III —

I thus come to the crux of the present case: in the absence of a Community system protecting consumers and guaranteeing “fairness” of competition, who are the authorities entrusted with applying the terms “similarity of trade-marks”, “'similarity of products” and “risk of confusion” and how is it to be guaranteed that the criteria according to which they are adopted should be uniform? Following the precedent set by your judgment of 4 December 1974 in Case 41/74, Van Duyn [1974] ECR at p. 1350, ground 18) I think that in the absence of any Community implementing legislation it is, in general, for the authorities of the Member States to decide the extent to which they intend to guarantee the protection of trade-marks and in particular to decide the degree of similarity or resemblance required for the simultaneous presence of two products covered by trade-marks on the same market to risk causing confusion. What you said with regard to the concept of public policy appears to me to be applicable to the protection of trade-marks: “the particular circumstances justifying recourse to the concept of public policy may vary from one country to another and from one period to another, and it is therefore necessary in this matter to allow the competent national authorities an area of discretion within the limits imposed by the Treaty”. You returned to this consideration in your judgment of 28 October 1975 in Case 36/75, Rutili [1975] ECR at p. 1231, ground 26): “Member States continue to be, in principle, free to determine the requirements of public policy in the light of their national needs”. As for the criteria for judging the risk of confusion it must be observed that they vary from country to country: “truth this side of the Pyrenees, error beyond”. In France imitation is judged having regard to “the averagely observant buyer who does not have the two trade-marks simultaneously before him”; further in that country the principle of the “speciality of the trade-mark” is adopted. In Great Britain the criterion is the “honest concurrent user”. Assessing the risk of confusion is sometimes a question of pure fact and sometimes a complex problem in which questions of fact and law are mingled. In France, according to the formula adopted by the Cour de Cassation, the courts trying the issue are sovereign in assessing the risk of confusion: “the court has only made use of its sovereign power of assessment in deciding that this resemblance was such as to cause confusion in the mind of the averagely abservant consumer who does not have the two trade-marks simultaneously before him”. In other countries of the Community, on the contrary, it is a matter subject to review even if its application to the particular case requires, as a preliminary, that certain facts should be found and classified. In German law the risk of confusion is a matter of law subject to review by the Bundesgerichtshof. Other courts are much more exigent in requiring proof of risk of confusion. I shall cite two examples: — The Supreme Court of Ireland decided on 1 May 1967 that the American company Sterling Winthrop which had acquired the Irish subsidiary of Farben-Fabriken Bayer A.G. and the trade-mark Bayer in circumstances similar to that of Van Zuylen with regard to the trade-mark Hag, could not obtain an injunction prohibiting the German company from selling in Ireland the products covered by the trade-mark “Bayer Germany” since there was no risk of confusion in the mind of the public between the products of the American company marked “Bayer” and those of the German company marked “Bayer Germany” in view of the fact that the latter qualification was clearly shown and the packaging was different. — In the United Kingdom Mr Justice Graham decided (High Court of Justice, Chancery Division, Sirdar Ltd. v. Les Fils de Louis Mulliez,19 March 1975), in a case in many respects similar to the present, that prima facie there was no likelihood of confusion between the trade-marks Sirdar and Phildar placed on an identical product (knitting wool) since, apart from the United Kingdom, these trade-marks had never competed against one another. He advised the parties to settle their differences amicably on the basis of the principle “live and let live” by adding if necessary an additional distinctive feature to their trade-mark. Is it not conceivable that a prohibition does not benefit from the derogation in Article 36 when industrial and commercial property can be protected just as effectively by measures which restrict Community trade less than a radical prohibition on marketing? You have been very exigent in this respect in the sphere of public health: you have just decided in the de Peijper case on 20 May 1976 that it is for the national authorities clearly to prove that any other rules or practices protecting public health as effectively and less restrictive of intra-Community trade would obviously be beyond the means which can reasonably be expected of an administration operating in a normal manner. In a sphere akin to that with which we are concerned, designations of origin, you said (Case 8/74, Dassonville [1974] ECR at p. 852, ground 6) that if a Member State takes measures to prevent unfair practices in connexion with the requirement of the authenticity of designations of origin, “it is however subject to the condition that these measures should be reasonable and that the means of proof required should not act as a hindrance to trade between Member States”. With regard to trade-marks you decided in Case 192/73, Hag [1974] ECR at p. 744, ground 14) that “whilst in such a market the indication of origin of a product covered by a trade-mark is useful, information to consumers on this point may be ensured by means other than such as would affect the free movement of goods”. Is this the case as regards the fight against unfair competition? In particular, faced with the restrictive nature of the exceptions recognized by Article 36 to the fundamental principle of free movement is a simple risk of confusion sufficient, even though indirect? Does Article 36 justify a measure prima facie useful from the point of view of protection of commercial property, but having restrictive characteristics explicable, at least in part, by the fact that having regard to the multiplicity of possible conflicts or clashes between the trade-marks the court wishes to reduce the complexity of its task and to spare itself the task, which is always difficult, of taking evidence on actual confusion by presuming the existence of such a risk? It is not conceivable that the additional work involved in inquiring as to the existence of actual confusion might not obviously be beyond the means which can reasonably be expected of a court operating in a normal manner? Moreover in this sphere courts are often inclined to underestimate the consumer's perceptive capability and the reasoning on the part of the industry in trade-marked products serves only to camouflage interests in respect of price and distribution. Far from simply providing a guarantee of origin the trade-mark is then used to guarantee the reputation acquired by a product and to prevent the distribution of a similar product the competition from which on the market would be dangerous. Assuming that it is justified to prohibit Terrapin from trading in Germany under its trade-mark and commercial name, it could therefore be unduly harsh not to allow it to make arrangements other than those implying a pure and simple renunciation of its present trade-mark. Would it not be possible to provide for the addition of a distinctive sign to enable the products to be distinguished? Two similar trade-marks could therefore be followed or preceded by another sign indicating their respective sources as the Commission suggested in the administrative procedure which it instituted against the company Sirdar (letter of 10 February 1975, produced as Annex IV to the application in Case 34/75). On the other hand it may be maintained that according to the provisions of the Treaty it is not the free movement of trade-marks but of goods which is required. This freedom of movement may not, however, completely disregard trade-mark law, especially as today products are often inseparable from trade-marks; in any event this is the direction in which the efforts of traders tend, even those who sell so-called “free” products. It is true the company Terrapin could export its products to Germany under another trade-mark in the same way as did Hag Bremen at one time before the Luxembourg court referred to you the dispute between it and Van Zuylen. But from the point of view of the British company would not the use of a different trade-mark deprive it in its turn of the benefit of its publicity since it would not be able to export the products as they are sold in its own country? In its decision of 5 March 1975, Sirdar - Phildar (OJ L 125 of 16. 5. 1975, p. 27) the Commission considered that the restriction on competition resulting from the agreement to divide the markets between the two competitors is not removed by the fact that the French company can under the agreement export knitting wool to the United Kingdom under a trademark other than Phildar. But I do not think that you have jurisdiction to settle these questions under Article 177 of the Treaty: the assessment of what is necessary for the purpose of protecting consumers and the fight against unfair competition is, in my opinion, primarily for the national authorities.