Opinion of Mr Advocate General Jacobs delivered on 25 May 2000. - Schutzverband gegen Unwesen in der Wirtschaft eV v Warsteiner Brauerei Haus Cramer GmbH & Co. KG. - Reference for a preliminary ruling: Bundesgerichtshof - Germany. - Protection of geographical indications and designations of origin - Regulation (EEC) No 2081/92 - Scope - Directive 79/112/EEC - National rules prohibiting the potentially misleading use of "simple" geographical indications of source. - Case C-312/98.



European Court reports 2000 Page I-09187



Opinion of the Advocate-General

1. This case concerns the interface between Community law on the protection of geographical indications of origin and on the free movement of goods and national law on the protection of geographical indications of source and unfair competition law, including the protection of consumers. The Bundesgerichtshof (Federal Court of Justice), Germany, asks the Court whether Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs precludes application of a national provision which prohibits the misleading use of a simple geographical indication of source.

2. I would note at the outset that the terminology used in this area itself risks being a fruitful source of confusion. I will use the term geographical indication of source in the sense simply of a place name designating a product where, first, there is no link between the characteristics of the product and its geographical provenance and, secondly, use of the name may or may not lead consumers to think that the product originates in that place; it is clear from the order for reference that this is moreover the sense in which the referring court uses the term simple geographical indication of source. I will in contrast use the terms geographical indication and designation of origin only in the sense in which they are defined in Regulation No 2081/92, namely (in brief) where there is some link between the characteristics of the product and its geographical provenance.

The facts and the main proceedings

3. The defendant, which operates a brewery in Warstein, is the owner of the German trade mark No 1 166 399 Warsteiner for beer of Pilsener style, which was registered on 24 October 1990. In Autumn 1990 the defendant acquired the Paderborn brewery, situated 40 km from Warstein.

4. The subject-matter of the dispute is the wording used by the defendant on the labels on the bottles for Light and Fresh beer brewed in the Paderborn brewery to the end of 1991. The front label describes the beers respectively as Warsteiner Premium Light and Warsteiner Marke [Brand] Premium Fresh. The back label in each case repeats the name, gives some promotional information about the beer, and concludes with the statement:

Specially brewed in accordance with the

German beer purity law and bottled in our new

PADERBORN BREWERY.

5. I would note at this point that it is common ground first that Warsteiner, the adjectival form of Warstein as a place name, is a geographical indication of source and secondly that beer brewed in Warstein has no special features attributable to locality: the reputation of Warsteiner branded beer derives from the quality of the beer and promotion of the mark.

6. The applicant, an association whose object according to its statutes is to combat unfair competition, considers that the design of the labels is misleading and that the geographical indication of source Warsteiner may consequently not be used for beer brewed in Paderborn. The defendant responds that customers do not regard Warsteiner as a reference to geographical provenance. The place Warstein is unknown to customers; even if some customers associate the designation Warsteiner with geographical provenance, appreciation of the beer does not depend on local factors. There are other beers with a geographical indication of source which do not come (exclusively) from the place thereby designated.

7. The Landgericht (District Court), Mannheim, after obtaining a consumer survey, essentially upheld the application for an injunction and by order of 10 June 1994 prohibited the defendant from offering for sale, distributing and/or putting into circulation with the labels referred to above the Warsteiner Premium Light and Warsteiner Premium Fresh beers brewed in the Paderborn brewery. The Landgericht based its decision on Paragraph 3 of the Gesetz gegen den unlauteren Wettbewerb (law against unfair competition; UWG).

8. On appeal, the Oberlandesgericht (Higher Regional Court), Karlsruhe, after a supplementary expert opinion on the consumer survey, quashed the judgment of the Landgericht and dismissed the action. It considered that the survey showed that the designation did not mislead a significant part of the customer groups surveyed in a manner decisive for consumer behaviour. Ultimately only 8% of those consumers surveyed who drank beer, even if only occasionally or rarely, both knew that there was a place called Warstein and, when asked, also regarded that place as of importance.

9. The applicant appealed on a point of law to the Bundesgerichtshof. That court considered that the decision on the appeal depended on whether Regulation No 2081/92 precluded national protection of simple geographical indications of source: if the national legislation remained unaffected by that Regulation, then for reasons explained below the applicant's claim should succeed. It accordingly stayed the proceedings and by order of 2 July 1998 referred to the Court the following question:

Does Regulation No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs preclude application of a national provision which prohibits the misleading use of a simple geographical designation of source, that is, an indication in the case of which there is no link between the characteristics of the product and its geographical provenance?

10. Written observations have been presented by the parties, the Austrian, French, German, Greek and Italian Governments and the Commission. The parties, the German, Greek and Italian Governments and the Commission were represented at the hearing.

The relevant national legislation and its interpretation by the referring court

11. Paragraph 3 of the UWG provides:

Whoever in commercial transactions for the purposes of competition gives misleading information about ... the origin ... of specific goods ... may be restrained by action from continuing to provide such information.

12. Although it appears that the action was originally brought and decided at first instance on the basis of the above provision, the Bundesgerichtshof states in the order for reference that the case is governed primarily by the Markengesetz (Trade Marks Law) which entered into force on 1 January 1995, and all the observations proceed on that basis.

13. The sixth part of the Markengesetz contains three sections. The first (containing Paragraphs 126 to 129) is headed Protection of geographical indications of source, while the second (Paragraphs 130 to 136) is headed Protection of geographical indications and designations of origin within the meaning of Regulation (EEC) No 2081/92. The third section contains provisions delegating authority for the adoption of regulations.

14. Paragraph 126 of the Markengesetz is headed Names, indications or signs protected as geographical indications of source. Paragraph 126(1) provides:

Geographical indications of source within the meaning of this Law mean names of places, areas, regions or countries and other indications or signs used commercially to designate the geographical provenance of goods or services.

15. Paragraph 127 of the Markengesetz, headed Scope of protection, provides in so far as relevant:

(1) Geographical indications of source may not be used commercially for goods or services which do not come from the place, area, region or country which they designate, if with the use of such names, indications or signs for goods or services of other origin there is a risk of misleading as to the geographical provenance.

(2) If the goods or services marked with a geographical indication of source have particular characteristics or a particular quality, the geographical indication of source may be used commercially for the corresponding goods or services of that source only if the goods or services have those characteristics or that quality.

(3) If a geographical indication of source enjoys a particular reputation, it may not be used commercially for goods or services of other provenance, even if there is no risk of misleading as to the geographical provenance, where use for goods or services of other provenance is liable unfairly to exploit or affect adversely, without justification, the reputation of the indication of geographical source or its distinctive force.

16. Paragraph 128(1) of the Markengesetz provides:

An action for a prohibitory order may be brought against a person who uses names, indications or signs commercially contrary to Paragraph 127 by those entitled to bring claims under Paragraph 13(2) of the Law on Unfair Competition.

17. According to the order for reference, Paragraph 13(2) of the UWG refers to competitors, trade associations, consumer organisations and chambers of industry and commerce or craft trade associations.

18. The Bundesgerichtshof stresses in the order for reference that the protection of geographical indications of source embodied in Paragraphs 126 to 128 of the Markengesetz is to be regarded as a lex specialis of a protection which by its nature is a matter of competition law; Paragraph 3 of the UWG may now be invoked only for situations which do not fall within Paragraph 126 et seq. of the Markengesetz. Geographical indications of source are not, however, an additional type of intellectual property in the absence of an allocation of the designation to a specified (exclusive) holder. Individual protection still arises only as a reflex of the essentially competition law protection.

19. The Bundesgerichtshof continues by stating that, since incorrectly indicating the geographical provenance of goods is prohibited on grounds of the protection of competitors, geographical indications of source may be protected also when the provenance of the goods is unimportant for the consumer's decision to purchase. Protection of simple geographical indications of source under Paragraph 127(1) of the Markengesetz requires merely that the place indicated is not recognisably excluded as a place of production on the basis of its particular character or the special nature of the goods; it does not presuppose that the consumer associates with the indication a special quality attributable to regional or local characteristics or that the indication is known to customers as such. For the present case, therefore, it is not relevant whether the consumer associates particular expectations as to quality with the place of provenance of the beer or to what extent the designation Warsteiner as geographical indication is of importance for the consumer's decision to purchase. Since the defendant fails to provide sufficient and reasonable clarifying indications as to the place of brewing, Paderborn, it is prohibited from using the local designation Warsteiner for beer brewed in Paderborn.

20. The Bundesgerichtshof concludes by indicating that the defendant could neutralise the meaning of Warsteiner as a geographical indication by stating on the front labels of the beer bottles that the beer is brewed in Paderborn, and perhaps in addition by adding the word Marke (brand or trade mark) to the designation Warsteiner. According to the applicant, some Fresh and Light beer brewed by the defendant at Paderborn was marketed under labels satisfying both those criteria and, in a judgment given in parallel proceedings brought by the applicant against the defendant in respect of such labelling, the Bundesgerichtshof has ruled in favour of the defendant. It appears however that the proceedings which gave rise to this request for a preliminary ruling are not regarded by the parties as rendered moot by that judgment; according to the applicant, the defendant wishes to return to the label designs at issue in these proceedings if it may lawfully do so.

The relevant Community legislation

Regulation No 2081/92

21. Regulation No 2081/92 provides, for designations which satisfy its conditions and are registered thereunder, a system of protection throughout the Community.

22. The seventh, ninth and tenth recitals in the preamble to Regulation No 2081/92 state:

... there is diversity in the national practices for implementing registered designations of origin and geographical indications; ... a Community approach should be envisaged; ... a framework of Community rules on protection will permit the development of geographical indications and designations of origin since, by providing a more uniform approach, such a framework will ensure fair competition between the producers of products bearing such indications and enhance the credibility of the products in the consumers' eyes;

... the scope of this Regulation is limited to certain agricultural products and foodstuffs for which a link between product or foodstuff characteristics and geographical origin exists; ... however, this scope could be enlarged to encompass other products or foodstuffs;

... existing practices make it appropriate to define two different types of geographical description, namely protected geographical indications and protected designations of origin.

23. Article 1(1) provides:

This Regulation lays down rules on the protection of designations of origin and geographical indications of agricultural products intended for human consumption referred to in Annex II to the Treaty and of the foodstuffs referred to in Annex I to this Regulation and agricultural products listed in Annex II to this Regulation. ...

The foodstuffs referred to in Annex I include beer.

24. According to Article 2(1) of the Regulation, Community protection of designations of origin and of geographical indications of agricultural products and foodstuffs is to be obtained in accordance with the Regulation.

25. The general definition of designation of origin and geographical indication for the purposes of the Regulation appears in Article 2(2):

(a) designation of origin: means the name of a region, a specific place or, in exceptional cases, a country, used to describe an agricultural product or a foodstuff:

- originating in that region, specific place or country, and

- the quality or characteristics of which are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors, and the production, processing and preparation of which take place in the defined geographical area;

(b) geographical indication: means the name of a region, a specific place or, in exceptional cases, a country, used to describe an agricultural product or a foodstuff:

- originating in that region, specific place or country, and

- which possesses a specific quality, reputation or other characteristics attributable to that geographical origin and the production and/or processing and/or preparation of which take place in the defined geographical area.

26. Pursuant to Article 17(1) of the Regulation, Member States were obliged within six months of the entry into force of the Regulation, [to] inform the Commission which of their legally protected names or, in those Member States where there is no protection system, which of their names established by usage they wish to register pursuant to this Regulation. Furthermore, Article 17(3) provides that Member States may maintain national protection of the names communicated in accordance with paragraph 1 until such time as a decision on registration has been taken. Subsequent registrations are of course possible, and indeed there is still a steady stream of applications for registration pursuant to the Regulation. The registration procedure is laid down in Articles 4 to 7: in brief, a group or in certain circumstances a natural or legal person may apply for registration in respect of agricultural products or foodstuffs which it produces or obtains within the meaning of Article 2(2)(a) or (b); the Commission verifies whether the application contains all the prescribed particulars and, if satisfied, publishes the details in the Official Journal; if there has been no opposition within six months of publication, the name is registered.

The labelling and advertising directives

27. The applicant, the defendant, the German Government and the Commission variously refer in their observations to Directive 79/112 on the labelling, presentation and advertising of foodstuffs and Directive 84/450 on misleading advertising.

28. Directive 79/112 enacts Community rules of a general nature on labelling which are applicable horizontally to all foodstuffs put on the market and intended for sale to the ultimate consumer. The prime consideration is the need to inform and protect the consumer; the rules are also to prohibit the use of information which would mislead the purchaser. Labelling is defined to include any words, particulars, trade marks or brand name relating to a foodstuff and placed on any label; it must not be such as could mislead the purchaser to a material degree, particularly as to the characteristics of the foodstuff including its origin or provenance.

29. Directive 84/450 aims to improve consumer protection and to put an end to distortions of competition and hindrances to the free movement of goods and services arising from disparities between the Member States' laws against misleading advertising. With those objectives in mind, it seeks to establish minimum objective criteria for determining whether advertising is misleading and minimum requirements for the means of affording protection against such advertising. Advertising is widely defined in Article 2(1) to mean the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services; misleading advertising is defined in Article 2(2) to mean any advertising which in any way deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor. Article 3 makes clear that, in determining whether advertising is misleading, account is to be taken of any information it contains concerning the geographical or commercial origin of goods. Article 7 provides that Member States may retain or adopt provisions with a view to ensuring more extensive protection for, inter alia, consumers.

Analysis of the issues

30. A number of different issues arise in this case. First and foremost it must be established whether Regulation No 2081/92 permits the co-existence of national legislation on simple indications of source: that of course is the question referred by the Bundesgerichtshof. If so, the further question arises whether that national legislation is compatible with other requirements of Community law, in particular the Treaty provisions on the free movement of goods. That issue was raised by the defendant and the French, German and Italian Governments in their written observations. Since however the observations concentrated substantially on the scope of Regulation No 2081/92, the subject-matter of the sole question referred, the Court asked that observations at the hearing should also address the links between national protection of simple geographical indications of source and the Treaty provisions on the free movement of goods and, in that connection, on the compatibility of the Bundesgerichtshof's interpretation of Paragraph 127(1) of the Markengesetz with the requirements of Community law, in particular concerning consumer protection. I will consider first the question referred, namely whether Regulation No 2081/92 permits the co-existence of national legislation on simple geographical indications of source.

The scope of Regulation No 2081/92

31. The applicant, the French, German and Italian Governments and the Commission all echo the view of the Bundesgerichtshof as set out in the order for reference: Regulation No 2081/92 applies exclusively to the designations of origin and geographical indications defined in Article 2 thereof - namely designations in respect of products for which there is a link between their geographical origin and their particular quality - and does not preclude national legislation protecting other types of geographical indications.

32. The German Government adds that Directive 79/112 on the labelling, presentation and advertising of foodstuffs and Directive 84/450 on misleading advertising require Member States to prohibit all misleading indications, including therefore misleading indications as to geographical provenance; it would be contrary to those Directives if the Regulation rendered Member States powerless in the area of geographical indications of source. Moreover, if the Regulation were exhaustive the misleading use of such indications of source would be uncontrolled at both national and Community level.

33. The Austrian Government concurs with the view that the Regulation does not preclude national legislation protecting geographical indications of source, but arrives at that conclusion by another route. It notes that the objectives of the Regulation include in particular the improvement of income in rural areas; it would conflict with that objective if simple geographical indications of source which cannot benefit from the protection of the Regulation were to lose all national protection as well, since the standard of living of the producers concerned would be significantly affected. The Austrian and German Governments both refer in addition to Article 22 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires parties - including the Community itself and the Member States as members of the WTO - to protect geographical indications.

34. The defendant and the Greek Government, in contrast, submit that the Regulation has exhaustively regulated the protection of all types of geographical indications and designations of origin and thus precludes national legislation in the area (although the defendant in submitting observations at the hearing on the additional issues raised by the Court proceeded on the basis that the national legislation was not so precluded). The defendant adds that the Regulation does not affect national competition laws which have as their object the protection of the consumer against misleading practices, in particular those implementing Directive 79/112 on the labelling, presentation and advertising of foodstuffs and Directive 84/450 on misleading advertising.

35. In my view it is apparent from both the purpose and wording of the Regulation that it does not preclude national systems of protection of simple geographical indications of source, namely indications where there is no link between provenance and quality or reputation.

36. First, it is to my mind clear that the Regulation itself extends only to those agricultural products and foodstuffs whose characteristics are linked to their place of origin: see the ninth recital in the preamble and the definitions in Article 2(2) of designation of origin and geographical indication, to which the Regulation is expressly limited in Article 1(1). It is common ground that simple geographical indications of source do not fall within that definition.

37. It could of course be argued that, since strict conditions are necessary to qualify for geographical indications within the meaning of the Regulation, it would be strange if simple indications could be protected without any conditions being imposed. The answer to that argument is that, within the field of true designations of origin and geographical indications (namely those within the definitions in Article 2(2)), stringent conditions are justified to warrant Community-wide protection under a Community regime, but that that should not preclude Member States from granting such national protection as they think fit (provided of course that such protection is compatible with other provisions of Community law and in particular the Treaty provisions on the free movement of goods).

38. The defendant argues that, although by virtue of Article 2 the Regulation protects by registration only designations of origin and geographical indications as there defined, the scope of the Regulation as set out in Article 1 extends to all types of geographical designations and indications and thus precludes national protection of all such types including indications of source. That seems to me a somewhat contrived interpretation; it is moreover contrary to the statement in the preamble to the Regulation that its scope is limited to products for which a link between characteristics and geographical origin exists.

39. As mentioned above, several parties refer in support of their arguments to Directive 79/112 on the labelling, presentation and advertising of foodstuffs and Directive 84/450 on misleading advertising. The Directives have been cited both by those submitting that the Regulation cannot be exhaustive, on the basis that it would in that case prevent Member States from complying with their obligations under the Directives to prohibit labelling and advertising which misleads as to provenance, and by the defendant, which argues that the Regulation, although precluding national legislation on indications of source, leaves unaffected legislation such as the Directives which have as their objective the protection of the consumer.

40. In my view the Directives do not assist with the argument whether the Regulation is exhaustive. They are however of some relevance to the question whether the national legislation is lawful independently of the scope of the Regulation. I will accordingly consider them below, in that context.

41. I accept that it is not obvious whether the Regulation precludes the co-existence of national systems of protection of products and foodstuffs within the scope of the Regulation, namely products and foodstuff described by geographical indications and designations of origin there defined. That question however is not at issue in the present case, which is concerned solely with the lawfulness of a national system of protection of simple geographical indications of source, clearly not within the scope of the Regulation.

42. I therefore conclude on the question referred by the Bundesgerichtshof that the Regulation does not preclude national legislation such as Paragraph 127(1) of the Markengesetz which protects simple geographical indications of source. The question whether such legislation is lawful must therefore be assessed by reference to other principles of Community law.

The applicability of Article 30 of the EC Treaty

43. The next question to be considered is whether national legislation such as Paragraph 127(1) of the Markengesetz is within the scope of Article 30 of the EC Treaty (now, after amendment, Article 28 EC), which prohibits between Member States quantitative restrictions on imports and all measures having equivalent effect.

44. It may be wondered whether the facts giving rise to the main proceedings fall within the scope of that article, given that German legislation is sought to be enforced by a German association against a Germany company in the context of beer brewed in Germany. Indeed the representative of the Italian Government raised this doubt at the hearing. The defendant, however, and by implication the French and German Governments consider that Article 30 is in principle applicable on the basis of the potential effects of the national legislation on intra-Community trade.

45. A similar issue arose in Pistre, which concerned a prosecution brought against French nationals in connection with French products marketed on French territory. The prosecution was for failure to obtain authorisation required by national legislation for the use of certain descriptions in marketing the goods. The Court rejected an argument that in such circumstances the prosecutions did not fall within the ambit of Article 30, stating that that article could not be considered inapplicable simply because all the facts of the specific case before the national court were confined to a single Member State, since in such a situation the application of the national measure could also have effects on the free movement of goods between Member States. It must be observed however that the issue arose in that case in a rather unusual manner: it was argued that the compatibility of the national legislation with Article 30 was relevant since if the legislation had been unlawful as regards imports alone, there would have been discrimination against domestic producers. Such reverse discrimination would have been unlawful under national law. Consequently the domestic producers could rely indirectly on Article 30 to resist the application of the national legislation to them.

46. In the present case in contrast no such link is involved. I remain of the view that, for Article 30 to apply, there has to be an actual or potential effect on trade between Member States; it may be noted that that view has recently been expressed also by Advocate General Saggio in Guimont. Since however argument has been addressed to Article 30, I shall consider the issues on the assumption that such an effect may be found to arise.

47. In terms of its substance, Paragraph 127(1) of the Markengesetz clearly falls within the scope of Article 30, which covers all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.

48. It accordingly remains to be determined whether the national provision at issue may be justified either by virtue of Article 36 of the Treaty (now, after amendment, Article 30 EC) or as an overriding requirement within the meaning of the Cassis de Dijon case-law.

The protection of industrial and commercial property under Article 36

49. Article 36 permits restrictions on imports which are justified on various grounds including the protection of industrial and commercial property, provided that the restrictions do not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. The applicant submits that the national legislation falls within this derogation, citing in support of its view the judgment in Exportur in which the Court appeared to accept that the protection of simple geographical indications of source falls within the scope of the protection of industrial and commercial property within the meaning of Article 36.

50. The defendant responds that the main proceedings in this case may be distinguished from those in Exportur in a critical respect. In that case, the Court appeared to accept that indications of source were entitled to protection because they may ... enjoy a high reputation amongst consumers and constitute for producers established in the places to which they refer an essential means of attracting custom. Protection of such indications of source was therefore justified because of the risk that their reputation might otherwise be exploited by another. In this case however the national legislation prohibits the use of indications of source whether or not there is any reputation linked to the geographical indication. The indication Warsteiner has been promoted by the defendant and its reputation lies with the quality of the beer it identifies rather than with the beer's geographical provenance. Accordingly, the defendant concludes that it alone is entitled to complain of infringement of its fundamental Community law right to the protection of its intellectual property.

51. I find those submissions on behalf of the defendant convincing. Exportur arose out of an action brought by a Spanish association of exporters of the product in question (nougat called Turrón de Alicante and Turrón de Jijona), formed with the aim of launching and promoting export, against two French manufacturers of nougat called tourons Alicante, tourons type Alicante, tourons Jijona and tourons type Jijona, in which the applicant sought an injunction prohibiting the defendants from using the Spanish names in question. The action was brought under the Convention between the French Republic and the Spanish State of 27 June 1973 on the protection of designations of origin, indications of provenance and names of certain products, which provided that the names Turrón de Alicante and Turrón de Jijona were, in the territory of the French Republic, to be reserved exclusively to Spanish products or goods and there used only in compliance with Spanish legislation. Whether or not simple geographical indications of source such as those at issue in Exportur can sensibly be considered to be on a par with mainstream intellectual property rights such as patents, trade marks and copyright, it is none the less clear that in that case the applicant was seeking to enforce a right of at least an analogous nature conferred on it (or its members) by the Convention; it was also clearly regarded as significant by the Court that the protected names and the products manufactured by the undertakings there established had a reputation of which the defendant manufacturers were taking advantage. In this case in contrast the applicant, which has no right of any sort to use the geographical indication of source at issue, is seeking to prevent its use by the undertaking which has itself built up the reputation which the name enjoys. It seems to me that it strains accepted use of Community law concepts to regard the legislation pursuant to which such an action is brought as falling within the scope of the protection of industrial and commercial property within the meaning of Article 36.

52. Moreover, the Court in its case-law on the scope of that derogation has consistently ruled that Article 36 admits derogations from the free movement of goods only to the extent to which they are justified for the purpose of safeguarding rights which constitute the specific subject-matter of such property. The Court has given guidelines as to what constitutes the specific subject-matter of particular types of intellectual property: in the case of patents, for instance, it is 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, as well as the right to oppose infringements; in the case of a trade mark, it is the guarantee that the owner of the trade mark has the exclusive right to use that trade mark for the purpose of putting products protected by the trade mark into circulation for the first time; the guarantee is intended to protect the owner against competitors wishing to take advantage of the status and reputation of the trade mark by selling products illegally bearing the mark. The object of national legislation such as Paragraph 127(1) of the Markengesetz is manifestly not to safeguard any comparable rights in connection with indications of source; indeed the Bundesgerichtshof is at pains to stress that, in the absence of an allocation of the indication of source to a specified exclusive holder, it is inappropriate to speak in terms of intellectual property rights. In my view, the principles developed by the Court in the context of industrial and commercial property in the strict sense of alienable rights such as patents, trade marks and copyright are an inherently inappropriate framework for assessing the lawfulness of national legislation on simple geographical indications of source.

53. Finally I would note that the facts in Exportur arose in an entirely different historical and legislative context from those in this case. In Exportur the Court was considering a Convention with a much broader aim than that of the national legislation at issue in this case: the Convention sought to protect designations of origin, indications of source and names of certain products, none of which at the time of the facts giving rise to the main proceedings was protected at Community level. I am not persuaded that the Court's general statement that the objective of that Convention may be regarded as falling within the sphere of the protection of industrial and commercial property within the meaning of Article 36 should apply to the much narrower field of simple geographical indications of source, all the more so now that designations of origin are within the scope of the Regulation and protected at Community level pursuant thereto.

54. I accordingly conclude that national legislation such as Paragraph 127(1) of the Markengesetz does not fall within the derogation for measures for the protection of industrial and commercial property within the meaning of Article 36 of the Treaty.

Justification on the grounds of overriding requirements

55. Although the Court appeared to accept that the need to protect producers against unfair competition and consumers against deception regarding the origin of products could constitute justification on grounds of public policy under Article 36, subsequent case-law has made it clear that, since Article 36 derogates from a fundamental rule of the Treaty enshrined in Article 30, it must be interpreted strictly and cannot be extended to objectives - such as protection against unfair competition and consumer protection - which are not expressly mentioned therein. Justification on the grounds of consumer protection for the national legislation at issue must accordingly be sought elsewhere.

56. Since the national legislation is expressed to apply without distinction to domestic goods and to imports, the restriction on the free movement of goods within the Community which it entails may in principle be justified under the formula first articulated by the Court in Cassis de Dijon, namely in order to satisfy overriding requirements which include protection against unfair competition and the defence of the consumer, provided that the legislation is proportionate to its objective.

57. The Bundesgerichtshof in its order for reference stresses its view that Paragraph 127(1) of the Markengesetz is a competition law provision; the German Government emphasises that it is based on consumer protection. That aspect of the legislation is clear not only from its tenor but also from the facts that, pursuant to the combined provisions of Paragraph 128(1) of the Markengesetz and Paragraph 13(2) of the UWG, consumer associations are entitled to bring proceedings for infringement of Paragraph 127(1), and that Paragraph 3 of the UWG, which Paragraph 127(1) of the Markengesetz appears designed to supplement if not to supplant in the area of indications of provenance, has been frequently analysed by the Court as a provision for the protection of consumers.

58. In any event it is apparent from Cassis de Dijon itself that the two concepts of consumer protection and unfair competition are closely related: the Court there stated that the mandatory fixing of minimum alcohol content could not be regarded as an essential guarantee of the fairness of commercial transactions since it was a simple matter to ensure that suitable information was conveyed to the purchaser on the packaging. The two grounds of justification will by their nature frequently arise together; indeed the twin aims of consumer and producer protection underlie Regulation No 2081/92.

59. It is clear from the case-law of the Court that the risk of misleading consumers cannot override the requirements of the free movement of goods and so justify barriers to trade unless that risk is sufficiently serious and that in assessing the level of risk the relevant criterion is the presumed expectations of an average consumer who is reasonably well-informed and reasonably observant and circumspect.

60. If therefore the average consumer, as so defined, of a particular product marketed under a simple geographical indication of source makes no link between the features of the product which inspire his purchase and the indication of source, then that indication does not influence his decision, he cannot sensibly be regarded as having been misled and a prohibition on marketing the product under such indication, ostensibly for the protection of consumers, would clearly be a disproportionate and inappropriate means to that end.

61. It appears from the figures cited in the order for reference (drawn from the consumer survey on which the Oberlandesgericht, Karlsruhe, based its judgment) that, although nearly 81% of frequent consumers of beer know of the place Warstein, a mere 8% of consumers who drink beer, even only occasionally or rarely, also regard that place as important to their decision to purchase.

62. The Bundesgerichtshof states in the order for reference that it is not a precondition for protection of a geographical indication of source under Paragraph 127 of the Markengesetz that the indication of source is known to consumers as such but merely that the place referred to is not recognisably excluded as the place of production. On that interpretation it is irrelevant whether the fact that there is a place called Warstein is significant for the average consumer's decision to purchase Warsteiner beer: the question whether there is a real risk that that consumer will be misled as to the geographical provenance of the product is disregarded.

63. If however the average consumer is not being misled, it is difficult to see what public interest is served by restricting the use of the indication of source. It is impossible to reconcile such a restriction with the standard of the average consumer which, as explained above, the Court has developed as a yardstick for assessing the lawfulness in this context of obstacles to the free movement of goods. Put another way, it is manifestly disproportionate to prohibit the marketing of a product under an indication of source in such circumstances. I accordingly conclude that for the above reasons Paragraph 127(1) of the Markengesetz as interpreted by the Bundesgerichtshof constitutes an unjustified limitation on the free movement of goods guaranteed by Article 30 since it would have the effect of protecting simple geographical indications of source, and hence potentially restricting intra-Community trade, even in the absence of any actual risk of confusion for consumers. It would however be compatible with Article 30, since it would be justified on the ground of consumer protection, if Paragraph 127(1) of the Markengesetz were interpreted by the national court as requiring a sufficiently serious risk of misleading the average consumer as defined by the Court as to geographical provenance.

64. That approach moreover ensures that the lawfulness of the national legislation is assessed on the basis of the same criteria which will determine its compatibility with Directive 79/112 on the labelling, presentation and advertising of foodstuffs since in the case of that directive the same yardstick of the average consumer as defined by Community law will apply: it is clear from the case-law of the Court that that standard applies to determine the extent to which a description, trade mark or promotional text is misleading under the provisions of the Treaty or of Community legislation.

65. The situation is slightly different however with regard to Directive 84/450 on misleading advertising, which is expressed to be a minimum standards directive which does not preclude Member States from retaining or adopting provisions with a view to ensuring more extensive protection for consumers, persons carrying on a trade, business, craft or profession, and the general public. The Directive itself would therefore not preclude national legislation such as Paragraph 127(1) of the Markengesetz as interpreted by the Bundesgerichtshof. Such legislation would however, as indicated above, need to be compatible with the principles articulated by the Court in the context of Article 30: the result would consequently be the same.

Conclusion

66. I accordingly consider that the question referred by the Bundesgerichtshof should be answered as follows:

(1) Regulation No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs does not preclude application of national legislation which prohibits the misleading use of a simple geographical indication of source, that is, an indication in the case of which there is no link between the characteristics of the product and its geographical provenance.

(2) Where such national legislation has an actual or potential effect on trade between Member States and is interpreted by the national court so as to prohibit use of a simple geographical indication of source even where it was not liable to mislead a reasonably well-informed and reasonably observant and circumspect consumer, it will be contrary to Article 30 of the EC Treaty (now, after amendment, Article 28 EC).