4.

The previous decisions relied upon by Harlequin and Simons do not appear to me to be conclusive. The Yaounde Convention of 1963, which was the subject of the Bresciani case, was not based on reciprocity. On the contrary, by that Convention the Community assumed a number of unilateral obligations vis-à-vis certain African States and Madagascar. That “imbalance” did not therefore prevent recognition that some of the provisions of the Convention had “direct effect”. Moreover, that case concerned the interpretation of the words “charges having an effect equivalent to customs duties” used in Article 2 (1) of the Convention by comparison with those of Article 13 (2) of the Treaty and not the expression “measures having an effect equivalent to quantitative restrictions”. In that regard provisions of the Convention referred expressly to Article 13 of the Treaty of Rome. In other words, the Member States had intended to assume the same obligations towards the African States and Madagascar as they had assumed towards each other and it was as a result of that reference that the Court was able to hold that the provision conferred personal rights on individuals. On the other hand, in its judgment of 12 December 1972 in the International Fruit case cited above, the Court held that Article XI of the General Agreement on Tariffs and Trade, a provision which also concerns the elimination of quantitative restrictions, was not capable of conferring on citizens of the Community rights which they could invoke before the courts. By way of contrast to that case, the issue in this case is not whether, just as Community law prevails in principle over national law, international commitments entered into by the Community take precedence over the acts of its institutions (for example, a regulation of the Council of Ministers), but whether commitments entered into by the Community with non-member countries must be regarded by the national courts as being of the same nature and having the same scope as those entered into by the Member States inter se, in other words whether the classical international legal order is identical to the Community internal legal order. Everyday reality shows that that is unfortunately not so. In the closely-related field of the protection of trade-mark rights, the judgments of the Court contain statements which are unequivocal. In its judgment of 15 June 1976 in Case 51/75 EMI Records Limited [1976] ECR 811 (in particular at pp. 845 and 846, paragraphs 8 and 11) given in response to a reference from the High Court of Justice, the Court held that the rule contained in Article 30 et seq. of the Treaty applied within the common market but was not to be extended to relations with non-member countries. Consequently, the exercise of a trademark right in order to restrict the marketing of products from those countries does not affect the free movement of goods between Member States and is therefore not caught by the prohibitions contained in Article 30 et seq., because the unity of the common market is not placed in jeopardy. It is not contrary to the Treaty for the proprietor of a trade mark to institute legal proceedings in a Member State of the Community in order to restrain the parallel importation of products bearing that mark from a non-member country. In its judgment of 31 October 1974 in Case 15/74 Centrafarm [1974] ECR 1147, the Court held that “in relation to patents, the specific subject-matter of the industrial property is the guarantee that the patentee, to reward the creative efforts of the inventor, has the exclusive right to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties, as well as the right to oppose infringements” (paragraph 9 at p. 1162). That decision was intended to prevent an obstacle to the free movement of goods arising out of the existence of national provisions to the effect that an industrial or commercial property right “is not exhausted” when the protected product is marketed, with the result that the owner could prevent the importation of the product when it had been marketed elsewhere. Applied to this case, that reasoning might lead to the view that if the recordings imported into the United Kingdom were indeed lawfully manufactured and marketed in Portugal with the consent of the composers or the persons entitled through them, payment of the fee for the granting of the right to put the recordings into circulation for the first time constitutes sufficient “reward” for the creative effort of the composers and the consideration for the exclusive rights granted. Thus the legitimate exercise of the copyright would be “exhausted” once the recordings had been placed on the market in Portugal and the “essence” of the right would not be affected by the free marketing thereof in the United Kingdom. However, such a view would completely undermine the basis of contracts granting exclusive licences of industrial or commercial property rights. The fee paid to RSO by Phonogram and Polygram Discos was for the exploitation of the rights of reproduction on the Portuguese market. If RSO, in possession of all the facts, had known that the recordings marketed with its consent in Portugal could be freely imported into the United Kingdom and into the other Member States, it would certainly have required much greater consideration. Similarly, if the United Kingdom licensee, Polydor, had been able to foresee that the exclusive right commercially to exploit the muscial work in the United Kingdom would be “exhausted” by its being placed on the Portuguese market, the company would never have agreed to pay a further fee for the right to manufacture and sell the recording in the United Kingdom. Consequently, the value placed on an industrial or commercial property right and the size of the “reward” for the efforts of the “inventor” and of the person who first puts into circulation the product manufactured from the invention (a reward and value which are part of the “specific subject-matter” or “essence” of the right) depend on the size and nature of the market on which the product may be distributed. The doctrine of “exhaustion” has been developed solely in the context of relations between Member States in order to achieve complete freedom of movement. It presupposes inter alia that freedom to provide services (judgment of 20 January 1981 in Joined Cases 55 and 57/80 Musik-Vertrieb membran v GEMA [1981] ECR 147, paragraph 25 at p. 165) and, I would add, freedom of establishment are achieved at the same time. It scarcely needs to be stated that the freedom of trade provided for by the Agreement between the EEC and Portugal is not accompanied by the achievement of those other freedoms, which are essential for the establishment of a common market. Even if the marketing or manufacture of the recordings in question arose, both in the common market and in the non-member country, from the activities of undertakings which were all subsidiaries of a single undertaking, even one established in a Member State, that common origin would be significant only if the copyrights in question coexisted on the territory of the common market, because in such a case the exercise of those rights would be capable of partitioning the market. Whilst the principle of the territoriality of copyright no longer exists within each of the Member States, it continues to exist in the Community's relations with non-member countries.