6.

I consider that the foregoing considerations convincingly establish that Theal and Watts were bound by an agreement which had its object the use by Theal, the exclusive distributor, of the marks for Watts products in order to obtain for the latter absolute territorial protection in the Netherlands in respect of the trade in Watts products. It follows logically from this finding that both infringements at issue between the Commission and Tepea-Theal (the infringement of the prohibition contained in Article 85 (1) of the EEC Treaty and of the duty to provide accurate information laid down in Regulation No 17), were in fact committed. Let us however suppose for the time being that proof of the existence of the above-described agreement had not been obtained or were held to be insufficient. Even in that case I think that the first and principal infringement which Tepea-Theal is alleged to have committed, that of the said Article 85 (1), must be regarded as proved. In fact, even if it were accepted that the marks registered by the applicant in its own name in the Netherlands belonged to it as the original proprietor and had not formed the subject-matter of an agreement to that end with Watts, this would not rule out the unduly restrictive effect on competition produced by the exclusive dealing agreement between Watts and Tepea to the prejudice both of competing undertakings, which were seriously hindered in marketing Watts products in the Netherlands, and of consumers, who were unable to enjoy to the fullest extent the lower prices charged by Watts in the United Kingdom. The restrictive effect emerges objectively from the combined effect of the exclusive dealing agreement and the following parallel and complementary circumstances: (a) the acquisition by Watts's sole distributor of the right in the Netherlands to marks identical with those applied by the manufacturer to designate the products in question (at least with regard to ‘Dust Bug’, ‘Disc Preener’ and ‘Watts’; (b) the employment of these Netherlands marks by Watts's exclusive distributor in order to prevent parallel imports into the Netherlands of products originating from Watts through distributors other than the exclusive distributor; (c) the imposition by Watts on British wholesalers of the prohibition on the exportation of its products from the United Kingdom; and for that purpose, (d) the affixing by Watts to its own products of vignettes from which it was possible to identify any wholesaler who might supply the products by way of parallel importations. The above-mentioned use by Theal-Tepea of the mark is established beyond doubt by the documents on the file. I refer in particular to the letter of 5 September 1972 from Theal to Audiogram, to the letter of 25 October 1972 from Theal to the editor of the newspaper RTH and to the documents in the court proceedings in the Netherlands from 1972 to 1976 between Theal and Wilkes. In the course of those proceedings Theal claimed that it was itself entitled ‘to prevent Wilkes from using Watts's marks for the sale of Watts products’ (paragraph 11 of Theal's statement of 21 November 1973 before the Arrondissementsrechtbank, Amsterdam). It is clear in particular from these documents that Theal, in seeking to prevent other persons from importing Watts products into the Netherlands, merely relied upon the fact that the products had not been supplied by it but had been obtained through other channels. On the basis of this fact alone Theal, in reliance on its trade-mark, contested the marketing of the products in the Netherlands which it considered an infringement of its mark. It was only after 1976, that is, after the Commission had begun the proceeding to establish the infringement of Article 85 that Theal, appreciating the weakness of its position in Community law, raised the point of the authenticity of the products marketed by Wilkes in the Netherlands as products manufactured by Watts. All this indicates that the argument in question is a pretext. Theal had in its possession examples of the ‘Dust Bug’ article marketed in the Netherlands by Wilkes and bearing on the container, in addition to the name ‘Dust Bug’, the Watts mark; however, instead of proving that the product in question was not in fact genuine, that is, that it was not manufactured by Watts, Theal relied on reversal of the burden of proof, requiring the parallel importer to discharge the burden of proving that the product in question was genuine. Without prejudice to the national rules of procedure in this matter I should like to observe that, from the point of view of Community law, such behaviour by Theal is not only capable of having effects at variance with the general principle of the free movement of goods between Member States but appears in itself contrary to the spirit of that basic principle of the Common Market, which implies that all limitations which a person claims to apply to that principle must be justified by that person. The specific intention of Theal and of Watts to prevent parallel imports into the Netherlands is furthermore confirmed, as I have said, by the prohibition imposed by Watts on British wholesalers against exporting its products. The existence of this prohibition, at any rate from 1972, that is, from the time when an appreciable divergence between the prices of Watts products in the two States in question began to develop, was admitted by Watts itself in the course of the administrative procedure before the Commission. In addition it was already clear from the reply supplied by Watts to the request from Netherlands undertakings to obtain direct supplies of its products (cf. the letter of 28 November 1973 from Watts to Fortissimo). If therefore the exclusive dealing agreement between Watts and Tepea is considered in the context of the subsequent behaviour of both parties in the United Kingdom and in the Netherlands its detrimental effect on competition is clearly perceptible. In fact through the effects of the abovementioned factors, in particular the effect of identical marks — Watts's in the United Kingdom and Tepea's in the Netherlands — and the prohibition on exports imposed by Watts on its wholesalers in the United Kingdom, that agreement meant that parallel imports could not be effected on the Netherlands market; that is, it brought about a situation which, even if the existence of a specific agreement concerning the marks is disregarded, nevertheless still appears similar to the situation considered by the Court of Justice in the Consten and Grundig case. It is on this view that I consider it would be possible to hold that Article 85 (1) of the EEC Treaty has been infringed even if there were no agreement between Watts and Theal having as its object the grant to the latter of the exclusive right to use as marks in the Netherlands the names given by Watts itself to its own products. However, there was in fact an agreement of this nature, as I have endeavoured to demonstrate above, so that the duty under Community law to supply complete and accurate information in making the notification required under Regulation No 17 has also been infringed in the present case.