 of the EEC Treaty must be interpreted as meaning that the use in a Member State of a company symbol which is lawfully used in another Member State as a reference to an undertaking, in the circumstances of previous economic unity and common origin described by the national court, cannot in itself be regarded as an unfair commercial practice. That applies without prejudice to the possible application of legal provisions of the importing State whereby such use may be prohibited on the ground of other specific factors of impropriety, such as the deception of consumers as to the particular nature and quality of the goods or services traded under such a company symbol. But even then the national authorities must still consider whether the restriction of the free movement of goods is absolutely necessary in the interests of fair trading.
(
1
)	Translated from the German.
(
2
)	Case 8/74, Procureur du Roi v Dassonville, [1974] ECR 837.
(
3
)	Case 152/78, Commissions France, [1980] ECR 2299.
(
4
)	Case 286/81, Oosthoek's Uitgeversmaatschappij, [1982] ECR 4575.
(
5
)	Case 120/78, Rewe v Bundesmonopolverwaltung für Branntwein, [1979] ECR 649.
(
6
)	Case 119/75, Terrapin v Terranova, [1976] ECR 1039.
(
7
)	Case 192/73, Van Zuylen v Hag, [1974] ECR 731.
(
8
)	Case 113/80, Commission v Ireland [1981] ECR 1625.
(
9
)	Case 6/81, Industrie Diensten Groep v Beele, [1982] ECR 707.
(
10
)	Case 220/81, Robertson, [1982] ECR 2349.
(
11
)	Case 286/81, Oosthoek's Uitgeversmaatschappij, [1982] ECR 4575.
(
12
)	Case 58/80, Dansk Supermarked v ¡merco, [1981] ECR 181.
(
13
)	Case 22/71, Béguelin Import Co. v SA G.L ¡muori Expon, [1971] ECR 949.
(
14
)	Case 59/82, Scbutzverband gegen Unwesen in der Wirtschaft v Weinvertriebs-GmbH, [1983] ECK. 1217.
(
15
)	Case 6/81, Industrie Diensten Groep v Beele, [1982] ECR 707.
(
16
)	Case 113/80, Commissioni Ireland, [1981] ECR 1625.
(
17
)	Case 58/80, Dansk Supennarked v ¡merco, [19811 ECR 181.
(
18
)	Case 22/71, Bégiielin Import Co. v SA G. L Import Export, [1971] ECR 949.
(
19
)	Case 6/81, Industrie Diensten Groep v Beele, [1982] ECR 707.
(
20
)	Case 286/81, Oosthoek'! Uitgeversmaatschappij, [1982] ECR 4575.
(
21
)	Case 192/73, Van Zuylen v Hag, [1974] ECR 731.
(
22
)	Case 119/75, Terrapins Terranova, [1976] ECR 1039.