Judgment of the Court (Fifth Chamber) of 20 March 1997. - Phytheron International SA v Jean Bourdon SA. - Reference for a preliminary ruling: Tribunal de commerce de Pontoise - France. - Articles 30 and 36 of the EC Treaty - Trade Mark Directive - Plant health product - Parallel import - Exhaustion. - Case C-352/95.



European Court reports 1997 Page I-01729



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 Preliminary rulings - Jurisdiction of the Court - Limits - Presentation during the procedure before the Court of facts which differ from those described in the order for reference - Obligation of the Court to abide by the facts as stated in the order for reference

(EC Treaty, Art. 177; EC Statute of the Court of Justice, Art. 20)

2 Free movement of goods - Exceptions - Existence of directives for approximation - Effects - Trade mark protected by national law where the product is put on the market in a Member State by the trade mark owner or with his consent - Assessment in the light of Directive 89/104

(EC Treaty, Arts 30 and 36; Council Directive 89/104, Art. 7)

3 Acts of the institutions - Directives - Implementation by the Member States - Need to ensure the effectiveness of directives - Obligations of national courts

4 Approximation of laws - Trade marks - Directive 89/104 - Product from a non-member country put on the market in a Member State by the trade mark owner or with his consent - Lawful acquisition by an independent trader - Importation, without processing or changing the packaging, into another Member State - Trade mark rights in both Member States held by the same group - Opposition to importation by the trade mark owner - Not permissible, by reason of the principle of exhaustion of trade mark rights

(EC Treaty, Arts 30 and 36; Council Directive 89/104, Art. 7(1) and (2))

Summary

5 In answering a question referred to it for a preliminary ruling, the Court cannot base its ruling on facts mentioned in the course of the proceedings which differ from those in the order for reference. If it did so, it would have to address a question of principle which it has not yet had occasion to decide, on the basis of facts which required clarification to enable a proper answer to be given. Moreover, where the question referred raises an important point on the extent of the rights which a trade mark owner may derive from the mark, and the owner, not being a party to the main proceedings, cannot put his arguments to the Court, there are specific reasons why the Court should not depart from the facts as stated in the order for reference. In any event, to alter the substance of questions referred for a preliminary ruling would be incompatible with the Court's function under Article 177 of the Treaty and with its duty to ensure that the Governments of the Member States and the parties concerned are given the opportunity to submit observations under Article 20 of the Statute of the Court, bearing in mind that, under that provision, only the order of the referring court is notified to the interested parties.

6 Article 7 of the First Trade Mark Directive 89/104 is worded in general terms and comprehensively regulates the question of the exhaustion of trade mark rights for products traded in the Community, so that national rules on the point must be assessed in relation to that provision and not Articles 30 and 36 of the Treaty, it being understood, however, that, like any secondary legislation, the directive itself must be interpreted in the light of the Treaty rules, in this case those on the free movement of goods.

7 When applying national law, whether adopted before or after a directive, the national court which has to interpret that law must do so, as far as possible, in the light of the wording and the purpose of the directive so as to achieve the result which the directive has in view.

8 Article 7 of the First Trade Mark Directive 89/104, which is framed in terms corresponding to those used by the Court in judgments which, in interpreting Articles 30 and 36 of the Treaty, have recognized in Community law the principle of exhaustion of the rights conferred by a trade mark, must be interpreted as precluding application in one Member State of a national rule under which the owner of a trade mark may prevent importation of a product protected by the mark where

- the product has been manufactured in a non-member country,

- it has been imported into a second Member State by the owner of the mark or by another company in the same group as the owner of the mark,

- it has been lawfully acquired in the second Member State by an independent trader, who has exported it to the first Member State,

- it has not been processed and the packaging has not been changed, apart from the addition to the label of certain information to comply with the requirements of the legislation of the Member State of import, and

- the trade mark rights are held in both Member States by the same group.

First, the principle of exhaustion laid down in Article 7 applies where the owner of the trade mark in the State of import and the owner of the mark in the State of export, although different persons, are economically linked, for example as subsidiaries of the same group. Second, it is of no importance whether or not the product protected by the mark has been manufactured in a non-member country if it has in any event been lawfully put on the market, in the Member State from which it has been imported, by the owner of the mark or with the owner's consent, including marketing by another company in the same group as the owner. Finally, the mere addition on the label of information of the kind described above cannot constitute a legitimate reason for the trade mark owner to oppose the further commercialization of the products within the meaning of Article 7(2) of the directive, provided that the label so altered does not omit important information or give inaccurate information and its presentation is not liable to damage the reputation of the trade mark and that of its owner.

Parties

In Case C-352/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Tribunal de Commerce (Commercial Court), Pontoise, France, for a preliminary ruling in the proceedings pending before that court between

Phytheron International SA

and

Jean Bourdon SA,

on the interpretation of Articles 30 and 36 of the EC Treaty,

THE COURT

(Fifth Chamber),

composed of: J.C. Moitinho de Almeida, President of the Chamber, C. Gulmann (Rapporteur), D.A.O. Edward, J.-P. Puissochet and M. Wathelet, Judges,

Advocate General: F.G. Jacobs,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

- Phytheron International SA, by Lise Funck-Brentano, of the Paris Bar,

- the French Government, by Catherine de Salins, Deputy Director in the Legal Affairs Department of the Ministry of Foreign Affairs, and Philippe Martinet, Secretary for Foreign Affairs in that Ministry, acting as Agents,

- the Commission of the European Communities, by Berend Jan Drijber, of its Legal Service, and Jean-Francis Pasquier, a national civil servant seconded to that service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Phytheron International SA, the French Government and the Commission at the hearing on 12 September 1996,

after hearing the Opinion of the Advocate General at the sitting on 24 October 1996,

gives the following

Judgment

Grounds

1 By judgment of 3 October 1995, received at the Court on 15 November 1995, the Tribunal de Commerce (Commercial Court), Pontoise, France, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation of Articles 30 and 36 of that Treaty.

2 Those questions were raised in proceedings between the French companies Phytheron International SA (hereinafter `Phytheron') and Jean Bourdon SA (hereinafter `Bourdon'), concerning the cancellation by the latter of a contract concluded between them in 1994 for the purchase by Bourdon of 3 000 litres of a plant health product, Previcur N, imported from Germany but originally from Turkey.

3 Bourdon cancelled its order before delivery, claiming that the consignment of Previcur N could not be marketed in France without the agreement of the trade mark owner, who apparently intended to refuse consent. Phytheron thereupon brought an action for damages against Bourdon in the Tribunal de Commerce, Pontoise, on the ground of wrongful termination of the contract.

4 Before that court, Bourdon argued that in French law imports of products from non-member countries are unlawful if they have not been authorized by the proprietor of the trade mark covering the goods. In the present case, it had formed the conclusion that if the contract had been performed, it would have risked being sued for infringement, since the proprietor of the mark had not authorized the marketing of the consignment in question.

5 Phytheron argued that under Community law, when a product is lawfully imported and marketed in a Member State, it enjoys the benefit of free movement within the European Union. Since at the material time the Federal Republic of Germany applied the system of international exhaustion of the trade mark owner's rights, the consignment of Previcur N at issue, having been lawfully imported into and marketed in Germany, had thus acquired the right of free movement within the European Union.

6 In those circumstances, the Tribunal de Commerce, Pontoise, stayed proceedings and referred the following questions to the Court:

`1. Can a product which is covered by a protected trade mark and which is lawfully acquired by a trader of Member State A in Member State B, where it is approved and marketed under the same trade mark, be lawfully imported from Member State B and marketed in Member State A when the product in question:

- is a genuine product which has not undergone any processing;

- has not undergone any alteration in packaging, save for the addition on the label of a number of statements designed to comply with the legislative requirements of Member State A; and

- is also approved in Member State A?

2. Does a prohibition based on the trade mark legislation of Member State A infringe Article 30 of the Treaty?'

7 For a proper answer to be given to those questions, they must, as the French Government and the Commission have observed, be set in their legal and factual context.

8 According to the order for reference, Bourdon argued before the national court that, by virtue of the principle of the territoriality of trade marks in French law, the proprietor of a mark may, in the absence of authorization by him, prevent his products from being imported from a non-member country, and the purpose of the national court's questions is therefore to ascertain whether Article 30 of the Treaty, which prohibits measures having equivalent effect to quantitative restrictions on imports, precludes application of such a rule of national law.

9 Again according to the order for reference, it is common ground that the product which was the subject of the contract at issue was manufactured in Turkey, where Schering, a company incorporated under German law and belonging to the German Hoechst group, has it manufactured by another subsidiary before importing it into Germany.

10 However, during the proceedings before the Court, it was stated that the place of manufacture of the product in question was in fact Germany, from where it was thereafter exported to Turkey, and that the batch at issue had been acquired there from a Turkish subsidiary of the German Hoechst group by an independent trader, who then sold it to Phytheron.

11 For the reasons set out in paragraphs 12 to 14 below, the Court in the present case can answer the national court's questions only on the basis of the facts as they appear from the order for reference.

12 Were the Court to base its ruling on the facts mentioned in course of proceedings before it, the very substance of the problem raised by the questions referred would be changed. It would then have to address a question of principle which it has not yet had occasion to decide, on the basis of facts which required clarification to enable a proper answer to be given.

13 Furthermore, in the context of proceedings raising an important point on the extent of the rights which a trade mark owner may derive from the mark, there are specific reasons why the Court should not depart from the facts as stated in the order for reference, given that the owner of the mark, not being a party to the main proceedings, cannot put his arguments to the Court.

14 Finally, to alter the substance of questions referred for a preliminary ruling would be incompatible with the Court's function under Article 177 of the Treaty and with its duty to ensure that the Governments of the Member States and the parties concerned are given the opportunity to submit observations under Article 20 of the EC Statute of the Court, bearing in mind that, under that provision, only the order of the referring court is notified to the interested parties (see inter alia the judgments in Joined Cases 141/81 to 143/81 Holdijk and Others [1982] ECR 1299, paragraph 6, and Case C-178/95 Wiljo v Belgium [1997] ECR I-0000, paragraph 30).

15 Moreover, the national court does not state expressly who is the proprietor, in Germany and France, of the trade mark in question. However, it follows implicitly from the order for reference that the mark is owned by companies belonging to the German Hoechst group, both in Germany and in France, and that it was the owner of the mark or another company in the same group which marketed the product in Germany.

16 As to the rules applicable in France at the material time, as the French Government observes, Article L.713-4 of the Code de Propriété Intellectuelle (Code of Intellectual Property) transposed into French law Article 7 of the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1, hereinafter `the Trade Mark Directive'), which provides:

`1. The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.

2. Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialization of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.'

17 It should be noted that, according to the Court's case-law, Article 7 of the Trade Mark Directive is worded in general terms and comprehensively regulates the question of the exhaustion of trade mark rights for products traded in the Community, and that where Community directives provide for the harmonization of measures necessary to ensure the protection of the interests referred to in Article 36 of the Treaty, any national measure relating thereto must be assessed in relation to the provisions of that directive and not Articles 30 and 36 of the Treaty (see Joined Cases C-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb and Others [1996] ECR I-3457, paragraphs 25 and 26).

18 The national court's questions must therefore be understood as relating to Article 7 of the Trade Mark Directive, given that the Court has already held that that article is to be interpreted in the light of the Treaty rules on the free movement of goods (Bristol-Myers Squibb, paragraph 27), and that when applying national law, whether adopted before or after the directive, the national court which has to interpret that law must do so, as far as possible, in the light of the wording and the purpose of the directive so as to achieve the result which the directive has in view (see Joined Cases C-71/94, C-72/94 and C-73/94 Eurim-Pharm [1996] ECR I-3603, paragraph 26).

19 In those circumstances, the questions put by the national court, which should be answered together, seek in substance to ascertain whether Article 7 of the Trade Mark Directive precludes application of a national rule in Member State A under which the proprietor of a trade mark may prevent importation of a product protected by the mark where

- the product has been manufactured in a non-member country,

- it has been imported into Member State B by the owner of the mark or by another company in the same group as the owner of the mark,

- it has been lawfully acquired in Member State B by an independent trader, who has exported it to Member State A,

- it has not been processed and the packaging has not been changed, apart from the addition to the label of certain information to comply with the requirements of the legislation of the Member State of import, and

- the trade mark rights are held in Member States A and B by the same group.

20 Firstly, Article 7(1) of the Trade Mark Directive is framed in terms corresponding to those used by the Court in judgments which, in interpreting Articles 30 and 36 of the Treaty, have recognized in Community law the principle of exhaustion of the rights conferred by a trade mark. It thus reiterates the case-law of the Court to the effect that the owner of a trade mark protected by the legislation of a Member State cannot rely on that legislation to prevent the importation or marketing of a product which has been put on the market in another Member State by him or with his consent (see Bristol-Myers Squibb, paragraph 31).

21 As far as the case before the national court is concerned, the following two points must be made:

- the principle of exhaustion of rights laid down in Article 7 applies where the owner of the trade mark in the State of import and the owner of the mark in the State of export are the same or where, even if they are different persons, they are economically linked, for example as subsidiaries of the same group (see Case C-9/93 IHT Internationale Heiztechnik v Ideal-Standard [1994] ECR I-2789, paragraphs 34 and 37), and

- it is of no importance for the application of Article 7 of the Trade Mark Directive whether or not the product protected by the mark has been manufactured in a non-member country if it has in any event been lawfully put on the market, in the Member State from which it has been imported, by the owner of the mark or with the owner's consent, including marketing by another company in the same group as the owner.

22 Secondly, in accordance with the Court's case-law on Articles 30 and 36 of the Treaty (see Bristol-Myers Squibb, paragraphs 40 and 41), Article 7(2) of the Trade Mark Directive provides that the principle of exhaustion of rights does not apply where there are legitimate reasons for a trade mark owner to oppose the further commercialization of the products, in particular where the condition of the products has been changed or impaired since they were put on the market.

23 On this point, it suffices to note that, as the Court has held, the mere addition on the label of information of the kind described in the national court's question cannot constitute a legitimate reason within the meaning of Article 7(2) of the Trade Mark Directive, provided that the label so altered does not omit important information or give inaccurate information and its presentation is not liable to damage the reputation of the trade mark and that of its owner (see Bristol-Myers Squibb, paragraphs 65, 75 and 76).

24 The answer must consequently be that Article 7 of the Trade Mark Directive is to be interpreted as precluding application of a national rule in Member State A under which the owner of a trade mark may prevent importation of a product protected by the mark where

- the product has been manufactured in a non-member country,

- it has been imported into Member State B by the owner of the mark or by another company in the same group as the owner of the mark,

- it has been lawfully acquired in Member State B by an independent trader, who has exported it to Member State A,

- it has not been processed and the packaging has not been changed, apart from the addition to the label of certain information to comply with the requirements of the legislation of the Member State of import, and

- the trade mark rights are held in Member States A and B by the same group.

Decision on costs

Costs

25 The costs incurred by the French Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT

(Fifth Chamber),

in answer to the questions referred to it by the Tribunal de Commerce, Pontoise, by judgment of 3 October 1995, hereby rules:

Article 7 of the First Council Directive (89/104/EEC) of 21 December 1988 to approximate the laws of the Member States relating to trade marks is to be interpreted as precluding application of a national rule in Member State A under which the owner of a trade mark may prevent importation of a product protected by the mark where

- the product has been manufactured in a non-member country,

- it has been imported into Member State B by the owner of the mark or by another company in the same group as the owner of the mark,

- it has been lawfully acquired in Member State B by an independent trader, who has exported it to Member State A,

- it has not been processed and the packaging has not been changed, apart from the addition to the label of certain information to comply with the requirements of the legislation of the Member State of import, and

- the trade mark rights are held in Member States A and B by the same group.