61981C0006
OPINION OF MR ADVOCATE GENERAL
VERLOREN VAN THEMAAT
DELIVERED ON 25 NOVEMBER 1981 (
1
)
Mr President,
Members of the Court,
I — Introduction
Bv a judgment of 11 December 1980 the Gerechtshof [Regional Court of Appeal], The Hague, requested the Court:
“To rule on the interpretation of the rules concerning the free movement of goods contained in the EEC Treaty and of Articles 85 and 86 of the Treaty with reference to the following question:
Assuming that:
(a)
A trader, A, markets products in the Netherlands which are no longer covered bv any patent and which for no compelling reason are practically identical with products which have been marketed for a considerable period of time in the Netherlands by another trader, B, and which are different from similar kinds of articles, and in so doing trader A needlessly causes confusion;
(b)
Under Netherlands law trader A is thereby competing unfairly with trader B and acting unlawfully;
(c)
Netherlands law gives trader B the right to obtain an injunction on that ground restraining trader A from continuing to market the products in the Netherlands;
(d)
The products of trader B are manufactured in Sweden and those of trader A in the Federal Republic of Germany;
(e)
Trader A imports his products from the Federal Republic of Germany in which those products are lawfully put on the market by someone other than trader B, the Swedish manufacturer, someone who is associated with one of them or by someone who is authorized to do so by one of them,
do the rules contained in the EEC Treaty on the free movement of goods, notwithstanding the provisions of Article 36 thereof, then prevent trader B from obtaining such an injunction against trader A?”
With that question a national court is for the first time confronting the Court with the problem of how the general rule against precise or unauthorized imitation is to be treated under Community law. In the authoritative comparative legal study by Ulmer and others of the law of unfair competition in the Member States of the EEC the rule is described as belonging to one of the most difficult branches of the law óf unfair competition (Ulmer and Reimer, Das Recht des unlauteren Wettbewerbs in den Mitgliedstaaten der EWG, Volume III: Germany, Munich 1968, p. 190). An up-to-date comparative legal study shows that the rule exists in all the present ten Member States and that the conclusion drawn by Ulmer and Reimer in regard to German law that the rule is a difficult one is probably true of most other Member States.
Only Italy expressly prohibits precise imitation by statute, namely in Article 2598 of its Civil Code. All other Member States infer such a prohibition either from specific legislation on unfair competition in genera! or from general principles of tortious liability. The concept of “precise imitation” prevailing in academic writing appears, admittedly not without some confusion, to be this: (1) even the exact imitation of someone else's product is not caught per se by the prohibition and (2) all the legal systems of the Member States are based on the principle that in the absence of a specific industrial property right like a patent anyone may freely draw inspiration in his industrial or trading activities from what others have done. In principle that freedom also comprises the right to imitate a competitor's product. Only if such imitation may create confusion in the mind of purchasers as to the identity or origin of the product do all the legal systems of the Member States regard imitation as prohibited. The nature of the product, the characteristic features or components imitated, the necessity for or functionality of the imitation as well as the degree of technical expertise of the persons who usually buy it makes for an abundance of casuistry in the results of legal analysis. The criteria applied in such analysis vary to a greater or lesser extent from Member State to Member State. Such different approaches could help to explain inter alia why in the case of the cable ducts at issue here an action has never been brought in the Federal Republic of Germany concerning the Swedish product imitated by a German manufacturer. It may be seen from the file on the case that just the reverse happened and that the imitator successfully sued the Swedish manufacturer for unfair competition on the ground that in its advertisements it purported to own a patent which had already expired when the advertisements appeared. In pan (e) of its question the Gerechtshof, The Hague, therefore expressly assumes that the product in question was lawfully marketed in another Member State — in this case the Federal Republic of Germany. I shall later return to the question of the relevance of this point for the Court's ruling.
The criterion of the risk of confusion used in all the Member States to determine whether there is a case of precise imitation also finds support in Article 10 bis of the International Convention revising the Paris Convention for the Protection of Industrial Property of 20 March 1883, done in Stockholm on 14 July 1967 (Tractatenblad [collection of treaties and conventions] of the Kingdom of the Netherlands, 1970, No 187).
According to Article 1 (2) of that convention the protection of industrial property also has as its object the repression of unfair competition. Whether that must also be assumed in the case of the similar term appearing in Article 36 of the EEC Treaty is not certain. I shall also return to that question and its possible relevance for the Court's judgment.
More important for meeting the justification based on reasons of public interest required by Article 36 and the Court's decisions on Article 30 for breaches of the principle of the free movement of goods I consider to be Article 10 bis of the International Convention, as previously mentioned. In paragraph 3 of that article it is stated that (at art of the general obligation imposed o y paragraphs 1 and 2 on the countries of the Union to assure effective protection against unfair competition) the following in particular are to be prohibited:
1.
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.
...
3.
indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for the purpose, or the quantity, of the goods.
The criterion of th- risk of confusion also plays a major pr in trademark law. That is clear not or.iv from the Court's case-law but also from Article 6 bis of the International Convention. To that extent it might be possible to say that the design of a product functions almost like a trademark which is then protected by the general rule against precise or unauthorized imitation.
Again I shall later return to the question of how far this can be taken to mean that the Court's case-law on the risk of confusion in trademark law is also relevant to the question raised in this case.
It is much more difficult to answer the question how far the rule against precise or unauthorized imitation acts like a patent besides having a function like a trademark. The facts of the case before the national court show that this question is also relevant to the questions submitted for a preliminary ruling. This question has arisen not only in this case but also in many other cases which national courts have had. to decide. After a patent has expired its original owner will naturally quite readily consider that there is a risk of confusion as soon as others start to use the subject of his patent. Generally speaking it can only be stated in this regard that the rule against precise or unauthorized imitation may not interfere with the right freely to use the subject of an expired patent. To some extent the case-law of many Member States corresponds to that principle by drawing a distinction between the elements technically necessary for a product, or at any rate its functional elements which a competing product may incorporate, and technically unnecessary or functional external features which a competing product may not incorporate. In principle patent protection will be available only in respect of the first-mentioned elements and then only on specific conditions laid down by the relevant patent legislation. The correspondence is not an absolute one, however, because the rule against precise imitation may also be applied outside the patent field. The factual question whether the SVT product at issue incorporates only technically necessary elements of the MCT product imitated, or technically unnecessary, external features as well, is of no concern to the Court in the context of proceedings for a preliminar) ruling. Nor is it of concern to the Court that according to the leading German judgment of 3 May 1968 in Pulverbehälter (an instructive summary of the case-law of the Bundesgerichtshof is given by Droste in Gewerblicher Rechtsschutz und Urheberrecht 1968 I, p. 591, et seq.) the facts of this case would presumably be approached in the Federal Republic of Germany by using criteria different from those formulated in paragraph (a) of the question posed by the Gerechtshof, The Hague. In its judgment of 11 February 1977 (Gewerblicher Rechtsschutz und Urheberrecht 1977, p. 642) the Bundesgerichtshof had to deal with facts (concerning built-in lamps) very much akin to those in this case. Judging by inter alia a judgment of the Cour de Cassation of 25 January 1977 (Annuaire 1977, p. 63) French courts also give the imitator considerably more freedom than Netherlands courts in their decisions. As the Court has indicated earlier in the Terrapin v Terranova judgment in Case 119/75 [1976] ECR 1039, it is no pan of the Court's duty to attempt to harmonize the concept of “risk of confusion” in the context of the interpretation of Articles 30 and 36 of the Treaty. It is as well to mention in this connection that the absence of any compelling reason for the product in issue to be virtually identical to the product imitated and the needless confusion thereby caused referred to in the question submitted allude to the construction of the concepts of “compelling reason”, “needlessly” and “confusion” occurring in a long line of judgments of the Hoge Raad [Hoge Raad 26 June 1953, Nederlandse Jurisprudentie 1954, p. 90; Hoge Raad 21 December 1956, Nederlandse Jurisprudentie 1960, p. 414; Hoge Raad, 8 Februar 1960, Nederlandse Jurisprudentie 1960, p. 415; Hoge Raad, 14 March 1968, Nederlandse Jurisprudentie 1968, p. 268; Hoge Raad, 12 June 1970, Nederlandse Jurisprudentie 1970, p. 434 and Hoge Raad, 24 November 1974, Nederlandse Jurisprudentie 1975, p. 176]. Naturally those authorities cannot bind this Court in so far as the concepts of “compelling reason” or “justification” or similar concepts occur in Article 36 of the Treaty and in the Court's decisions on Article 30. In construing the relevant Community law considerations wholly different from those which are material in national law in the field of unfair competition come into play. In other branches of the law of unfair competition or the law of industrial property the balancing of the interests protected by the law of unfair competition or the law of industrial propeny against the interests of the free movement of goods has always been crucial as far as this Court is concerned. In respecting the existence, the object or the essential aims of the national laws concerned, this Court has never hesitated from examining the application of those laws in the light of the aims of Community law. In this regard I consider it unnecessary to refer the Court to its numerous decisions on this matter. Where they are of more direct concern to the question submitted I shall return to them later.
Following those general introductor) remarki I shall deal with the following matters in turn.
In the second part of this opinion I shall make some further supplementary observations on the question posed by the Gerechtshof, The Hague. In so doing I shall examine more closely the question how far Articles 85 and 86 of the EEC Treaty mentioned at the beginning of the question submitted may be relevant for the purposes of the Court's answer.
In the third part of this opinion I shall examine more closely the question crucial to the Court's answer as to whether that answer must be based on Article 30 alone, or on Article 36 of the EEC Treaty as well, which the Gerechtshof, the Commission and the Government of the United Kingdom all appear'to assume. However, the United Kingdom does so only should the Court, contrary to its submission, take the viewthat the branch of the law of unfair competition in question does come under Article 30. In the third part of this opinion I shall also return to the point which I have already touched upon of relevant similarities and differences in the complex problem of distinguishing from Community law on the one hand and various branches of national industrial property in the narrow sense, national law on precise imitation and the law of unfair competition in more general terms on the other.
In the same part of this opinion I shall then examine the question as to which conclusions should follow from, first, the assumption that Article 36 also applies and, secondly, the assumption that only Article 30 applies. At the same time I shall indicate how far relevant differences may occur in practice and how far any differences may be overcome in practice. Finally, in the same part of this opinion, I shall indicate the reasons for which one of the two assumptions might eventually be chosen.
In the last pan of this opinion I shall set out and give reasons for my final conclusion.
As may appear from the outline I have given, I shall not devote any separate paragraph to the facts forming the basis of the case.
The dispute concerns cable ducts of a type which were originally manufactured under a patent in Sweden alone but after the patent expired were copied by a German manufacturer. Besides being marketed in Germany the German SVT product is marketed in the Netherlands and elsewhere. For the further developments in the case I can where the facts are concerned as usual mainly refer to the Report for the Hearing. I should moreover supplement the Report for the Hearing on one point of fact because it arose only at the end of oral procedure. Besides being used in buildings the cable ducts are also used in ships. Unlike a building a ship is movable. The question therefore arises as to how far the judgment at first instance, against which appeal has been made to the Gerechtshof, The Hague, also applies to the supply of components of the SVT product at issue for use in ships which are being repaired in a Netherlands port and in which a lawfully-sold SVT cable duct has been installed elsewhere in the Community. The judgment of the Arrondissementsrechtbank, The Hague, against which the appeal has been made to the Gerechtshof, The Hague, is not clear on this point as it restrains the defendant “from marketing or causing to be marketed in the Netherlands the cable ducts referred to in the proceedinr; and described above and orderir.. the defendant to pay the plaintiff a tine of ... for each cable duct unit or pan thereof which the defendant markets or causes to be marketed contran to this injunction ...” and so on. What did become clear during the brief discussion of this point is that the acceptability in Community law of restricting trade in components, accessories or, in some cases, accessories such as paint, is not immediately self-evident from the answer applying in the case of the end products for which they are used. The trade in components or accessories is in fact only a relatively minor point in this case. In other cases, such as trade in car parts, or trade in parts for cash registers, as in the Court's judgment in Case 22/78 Hugin v Commission [1979] ECR 1869, an assessment of the restrictions on trade may be much more important. In the application of Articles 85 and 86 it appears then that an important question arises as to the extent to which there is a separate relevant market for trade in components. In the cases cited as examples the same question might be relevant as regards the application of Articles 30 or 36 if upon the importation of products into a country they are barred in that country on the ground of the national law against precise or unauthorized imitation. Certainly, where there is a separate relevant market in components, it does not appear to be self-evident that, if a restriction of imports of the end product is regarded as permissible, imports of components may be automatically prohibited as well. In the present case it seems improbable that there is a separate relevant market in cable duct components. Trade in components is probably carried out by the same persons who trade in the end product. However, even then it does not appear to be self-evident that if a prohibition of trade in the end product is regarded as permissible it should automatically justify a prohibition of trade in components as well. I shall therefore briefly return to this point in the last part of this opinion.
II — Observations on the question raised
The question raised gives in exemplary fashion an abstract summary of the facts in terms appropriate to Netherlands law (assumption (a)), the legal position under Netherlands law (parts (b) and (c)), and of the facts which the Gerechtshof, The Hague, considers to be particularly relevant from the point of view of Community law (assumptions (b) and (e)).
The ultimate question submitted is also exemplary in so far as its clear, abstract wording makes reformulation on the part of the Court unnecessary to avoid the Court's ruling on the actual circumstances of the case in point. The fact that in view of that wording the Gerechtshof clearly assumes that Article 36 of the EEC Treaty may be relied upon in this case should not, in view of the further wording of the question, prevent the Court from examining the question whether it might be possible successfully to rely on the exceptions which the Court, when construing Article 30, has accepted in its previous judgments on the strict footing of the Dassonville judgment (Case 8/74 [1974] ECR 837). On the other hand the significance which the Court must attach in its answer to the beginning of the question in which an interpretation of Articles 85 and 86 is also sought is unclear.
It appears from the judgment making the reference that the plaintiff in the main action is the sole imponer of the Swedish MCT product the imitation of which is challenged. It also appears from paragraph 16 of the judgment making the reference that the Gerechtshof rejected the defence argument of BV Industrie Diensten Groep, the defendant in the main action at first instance, that the action of Beele, the plaintiff, was contrary to Articles 85 and 86 of the EEC Treaty “on the ground that IDG has not submitted and the facts do not disclose any question or the possibility of their being any question of an agreement between undertakings, a decision by an association of undertakings or concerted practices referred to in Article 85 or of a dominant position within the common market or in a substantial part of it as referred to in Article 86”. Since at the beginning of its question the Gerechtshof nevertheless seeks an interpretation of Articles 85 and 86 of the EEC Treaty with reference to its ultimate question, it seems to me to be useful here briefly to examine this aspect as well.
It is not claimed, nor is it likely on the basis of the facts, that the sole importer status of the plaintiff in the main action, presumably based on an exclusive dealing agreement, is not covered by Regulation No 67/67/EEC of the Commission on the application of Article 85 (3) to certain categories of exclusive dealing agreements (Official Journal, English Special Edition 1967, p. 10). In particular, the exceptions set out in Article 3 to the exemption granted in Article 1 of the regulation appear to have no application in this case. It therefore appears that, in the absence of any other conclusion to which facts not apparent from the file might lead, a national court may assume that the relevant exclusive dealing agreement is a valid one. Thus although, contrary to the Gerechtshof's assumption, there is presumably an agreement of the kind referred to in Article 85, none of the known facts therefore indicate that there is an agreement which is prohibited by Article 85. The fact that the Commission may pursuant to Article 7 of Regulation No 19/65/EEC of the Council (Official Journal, English Special Edition 1965-1966, p. 35) terminate the validity of an exclusive dealing agreement falling under the relevant regulation granting exemptions where the conditions of Article 85 (3) do not appear to be fulfilled in practice does not militate against that conclusion. That could happen, for example, if, in conjunction with the exercise of the right to protection against unfair competition, the exclusive dealing agreement in question afforded an undertaking the possibility of eliminating competition in respect of a substantial pan of the products in question on the relevant product market (Article 85 (3) (b)). Since there is nothing to indicate such market control exists and the right to apply Article 85 (3) and Article 7 of Regulation No 19/65 of the Council is reserved to the Commission, the Gerechtshof does not in my opinion need to concern itself with that possibility.
However, the literal text of the question posed by the Gerechtshof with reference to Anieles 85 and 86 includes this question in the interpretation sought of the provisions concerning the free movement of goods. The question then arises whether the Coun's judgment in Case 13/77 INNO v ATAB [1977] ECR 2115 may be relevant in this case.
In that judgment the Court ruled, after first stating that the abuse of a dominant position encouraged by a national legislative provision is also prohibited by
Article 86, inter alia that “in order to assess the compatibility with Article 86 of the Treaty, in conjunction with Article 3 (f) and the second paragraph of Article 5 of the Treaty, of the introduction or maintenance in force of a national measure whereby the prices determined by the manufacturer or importer must be adhered to when tobacco products are sold to a consumer, it must be determined, taking into account the obstacles to trade which may result from the nature of the fiscal arrangements to which those products are subject, whether, apan from any abuse of a dominant position which such arrangements might encourage, such introduction or maintenance in force is also likely to affect trade between Member States”. It continued: “Rules in a Member State whereby a fixed price is imposed for the sale to the consumer of either imponed or home-produced tobacco products, namely the price which has been freely chosen by the manufacturer or imponer, constitute a measure having an effect equivalent to a quantitative restriction on impons only if, ... such a system of fixed prices is likely to hinder, directly or indirectly, actually or potentially, impons between Member States”.
By analogy with that judgment the question ought to be examined in this case whether a prohibition of imitation such as the one at issue here might encourage abuse of a dominant position within the meaning of Article 86 or whether in a case such as this the application of a prohibition of imitation imposes conduct on the pan of an undertaking which as such is contran to Anieles 85 and 86. As I argued earlier, there is nothing to indicate the imposition of any conduct on the pan of an undertaking which as such would de jure be contrary to Article 85. The exclusive dealing agreement in question could have been declared prohibited by the Commission on the basis of Regulation No 19/65 at most. As regards Article 86, a prohibition of imitation might well encourage the creation of a dominant position on the pan of the plaintiff undertaking in the main action. However, Article 86 does not prohibit the creation of a dominant position but only the abuse of one and then only when the abuse may affect trade between Member States. Since, unlike that in the INNO v ATAB case, the reference does not assume any possible specific abuse of a dominant position within the meaning of Article 86 which may be encouraged or imposed by the application of a prohibition of imitation, I think that on balance in its actual interpretative ruling the Court does not need to give any consideration to the application in this case of the INNO v ATAB authority.
III — Examination in the light of Articles 30 and 36 of the EEC Treaty of a prohibition of imitation such as the one under consideration
(a)
In its observations the Commission rightly points out that national rules against unfair competition which allow a manufacturer to obtain an injunction restraining the sale of imported products in a Member State on the ground that they precisely imitate the goods which he manufactures may constitute a measure having equivalent effect referred to in Article 30 of the Treaty. The same is true of course if, as in this case, the injunction is obtained by the sole importer of the imitated products in question. On the basis of the principle established in the Dassonville judgment (Case 8/74 [1974] ECR 837) there can be no reasonable doubt about that. There is certainly a question here of “trading rules enacted by a Member State which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade”. According to its written observations, the United Kingdom has come to the conclusion that viewed on their own such legal rules cannot constitute a measure having equivalent effect. In this connection a response to that question is not necessary. The point is whether the national rules are or may be contrary to the principle laid down in the Dassonville judgment which I have just mentioned. The strict question whether the national rules themselves, or their construction or application by the courts, actually causes the principle to be contravened, will depend on the circumstances of the case. I believe that there is no need to investigate this point further for the purposes of this case since the application given to the legal rules in this case is in any event contrary to the aforesaid principle of the Dassonville judgment.
The question on which this case really turns is how far an injunction on sales issued in that way can be justified either on the ground of Article 36 or on the ground of the exceptions which the Court accepted to the main principle in inter alia the Dassonville judgment (Case 8/74 [1974] ECR 837) and the Cassis de Dijon judgment (Case 120/78 [1979] ECR 649). Those grounds of justification for a prohibition of sale on account of precise imitation, which must be fully distinguished at first instance, will now be examined in turn. I would however point out at the outset that the second ground of justification goes less far than the first. I refer here to paragraphs 9 to 18 of the decision in the Court's judgment of 17 June 1981 in Case 113/80 Commission v Ireland [1981] ECR 1625. Citing its relevant previous decisions the Court makes it particularly clear in those paragraphs that the “reasonableness rule” adopted in the Dassonville judgment can never justify discrimination detrimental to trade.
(b)
The application of Article 36 to the problem under consideration may be justified on two grounds.
In the first place it can be argued on the basis of Articles 1 (2) and 10 bis oi ihr International Convention revising the Paris Convention cited above that ihr concept of the “protection of industriji property” contained in Article 36 also has as its object protection against untur competition. I do not consider this first argument to be a compelling one. For it is possible to infer from the International Convention any prohibition against separately regulating the right to protection against unfair competition wholly outside the law of industrial property in its narrow sense. A study of the law of the Member States shows that to be the general rule. In view of that situation there is therefore perhaps more to be said for the view that in referring to the protection of industrial and commercial property Article 36 had in view only specific legislation to protect distinct industrial and commercial property rights. Patent law, trademark law, copyright law and possibly the law of designs spring to mind in particular, as well as specific laws comparable to them, where an object of industrial property right may be clearly distinguished.
However, I consider that a second argument which may be made out in favour of Article 36 applying to the general rule against precise imitation has greater force. It appears in fact from the case-law of all the Member States that the specific justification or subject-matter of a prohibition against precise imitation may be best grasped by examining the similarities and differences between such a prohibition and similar prohibitions arising from patent law, design law, copyright or trademark law. As regards the facts of this case, a comparison with patent law, design law and trademark law in particular seems to be relevant.
It may be observed first that justification of a prohibition of imitation cannot reside in protection against the imitation of technically functional elements or features of a product which do not or no longer qualify for patent protection. It is not without reason that patent laws impose special requirements for an invention to qualify for patent protection and that the exclusive right granted to the inventor by those laws to be the first to market the product in question is limited in time. Moreover, the quid pro quo from the inventor for his limited period of statutory monopoly is the contribution which his invention makes to technological and economic progress and also in particular the obligation to publish his invention. It is precisely when a product has been protected by a patent in the past, as in this case, that the chance of there arising a kind of informal standardization of the product in question will be particularly great. It is therefore necessary to be on the alert against patent protection being prolonged by a widely construed prohibition of imitation. The usual distinction in case-law between a product's functional elements, which must be regarded as necessary for the product to be equally competitive vis-à-vis buyers and cannot be affected by a prohibition of imitation, and its nonfunctional elements, which can be affected by such a prohibition, appears to have its justification in such a line of reasoning. A prohibition of imitation does not function like a patent nor should it because the general economic benefit of such a prohibition is smaller rather than greater than the economic benefit of patent protection on which many economists have doubts anyway.
Where a product does not fulfil the conditions for the statutory protection of designs it will not be possible to regard a prohibition of imitation as functioning like a design either. This twofold principle is also to be found in the judgment of the Hoge Raad in the Thole v Hijster case (Hoge Raad 26 June 1953, Nederlandse Jurisprudentie 1954, p. 90 et seq.). However, it was expressed particularly succinctly in a judgment of the Paris Court of 10 April 1962 (Annuaire, 1962, p. 240 et seq.): “Considérant que le fait de reproduire des objets qui ne sont protégés ni par un brevet ni par un dépôt de modèle n'est que l'exercice d'un droit dans le cadre de la liberté du commerce et de l'industrie ...”
What therefore remains as justification for a prohibition of imitation is in particular a needless risk of confusion which the Gerechtshof did correctly assume in the question which it has submitted. I pointed out previously that Article 10 bis (3) of the International Convention also refers in particular to the risk of confusion as a basis for prohibitory measures. The fact that under some legal systems other reasons for a prohibition of imitation, such as the improper appropriation of the fruits of someone else's efforts, or the exploitation of the prestige and good name of the work of others, may be a consideration is not material for the purposes of the question raised in this case. It is indeed a warning against making any attempts to arrive at a general definition of the justification for prohibiting precise imitation. The Bundesgerichtshof, for example, has steadfastly refused to give a general definition of the concept.
The ground of the justification relevant in this case, namely the risk of confusion, is somewhat like the ground of justification in trademark law. In paragraph 6 of its judgment in Case 119/75 Terrapin v Terranova [1976] ECR 1039 the Court stated that the basic function of a trademark is “to guarantee to consumers that the product has the same origin”. As justification for a prohibition of imitation the Commission submitted on the basis of similar considerations, therefore correctly I think, that it must also be sought in order to “prevent needless confusion being caused amongst the public as to the origin of particular products”. For the reasons given above, it would in my opinion have been more correct if the Commission had restricted that justification to cases like that now before the Court. The Commission also relies on Article 10 bis of the International Convention in order to support its argument. To that extent it might be possible to say that a prohibition of imitation has a function like a trademark which must have limits at least the same as those of trademark law itself. In its written observations the Government of the United Kingdom also points out how a prohibition of precise imitation and trademark law have similar justification.
However, it has to be said about that parallel justification or function that there is a considerable economic difference between a prohibition against imitating a trademark and a prohibition against imitating a product. As a rule a manufacturer or trader can escape the first prohibition without undue investment by selecting for the national market in question another trademark which does not create any risk of confusion. In most cases the importer will himself be able to choose and register another trademark, subject to any necessary approval of the manufacturer entitled to the trademark. On the other hand a prohibition of precise imitation requires the imitator of a product to make constant changes in his production process which cannot always be reasonably demanded of him. Particularly where the imitator of a product has lawfully marketed his product in another Member State, as the Gerechtshof assumes in its question, very appreciable obstacles to trade between Member States may occur. The producer concerned may then have to bear investment expenditure, which may be prohibitive in some circumstances, in order to make a differing line of product to sell in a country which accepts more readily than the country of manufacture that there is a case of precise imitation. An action for the infringement of a trademark will not have such an immediate prohibitive effect on imports of the products concerned because selection of another trademark allied with marketing activities which are necessary anyway will not involve immediate prohibitive costs. Besides, as I said, the importer can as a rule bear them himself.
Nor is it possible, as the Court considered possible in trademark law with the concept of the “risk of confusion”, for the Court to resolve the problem in this case by imposing harmonization of the relevant branch of the law on protection against unfair competition. For that reason in my view it is not possible as Community lawstands at present to give the court making the reference the answer proposed by the Commission. However, that does not necessarily mean that a complete closure of certain national markets to the import of products lawfully produced and marketed in another Member State must be regarded as unacceptable on the ground of the second sentence of Article 36. To that extent I consider that the principle laid down in Article 85 that competition may not be eliminated in respect of a substantial pan of the products concerned is also relevant as regards the limits which Community law snould place on the application of the general rule against precise imitation. Assuming Article 36 applies in this case I accordingly propose the following answer to the question from the Gerechtshof, The Hague:
“A disguised restriction on trade between Member States, as referred to in the second sentence of Article 36 of the EEC Treaty, may be said to exist if upon consideration of a question relevant under national law whether an imitator could have adopted a different course without detracting from the soundness and the utility of his product no account is taken of the extra costs which the alternative design would entail for the manufacturer concerned in a Member State in which the product is lawfully manufactured and marketed.”
In other words, in such a situation the alternative design must not only be technically feasible but commercially feasible as well. Such an answer fully observes the principles of national law yet requires the national court to look beyond its own national frontiers and take account of economic necessities besides technical ones when construing the term “needlessly” or “for no compelling reason”. I shall return to further qualifications to the Court's reply in the final pan of my opinion.
(c)
There are also powerful arguments to be made out in favour of Article 36 not having application in this case but Article 30 alone, together with the “reasonableness rule” applied by the Coun. As is apparent from the Court's decisions', the “reasonableness rule” used by the Coun in this context applies, so far as here material, only while there are it is a matter of adopting reasonable measures to prevent unfair competition which moreover may not constitute a means of arbitran' discrimination or a disguised restriction on trade between Member States. Hitherto in its decisions the Court has for its pan always treated protection against unfair competition as a pressing public interest which may justify mandatory measures entailing some obstacles to intra-Community trade. I refer here again to the Court's judgment in Dassonville cited above (Case 8/74 [1974] ECR 837) and also to the Court's judgments in Case 120/78 Cassis de Dijon [1979] ECR 649, Case 788/79 Gilli-Andres [1980] ECR 2071 and Case 113/80 Commission v Ireland [1981] ECR 1625. What is more, in the last-mentioned judgment the Court expressly stated that the measure concerned must apply equally to imported and domestic products. From the point of view of the public interest to be protected the origin of the products does not matter. Measures in the public interest which in particular affect trade may be justified at most in the context of Article 36 which does not, however, apply for the purposes of this hypothesis.
In the Dassonville judgment, and still more explicitly in the next two judgments which I cited, when weighing up the justification for a reasonable measure in the public interest, such as in issue here, and the obstacles to trade which it causes, the Court attached still greater importance to establishing whether the product in question has been lawfully manufactured and marketed in another Member State. An argument which goes even further may be deduced from the Court's judgments in the Béguelin (Case 22/71 [1971] ECR 949) and Dansk Supermarked v Imerco (Case 58/80 [1981] ECR 181) cases. The crux of that argument for the purposes of this case is that the right to protection against unfair competition may never prevent the importation as such of imitations of a product if they have been lawfully manufactured and marketed in another Member State. Only if, owing to circumstances distinct from importation itself and thus, in the case of imitations of a product, distinct from their composition and design, such as advertising, offers or the absence of a clear indication as to their origin, there is a risk of confusion with the product imitated, could action be taken on the basis of the law of the importing country against precise imitation. Such a solution would find support in particular in paragraph 16 of the decision in the judgment in Dansk Supermarked v /merco which refers to paragraph 15 of the decision in the judgment in Béguelin. The Court there held: “It must nevertheless be emphasized, as the Court of Justice has stressed in another context in its judgment of 25 November 1971 (Case 22/71 Béguelin [1971] ECR 949), that the actual fact of the importation of goods which have been lawfully marketed in another Member State cannot be considered as an improper or unfair act since that description may be attached only to offer or exposure for sale on the basis of circumstances distinct from the importation itself.” Meaningfully interpreted that passage seems to me to mean that the importer of the product lawfully imported in that way no relevant Community regulations and may be made liable only for what he has done or neglected to do in his own sales operations to cause the risk of confusion to arise. To me it even appears to follow from the summary of the Court's earlier decisions contained in paragraph 10 of the decision in its judgment in Commission v Ireland (Case 113/80 [1981] ECR 1625) that in the context of Article 30 the Court will never accept indirect obstacles to imports such as those at issue in this case. Whenever an authorized importer of the product imitated could in any one Member State impede every import of imitations lawfully produced and put on the market elsewhere in the Community, then, as I pointed out previously, that might also be said to be a “disguised restriction on trade” within the meaning of the Court's Dassonville judgment.
As appears from a recent judgment of the Bundesgerichtshof (judgment of 23 January 1981 in the Rollhocker case, Monatsschrift für Deutsches Recht 1981, p. 821), an interpretation such as that deduced from the Court's previous decisions would place a clear limit on what may apply under national law. In the judgment cited the Court expressly and without limitation states that the law against precise imitation applies to importers as well. The existence of such a limit in Community law to the application of national law has been affirmed countless times by the Court in its decisions on both Article 30 and Article 36.
Finally, still assuming that Article 30 alone of the EEC Treaty applies, I would like to look briefly at the Commission directive of 22 December 1969 concerning the abolition of measures having an effect equivalent to quantitative restrictions on imports (Directive 70/50/EEC, Official Journal, English Special Edition 1970 (I), p. 17). In so doing I assume that this Commission directive naturally leaves untouched the direct effect of the prohibition contained in Article 30 as construed by the Court.
This point is particularly relevant in connection with the somewhat different approximation of rules applying equally to domestic and imported products. According to the ninth recital in the preamble to the directive such measures are not in principle caught by the prohibition contained in Article 30 whereas in the Court's case-law they are not caught by that prohibition except on a large number of conditions which have been further defined since the Dassonville judgment. They do in fact come under the main principle laid down in the Dassonville judgment.
It must be assumed in the second place that Directive 70/50/EEC and the earlier directives concerning the implementation of Article 33 (7) of the EEC Treaty, but not relevant here, offer no comprehensive guarantee as regards the cases occurring in practice. There is express reference to that in the preamble to Directive 70/32/EEC (Journal Officiel 1970, L 13).
On the whole rules providing protection against unfair competition having an unnecessarily restrictive effen on trade are not mentioned in the directive in question. It may be deduced from the Commission's answer given to one of the questions put by the Court during the oral procedure that the reason for that is connected with the Commission's view chat Article 36 is applicable in this case. At the same time Article 3 of Directive 70/50/EEC does deal with rules governing a situation of a kind bearing some resemblance to the problem in this case.
That article reads as follows:
“This directive also covers measures governing the marketing of products which deal, in particular, with shape, size, weight, composition, presentation, identification or putting up and which are equally applicable to domestic and imported products, where the restrictive effect of such measures on the free movement of goods exceeds the effects intrinsic to trade rules.
This is the case, in particular, where:
—
The restrictive effects on the free movement of goods are out of proportion to the objective sought;
—
The same objective can be attained by other means which are less of a hindrance to trade.”
Although that provision clearly relates to the so-called technical obstacles to trade and not to the law on protection against unfair competition, it may be said that a prohibition of precise imitation also relates amongst other things tc shape, size, weight, composition, presentation and identification. If, on the basis of that resemblance yet taking account of the differences, Article 3 is applied to the problem before us, it will be necessary in particular to ascertain whether the restrictive effect on the free movement of goods of a prohibition of imitation in a case such as this is out of proportion to its purpose (principle of proportionality). It will also be necessary to examine whether the same objective can be attained by other means which are less of a hindrance to trade (principle of alternative means).
In my opinion such an application of a prohibition of imitation which indirectly prevents the importation of products lawfully sold and marketed elsewhere is indeed contrary to both the principle of proportionality and the principle of alternative means as formulated above. It is contrary to the principle of proportionality because the justifiable aim to prevent confusion as to a product's origin and identity cannot justify such a restriction on imports. It is contran to the principle of alternative means because the risk of confusion can be prevented'quite easily by requiring steps to be taken by the importer after importation. A different view of the matter may be taken only if it can be demonstrated that the risk of contusion cannot be prevented by the importer alone and that it is technicalh and economically feasible for the manu facturer to take steps to avoid con t u nor.
Therefore on balance an analopouapplication of Article 3 of Director 70/50/EEC does not in my opinar if ic' to conclusions essentially diftcrrn Urr-those which I deduce from thr previous decisions on Aru.r. However, as I have observed based on a premise with rrn'v' t measures which apply ccil.j -domestic and imported product'i, different from that which I dedurr ! the Coun's decisions. Parts hMjr Article 3 evidently relates to traue r wholly different from those in question here I shall not therefore base my final conclusion on that directive as well.
Paragraphs 7 and 8 of the decision in the Court's judgment in Case 113/80 Commission v Ireland [1981] ECR 1625 in particular tend to support the view of course that only Article 30 may be relied upon when the law on protection against unfair competiton is invoked. Having held that Article 36 must be interpreted strictly the Court stated: “In view of the fact that neither the protection of consumers nor the fairness of commercial transactions is included amongst the exceptions set out in Article 30, those grounds cannot be relied upon as such in connection with that article.”
As argued above, this determination of the true place of the law against unfair competition, which to me also seems relevant for the purposes of the question submitted, does not necessarily preclude guidance also being drawn from the Court's decisions on Article 36 in order to answer that question.
The Court has already shown in paragraph 7 of the decision in Dassonville that the second sentence of Article 36 also applies in relation to reasonable measures which the Court permits in the context of construing Article 30. Furthermore, in paragraph 8 of the decision in Case 120/78 (Cassis de Dijon) the Court mentions together measures concerning the fairness of commercial transactions, which the Court evaluates on the basis of Article 30, and measures for the protection of public health, which fall under Article 36. The Court lays down the following principle for both cases:
“Obstacles to movement within the Community resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.”
At most it could be said that in the context of Article 30 the Court attaches much greater importance to the question whether a product has been lawfully sold and marketed in another Member State than in the context of.Article 36.
Assuming that Article 30 alone applies my conclusion is therefore that an analysis of the Court's decisions in this context does not necessarily lead to the question submitted being answered otherwise than on the assumption that both Anieles 30 and 36 apply, although the Court's judgments in Dansk Supermarked (Case 58/80) and Commission v Ireland (Case 113/80) in particular may give rise to some doubt in this respect. In the final part of this opinion I shall further clarify the conclusion which I reach on the assumption that only Article 30 applies.
(d)
Before that, however, I should like to set out my own view on the feasibility of the two assumptions under consideration.
In particular it seems to me that it may be inferred from paragraph 8 of the decision in the Cassis de Dijon (Case 120/78) cited above that in its decisions on Article 36 the Court does not apply criteria essentially any different from those applied in its decisions on Article 30 where measures which apply equally to domestic and imported products are concerned. The measure at issue here is such a measure. In both cases the Court then applies criteria such as the necessity for trade restrictions on grounds of compelling public interests not of an economic nature, the principle of proportionality, the principle of alternative means md the unacceptability of disguise trictions on trade between Membe and of arbitrary discrimination, relevance of the question whethe iduct has been unlawfully market..nother Member State also enters ???????he Court's decisions, based on Article 36, on cases concerning industrial property rights as well as those, based on Article 30, on cases concerning protection against unfair competition.
If the recent judgments in Dansk Supermarked (Case 58/SC) and Commission v Ireland (Case 113/80) had not in the meantime thrown a new light on the issues now before the Court, my conclusion would accordingly have been that the question whether or not Article 36 applies could be left open as in the Dassonville judgment. However, since it is expressly stated in paragraph 8 of the decision in Commission v Ireland that fairness of commercial transactions cannot be brought under the exceptions set out in Article 36, that solution seems to me to be no longer possible. In the final analysis therefore 1 come down in favour of the application of Article 30 alone. Before the Court's judgment in Dansk Supermarked (Case 58/80) as I have already said, my decision to opt for Article 30 would not in my opinion have necessarily produced a result substantially different from that produced by the application of Article 36. However, as I said earlier, the Dansk Supermarked judgment raises some doubt about the matter. It is true that paragraph 15 of the decision states that the marketing of imponed 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. But paragraph 16 then concludes: “It must nevertheless be emphasized, as the Court of Justice has stressed in another context in its judgment of 25 November 1971, (Case 22/71 Bėguelin [1971] ECR 949) that the actual fact of the importation of goods which have been lawfully marketed in another Member State cannot be considered as an improper or unfair act since that description may be attached only to offer or exposure for sale on the basis of circumstances distinct from the importation itself”. That formulation is repeated with slightly different wording in paragraph 2 of the operative part of the judgment. In view of that formulation the question on which this case turns is whether a prohibition of imitation which is also applied to imported goods, albeit in principle not exclusively, relates to circumstances, here consisting of the imitation, distinct from the importation itself. Bearing in mind the Court's previous decisions and the special circumstances of the Dansk Supermarked case I consider that ultimately an affirmative answer to that question is not to be ruled out. In its extensive case-law on the subject the Court has never in principle ruled out the possibility that provisions adopted in the public interest such as those mentioned in paragraph 8 of the decision in the Cassis de Dijon case may result in indirect restrictions on trade. Such restrictions may well then have to be examined in the light of the strict criteria mentioned earlier in this part of this opinion.
IV — Summing-up and conclusion
(a)
If the question submitted to the Court is answered on the basis of both Article 30 and Article 36 of the EEC Treaty, in accordance with the assumption of the national court which has made the reference, my examination leads to the following answer:
“In circumstances such as those assumed by the Gerechtshof, The Hague, in subparagraphs (a) to (e) of its question Anieles 30 and. 36 of the EEC Treaty must be construed as meaning that an injunction of the kind referred to in the question may be justified on the ground of Article 36 of the EEC Treaty, despite being a measure having an effect equivalent to a quantitative restriction on imports within the meaning of Article 30, provided that, in examining whether an alternative design is possible, consideration is given not only to the state of technology but also to what may be reasonably required economically of a manufacturer who has lawfully sold and marketed the product at issue in another Member State. In so far as pans of the product at issue have been marketed separately they should be considered separately in the light of the aforesaid criteria. Particularly pans intended for products lawfully obtained elsewhere in the Community ought not to be made subject to conditions which make it virtually impossible to trade in them.”
(b)
On the other hand if for the reasons set out above the question submitted to the Court is answered on the basis of Article 30 alone the following answer is the most likely on the basis of the previously cited case-law of the Court:
“In circumstances such as those assumed by the Gerechtshof, The Hague, in subparagraphs (a) to (e) of its question, as Community law stands at present Article 30 of the EEC Treaty must be construed as meaning that it prevents the grant of an injunction of the kind mentioned in the question if the relevant product has been imported from another Member State in which it is lawfully sold and marketed. However, it does not do so in so far as the ascertained causes of the risk of confusion are attributable exclusively to the acts or omissions of the national dealer concerned and he may eliminate them without involving the manufacturer.”
I do not consider the difference in outcome in the case of the two assumptions under discussion to be wholly satisfactory. In particular I do not consider it to be wholly satisfactory that in the case of the second assumption no account is taken of the guidance which mav be drawn from an examination of the similarities and differences between on the one hand the law of imitation and on the other the law of patents and trademarks and the Court's case-law thereon. Although the law of imitation is a branch of the law against unfair competition, despite the differences which I have indicated and still other differences, it exhibits such similarity with trademark law in particular that an approach somewhat less rigid than that which might be inferred from the judgment in the Dansk Supermarked case in particular can be justified in this case. As 1 have shown, this case after all concerns a branch of the law against unfair competition bordering very closely on trademark law. A synthesis of both assumptions might then be found by adding the following passage to the answer based on the assumption — for which I ultimately opt — that only Article 30 applies: “The grant of an injunction is not prevented either if another design may be reasonably demanded of the foreign manufacturer bearing in mind not only the technical feasibility but also the economic feasibility inherent in that manufacturer's product range. In so far as parts of the product at issue are marketed separately they should be considered separately in the light of the aforesaid criteria. Particularly pans intended for products lawfully obtained elsewhere in the Community ought not to be made subject to conditions which make it vinually impossible to trade in them.”
I have already pointed out that owing to the judgment in Dansk Supermarked the compatibility of this final passage with that judgment may be doubted. However, I aiso indicated the grounds on which it may ultimately be argued in the light of the Coun's earlier decisions that the passage is nevertheless acceptable. I think that it can withstand tne test of the principle of proportionalitv which is regularly applied by the Court in its decisions on cases concerning rules of public interest considered in principle to be reasonable and the principle of alternative means also applied in those decisions. I think that it is compatible with the second sentence of Article 36 too which, judging by the Court's Dassonville judgment, the Court also applies in the context of Article 30.
(
1
)	Translated from the Duuh