OPINION OF MR ADVOCATE GENERAL REISCHL

DELIVERED ON 3 JUNE 1981 ( 1 )

Mr President,

Members of the Court,

The Court of Justice has already expressed itself in a number of decisions on the relationship between the legal protection of industrial and commercial property rights under the laws of the individual Member States and the principle of the free movement of goods which is guaranteed by Community law. The reference for a preliminary ruling on which I give my opinion today offers a further opportunity of clarifying the case-law to date on the problems in this field and, if need be, of developing it further.

The facts may be summarized as follows:

The American company Merck & Co Inc., which is established in Rahway (New Jersey), and which I shall call “Merck”, is the proprietor of two Netherlands patents taken out in 1973 and 1974 to protect a drug known as “Moduretic” and the process for manufacturing it. Similar parallel patents identical with at least one of those patents exist in all the Member States of the Community with the exception of Luxembourg and Italy. The preparation, which is used in the treatment of high blood pressure, amongst other things, is manufactured and marketed together with other products by a wholly-owned subsidiary of the American company established in the Netherlands. In particular the product is also put on the market in Italy where by virtue of Article 14 (1) of the Italian Patent Law (Regio Decreto [Royal Decree] No 1127 of 29 June 1939) patents were not available for drugs and the processes for manufacturing them. Although that provision was declared unconstitutional by Decision No 20 of the Italian Constitutional Court of 20 March 1978 (Official Gazette of the Italian Republic of 29 March 1978) Merck was unable even subsequently to obtain patent protection in Italy because until now there have been no corresponding transitional provisions with retroactive effect.

Stephar BV of Rotterdam, a company of which Mr Exler is the shareholder and director (I shall refer to it simply as “Stephar”) purchased supplies of the preparation described above and placed by Merck on the market in Italy from wholesalers in that country and imported them into the Netherlands for the purpose of marketing the product there. In carrying out this parallel import it benefits from a considerable difference in price because the preparation is sold in Italy at a lower price.

In an application for an interim injunction heard by the Arrondissementsrechtbank [District Court] Rotterdam, Merck opposed the imports on the ground that they infringed its Netherlands patents. It based its application on Article 30 of the Netherlands Patent Law (Rijksoctrooiwet) which gives the proprietor of a patent exclusive rights to manufacture and exploit the protected product and according to which the acquirer or later proprietor does not infringe the patent if he exploits the product which has been lawfully put on the market in the Netherlands.

On the basis of those facts the President of the Arrondissementsrechtbank Rotterdam by order of 2 July 1980 suspended the proceedings and referred the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

“In a case where:

1. an undertaking is the proprietor of a patent in a Member State of the European Communities for a drug and the processes for manufacturing it;

2. by or with the consent of that undertaking that drug is marketed in Italy where the undertaking could not by law acquire a patent for that drug by virtue of Article 14 (1) of the Italian Patent Law (Regio Decreto of 29 June 1939 No 1127), later declared unconstitutional by the Italian Constitutional Court in its judgment of 20 March 1978, which prohibited the grant of patents for drugs and processes for manufacturing them;

3. a third party imports the drug referred to in paragraph 2 above from Italy into the Member State referred to in paragraph 1 above and deals in them there;

4. and the patent legislation in that country gives the proprietor of the patent the right to oppose by legal action the marketing there by others of the products protected by the patent even if previously they had been lawfully marketed in another country by the proprietor of the patent or with his consent;

do the rules contained in the EEC Treaty concerning the free movement of goods, notwithstanding the provisions of Article 36, then prevent the proprietor of the patent from availing himself of the right referred to in paragraph 4 above?”

My opinion on this reference for a preliminary ruling, on which the Governments of the French Republic and of the United Kingdom, as also the Commission of the European Communities, have submitted their observations, is as follows:

The question is essentially whether and to what extent Articles 30 and 36 of the EEC Treaty prevent the proprietor of a national patent from relying on that patent to prevent the product protected by the patent from being imported from another Member State, in which no patent protection is available and in which the product had been placed on the market by the proprietor of the patent himself or with his consent, and from being subsequently marketed.

I —

Permit me, first, to recall in general terms how the Court has attempted in its now firmly-established case-law, which I take to be familiar, to reconcile the requirements of the free movement of goods guaranteed by Community law with the territorial protection of industrial and commercial property rights in the Member States.

The Court takes as its starting point the premise that the relevant national protective rights must be considered in the light of the provisions in the Treaty concerning the free movement of goods, in particular Article 30 et seq., according to which quantitative restrictions on imports and all measures having equivalent effect are prohibited between Member States. Under Article 36 those provisions nevertheless do not preclude prohibitions or restrictions on imports justified on the ground of protection of industrial and commercial property. However, it is clear from that article, in particular the second sentence, as well as from the context, that whilst the Treaty does not affect the existence of rights recognized by the legislation of a Member State in matters of industrial property, the exercise of those rights may nevertheless, depending on the circumstances, be restricted by the prohibitions contained in the Treaty. Inasmuch as it creates an exception to one of the fundamental principles of the common market, Article 36 in fact admits of exceptions to the rules on the free movement of goods only to the extent to which such exceptions are justified for the purpose of safeguarding the rights whicn constitute the specific subject-matter of that property. That statement is complemented in the relevant decisions by a definition of what constitutes the specific subject-matter of individual property rights and, based on that, which trade barriers may be accepted under Community law and which may not. What is clear is that the Court has consistently held (of the more recent decisions, see in particular the judgment of the Court of 22 June 1976 in Case 119/75, Terrapin (Overseas) Ltd ν Terranova Industrie CA Kapferer & Co [1976] ECR 1039; judgment of 20 January 1981 in Joined Cases 55 and 57/80, Musik-Vertrieb membran GmbH and K-tel International ν GEMA [1981] ECR 147; and the judgment of 22 January 1981 in Case 58/80, Dansk Supermarked AIS ν A/S Imerco [1981] ECR 181) that an exclusive right guaranteed by the legislation on industrial and commercial property is exhausted when a product has been lawfully distributed by the actual proprietor of the right or with his consent, on the market in another Member State.

That principle, which finds general application with regard to all kinds of industrial and commercial property, must also be borne in mind in deciding the present case where the drug in question, “Moduretic”, was marketed in Italy by a subsidiary of the proprietor of the patent with his consent.

Should it be found, however, that the applicant in the main proceedings is not “justified”, within the meaning of Article 36 of the EEC Treaty, in relying on its patent rights in the Netherlands to prevent the importation of the goods in question from Italy, then it may be assumed without further consideration that, contrary to the opinion of the applicant in the main proceedings as well as to that of the French and British Governments, the additional criterion of the existence of a disguised restriction on trade between Member States, introduced by the Court in particular in its judgments of 23 May 1978 in Case 102/77 (Hoffmann-La Roche & Co AG ν Centrafarm Vertriebsgesellschafi Pharmazeutischer Erzeugnisse mbH [1978] ECR 1139) and 10 October 1978 in Case 3/78 (Centrafarm BV ν American Home Products Corporation [1978] ECR 1823), need not be considered in the present case. In those two cases, which were concerned with the protection of trademarks, the Court had come to the conclusion that the right granted to the proprietor to prohibit any unauthorized affixing of his mark to his product forms part or the specific subject-matter of the trade-mark, that is to say, the protection given by national patent laws to the proprietor of the patent is “justified” within the meaning of the first sentence of Article 36 of the EEC Treaty. Only after establishing thus that there was “justification” for invoking a trade-mark right to oppose the importation did the Court proceed to consider whether the exercise of that right might constitute a “disguised restriction on trade between Member States” within the meaning of the second sentence of Article 36. Such an examination is not required, however, if the reliance on the existence of an industrial property right is in itself not “justified” within the meaning of the first sentence of Article 36.

II —

Having made those general observations by way of introduction, I now turn to the case-law of the Court in so far as it concerns the assertion of national patent rights.

1. In its judgment in Case 24/67 (Parke, Davis & Co v Probei, Reese, Beintema-Interpharm and Centrafarm, judgment of 29 February 1968 [1968] ECR 55) the Court had the occasion for the first time, albeit in the context of competition law, to state its views in regard to the exercise of national patent rights in relation to parallel imports of pharmaceutical products from Italy, which did not recognize any exclusive right to the manufacture and marketing of such products. Although it did not state so clearly, the Court appears to have proceeded on the assumption that the proprietor of a Netherlands patent was entitled, notwithstanding Article 30 et seq. of the EEC Treaty, to prohibit parallel imports of pharmaceutical products from Italy, but the Court did not on that occasion consider whether those products had been manufactured or put on the market in Italy by the Netherlands proprietor of the patent or with its consent.

2. On the other hand that factor was held to be of decisive importance in the Court's judgment of 8 June 1971 in Case 78/70 (Deutsche Grammophon-Gesellschaft GmbH ν Metro-SB-Großmärkte GmbH & Co KG [1971] ECR 487) which is also pertinent to the judgment of the issues in the present case. The Deutsche Grammophon-Gesellschaft case concerned a right analogous to a copyright, connected with the reproduction of sound recordings. The Court was called upon to decide whether a German manufacturer of sound recordings was able on the basis of such a right to prevent the marketing in the Federal Republic of Germany of sound recordings which it had itself delivered to its legally independent but economically wholly dependent subsidiary in France. It is noteworthy that at the time in question, despite the existence in France of a certain degree of protection against unfair competition, there was no parallel right of exclusivity for manufacturers of sound recordings comparable to German protective rights. That was not considered by the Court to be relevant to the decision, however, as it confined itself upon a consideration of the specific subject-matter of the exclusive right in question, to holding that such an exclusive right might not be used to prohibit parallel imports of products which have been put on the market in the territory of another Member State by the proprietor of the right or with his consent.

3. That the proprietor of an industrial or commercial property right may not invoke his exclusive right in order to prevent the importation of a protected product into a Member State if the product has been marketed in another Member State by him or with his consent, and that that applies irrespective of whether there exists in that Member State parallel rights, is to be inferred also, in my view, from the judgment of the Court of Justice of 31 October 1974 in Case 15/74 (Centra/arm and Adrian de Peijper ν Sterling Drug Inc. [1974] ECR 1147). In contrast to the above-mentioned case and the proceedings being dealt with today, the issue there concerned the importation of pharmaceutical products from the United Kingdom into the Netherlands. The holder of the Netherlands patent held parallel patents in the United Kingdom and the products in question had been put on the market there by him or with his consent. After the Court had defined the specific subject-matter of the patent it continued, without going into the question of the existence of parallel patents, as follows: “An obstacle to the free movement of goods may arise out of the existence, within a national legislation concerning industrial and commercial property, of provisions laying down that a patentee's right is not exhausted when the product protected by the patent is marketed in another Member State, with the result that the patentee can prevent importation of the product into his own Member State when it has been marketed in another State. ... An obstacle to the free movement of goods of this kind may be justified on the ground of protection of industrial property where such protection is invoked against a product coming from a Member State where it is not patentable and has been manufactured by third parties without the consent of the patentee and in cases where there exist patents, the original proprietors of which are legally and economically independent;...” That statement, which plainly refers to the case of a territory where there is no patent protection, makes it clear in my view that, as both the Commission and the applicant in the main proceedings maintain, regardless of whether parallel protection exists or not the proprietor of a patent may oppose imports from another Member State only when the product in question has been manufactured or put on the market there by third parties without his consent. That means, conversely, that imports of goods cannot be prohibited by proprietors of patents if the products come from a Member State where no patents exist and in which they have been put on the market by the proprietor of the patent or by third parties with his consent. Finally, that the Court did not found its statements in Case 15/74 (Sterling Drug) solely upon the existence of parallel patents may be seen, finally, in the fact that the case of parallel patents is mentioned only by way of example and even the operative part of that judgment is based solely on the manner and means whereby the patented product is put on the market in another Member State.

4. It also follows from this account of the essential features of the case-law and especially from the judgment of 8 June 1971 in Case 78/70 (Deutsche Grammopbon-Gesellschafi GmbH ν Metro-SB-Großmärkte GmbH & Co KG [1971] ECR 487) that in the examination of the question of the existence of parallel imports from a Member State which does not provide patent protection for the products in question there is no need, as the applicant in the main proceedings considers, to have recourse to the interpretative criteria laid down in the judgment of 27 February 1979 in Case 120/78 (Rewe-Zentral AG ν Bundesmonopolverwaltung fiir Branntwein [1979] ECR 649), which was concerned not with the protection of industrial and commercial property but with uniformly applicable rules on marketing.

III —

All that remains to be examined now is whether the specific circumstances of this particular case are capable of justifying a departure from the case-law as it stands on the protection of industrial and commercial property.

Merck and the French and British Governments are essentially in agreement in considering that according to the definition of what constitutes the specific subject-matter of a patent right, given by the Court of Justice in the Sterling Drug judgment (Case 15/74), the purpose of that right is primarily to ensure that the inventor is recompensed for his creative effort. To that end the inventor is given an exclusive right to exploit his invention and is thus guaranteed the possibility of fixing the price of the patented goods unaffected by the competitive forces which would exist in the absence of the exclusive rights conferred by the patent. Only that premise can justify the fact that in its case-law to date the Court has accepted, on the basis of the doctrine of the exhaustion of patent rights which is recognized in various Member States, that such exhaustion occurs if the patented product has been put, by the proprietor of the patent himself or with is consent, on the market in another Member State where a parallel right has existed. This doctrine is based on the principle that the proprietor of the patent should enjoy a monopoly only once. It is therefore sufficient for him to obtain his reward in any one of the Member States in which he holds a patent right. But the theory of the exhaustion of rights does not apply and would, moreover, entail unacceptable consequences if, as in Italy in the present case, the products in question were unpatentable by law. That is because in such a case the proprietor of the patent obtains no recompense for his creative effort for he is exposed in Italy to competition from other firms which have no research costs to offset. If products put on the market in the presence of such competition were to reach the territory of the States in which patents existed there would be no guarantee of recompense for creative effort and, hence, of the very existence of the patent right.

In my view, however, that argument does not hold good for several reasons.

1. First, it must be recalled that it is one of the fundamental principles of a common market that any product which has been lawfully put on the market in a Member State must be allowed to circulate freely within the Community, unless the protection of a right or interest which is recognized in the Community legal order as being of greater value requires that different rules be applied. According to the case-law of the Court derogations from that principle which are permitted by way of exception in order to protect industrial and commercial property in accordance with Article 36 of the EEC Treaty are subject to the requirement that they be justified on the ground that they safeguard rights which constitute the specific subject-matter of such property. In the field of patent law the specific subject-matter of industrial property has been described by the Court in the Sterling Drug judgment (Case 15/74) as the guarantee “that the patentee, to reward the creative effort of the inventor, has the exclusive right to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties, as well as the right to oppose infringements”. In that définition the Court made it plain, as Stephar and the Commission observe, rightly in my view, that the essence of a patent right lies primarily in the fact that the inventor is guaranteed an exclusive right to manufacture and market the product in question. That exclusive right necessarily also embraces the right to oppose the marketing of the patented product where it is manufactured by third parties or put on the market without the consent of the proprietor of the patent. These rights are not an end in themselves, however, but are designed, as the Court noted in the definition cited above, to provide the proprietor of patent rights with the posibillity of obtaining a recompense for is creative effort of invention. However, whilst that is one of the objectives of a patent right it is not, in my view, inherent in that right but must be seen as being separate from it, for it is open to any proprietor of a patent to put his invention on the market without seeking the recompense described above. Furthermore, it should not be forgotten that the return on research investment is merely a possibility, the realization of which depends on numerous market factors such as the presence of substitute products, commercial exploitability and similar conditions. But there is a further conclusion to be drawn, at least indirectly, from the definition given by the Court, namely that the purpose of an industrial property right is achieved when the product is first lawfully put on the market because that is when the opportunity for making a monopoly profit may be exploited and it would exceed the purpose of the protection were the patentee to be given control over subsequent marketing. That is why in most of the Member States, too, the concept of the exhaustion of patent rights is recognized as embracing the principle that the rights flowing from the patent may no longer be exercised within the territory in which the patent has effect once the product has been put on the market there by the proprietor of the patent himself or with his consent, for the proprietor of the patent has then enjoyed the advantages conferred on him by the patent and has thus exhausted his right. Although that doctrine, which is based on the national patent, cannot be directly applied as far as the Community rules are concerned, as Mr Advocate General Trabucchi stated in his opinion of 18 September 1974 in Case 15/74 (Sterling Drug [1974] ECR 1147, at p. 1169), it must still be acknowledged that even that theory is posited on the putting on the market of the patented product. Thus the Court of Justice, too, stated in Case 15/74 (Sterling Drug) that when a patentee has put the patented product on the market in one Member State the product is “released” for further sale on that market and that the product thus released must be permitted to circulate freely on the other markets within the Community too, in accordance with the principle of the free movement of goods.

2. On the correct assumption that the lawful putting on the market of the patented product constitutes the taking of the opportunity of obtaining a recompense for creative effort then it is of no consequence whether or not the proprietor of the patent had the possibility of obtaining patent rights in the Member State in question. In considering Merck's view that it is. unable to obtain a suitable recompense for its creative effort because or the theoretical existence of competition from other firms in Italy owing to the absence of patent protection it should be recalled once again that patent rights do not guarantee a definite profit but only an opportunity for the proprietor of the patent to realize a profit. A further result of the purpose, which I have already described, of a patent right, and one to which Mr Advocate General Trabucchi in particular has already referred in the opinion which I have cited, is that purely negative effects of the free movement of goods on the reward which a manufacturer hopes to make do not affect the existence of the protective right. In that connection it should also not be overlooked when considering the present case that Merck, as a holder of a patent within a common market characterized by the free movement of goods and services, was in a position to decide freely in which Member State it wished to place on the market the product patented in the Netherlands. Obviously its choice was guided by its own interests, taking into account the guaranteed level of wages and salaries in Italy and other market factors ensuring it a corresponding profit in the section of the market in that country on which it held, moreover, a de facto monopoly for the product in question. Were it to be allowed, in reliance upon the Netherlands patent, to close the market in the Netherlands to products marketed in Italy with its consent, the result would be a partitioning and consequent isolation of the national markets, which is precisely what the Treaty establishing the European Economic Community seeks to eliminate. As the Court has already explained, however, in its judgment in Case 15/74 (Sterling Drug) and reiterated in its judgment in Joined Cases 55 and 57/80 (Musik-Vertrieb membran GmbH and K-tel International ν GEMA), a disparity between national legal provisions which is capable of distorting competition between Member States does not justify the protection by a Member State of private practices which are incompatible with the rules on the free movement of goods. In this connection it is also of interest that no causal relationship can be established between patentability and price levels, as is shown in the present case by the prices for Moduretic in the individual Member States. On the contrary, the market in medicines is everywhere extensively influenced by interventions in the process of price formation by various authorities or other agencies, which take into account the cost of raw materials and wages, normal profit margins, the cost of packaging, distribution of the medicines, research expenditure and other special factors. Likewise that kind of price formation is clearly responsible for the fact that prices for Moduretic in Italy, where there is no patent protection, as well as in France and the United Kingdom, where such protection exists, are relatively low compared to those in the Netherlands. Were parellel imports from the two last-named Member States into the Netherlands to be permitted whilst like imports from Italy were not permitted on the ground of the patent protection existing in the Netherlands the result would be discrimination against parallel imports from Italy which is not objectively justified and which is therefore prohibited by the Treaty.

3. Finally, I see no reason, as far as the economic consequences in the present case are concerned, to suggest that the Court depart from its existing case-law. The United Kingdom Government is of the opinion that an extension of that case-law would ultimately be of benefit only to traders at the expense of the manufacturer and without any visible advantage for consumers. As to this, the quite general observation should be made that one of the essential aspects of the Common Market is that it should be possible for products to be manufactured or put on the market in a place where this can be done as cheaply as possible. The principle of the free movement of goods may always, therefore, confer an economic advantage on traders. In the present case, however, I cannot see why, in view of the special features, described above, of the market in pharmaceutical products the economic advantage which importers obtain from the differentiated price structure should be the subject of different evaluations according to whether the product protected by a patent is imported into the Netherlands from Italy, where it is not patentable, or from other Member States where, although patent rights are recognized, the price level is correspondingly low. The French Government fears that by reason of this case-law Italian industry might, on the one hand, be placed at an advantage because its export opportunities are improved by the lower market price, but that on the other hand it is also placed at a disadvantage because in this case proprietors of patents might avoid the Italian market. To this it may be objected, however, that under national patent law patented products which have not been lawfully marketed in the patent-free area may in any case be prevented from entering the territory in which patent protection exists. Moreover, the example of both France and the United Kingdom, both countries in which the market prices for the product in question are comparable to those on the Italian market, shows that the risk which has been intimated does not exist in the case in point.

IV —

Nor do I think, moreover — and here I am broaching the final arguments put forward by the parties to the proceedings — that the present case could be treated any differently even under the Convention for the European Patent for the Common Market signed by the Member States on 15 December 1975 (76/76/EEC, Official Journal L 17 of 26 January 1976, p. 1). Although the Community Patent Convention has not yet come into force because not all the signatory States have deposited their instruments of ratification — to the best of my knowledge the ratification procedure has been completed in the Federal Republic of Germany, Belgium, France, Italy, Luxembourg and the United Kingdom — it may, as all the parties have rightly pointed out, provide valuable indications of how the Member States intend to deal with the case of parallel imports of a product protected by national patents from a territory where no patent protection exists.

Article 32 of the Convention deals with the exhaustion of the rights conferred by the Community patent. In order to prevent, as far as possible, the protection afforded by national patents from having effects which differ from the protection afforded by the Community patent the authors of the Convention saw fit, in the interests of the free movement of goods, to provide identical rules in relation to national patents in another article, Article 81, the first paragraph of which is relevant in the present context. It provides as follows:

“The rights conferred by a national patent in a Contracting State shall not extend to acts concerning a product covered by that patent which are done within the territory of that Contracting State after that product has been put on the market in any Contracting State by the proprietor of the patent or with his express consent, unless there are grounds which, under Community law, would justify the extension to such acts of the rights conferred by the patent”.

According to the views expressed by Merck and the Governments of France and the United Kingdom the facts in the present case constitute a typical case for application of the exception provided for in the final phrase of Article 81 (1), which permits a derogation from the principle that rights under national patents are exhausted once the product protected by the patent has been put on the market for the first time in one of the Contracting States by the proprietor of the patent or with his express consent.

A systematic examination of the Convention and a glance at the background to its adoption shows, however, that that interpretation does not have to be followed. It must be borne in mind, in fact, that according to Article 93 of the Community Patent Convention no provision of that Convention may be invoked against the application of any provision of the Treaty establishing the European Economic Community. That article is all the more significant in that it was incorporated into the Convention in the knowledge of the judgment of the Court in Case 15/74 (Sterling Drug) in which an attempt had been made to establish equilibrium in the strained relationship between the requirements of the free movement of goods and national patent laws.

In the course of the negotiations prior to the Luxembourg Conference which finally led to the signing of the Convention and during the Conference itself, however, as the preparatory documents and the Report of the Conference's General Rapporteur, Professor Savignon, of 14 December 1975 (Document LUX/106) reveal, differences of opinion concerning the content and scope of the provisions on the exhaustion of patent rights had once more arisen. The French delegation, followed by the British, had already insisted in their opinions on the first preparatory documents for the Conference (see preparatory Document No 17 and Document R/21/73/74) that the principle of exhaustion should be restricted to cases where the patented product had been put on the market by the proprietor of the patent or with his consent in a Member State in which the patent itself has effect, whereas exhaustion of rights should not occur if the product protected by patent was first put on the market in a country where there was no protection. In such cases it should be possible, according to the views of both delegations, which were supported by a group of trade association delegations with observer status, to invoke the patent to the fullest extent against imports from the patent-free area into the area where the patent was in force. The principal justification for that proposal, as in the case of the argument now under consideration, was that as a matter of logic there can only be an exhaustion of patent rights where a patent exists. In an area where there is no patent protection, however, the proprietor of the patent, and his products, are exposed to the full force of competition and he must therefore have the possibility of preventing the reimportation of his products into the area protected by the patent. The Commission, in particular, but the German delegation too, found themselves unable to agree to this proposal in view of Community law and decisions of the Court of Justice on the subject (see the Opinion of the Commission of 26 September 1975, 75/597/EEC, Official Journal L 261 of 9 October 1975, p. 26). Agreement was finally reached, in the knowledge of the decisions of the Court and the problems presented by parallel imports from areas where there is no patent protection, and after exhaustive consultations, on the above-mentioned provision in the Convention which was based on a proposal of the German delegation (Document LUX/48). It is remarkable that the provision does not stipulate in principle whether and to what extent the possibility of obtaining parallel patents in the various Contracting States exists, but merely provides that the right deriving from tne national patent may be exercised against parallel imports if the product protected by the patent has been put on the market in any of the Contracting States by the proprietor of the patent or with his express consent.

To that principle there was then added an exception to the effect that the legal consequences mentioned do not apply if they are not justified under Community law.

As is apparent from Professor Savignon's Report the purpose of this exception, having regard to the fact that in each individual case the Court must take account of special circumstances, was to avoid establishing rigid rules “on whether the exhaustion of the right should in every case extend to the entire territory of the Community in particular in cases where in part of that territory no protection is afforded by the patent at all”. Accordingly the exception was designed to enable the special circumstances of the individual case to be considered, especially in cases of reimportation from areas in which there is no patent protection. With regard to the application of the exception it was expressly made clear in the Conference, as is also revealed in the report, that the phrase “Community law” covers both the express provisions of the EEC Treaty and its implementing provisions, together with the case-law of the Court of Justice and such principles as are common to the national laws of all the Member States. These include, for instance, the principle of good faith [Treu und Glauben], the rule against the abusive exercise of legal rights [Verbot mißbräuchlicher Rechtsausübung], principles such as pacta sunt servanda or volenti non fit injuria nemo contra factum suum proprium venire potest, and similar general legal principles.

However, on the facts of the present case and having regard to my observations up to now, there is nothing requiring an examination of general principles of this kind which might justify a departure from the general rule. On the contrary, there would be more reason to speak of venire contro factum proprium if Merck were relying on its Netherlands patent in order to try to prohibit the reimportation of a product which its subsidiary had manufactured and exported to Italy.

V —

In conclusion, I therefore propose that the question which has been referred to the Court be answered as follows :

It is not compatible with Articles 30 and 36 of the EEC Treaty for the proprietor of a patent to exercise the right conferred on him by the legislation of a Member State in order to oppose the putting on the market in that State of products protected by patent which have been put by the proprietor of the patent himself or with his express consent on the market in another Member State in which the product is not patentable.

( 1 ) Translated from the German.