Opinion of Mr Advocate General Gulmann delivered on 1 June 1994. - Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission of the European Communities. - Competition - Abuse of a dominant position - Copyright. - Joined cases C-241/91 P and C-242/91 P.



European Court reports 1995 Page I-00743



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

1. In these joined cases the Court is to rule on whether the Commission, by a decision on the basis of Article 86 of the EC Treaty, can require undertakings to license their copyright works. The Court is thus asked to decide whether it is possible on the basis of the competition rules of the Treaty in special circumstances to interfere with the specific subject-matter of copyright. The cases again raise the fundamental issue of the balancing of two conflicting interests, on the one hand the concern to protect industrial and commercial property rights based on national law and on the other the concern for undistorted competition which it is one of the Community' s tasks to ensure.

2. By a decision of 21 December 1988 the Commission required three undertakings to license their television programme listings. (1) That decision was upheld by judgments of the Court of First Instance of 10 July 1991. (2) It is those judgments that are being challenged in these proceedings before the Court of Justice.

A ° The background to the cases

3. Programme listings are lists of forthcoming television programmes which contain information as to the title, channel, date and time of broadcasts. They are produced by the television broadcasting organizations in connection with and for the purposes of their programme scheduling. Programme listings enjoy copyright protection as literary works and compilations under the United Kingdom Copyright Act 1956 and the Irish Copyright Act 1963.

4. At the time of the Commission' s decision three weekly television guides were marketed in Ireland and Northern Ireland, TV Times, Radio Times and RTE Guide, each containing programme listings for two of the six television channels that could be received by most households in Ireland and 30-40% of households in Northern Ireland. Apart from the actual programme listings, the television guides typically contained programme summaries ° that is information on the content of programmes and those taking part ° comments, background articles and so forth.

5. TV Times contained the weekly programme listings for ITV and Channel Four broadcast by television companies franchised by the Independent Broadcasting Authority (IBA) (3) to broadcast independent television programmes. It was published by Independent Television Publications Ltd, London (ITP), which had been assigned the copyright in the programme listings by the producers of programmes for those two channels. Radio Times contained the weekly programme listings for BBC 1 and BBC 2 and was published by the wholly owned subsidiary BBC Enterprises Ltd, which was assigned the copyright to the weekly programme listings by its parent organization, the BBC. In the United Kingdom the BBC and IBA had a duopoly for supplying national television services. RTE Guide contained the weekly programme listings for RTE 1 and RTE 2 and was published by Radio Telefis Eireann (RTE) which has a statutory monopoly for radio and broadcasting services in Ireland.

6. Unlike in the other EC Member States, on the market in Ireland and Northern Ireland there was no television guide containing all weekly programme listings for the channels which all or most television viewers could receive ("comprehensive weekly television guides"). The reason lay in the licensing practice of the three undertakings: daily and weekly newspapers and in some case magazines could receive free on request the weekly programme listings together with any programme summaries. In each case they were accompanied by a licence laying down conditions for reproduction of the information: the newspapers could publish the daily listings or, at weekends and before public holidays, the listings for two days subject to certain conditions as to the format of the publication. They were also permitted to publish highlights of the week' s television programmes.

7. In 1985 the Irish publisher Magill TV Guide Ltd ("Magill") began to publish a weekly paper in Ireland and Northern Ireland containing information on forthcoming television programmes. At first the paper only contained information on the weekend programmes of RTE, BBC, ITV and Channel Four and highlights from the week' s programmes. When in May 1986 an edition of Magill TV Guide appeared containing all the weekly listings for all television channels that could be received in the area, an Irish court, in response to an application from RTE, BBC and ITV, issued an interim injunction restraining Magill from publishing the weekly programme listings of those undertakings on the grounds that such publication infringed their copyright. That decision was upheld by a judgment of the High Court of 26 July 1989. (4)

8. Before it published the comprehensive edition of Magill TV Guide, Magill had already lodged a complaint with the Commission under Article 3 of Regulation No 17 of the Council implementing Articles 85 and 86 of the Treaty. (5) In Article 1 of its decision of 21 December 1988 the Commission held: "The policies and practices of ITP, BBC and RTE, respectively, in relation to their individual advance weekly programme listings, on programmes which may be received in Ireland and Northern Ireland, constitute infringements of Article 86 in so far as they prevent the publication and sale of comprehensive weekly TV guides in Ireland and Northern Ireland".

Accordingly, in Article 2 of the decision the Commission required ITP, BBC and RTE to bring the infringement of Article 86 to an end:

"by supplying each other and third parties on request and on a non-discriminatory basis with their individual advance weekly programme listings and by permitting reproduction of those listings by such parties. This requirement does not extend to information in addition to the listings themselves ... . If they choose to supply and permit reproduction of the listings by means of licences, any royalties ... should be reasonable. Moreover, ITP, BBC and RTE may include in any licences granted to third parties such terms as are considered necessary to ensure comprehensive high-quality coverage of all their programmes, including those of minority and/or regional appeal, and those of cultural, historical and educational significance."

9. ITP, BBC and RTE lodged applications for the annulment of the Commission' s decision to the Court of Justice. By order of 11 May 1989 the President of the Court of Justice suspended the operation of the Commission' s decision in so far as it obliged the applicants to permit reproduction of their programme listings. (6)

By order of 15 November 1989 the cases were referred to the Court of First Instance which, by judgments of 10 July 1991, found in favour of the Commission. RTE and ITP, but not BBC, (7) have appealed against those judgments to the Court of Justice.

By order of 6 July 1989 the Court of Justice gave Magill leave to intervene in support of the form of order sought by the Commission and by order of 25 March 1992 gave Intellectual Property Owners Inc. (IPO) leave to intervene in support of the forms of order sought by the appellants. By order of 21 April 1993 the cases were joined for the purposes of the oral procedure.

10. For the sake of completeness it should be noted that new rules came into force in the United Kingdom on 1 March 1991, (8) under which broadcasting organizations are obliged to license the reproduction of their programme listings. BBC and ITP have each begun to market their own comprehensive weekly television guides. The Irish legislation has not been amended. However, RTE has obtained licences from BBC and ITP with a view to marketing a comprehensive weekly television guide and has given licences for its own programme listings. (9) The three television guides RTE Guide, Radio Times and TV Times therefore now appear as comprehensive weekly television guides.

B ° Introductory remarks

11. Copyright is of fundamental importance both for the individual owner of the right and for society. The Member States have entered into international commitments to give copyright owners sufficient protection in order to ensure an appropriate framework for their creative efforts and in their copyright legislation have given copyright owners the exclusive right to exploit the protected work. In other words copyright laws give copyright owners the right to restrict competition.

12. However those laws do not confer unrestricted exclusive rights on copyright owners. The Berne Convention for the protection of literary and artistic works, as last revised at Paris on 24 July 1971, envisages and accepts certain limits on the exclusive right and such limits are indeed contained in the copyright laws of the Member States. The limits may consist of provisions conferring a limited right to free exploitation of the protected work or "compulsory licences" which confer a right to make a certain use of the work on payment of a royalty. A characteristic feature of compulsory licences in the field of copyright is that permission to make certain use of the protected work stems from general legislative provisions, which may include provision for the question of royalties being submitted to a public authority. It is generally not the case that, as in the patent field, permission to make certain use of the protected work in the public interest is given by a court or a public authority which then lays down the corresponding terms.

13. The copyright laws of the Member States have thus duly balanced the various interests that must be protected by society ° including on the one hand the protection of the interests of the copyright owner, and on the other undistorted competition. (10) The natural consequence of that is that compulsory licences under competition law, that is licences which undertakings are required to grant by competition authorities on the basis of competition rules, are practically without precedent in the Member States in the field of copyright. In principle, where copyright law confers an exclusive right, that must be respected by competition law. (11)

14. The fact that the national rules have balanced the interests of the copyright owners against restrictions on competition resulting from copyright protection in the national ambit does not necessarily preclude further limitations on the copyright owners' exclusive right on the basis of the Treaty' s competition rules, whose aim is to ensure undistorted competition in a single market. But the basic relationship between copyright law and competition law described above shows that it is natural to be cautious in dealing with issues concerning interference with copyright rights on the basis of the Community competition rules.

15. It seems to me that the Commission' s decision and the judgments of the Court of First Instance produce a reasonable result in practice. There are strong reasons to suggest that it should not be possible for television broadcasting organizations to prevent, by means of their copyright in programme listings, publication of comprehensive weekly television guides. I do not consider that the copyright interests thus protected can be regarded as substantial and the Irish and United Kingdom consumers have a clear interest in being given access to a product which is common in the other Member States and which offers a number of advantages by comparison with existing products.

16. But that does not necessarily mean that that result which is reasonable in this instance can be achieved by means of decisions adopted by the Commission under Article 86 of the Treaty. It is possible that that result can be achieved only by rules adopted by the national legislature, as happened in the United Kingdom, or by rules adopted by the Community legislature.

C ° Delimitation of the subject-matter of the appeals

17. RTE, ITP and IPO have claimed that the judgments of the Court of First Instance should be set aside and the Commission' s decision annulled. The Commission has contended that the judgments of the Court of First Instance should be upheld and, in the alternative, that the judgments of the Court of First Instance should be upheld but that the grounds of judgment should be amended. (12)

18. RTE, ITP and IPO all claim that the Court of First Instance misconstrued the concept of abuse of a dominant position under Article 86 of the Treaty. RTE further claims that the Court of First Instance wrongly refused to take into consideration the Bern Convention and misconstrued the concept of trade between Member States. ITP further claims that the Court of First Instance infringed Article 3 of Regulation No 17 by holding that the Commission had the power to require a proprietor of intellectual property rights to grant licences and that it disregarded Article 190 of the Treaty by holding that the reasoning of the decision satisfied the principle of the rights of the defence.

19. Finally, IPO claims that the Court of First Instance defined the relevant product market and applied the concept of a dominant position incorrectly. In their replies RTE and ITP state that even if they did not expressly challenge the judgment of the Court of First Instance on those two points, that does not mean that they have abandoned their arguments in that respect. They claim that if the Court should find that there is an abuse and on that basis is to adopt a position on the substance of the case pursuant to the first paragraph of Article 54 of the Statute, it must also rule on these pleas in law.

20. The Commission argues, and its contention must be accepted, that RTE and ITP cannot, in their replies, introduce new pleas in law not set out in their appeals (see Article 118 in conjunction with Article 42(2) of the Rules of Procedure of the Court of Justice). Matters not expressly appealed against must be relied on by the Court of Justice even if it is giving final judgment in the case pursuant to the first paragraph of Article 54 of the Statute.

21. Noting that RTE and ITP did not appeal against the judgments of the Court of First Instance on those two points, the Commission claims that those factors are not within the scope of the appeals and that IPO cannot therefore raise those pleas in law either.

22. An intervener can only intervene in support of the submissions of one of the parties (see the third paragraph of Article 37 of the Statute). It is also clear that an intervener in appeal proceedings can only submit pleas in law which fall within the scope of the subject-matter of the proceedings that were brought before the Court of First Instance (see Article 51 of the Statute). The IPO has complied with both those conditions since, in support of the claim by RTE and ITP that the judgments of the Court of First Instance should be set aside, it puts forward pleas in law which were part of the subject-matter of the judgment of the Court of First Instance. The question is, therefore, whether the IPO is precluded from raising those pleas in law merely because they have not been put forward by the appellants.

23. Article 93(4) of the Rules of Procedure of the Court of Justice provides that an intervener must accept the case as he finds it at the time of his intervention. However, that provision is not to be interpreted as meaning that a party intervening at first instance is precluded from raising pleas in law that have not been put forward by the party in support of whom he is intervening. The Court has held that such an interpretation would deprive the intervention procedure of all meaning (see the judgments in Steenkolenmijnen (13) and in SNUPAT (14)).

24. Article 118 of the Rules of Procedure provides that, subject to certain provisions, Article 93 applies also to the procedure before the Court of Justice on appeal from a decision of the Court of First Instance. Since there is no express provision to the contrary in the Rules of the Procedure of the Court of Justice, that signifies in my view that in appeal proceedings as well Article 93 is to be interpreted as meaning that an intervener may raise pleas in law that have not been put forward by the appellants.

D ° The question whether the Court of First Instance misconstrued the concept of abuse of a dominant position

25. In its decision the Commission found that the refusals by ITP and RTE to grant licences constituted an abuse of their dominant positions. That finding was upheld by the Court of First Instance. In its judgments the Court of First Instance took as its starting point the case-law of the Court of Justice concerning the relationship between the Treaty rules on the free movement of goods and intellectual property rights based on national law and accordingly the concepts of the specific subject-matter of copyright and its essential function formed an important part of its reasoning.

26. As I shall explain below, that approach is basically correct. The question does, however, arise, whether the conceptual structure relied on by the Court of First Instance was in every respect formulated and applied in an appropriate manner. The submissions in these appeals show that that conceptual structure gave rise to problems and it is on this point in particular that the judgments of the Court of First Instance drew criticism from academics. (15) In the following three sections I shall consider the concept of specific subject-matter and in the course of my review of the judgments of the Court of First Instance in section (d) I shall consider the significance of the concept of essential function.

(a) The question whether the concept of specific subject-matter is relevant to an analysis under Article 86 of the Treaty

27. In a number of judgments concerning Articles 30 and 36 of the Treaty the Court of Justice has considered the balancing of the concern for free movement of goods on the one hand and that of protecting intellectual property rights on the other. The Court weighs up those interests within the framework of its finding that Article 36 only admits derogation from the fundamental principle of the free movement of goods within the common market to the extent to which they are justified for the purpose of safeguarding rights which constitute the specific subject-matter of such property. (16)

28. The application of the concept of the specific subject-matter is an expression of the reasoning that for each intellectual property right it is possible to identify a number of core rights which the owner of that right enjoys under national law and whose exercise is not affected by the Treaty rules.

29. The question is whether the starting point for the balancing, pursuant to Article 86 of the Treaty, of the concern for undistorted competition on the one hand and that of protecting intellectual property rights on the other may likewise be the determination of what constitutes the specific subject-matter of that intellectual property right.

30. In its judgments the Court of First Instance answered that question in the affirmative stating: "only those restrictions on freedom of competition, free movement of goods or freedom to provide services which are inherent in the protection of the actual substance of the intellectual property right are permitted in Community law" (paragraph 69 of the RTE judgment; paragraph 54 of the ITP judgment). (17)

31. In the light of the case-law of the Court of Justice that result is correct.

In its judgment in Consten and Grundig (18) the Court of Justice ruled on the compatibility with Article 85 of the Treaty, which prohibits anti-competitive agreements, of an exercise of national trade mark rights. The Court took as its starting point Article 222 of the Treaty which provides: "This Treaty shall in no way prejudice the rules in Member States governing the system of property ownership"; it then drew a distinction between the existence of trade mark rights, which are not affected by Article 85, and the exercise of those rights, which is limited to the extent necessary to give effect to the prohibition under Article 85. The same reasoning in a slightly different formulation was put forward in the judgment in Parke, Davis which related to both Articles 85 and 86. (19)

The distinction between the existence and the exercise of intellectual property rights is reiterated in a number of judgments relating to both the competition rules and the rules on the free movement of goods. (20) It is apparent from the last-mentioned judgments that the concept of the specific subject-matter was developed for the purposes of applying that distinction. (21) An exercise of rights that falls within the specific subject-matter of an intellectual property right will relate to its existence. In other words the distinction between the existence and the exercise of rights and the application of the concept of the specific subject-matter are basically expressions of the same conceptual approach. Accordingly I consider that the distinction between the existence and exercise of rights has no independent significance for resolving specific questions of delimitation. In more recent cases concerning the free movement of goods, the Court of Justice has not considered it necessary to make express reference to that distinction. (22)

In more recent judgments on the competition rules too, the Court of Justice has expressly taken as its starting point the determination of the rights which constitute the specific subject-matter of the intellectual property right in question (see in particular its judgment in Volvo v Veng which concerned Article 86 of the Treaty). (23)

32. Thus in considering these cases the starting point must be a definition of the specific subject-matter of copyright, which is used synonymously in the Court' s case-law with the concepts of the actual substance of copyright and the essential rights of the copyright proprietor. (24)

(b) The specific subject-matter of copyright

33. In determining the specific subject-matter of copyright the Court of First Instance referred in particular to the judgment in Warner Brothers in which the Court of Justice pointed out that literary and artistic works may be the subject of commercial exploitation, whether by way of public performance or of the reproduction and marketing of the recordings made of them and held that the "essential rights of the author, namely the exclusive right of performance and the exclusive right of reproduction, are not called in question by the rules of the Treaty" (25) (paragraph 70 of the RTE judgment; paragraph 55 of the ITP judgment).

34. It is common ground that the exclusive right to reproduce the protected work forms part of the specific subject-matter of copyright.

35. RTE, ITP and IPO have criticized the judgments of the Court of First Instance for stating that the "essential function" of copyright is "to protect the moral rights in the work and ensure a reward for the creative effort" (26) (paragraph 71 of the RTE judgment; paragraph 56 of the ITP judgment). They claim that the Court of First Instance has thus departed from the definition of the specific subject-matter of copyright and has "omitted" the exclusive right to reproduce the work and its corollary, the right of first marketing.

36. That criticism of the judgments of the Court of First Instance is not justified. As the Commission has stated, the concept of the essential function (27) is different from that of the specific subject-matter. The two concepts serve different purposes. In its case-law on Articles 30 and 36 of the Treaty the Court of Justice has used the two concepts at the same time and held that in order to determine the exact scope of the rights conferred on the owner of an intellectual property right, that is in defining the specific subject-matter, regard must be had to the essential function of the right. (28)

37. There is therefore no conflict between finding that the specific subject-matter of copyright includes the exclusive right to reproduce the work and its corollary, the right of first marketing and holding that the essential function of copyright is to protect the moral rights in the work and ensure a reward for creative effort.

(c) The question whether Article 86 of the Treaty may be applied to the exercise of rights falling within the specific subject-matter of copyright

38. It is plain that a corollary of an exclusive right to reproduce the protected work is the right to refuse licences. Accordingly the right to refuse licences forms part of the specific subject-matter of copyright. That is borne out by the judgment of the Court in Volvo v Veng, (29) which concerned products protected by registered designs. The Court held:

"an obligation imposed upon the proprietor of a protected design to grant to third parties, even in return for a reasonable royalty, a licence for the supply of products incorporating the design would lead to the proprietor thereof being deprived of the substance of his exclusive right, and ... a refusal to grant such a licence cannot in itself constitute an abuse of a dominant position" (paragraph 8, emphasis added).

39. In these cases it is thus not disputed that the exercise of the exclusive right of reproduction by refusing to grant licences does not in itself constitute an abuse of a dominant position. The Commission has stressed that it agrees.

40. The central and fundamental issue in these cases is whether, and if so under what circumstances, a refusal to license ° that is the exercise of a right falling within the specific subject-matter of copyright ° notwithstanding the abovementioned premiss may constitute an abuse of a dominant position. The question is whether there may exist such special circumstances in connection with a refusal to license that it can no longer be regarded as a refusal to license in itself. If Article 86 can apply where the dominant undertaking has done no more than refuse to grant licences, but where there were special circumstances in connection with the refusal to license, the position will be that the infringement of Article 86 can be terminated only by granting licences. A requirement to grant licences signifies, as the Court ruled in Volvo v Veng, interference in rights forming part of the specific subject-matter. The copyright owner can no longer retain the exclusive right to reproduce the protected work but must content himself with charging royalties.

41. RTE and ITP, supported by IPO, claim that they did no more than refuse to grant licences and that such an exercise of rights falling within the specific subject-matter of copyright cannot be affected by Article 86.

42. The Commission contends that an exercise of rights falling within the specific subject-matter of copyright can be contrary to Article 86 where that exercise takes place under special circumstances. The Commission stresses that the specific subject-matter of copyright is not immune and that it cannot be precluded from taking action against abuse of a dominant position merely because the means for that abuse is an intellectual property right.

43. The Commission points out in particular that while it is logical to take as the starting point the case-law of the Court of Justice on Articles 30 and 36 of the Treaty, that case-law is not conclusive for an analysis under Article 86 since it is important to bear in mind that those provisions have different functions and objectives. Even if the national legislation on which the intellectual property right in question is based is compatible with Article 36, that does not rule out the possibility of Article 86 being applicable to an exercise of those rights. Articles 30 and 36 are directed to the Member States and serve to determine whether national provisions restrict the movement of goods. Article 86 is directed to dominant undertakings which, in their commercial behaviour, are subject to higher standards than other undertakings. The analyses and criteria to be applied are not the same in relation to Articles 30 and 36 and in relation to Article 86. An analysis under Articles 30 and 36 is general and applies to every case subject to the rules in question while an analysis under Article 86 only relates to a specific case in respect of which account is taken of all the special circumstances surrounding it.

44. As stated in section (a) the Court of Justice' s case-law shows that the starting point for consideration of the exercise of intellectual property rights with respect to Articles 30 and 36 of the Treaty and with respect to Article 86 of the Treaty is the same, namely that it is possible to identify a number of core rights which the owner of an intellectual property right enjoys under national law and whose exercise is not affected by the Treaty rules on the free movement of goods and undistorted competition. The question is whether a more precise formulation of that starting point is necessary in the sense that an exercise of rights may in special circumstances conflict with the Treaty rules.

45. Since the purpose of the concept of specific subject-matter is precisely to define the rights which cannot be affected by the Treaty rules, it is natural that acceptance that it is possible on the basis of Article 86 to interfere with rights forming part of the specific subject-matter at first sight gives rise to problems.

46. However, that reaction seems primarily to stem from a misconception of the Court of Justice' s application of the concept of specific subject-matter in its case-law on Articles 30 and 36. A definition of the specific subject-matter laid down by the Court is not absolute in the sense that any exercise of rights falling within the specific subject-matter is then immune from challenge under Article 30. The Court' s case-law shows first that questions may arise as to whether or not certain rights ° which are new in so far as they are not certainly covered by the Court' s definition of specific subject-matter ° are to be regarded as falling within that definition. (30) Second, the Court' s case-law also shows ° and this is most significant in the present context ° that questions may arise as to whether a right which is in principle within the scope of the specific subject-matter has been exercised under such special circumstances that that exercise creates an unacceptable obstacle to the free movement of goods and for that reason cannot be regarded as being covered by the specific subject-matter of the intellectual property right.

47. The Court' s case-law concerning Articles 30 and 36 thus shows that it is possible, and may be necessary, to specify whether a right is covered by the specific subject-matter even where it is exercised under specific circumstances. In a number of cases the Court has indicated that it may be necessary to assess whether conduct ° exercise of a right covered by the specific subject-matter ° must be denied protection because it is to be regarded as an improper exercise of a right since it may lead to artificial partitioning of the common market.

48. In a few instances the Court has formulated its judgments in such a way that such specification appears as an actual exception from ° an interference with ° a right covered by the specific subject-matter of the intellectual property right. But generally the Court approaches such situations as a matter of specifying whether a right is covered by the specific subject-matter, even when it is exercised under specified circumstances.

49. An example of a judgment falling into the former category is the case of Hoffmann-La Roche v Centrafarm, (31) in which the Court held that the essential function of a trade mark is to guarantee the origin of the product to the consumer and that a right to oppose any use of the trade mark which is likely to impair the guarantee of origin is, by extension, part of the specific subject-matter (paragraph 7). The Court further held that it is accordingly justified under the first sentence of Article 36 to recognize that the proprietor of a right is entitled to prevent an importer of a trade-marked product, following repackaging of that product, from affixing the trade mark to the new packaging without the authorization of the proprietor (paragraph 8). However, such an exercise of rights falling within the specific subject-matter may constitute a disguised restriction on trade which is contrary to the second sentence of Article 36 if it is established that the use of the trade mark right by the proprietor, having regard to the marketing system which he has adopted, for example where the same product is marketed in different packaging in different Member States, will contribute to the artificial partitioning of the market between the Member States (paragraphs 9 and 10). In those circumstances and provided that the essential function of the trade mark as a guarantee of the origin of the goods is not jeopardized in so far as the repackaging has not affected the original condition of the product, it will be contrary to Article 36 for the proprietor to exercise his right to prevent imports of repackaged goods (paragraphs 10, 11 and 12). (32)

50. The Court clearly stated why, in the event of the existence of special circumstances, it may be necessary to further specify the scope of the specific subject-matter of an intellectual property right in its judgment in Keurkoop v Nancy Kean Gifts. (33) The Court there took as its starting point the finding that "the protection of industrial and commercial property established by Article 36 would be rendered meaningless if a person other than the owner of the right to the design in a Member State could be allowed to market in that State a product which is identical in appearance to the protected design" (paragraph 22). The Court pointed out that restrictions on the free movement of goods must be justified on grounds of the protection of intellectual property and must not, in particular, constitute disguised restrictions on trade within the meaning of the second sentence of Article 36 and further held:

"Article 36 is thus intended to emphasize that the reconciliation between the requirements of the free movement of goods and the respect to which industrial and commercial property rights are entitled must be achieved in such a way that protection is ensured for the legitimate exercise, in the form of prohibitions on imports which are 'justified' within the meaning of that article, of the rights conferred by national legislation, but is refused, on the other hand, in respect of any improper exercise of the same rights which is of such a nature as to maintain or establish artificial partitions within the common market. (34) The exercise of industrial and commercial property rights conferred by national legislation must consequently be restricted as far as is necessary for that reconciliation" (paragraph 24, emphasis added).

On that basis and by reference to its consistent case-law, the Court further specified its starting point by stating that the proprietor of an intellectual property right may not rely on his rights under the legislation of a Member State in order to oppose the importation or marketing of a product which has lawfully been marketed in another Member State by, or with the consent of, the proprietor of the right or a person legally or economically dependent on the proprietor of the exclusive right (principle of exhaustion of rights). (35)

51. If the case-law of the Court of Justice concerning Articles 30 and 36 shows that its definition of specific subject-matter is not absolute in the sense that every exercise of rights falling within the specific subject-matter is immune from challenge under Article 30, it may reasonably be assumed that Article 86 can also affect rights which are in principle within the specific subject-matter if those rights are exercised in special circumstances. (36)

52. It is important here, as the Commission pointed out, that the scope of Article 30 and that of Article 86 differ in so far as Article 30 relates to all undertakings, (37) while Article 86 only applies to undertakings in a dominant position. It is undoubtedly true that in their commercial conduct undertakings in a dominant position must comply with higher standards than other undertakings. (38) Many forms of commercial conduct will, in fact, only affect the proper functioning of the common market in so far as they are engaged in by undertakings in a dominant position. (39) In other words a number of circumstances may only be of significance if the right is being exercised by a dominant undertaking. That means that a specific exercise of rights which in principle are within the specific subject-matter may be incompatible with Article 86 even if the same conduct is acceptable with respect to Articles 30 and 36.

53. For the same reason it is most appropriate to treat the restrictions imposed pursuant to Article 86 on the exercise by undertakings of their rights under national intellectual property laws as exceptions from ° interference with ° the specific subject-matter of the intellectual property right in question and not as specifying the scope of the specific subject-matter, as in an Articles 30 and 36 analysis. It should be affirmed that in principle the concept of the specific subject-matter has the same content and function in relation to the Treaty rules on the free movement of goods and on undistorted competition. It will still be lawful under the Treaty for undertakings which are not in a dominant position to exercise the rights in question since they are within the specific subject-matter of the intellectual property right concerned and since the special circumstances in question are significant for the proper functioning of the common market only if the rights are exercised by a dominant undertaking. (40)

54. The Court' s case-law confirms that it is possible to interfere with the specific subject-matter of an intellectual property right on the basis of Article 86.

55. In its judgments the Court of First Instance referred to the judgments of the Court of Justice in Volvo v Veng and CICRA v Renault (41) (paragraph 72 of the RTE judgment; paragraph 57 of the ITP judgment). It has prompted much debate in the submissions to the Court of Justice as to whether those judgments can be relied on in support of that result.

56. In its judgment in Volvo v Veng the Court held that a refusal to grant licences could not in itself constitute an abuse of a dominant position and stated:

"It must however be noted that the exercise of an exclusive right by the proprietor of a registered design in respect of car body panels may be prohibited by Article 86 if it involves, on the part of an undertaking holding a dominant position, certain abusive conduct such as the arbitrary refusal to supply spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation ..." (paragraph 9, emphasis added). (42)

57. In the first two examples the dominant undertaking has carried out other acts, apart from refusing to grant licences, which do not relate to the registered design and which are in themselves expressions of an abuse (see section (f) below on the Court' s case-law concerning the refusal to supply and see Article 86(a) on imposition of unfair prices). The characteristic feature of those situations is, as pointed out in particular by ITP, that the proprietor of the registered design can terminate the infringement of Article 86 without licensing his design, either by resuming supplies to persons who were arbitrarily refused supplies or by reducing his prices. Application of Article 86 in those circumstances does not therefore lead to interference with the specific subject-matter of the registered design. (43)

58. In the third situation the dominant undertaking has also done more than simply refuse to license, namely by refraining from producing the protected work itself, but this act is itself the exercise of a right falling within the specific subject-matter of the registered design. The exclusive right to reproduce the work thus comprises not merely the right to refuse to grant licences but also the right to determine freely if, where, when and how the protected work is to be exploited, inter alia with the aim of obtaining the greatest possible reward from it. (44) Regardless of the fact that the proprietor of the registered design may choose to terminate the infringement of Article 86 by resuming production or by granting licences, the third example in Volvo v Veng shows that the Court has accepted that it is possible pursuant to Article 86 to interfere with rights falling within the specific subject-matter of an intellectual property right.

59. It is common ground that Article 86 may apply where a dominant undertaking demands unreasonable royalties or applies a discriminatory licensing policy. As the Commission pointed out, in its judgments in Basset (45) and in Tournier, (46) the Court of Justice expressly held that the charging by a copyright management society of unreasonable royalties for the public performance of recorded musical works may constitute an abuse of a dominant position. The Commission contends that that shows that it is possible pursuant to Article 86 to interfere with rights forming part of the specific subject-matter.

60. RTE and ITP on the other hand contend that the dominant undertakings in those situations did something more than merely exercise rights falling within the specific subject-matter and that application of Article 86 does not therefore affect the specific subject-matter of copyright. It is hard to see how that something more differs from the situation in which rights within the specific subject-matter are exercised under special circumstances. In the aforesaid situations at least there is no autonomous abusive conduct which is independent of the exercise of the intellectual property right in question as was the case in the first two examples in Volvo v Veng.

61. I consider that in fact, as the Commission has argued, unreasonable royalties and a discriminatory licensing policy are examples showing that it is possible pursuant to Article 86 to interfere with rights within the specific subject-matter where those rights are exercised in special circumstances. The dominant undertaking does not do anything more than exercise rights within the specific subject-matter, namely impose royalties (47) and refuse to grant licences. But the exercise of those rights takes place under special circumstances since the undertaking demands royalties which are considerably higher than in other Member States or refuses a licence at the same time as licences are in fact given to others. Application of Article 86 to the two situations would signify interference with rights falling within the specific subject-matter since the possibility for the owner to freely determine his remuneration would be restricted and he would be required to grant a licence to the person against whom he had discriminated. There is no reason to define the charging of unreasonable royalties or operation of a discriminatory licensing policy as conduct which in general is outside the specific subject-matter of copyright and thus as conduct which might potentially be incompatible with Articles 30 and 36 since such conduct will not affect the proper functioning of the common market in so far as it is engaged in by undertakings which do not have a dominant position and which otherwise operate in accordance with usual market conditions (see Article 85). (48)

62. It follows that both in an Article 86 analysis and an Articles 30 and 36 analysis the Court must further specify whether rights which are in principle within the specific subject-matter are exercised in such special circumstances that they create unacceptable hindrances to undistorted competition or the free movement of goods.

63. The key question in these cases is, of course, when there exist such special circumstances. I shall set out my position on this point in connection with my review of the judgments of the Court of First Instance.

(d) The reasons given by the Court of First Instance for finding that it is possible to interfere with the specific subject-matter of copyright: the essential function of copyright

64. The Court of First Instance made the following remarks concerning the possibility of interfering with the specific subject-matter of copyright:

"However, while it is plain that the exercise of the exclusive right to reproduce a protected work is not in itself an abuse, that does not apply when, in the light of the details of each individual case, it is apparent that that right is exercised in such ways and circumstances as in fact to pursue an aim manifestly contrary to the objectives of Article 86. In that event, the copyright is no longer exercised in a manner which corresponds to its essential function, within the meaning of Article 36 of the Treaty, which is to protect the moral rights in the work and ensure a reward for the creative effort, while respecting the aims of, in particular, Article 86. ... In that case, the primacy of Community law, particularly as regards principles as fundamental as those of the free movement of goods and freedom of competition, prevails over any use of a rule of national intellectual property law in a manner contrary to those principles" (paragraph 71 of the RTE judgment; paragraph 56 of the ITP judgment).

65. The Court of First Instance thus reaches the right result in principle but its formulation of the grounds for that result gives rise to problems in several respects.

(aa) Conduct pursuing an aim manifestly contrary to the objectives of Article 86

66. The Court of First Instance states that the exercise of the exclusive right to reproduce a protected work constitutes an abuse when in the light of the details of each individual case, it is apparent that that right is exercised in such ways and circumstances as in fact to pursue an aim manifestly contrary to the objectives of Article 86.

67. The Court of First Instance seems, wrongly in my view, to take as its premiss that the exercise of copyright will constitute an abuse of a dominant position to the extent that it is found that that exercise pursues a manifestly anti-competitive aim. As ITP in particular has pointed out, the aim of copyright is precisely to give the proprietor the possibility of restricting competition and that possibility must also be afforded to a dominant undertaking. The Court of First Instance' s premiss seems to be that the aim pursued by Article 86 outweighs the aim of copyright. As I understand the case-law of the Court of Justice, the contrary premiss is the right one.

68. That does not of course mean that the question what aim is being pursued by the conduct in question is not relevant for the purposes of the application of Article 86. It is thus not sufficient to determine whether there is anti-competitive conduct within the meaning of Article 86 where a right within the specific subject-matter is exercised in special circumstances. In that case it is further necessary to examine whether there is actually valid justification for exercising the right in the circumstances in question or whether that exercise solely pursues aims that are manifestly contrary to Article 86 (see section (i) below).

(bb) The definition of the essential function of copyright

69. The Court of First Instance states that the essential function of copyright is to protect the moral rights in the work and ensure a reward for the creative effort while respecting the aims of, in particular, Article 86.

70. The Court of First Instance here seems to be reading the aim pursued by Article 86 into a definition of the essential function of copyright. That cannot be correct. The concept of the essential function is a concept of Community law but it is based on the national copyright laws. It is an expression of the Court of Justice' s view of the essential aim pursued by the national copyright laws and is applied, as stated below, inter alia to determine where, pursuant to Article 86, it is possible to interfere with rights within the specific subject-matter of copyright. It does not make sense therefore to incorporate the aim of the competition rules in the determination of the essential function of copyright.

71. The Court of First Instance is right, on the other hand, in stating that the essential function of copyright is to protect the moral rights in the work and ensure a reward for creative effort. As regards reward for creative efforts, that is supported, as the Court of First Instance stated, by the case-law of the Court of Justice. (49)

72. ITP has claimed that to define the essential function of copyright as including the protection of moral rights would signify that assignees of the creator, like ITP, could not avail themselves of such rights which are inalienable and thus could not exercise the right of exclusive reproduction. At the hearing, however, ITP clarified its view by stating that it can accept that the aim of copyright is to protect moral interests provided that the economic and commercial interests linked to copyright, which are the only ones that concern an assignee like ITP, are not forgotten.

73. Copyright does undeniably include economic and commercial rights. But that is of course not incompatible with the finding that copyright also includes moral rights and that the protection of those interests is so important a component of copyright that it must necessarily be taken into consideration in defining the essential function of copyright. National laws provide for the protection of moral rights even though the scope of the protection may vary from one country to another. It will however typically include protection of the author' s right to claim authorship and protection of his right to oppose any prejudicial alterations of his work. Those components of copyright are normally inalienable. (50) That characteristic of copyright law does not affect ITP' s possibility of exercising the economic and commercial rights assigned to it. (51)

74. In so far as the Court of First Instance did not alter the definition of the specific subject-matter when defining the concept of essential function (see section (b) above) the actual definition of the essential function of copyright does not otherwise appear to have been disputed in these proceedings.

75. On the other hand, ITP, RTE and IPO do criticize the use made by the Court of First Instance of the concept of essential function. They claim that in applying that concept the Court of First Instance has reduced the rights of the copyright proprietor to the right to exploit the protected work through licences.

(cc) The application of the concept of essential function

76. The Court of First Instance states that where the copyright is no longer exercised in a manner which corresponds to its essential function the primacy of Community law prevails over any use of rules of national intellectual property law contrary to the principles of the free movement of goods and freedom of competition.

77. That result is correct in principle. But it is necessary to specify in what way the concept of essential function is relevant to an Article 86 analysis.

78. I have already said that it may be assumed that Article 86 as well as Articles 30 and 36 may apply where rights within the specific subject-matter are exercised in special circumstances. The key issue is, as mentioned above, how the Court of Justice is to determine whether such special circumstances exist. It is in this context that the concept of the essential function is relevant.

79. The determination of which rights fall under the specific subject-matter depends on a balancing of on the one hand the concern of protecting the intellectual property right in question and on the other the concern for free movement of goods or undistorted competition. The question whether there exist special circumstances which signify that an exercise of rights which in principle fall within the specific subject-matter may none the less be regarded as incompatible with the Treaty rules hinges on another balancing of those factors. The concept of the essential function is an auxiliary concept which enables the Court of Justice to carry out those assessments. The purpose of defining the essential function of the right is to determine the interests that must be balanced against contrasting interests of the free movement of goods or free competition.

80. The fact that there is a balance does not signify that both interests must be given equal weight. The balance must always be in favour of the intellectual property rights. The starting point set out in the Treaty is that intellectual property rights can be exercised even if that leads to obstacles to trade or restrictions on competition. Consequently if an exercise of a given intellectual property right is necessary in order for that right to be able to fulfil its essential function, that exercise is not affected by the Treaty rules. It is only where an exercise is not necessary in order to fulfil the essential function that the interest of free movement of goods or the interest of free competition must prevail over the interest of the owner of the right to engage in that exercise.

81. However, the question of what is necessary in order that the essential function of the intellectual property right is fulfilled is not an absolute concept but a relative one.

82. It is not true, as RTE, ITP and IPO seem to fear, that interference with the right to refuse licences is justified by the mere finding that the copyright owner will be able to demand royalties and in that way obtain a reward for his creative effort.

On the contrary, the starting point for the balance carried out by the Court is precisely that rights within the specific subject-matter are regarded as necessary for the intellectual property right in question to be able to fulfil its essential function. The right of exclusive reproduction and thus the right to refuse licences is, as a first principle, necessary in order to guarantee the copyright owner a sufficient reward for his creative effort.

83. However, the presence of specified circumstances may mean that the interests of the copyright owner carry less weight or that the interests of competition carry more weight than usual. In such a situation an analysis under Article 86 may perhaps lead to the possibility of demanding royalties being regarded as sufficient to guarantee the owner a reward for his creative effort since the right to refuse licences cannot under those circumstances be regarded as necessary in order to fulfil the essential function.

84. At the same time it is clear that the concept of the essential function sets an absolute limit on what interference is possible pursuant to Article 86 in rights falling within the specific subject-matter. No such interference is possible if it would mean that the author cannot obtain a reward for his creative efforts or cannot be afforded the protection of moral rights that may be recognized by national law.

That limit would not be exceeded by a requirement to grant licences as it would be possible to demand royalties and because the author could not be precluded from taking steps against unlawful use or infringement of the protected work by the licensee and would also be able to obtain protection of his moral rights by laying down corresponding terms in the licensing agreement. (52)

85. The Court' s case-law concerning Articles 30 and 36 confirms that that is the meaning to be attributed to the essential function. (53)

The Court determines what rights are covered by the specific subject-matter on the basis of an assessment of what is necessary in order to fulfil the essential function of the intellectual property right in question. (54)

The presence of specified circumstances may, however, mean that the interests of the owner carry less weight and/or the interest of the free movement of goods carries more weight than usual and that the result of the balance is that an exercise in those circumstances is held to be incompatible with the Treaty rules. As described above in section (c), in the context of an Articles 30 and 36 analysis, such conduct will generally be defined as conduct not covered by the specific subject-matter. (55) Judgments of that nature indicate that the Court has found that an exercise of rights which are in principle covered by the specific subject-matter was not necessary in the circumstances in question in order for the intellectual property right to be able to fulfil its essential function.

However, in a number of cases the Court has also held that an exercise of rights covered by the specific subject-matter is to be regarded even in specified circumstances as necessary in order to fulfil the essential function of the intellectual property right in question. (56)

86. It was necessary to show above that in principle it is not impossible to interfere on the basis of Article 86 with a right which, according to the Court' s case-law, is covered by the specific subject-matter of copyright and in this connection to consider the significance of the concept of the essential function of copyright.

There is an inherent risk here that the impression might be given that the concept of specific subject-matter has been so relativized that it does not have any real meaning. Such a view would be wrong. Once the content of the specific subject-matter of copyright has been laid down, it is always the starting point for the Court' s analysis and it is clear that substantial and weighty grounds must be put forward to show that rights covered by the specific subject-matter of copyright can be exercised in a manner incompatible with the Treaty rules.

87. As regards in particular the right to refuse licences, it is clear that a requirement to grant licences constitutes a serious interference in copyright since it would be reduced merely to the right to receive an economic reward. There must therefore exist particularly substantial and weighty competition grounds for the right to refuse licences to be regarded as having been exercised in circumstances signifying that that exercise cannot be regarded as necessary for copyright to fulfil its essential function.

88. In the following sections I shall consider whether the circumstances cited by the Court of First Instance in its judgments as special circumstances that may justify application of Article 86 meet that condition.

(e) The emergence of a new product for which there exists a substantial potential demand from consumers

89. In its judgments the Court of First Instance stressed, as regards both RTE and ITP, that each undertaking "by reserving the exclusive right to publish its weekly television programme listings, was preventing the emergence on the market of a new product, namely a general television magazine likely to compete with its own magazine" and for which there was "potential consumer demand" (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment).

90. A clearly decisive factor for the application of Article 86 in these cases was that by their conduct RTE and ITP were preventing the emergence of a new product. No-one would doubt the fact that RTE and ITP were entitled to exercise their copyright in order to prevent the publication of television guides corresponding to their own respective guides. In its decision the Commission specified that Article 86 had been infringed in so far as the practice and policy of the undertakings prevented the publication of a comprehensive television guide and its decision must therefore be interpreted as meaning that the requirement for the undertakings to license their programme listings only applies to the extent that the listings are to be used to produce comprehensive weekly television guides. (57)

91. The interest of consumers in the emergence of a new product is undoubtedly relevant when considering whether there exists conduct restricting competition within the meaning of Article 86. The Commission has stressed that Article 86(b) provides that an abuse of a dominant position may, in particular, consist in "limiting production, markets or technical development to the prejudice of consumers". (58)

92. At first sight, therefore, there might appear to be grounds for finding that special circumstances exist which signify that the exercise of rights included in the specific subject-matter may be classified as an abuse where the exercise is carried out in order to prevent the emergence of a new product. Closer consideration shows, however, that such a conclusion is only right if the concept of a new product is qualified.

93. The first condition for there to be a new product is, of course, that the product does not exist on the relevant market. (59)

But that cannot suffice in itself in order to require a copyright owner to grant licences (see below concerning products which a proprietor could have produced himself but has for the time being chosen not to produce). In the context of the circumstances of these cases, it is necessary to consider whether, in order for a product to be regarded as new, it suffices that it is furthermore a product that the copyright owner cannot produce himself, for example because such production presupposes a licence to use works protected by the copyright of other parties. Alternatively, is the relevant criterion whether the product in question competes with the product of the copyright owner?

94. The Commission contends that in classifying a product as new it is not relevant whether it will compete with the copyright owner' s own products. (60)

95. I do not believe that the Commission' s view is tenable.

96. I consider it appropriate to find that there is an abuse of a dominant position if a copyright owner by means of his copyright prevents the emergence of a product which does not compete with his product since it meets other consumer needs than those that are met by his product.

97. The contrary is true, in my view, if copyright is used in order to prevent the emergence of a product which is produced by means of the work protected by the copyright and which competes with the products produced by the copyright owner himself. Even if that product is new and better, the interests of consumers should not in such circumstances justify interference in the specific subject-matter of the copyright. Where the product is one that largely meets the same needs of consumers as the protected product, the interests of the copyright owner carry great weight. Even if the market is limited to the prejudice of consumers, the right to refuse licences in that situation must be regarded as necessary in order to guarantee the copyright owner the reward for his creative effort.

98. RTE and ITP are not able themselves to produce a comprehensive weekly television guide. But a comprehensive weekly television guide would undoubtedly, as the Commission has stated, compete with their respective weekly television guides. A comprehensive weekly television guide would both be cheaper and give a better overview but it would basically meet the same consumer needs as may be met by buying weekly television guides for the individual television broadcasting organizations. In those circumstances the interests of the copyright proprietor should prevail over the interests of consumers. There is no new product in a sense that may be relevant for the application of Article 86 and thus no special circumstance capable of justifying interference with the specific subject-matter.

99. I also consider that the Court of First Instance was wrong to compare this situation with the situation described by the Court of Justice as the third example of abusive conduct in its judgments in Volvo v Veng and CICRA v Renault. The Court of First Instance stated:

"Moreover, the applicant' s conduct stifled the emergence on the market of a certain type of product, namely general television magazines. Consequently, in so far as it was in particular characterized, in that regard, by a failure to take consumer needs into consideration, that conduct also presented a certain similarity to a decision by a car manufacturer ... no longer to produce spare parts for certain models even though there was still a market demand for such products" (paragraph 74 of the RTE judgment; paragraph 59 of the ITP judgment).

100. This example concerns products which the copyright owner is able to produce himself on the basis of his copyright but has for the time being chosen not to produce. The example shows that there may exist an abuse of a dominant position where the owner of a registered design refuses to grant licences and at the same time does not himself produce the products protected by the registered design. As stated above, both those rights fall within the specific subject-matter of a registered design.

101. However, the example can hardly be taken to support the view that where a copyright proprietor at one and the same time does not himself produce a product and refuses to grant others licences for such products that in itself constitutes an abuse of a dominant position. It cannot be true that a dominant undertaking is under a general obligation either to produce itself or to grant licences for its products protected by copyright. Such an obligation must be conditional on the existence of special circumstances in addition to the fact that consumers do not have access to the product. (61)

It seems clear to me that the Court attached decisive importance to the fact that consumers are particularly dependent on the product where a car manufacturer refrains from producing spare parts for a particular car model even if there are still a large number of cars of that model and where the lack of access to spare parts for those cars may mean that consumers are obliged to buy a completely new car. The producer has himself created the need for spare parts and is thus abusing his registered design if by means thereof he prevents the need for spare parts from being met.

102. That example is thus different from the present situations and is not of decisive significance here since RTE and ITP have each provided consumers with the products which they were able to produce on the basis of their copyright, namely weekly television guides for their respective television channels.

(f) Use of a dominant position on one market in order to retain for itself a derivative market

103. The Court of First Instance attached significance in its judgments to the fact that: "the applicant was thus using its copyright in the programme listings which it produced as part of its broadcasting activity [in the ITP judgment: 'transferred to it by the television companies ... produced as part of the activity of broadcasting' ] in order to secure a monopoly in the derivative market of weekly television guides" (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment).

104. Those paragraphs must be understood as meaning that the market for programme listings is regarded as the main market and the market for television guides as the derivative market. They must be read in conjunction with the Commission' s decision in which it is stated that ITP and RTE each have a dominant position on one market, namely the market for their own programme listings, and use that position to retain for themselves a derivative market, namely the market for weekly television guides upon which competition could otherwise take place, particularly in relation to comprehensive weekly television guides.

105. With reference to the first example of abusive conduct given by the Court of Justice in its judgments in Volvo v Veng and in CICRA v Renault, the Court of First Instance further stated:

"In the present case, the aim and effect of the applicant' s exclusive reproduction of its programme listings was to exclude any potential competition from the derivative market represented by information on the weekly programmes ..., in order to maintain the monopoly enjoyed, through the publication of the RTE Guide [in the ITP case, TV Times], by the applicant on that market. From the point of view of outside undertakings interested in publishing a television magazine, the applicant' s refusal to authorize, on request and on a non-discriminatory basis, any third party to publish its programme listings is therefore comparable, as the Commission rightly stresses, to an arbitrary refusal by a car manufacturer to supply spare parts ° produced in the course of his main activity of car making ° to an independent repairer carrying on his business on the derivative market of automobile maintenance and repair" (paragraph 74 of the RTE judgment; paragraph 59 of the ITP judgment).

106. It is true that the fact that an undertaking makes use of its dominant position on one market in order to retain for itself a derivative market may constitute anti-competitive conduct which is incompatible with Article 86 (see for example the judgment of the Court of Justice in the Commercial Solvents case). (62) The question is, however, whether such considerations are relevant in a case concerning the exercise of intellectual property rights.

107. RTE, ITP and IPO essentially argue that it is part of a normal exercise of copyright to make use of it in order to exclude competition on a derivative market. A copyright owner will often obtain remuneration for his creative effort by producing and selling products which incorporate the product created on the basis of the copyright, that is to say on a derivative market. ITP adds that it was precisely only on the market for television guides that ITP commercially exploited its copyright in its programme listings.

108. The Commission claims that the fact that the copyright is being exercised in order to keep out any competition on a derivative market constitutes a special circumstance which may justify application of Article 86. In support of that view the Commission cites the judgments of the Court of Justice in General Motors Continental, (63) in Hugin, (64) in Télémarketing, (65) and in British Leyland, (66) which concerned the conduct of dominant undertakings in connection with the supply of services or products which only those undertakings were able to supply and which were necessary in order to carry out an activity on a derivative market.

109. The Commission has further claimed that the example from the judgments of the Court of Justice in Volvo v Veng and CICRA v Renault cited by the Court of First Instance is relevant to a decision in the present cases. According to the Commission the situation of Magill corresponds to that of an independent repairer in so far as both are dependent on the supply of products from an upstream market (in programme listings and car parts respectively) in order to carry on an activity on a derivative market (the market for television guides and the market for repairing Volvo and Renault cars respectively) where they compete with their suppliers (RTE' s and ITP' s own weekly television guides and Volvo' s and Renault' s authorized repairers respectively). The Commission concedes however that the analogy is not complete since Magill' s situation differs in so far as the supply of a product was not sufficient for Magill to be able to carry out its activity as Magill needed to obtain a licence in order to produce copies of the protected work itself.

110. That difference is precisely crucial. As RTE and ITP point out, a distinction must be drawn between a refusal to supply a product to customers who wish to use that product on a derivative market and a refusal to grant a licence to a competitor who wishes to produce and sell products incorporating the protected work. In the first case the existence of any infringement of Article 86 does not depend on whether the products concerned are protected by an intellectual property right. The analogy drawn by the Court of First Instance is therefore not apposite, nor are the judgments cited by the Commission relevant to a decision in these cases.

111. Instead, as pointed out by ITP and in contrast to what was stated by the Court of First Instance in its judgments (paragraph 74 of the RTE judgment; paragraph 59 of the ITP judgment) it is appropriate to draw an analogy with the situations at issue in Volvo v Veng and CICRA v Renault, namely that Volvo and Renault were entitled to refuse a licence to market spare parts that had been produced without Volvo' s and Renault' s approval. It should be noted that the Court of Justice did not see fit in that connection to distinguish between licences for the purpose of competing on the market for the sale of spare parts and licences for the purpose of competing on the market for repairing Volvo and Renault cars.

112. There is therefore no basis for treating the exercise by a copyright owner of his copyright in order to prevent competitors from using the protected work differently according to the market on which such use takes place. As ITP points out, the possibility of exploiting the copyright on what is described as a derivative market must be regarded as necessary in order to obtain sufficient reward for creative effort.

(g) The question of the existence of a discriminatory licensing policy or unreasonable licensing terms

113. The Court of First Instance attached significance in its judgments to the fact that "the applicant also authorized, free of charge, the publication of its daily listings and of highlights of its weekly programmes in the press in both Ireland and the United Kingdom. Moreover, it authorized the publication of its weekly listings in other Member States, without charging royalties" (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment).

114. The Commission has claimed that the first of the facts cited by the Court of First Instance was rightly taken into account in determining these cases. However, the Commission has failed to explain why that fact is relevant. Its view is presumably that the undertakings' conduct is an indication of a discriminatory licensing policy since licences are granted to certain categories of publishers, namely those who wish to publish daily programme listings or highlights of the week' s programmes, but not to other categories of publishers, namely those who wish to publish weekly programme listings. (67)

115. Such a view must be rejected however. Discrimination presupposes the existence of comparable situations. That is not the case here. On the contrary RTE and ITP precisely grant licences to anybody who wishes to have them and the same terms apply to all. The fact that the undertakings wish to reserve to themselves a certain use of the protected work cannot be an indication of discrimination.

116. In respect of the reference by the Court of First Instance to the fact that permission was granted for the publication of programme listings on a daily basis it may also be noted that Magill claimed at the hearing that these cases do not concern refusals of licences and thus do not entail the imposition of compulsory licences. Magill points out that ITP and RTE have granted a large number of licences and it claims in that context that these cases are concerned with the granting of licences on unreasonable terms, namely terms which preclude the publication of programme listings on a weekly basis. (68)

Magill further seeks to show that while the right to refuse to grant licences may possibly form part of the specific subject-matter of copyright, the same is not true of the right to set licensing terms. As shown in section (c) above, that view is incorrect. The right to grant licences also includes the right to do so on specified terms. On the other hand it may constitute a special circumstance possibly justifying interference in the specific subject-matter of the copyright if licences are granted on unreasonable terms. There has been nothing to suggest in these cases that there are any disputed terms other than the fact that the licences which are granted do not include the right to publish programme listings on a weekly basis. In view of the fact that the companies themselves publish weekly television guides, that term cannot be regarded as either discriminatory or unreasonable. That submission does not, therefore, add anything new. I do not consider that the fact that the undertakings wish to reserve for themselves the reproduction of the programme listings on a weekly basis can be any more or any less objectionable because it is found that they allow others to make a different, more restricted use of those listings.

117. As regards the second fact referred to by the Court of First Instance ° that permission was given for the publication of programme listings on a weekly basis in other Member States ° I would point out that it is apparent from the Commission' s decision that ITP, but not RTE, (69) has not sought to prevent the publication outside Ireland and the United Kingdom, namely inter alia in Belgium, the Netherlands and France, of its weekly programme listings in television guides on the ground that it has no interest in pursuing foreign-language publications, even if it is suspected that those publications may include material which, depending on local law, may infringe its copyright. A decision on such grounds to refrain from taking action against infringements of copyright cannot be assimilated to permission to publish and it is not therefore an indication of a discriminatory licensing policy. Nor does that fact appear to be otherwise significant for a decision in these cases.

(h) The question whether programme listings are works meriting protection

118. The Court of First Instance begins its discussion of the existence of an abuse by stating: "In the absence of harmonization of national rules or Community standardization, the determination of the conditions and procedures under which copyright is protected is a matter for national rules" (paragraph 66 of the RTE judgment; paragraph 51 of the ITP judgment). (70) The Court of First Instance concludes its examination on this point by finding that the conduct at issue is not compatible with the Treaty rules "although the programme listings were at the material time protected by copyright as laid down by national law, which still determines the rules governing that protection" (paragraph 75 of the RTE judgment; paragraph 60 of the ITP judgment).

119. During the proceedings before the Court of First Instance the Commission drew "attention, in general terms, to the incompatibility with Community rules of a national law which upholds the existence of copyright in programme listings" (paragraph 44 of the RTE judgment; paragraph 27 of the ITP judgment). The Commission submitted that "the programme listings are not in themselves secret, innovative or related to research. On the contrary, they are mere factual information in which no copyright could therefore subsist" (paragraph 46 of the RTE judgment: paragraph 29 of the ITP judgment). It recognized that programme listings are protected under national law but claimed, on the basis of the factors mentioned, that "the relevant policies and practices of the applicant are not covered by copyright protection as recognized in Community law" (paragraph 43 of the RTE judgment; paragraph 26 of the ITP judgment) but on the contrary constitute an abuse of a dominant position (paragraph 47 of the RTE judgment; paragraph 30 of the ITP judgment).

120. In the proceedings before the Court of Justice the Commission has stated that it is for the national authorities and courts to determine what works fall under copyright protection. At the same time, however, the Commission has stated that the Court of First Instance was right to take account of the unusual nature of the national right in deciding on the cases. (71)

121. RTE, ITP and IPO claim that both the views of the Commission and the judgment of the Court of First Instance illustrate lack of respect for the principle that the scope of copyright protection is to be determined by national law. They claim that the decisions taken were in fact intended to censure the copyright protection of programme listings under Irish and United Kingdom law.

122. It follows from the foregoing review that I do not otherwise consider that the refusals to grant licences in these cases took place under such special circumstances as to justify application of Article 86. I am therefore more inclined to endorse the undertakings' view that the actual grounds for applying Article 86 in the present circumstances must in that case be that the programme listings were not regarded as meriting protection.

123. As indicated at the outset it may reasonably be claimed that the effort involved in drawing up programme listings is not so deserving of protection as to justify acceptance that the author may prevent the emergence of comprehensive weekly television guides. The preparation of the programme listings does not require any incentive since the listings do not consist of anything more than the setting out on paper of certain information which must in any event be produced and compiled for the purposes of the television broadcasting service. If that factor is taken into consideration I see no difficulty in holding that the refusals to grant licences in these cases are indications of an improper exercise of copyright. The question is, however, whether the Court of Justice is able to attach significance to the nature of the work protected by copyright.

124. The Court of Justice has hitherto unreservedly held that it is for the national legislatures to determine what products may enjoy the protection of intellectual property rights. (72) In that respect national law is subject only to the limitations resulting from the second sentence of Article 36 of the Treaty under which restrictions on trade must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. Those limitations must be interpreted narrowly and there is nothing to suggest that they have been overstepped in these cases. (73)

125. In the present cases too the Court should adhere to that principle which, in my view, reflects a fundamentally correct division of competence between national law and Community law. If there is a need under Community law to restrict the copyright protection of specific products, that must be done by rules adopted by the Community legislature. (74)

126. It may be considered whether it is possible to affirm that principle while at the same time opening the possibility of taking account of the nature of the protected work in deciding whether there is an abuse of a dominant position. However, I cannot propose that the Court carry out such a balance even though it may be tempting and appear actually reasonable in the present cases. To accept that copyright owners must, in their commercial conduct, comply with different standards according to how deserving of protection their works are from the point of view of Community law would in any event signify that Community law is applied to censure rules in national intellectual property legislation on what products may obtain protection.

127. It must therefore be concluded that the fact that the programme listings are less-deserving of protection is also not a circumstance that can justify interference with the exercise of copyright therein.

(i) The question whether the refusals to grant licences were justified

128. In its judgments the Court of First Instance states that the "applicant' s refusal to authorize third parties to publish its weekly listings was ... arbitrary in so far as it was not justified either by the specific needs of the broadcasting sector, with which the present case is not concerned, or by those peculiar to the activity of publishing television magazines [in the ITP judgment: in so far as it was not justified by the requirements peculiar to the activity of publishing television magazines]. It was thus possible for the applicant to adapt to the conditions of a television magazine market which was open to competition in order to ensure the commercial viability of its weekly publication ..." (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment).

129. It follows from what I have said above that I do not consider that there exists, in the present cases, anti-competitive conduct within the meaning of Article 86 since the refusals to grant licences did not take place under such special circumstances that they may be classified as an abuse of a dominant position. There is accordingly no need to examine whether there is a valid justification for the undertakings' conduct (see section (d), subsection (aa) above). In those circumstances RTE and ITP, supported by IPO, are right to challenge the judgments of the Court of First Instance by pointing out that they cannot be required to justify their refusals to grant licences. However, in the event that the Court of Justice should find that the refusals to grant licences took place under special circumstances that render them liable to be classified as abusive it is necessary to consider whether there exists objective justification for such conduct. I would make the following comments.

130. ITP claims that it was not invited to justify its exercise of copyright by invoking the requirements peculiar to its activities since this was not referred to in the Commission' s decision.

131. That objection to the Commission' s decision is not tenable. It is customary in applying Article 86 first to assess whether there exists anti-competitive conduct and then to decide whether the undertaking has established that there is actually valid justification for it. (75) The Commission cannot therefore be required expressly to call on the undertaking to justify its conduct.

ITP' s submissions are, moreover, incorrect since in its decision the Commission stated:

"ITP, BBC and RTE (individually or collectively) claim that their current policies and practices with regard to their advance weekly listings are motivated by the need to ensure comprehensive high-quality coverage of all their programmes, including those of minority and/or regional appeal, and those of cultural, historical and/or educational significance. The Commission is of the opinion that these policies and practices are not necessary to achieve these aims, but can instead be achieved by less restrictive means, if necessary by imposing terms to this effect upon publishers to whom they grant licences to publish their programme listings. The Commission does note, however, that none of the parties have considered it necessary to impose any limitations on the publication by third parties of daily (or two days' ) listings in order to achieve this purpose."

132. In the proceedings before the Court of Justice, RTE and ITP have not claimed that the Commission' s view on that point is erroneous. Nor have they cited other objectively verifiable factors which in this case could justify the refusals to grant licences.

133. It may therefore be assumed, in my view, that, as the Court of First Instance held, ITP and RTE did refuse to grant licences and thus excluded all competition from the market for comprehensive television guides solely in order to secure their monopoly on the market for weekly television guides (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment). In other words, if the Court of Justice were to hold that the refusals to grant licences otherwise took place in special circumstances which are such as to render them liable to be classified as an abuse, they would be incompatible with Article 86.

(j) The further consequences of the judgment of the Court of Justice

134. The Commission claims that a distinction must be drawn between literary and artistic works in the narrow sense and functional or utilitarian works, relating for example to telecommunications, computing, information technologies and databases. Whereas the former do not create dependence for competitors on derivative markets, copyright in the latter works is more likely to create economic dependence and thus dominant positions that may lead to anti-competitive conduct. The Commission submits that the distinction is significant to a decision in these cases since it shows the need to confirm the principle that a refusal to grant licences may, in the context of the circumstances in which it took place, constitute an abuse of a dominant position. While the Commission' s decision ordering the grant of licences will not be of appreciable significance for literary and artistic works in the narrow sense, it is essential in order to maintain effective competition, particularly in the computer and telecommunications industries. (76)

135. RTE and ITP have disputed the distinction drawn by the Commission pointing out that the question of what products enjoy copyright protection is a matter for national law. But so far as I can see the Commission does not use the distinction as a basis for submitting that functional and utilitarian works are in general less deserving of protection than literary and artistic works and are therefore more susceptible to give rise to application of Article 86 (see section (i) above). The Commission in fact applies the distinction in order to illustrate the far-reaching consequences it believes annulment of the judgments of the Court of First Instance would have for competition in a number of important areas where it perceives a greater risk that copyright protection may lead to or strengthen dominant positions.

136. As regards the Commission' s fear that these cases may form a precedent in the field of computer software, ITP has claimed that the appropriate solution in that respect is legislation and that the Commission' s concerns do not, moreover, appear to relate to the reproduction of protected works but to information concerning them which does not affect the copyright.

137. ITP, for its part, has claimed if the judgments of the Court of First Instance are confirmed, it would have very far-reaching consequences for copyright under national law. ITP submits that in that case the following would all be examples of abuses of a dominant position: a writer of short stories who opposes the publication of one of his stories in an anthology; a poster artist who opposes the use of a copyright drawing in a Christmas card; the owner of the copyright in Popeye who opposes the use of Popeye on a T-shirt; a playwright who opposes the use of one of his plays for the making of a film; the owners of Sunday newspapers who oppose the publication by ITP of their feature articles at the same time in TV Times; compilers of calendars of the movements of the moon and the tides, cooking recipes or lists of Norman churches in England who oppose the reproduction thereof. IPO has submitted similar examples.

138. The Commission retorts that ITP' s and IPO' s fears of the consequences of confirmation of the judgments of the Court of First Instance are unfounded because it is highly unlikely that the copyright owners in the situations mentioned would hold dominant positions and their conduct cannot therefore be incompatible with Article 86. It adds that in the four years since the judgment of the Court of Justice in Volvo v Veng Article 86 has only once ° that is in these cases ° formed the basis for a formal decision in order to remedy an abuse of intellectual property rights.

139. It is difficult to form a view on whether the parties' respective fears as to the further consequences of a judgment in one sense or the other are justified. Not least because of the disagreement on that point, it would not be appropriate on the present basis to attempt to assess the merits of the examples given.

140. But precisely because it is not possible to foresee the consequences of such a result I consider that the Court of Justice should not, in its judgment in these cases, rule out the possibility that in special circumstances a refusal to license may be incompatible with Article 86. The Commission is right in my view in stating that "copyright law is unable to legislate explicitly for every single product-specific abuse that may arise. Countervailing policies, such as the competition rules, are essential to draw the correct balance between the interests of the right-holder and those dependent on the right-holder".

141. On the other hand the consequences of holding that refusals to license may be incompatible with Article 86 when they take place in special circumstances are not unforeseeable. In that case it would be for the Court of Justice itself in deciding future cases to lay down progressively more specific guidelines as to the special circumstances under which refusals to licence may constitute an abuse of a dominant position. Moreover, the Court, if it follows my opinion, will have held that such special circumstances do not exist in the present cases and that result will be an indication that very strict conditions apply to that way of applying Article 86 to an exercise of rights falling within the specific subject-matter of an intellectual property right.

142. Let me finally mention that ITP has claimed that confirmation of the judgments of the Court of First Instance would give rise to legal uncertainty, both for the owners of copyrights and for national courts which may also apply Article 86 and may have problems in determining whether the conditions for applying Article 86 resulting from the judgments of the Court of First Instance are met. I do not accept the view that a legal situation which presupposes ongoing further definition of the circumstances in which Article 86 may apply to exercise of rights which in principle fall within the specific subject-matter gives rise to legal uncertainty. That application of Article 86 does not differ from any other application of Article 86. (77) Moreover, national courts will be able to refer questions to the Court of Justice for a preliminary ruling on the precise circumstances in which Article 86 may apply.

143. The foregoing does not however necessarily finally resolve the question whether Article 86 constitutes a basis for requiring undertakings to grant licences for their copyright works. It has been contended in the course of these proceedings that such a result is incompatible with the Berne Convention for the Protection of Literary and Artistic Works.

E ° The question whether the Court of First Instance wrongly failed to take into consideration the Berne Convention

144. RTE and ITP claimed before the Court of First Instance that the Berne Convention must be regarded as forming part of Community law and that the Commission' s decision is incompatible with Article 9 of that Convention on the right to reproduce the protected work.

145. The Court of First Instance prefaces its assessment of that plea by stating "the Community ° to which, as Community law now stands, powers have not been transferred in the field of intellectual and commercial property (78) ° is not a party to the Berne Convention, which has been ratified by all the Member States" (paragraph 102 of the RTE judgment; paragraph 75 of the ITP judgment).

146. The Court of First Instance goes on to consider the significance of the fact that the Convention is binding on the Member States. It refers first to Article 234 of the Treaty which provides: "The rights and obligations arising from agreements concluded before the entry into force of this Treaty between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of this Treaty". It points to the Court of Justice' s interpretation of Article 234 showing that the provision affects only obligations entered into by Member States towards non-member countries and that consequently agreements concluded prior to the entry into force of the Treaty may not be relied upon in relations between Member States in order to justify restrictions on trade within the Community. (79)

147. The Court of First Instance draws a distinction between Article 9(1) of the Berne Convention which confers on the author the exclusive right of reproducing the protected work and Article 9(2) under which signatory States may permit the reproduction of protected works in certain special cases and subject to specified conditions.

148. Article 9(1) was, the Court of First Instance observes, ratified by the United Kingdom and Ireland before their accession to the Community on 1 January 1973 and, pursuant to the Court of Justice' s interpretation of Article 234, provisions which were ratified before accession to the Community cannot, in intra-Community relations, affect the provisions of the Treaty. The Court of First Instance found that the plea that the decision was in conflict with Article 9(1) could be dismissed on that ground alone.

As regards Article 9(2), the Court of First Instance points out that that provision was inserted in the Berne Convention by the Paris Act of 1971 to which the United Kingdom has been a party only since 2 January 1990 and which has not been ratified by Ireland. It observes, as far as the United Kingdom is concerned, that the Paris revision was ratified subsequent to its accession to the Community and that consequently Article 9(2) cannot affect a provision of the Treaty since the Member States may not set aside the Treaty rules merely by concluding an international agreement but must use the Treaty amendment procedure provided for in Article 236 of the Treaty.

The Court of First Instance therefore concludes that in any event the plea based on infringement of the Berne Convention must be dismissed as unfounded.

149. I believe it is correct, as will be shown below, that the Berne Convention cannot be a basis for annulling the Commission' s decision. However, in two respects it is expedient to clarify and expand upon the reasons given by the Court of First Instance.

150. First of all, the Court of First Instance was wrong in the present context to distinguish between Article 9(1) and Article 9(2) of the Convention. Secondly, and more importantly in my view, it failed to consider the significance which the Berne Convention may have for the interpretation of Article 86 of the Treaty.

151. The Court of First Instance treated Article 9(1) and Article 9(2) of the Berne Convention differently because it assumed that Article 9(1) had become binding for the United Kingdom and Ireland before their accession to the Community while that was not the case for Article 9(2). That premiss is, according to the information I have been able to obtain, erroneous. (80) Articles 9(1) and (2) were inserted in the Berne Convention in the context of the revision of that Convention in Stockholm in 1967. However, like the other substantive provisions resulting from the Stockholm revision those provisions did not enter into force. They were revised by the Paris Act and it was therefore in connection with the ratification of the P