9.

In the judgment in Commission v United Kingdom (cited above, paragraphs 16 to 21), as in the judgment in Commission v Italy ( 6 ) given on the same day (paragraphs 12 to 17), the Court delineated the framework -within which this question must be considered: ‘As Community law stands the provisions on patents have not yet been the subject of unification at Community level or in the context of approximation of laws. In that respect, it must be pointed out that, as stated above, the Community Patent Convention has not yet entered into force. In those circumstances it is for the national legislature to determine the conditions and rules regarding the protection conferred by patents. However, the provisions of the Treaty, and in particular Article 222 according to which the Treaty in no way prejudices the rules in Member States governing the system of property ownership, cannot be interpreted as reserving to the national legislature, in relation to industrial and commercial property, the power to adopt measures which would adversely affect the principle of free movement of goods within the Common Market as provided for and regulated by the Treaty. First, the prohibitions and restrictions on imports justified on grounds of the protection of industrial and commercial property are allowed by Article 36 of the Treaty only subject to the express proviso that they do not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. Secondly, as the Court has consistently held, Article 36 only admits derogations from the fundamental principle of the free movement of goods within the Common Market to the extent to which such derogations are justified for the purpose of safeguarding rights which constitute the specific subject-matter of such property (Case C-10/89 CNLSUCAL v HAG [1990] ECRI-3711, paragraph 12). In the case of patents, the specific subject-matter of the industrial property is, in particular, the exclusive right for the patent proprietor to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties, as well as the right to oppose infringements (Case 434/85 Allen and Hanburys v Generics [1988] ECR1245, paragraph 11).’ It must further be observed — see also Allen and Hanburys, paragraphs 12 and 13, — that in the case of a patent endorsed ‘licences of right’ the substance of the patent proprietor's exclusive right is particular. It is clear from the provisions of the Patents Act 1977 that in the United Kingdom the proprietor of such a patent cannot oppose the grant of such a licence to a third party who pays a fair return for it. However, it likewise appears from the abovementioned case-law of the House of Lords and from the way in which the Comptroller exercises his discretion on the basis of that case-law that the patent proprietor can nevertheless oppose the importation by the licensee of the patented product from outside the Community where the patent proprietor manufactures the product in the United Kingdom. In the light of this reference framework I shall now consider whether the practice adopted by the Comptroller in exercising his discretion is compatible with Articles 30 and 36 of the EEC Treaty.