Opinion of Mr Advocate General Mischo delivered on 28 April 1988. - Thetford Corporation and others v Fiamma SpA and others. - Reference for a preliminary ruling: Court of Appeal (England) - United Kingdom. - Protection of industrial and commercial property - Patents - Free movement of imported goods. - Case 35/87.



European Court reports 1988 Page 03585



Opinion of the Advocate-General

Mr President,

Members of the Court,

1. This request for a preliminary ruling relates to a patent infringement action in which Thetford

Corporation (USA) and Thetford (Aqua) Products Ltd (UK) (which I will refer to as Thetford)

are suing Fiamma SpA and Fiamma UK (which I will refer to as Fiamma). The latter are,

respectively, the manufacturers in Italy and the importers into the United Kingdom of portable

toilets patented by Thetford in the United Kingdom, and in that Member State alone. Thetford,

from which Fiamma has no licence whether in the United Kingdom, in Italy or elsewhere, is

relying in particular on a patent (which I will refer to as Patent 235) issued under the Patents Act

1949, which continues to govern the patent despite its having been replaced by the Patents Act

1977.

2. The Court of Appeal of England and Wales, before which the main proceedings are pending,

asks this Court to make the following assumptions:

(a) Patent 235 is a valid patent under United Kingdom law;

(b) Patent 235 would be invalid under the laws of other Member States, except possibly Ireland,

because seven patent specifications were published more than 50 years before the priority date

but excluded from consideration in the United Kingdom under section 50 of the Patents Act 1949;

(c) The exclusion of 50-year old specifications under section 50 of the 1949 Act does not apply

to patents granted under the Patents Act 1977;

(d) The plaintiffs have not sought to obtain any corresponding patent in any other Member State;

(e) The alleged infringing articles were manufactured in Italy and imported and sold in the United

Kingdom.

The first question

3. The first of the two questions referred to the Court by the Court of Appeal is as follows:

(1) Whether a subsisting patent which has been granted in the United Kingdom under the

provisions of the Patents Act 1949 in respect of an invention which but for the provisions of

section 50 of that Act would have been anticipated (lacked novelty) by a specification as is

described in paragraphs (a) or (b) of section 50 (1) of that Act constitutes industrial or

commercial property entitled to protection under Article 36 of the Treaty of Rome?

4. Section 50 (1) of the Patents Act 1949 provides as follows:

An invention claimed in a complete specification shall not be deemed to have been anticipated by

reason only that the invention was published in the United Kingdom:

(a) in a specification filed in pursuance of an application for a patent made in the United Kingdom

and dated more than 50 years before the date of filing of the first-mentioned specification;

(b) in a specification describing the invention for the purposes of an application for protection in

any country outside the United Kingdom made more than 50 years before that date; or

(c) ...

5. Consequently, it is not possible in United Kingdom law to base an action for the revocation of

a patent on a specification issued in the United Kingdom or in any other country more than 50

years before.

6. The first question put by the Court of Appeal therefore seeks to establish whether the

derogation from Articles 30 to 34 of the EEC Treaty which is set out in the first sentence of

Article 36 necessarily applies to all patents or whether, on the contrary, that exception does not

apply to patents which, were it not for section 50 (1) of the Patents Act 1949, would be liable to

be revoked, that is to say patents granted by virtue of the principle of relative novelty.

7. The defendant in the main proceedings (Fiamma) considers that the freedom which, according

to the Court, the Member States have to define the conditions for the existence of intellectual

and commercial property rights must necessarily be subject to limits and not exceed a certain area

of discretion. Accordingly, it considers that a right granted by a national legislature does not

constitute a patent and cannot qualify for the protection afforded on that ground by Article 36

unless certain fundamental conditions are fulfilled. In particular, a patent granted in the absence

of novelty or an inventive step could not be regarded as industrial and commercial property.

8. However, in its judgment in Keurkoop v Nancy Kean Gifts the Court made it clear that in the

state of Community law then obtaining it would not examine the precise conditions laid down by

national law for the grant of an intellectual property right. The question at issue in that case was

whether Article 36 of the Treaty permitted the application of a national law which, like the

Uniform Benelux Law on Designs, gave an exclusive right to the first person to file a design,

without persons other than the author or those claiming under him being entitled, in order to

challenge such an exclusive right or defend an action for an injunction brought by the holder of

the right, to contend that the person filing the design was not the author of it, the person who

commissioned the design from him or his employer. The Court stated that

in the present state of Community law and in the absence of Community standardization or of a

harmonization of laws the determination of the conditions and procedures under which protection

of designs is granted is a matter for national rules (paragraph 18 of the judgment).

9. Moreover, despite the fact that the Uniform Benelux Law afforded protection to a product

which in fact had not been commonly known in the industrial and commercial circles concerned

in the Benelux territory during the 50 years prior to the filing of the design (paragraph 15 of the

judgment) the Court ruled that

In the present state of its development Community law does not prevent the adoption of national

provisions of the kind contained in the Uniform Benelux Law, as described by the national court

(paragraph 1 of the operative part of the judgment).

10. However, Fiamma further argues that whereas there has been little harmonization in the field

of designs, with which Keurkoop was concerned, the same cannot be said of patents. There has

been significant progress towards harmonization of national laws regarding patents, and at

Community level agreement has even been reached on matters of substantive patent law, including

novelty. Account should therefore be taken of that development.

11. What is the actual position? The 1975 Luxembourg Convention for the European patent for

the common market (Community Patent Convention) has still not entered into force.

12. The Strasbourg Convention on the unification of certain points of substantive law on patents

for invention and the 1973 Munich Convention on the grant of European patents (European

Patent Convention) also incorporate the principle of absolute novelty, but those conventions are

not part of the Community legal order.

13. Furthermore, they did not enter into force until after the patent in question was granted to

Thetford (the Strasbourg Convention on 1 August 1980 and the Munich Convention, as far as the

United Kingdom was concerned, on 7 October 1977).

14. Lastly, both the Munich Convention and the Luxembourg Convention allow national patents

to continue to exist alongside European patents. Since Thetford's patent was not applied for under

the Munich Convention, it is purely national and continues to be governed by the provisions of

United Kingdom law.

15. In sum, I therefore consider that the judgment in Keurkoop does in fact constitute a relevant

precedent, and that there is no reason for not applying in this case the Court's ruling to the effect

that the definition of the conditions for the existence of industrial and commercial property rights

is a matter for the Member States, $1 even if the resulting differences between national laws

creates obstacles to the free movement of goods. Thus in Parke Davis and Deutsche Gramophon,

Dutch and German law made provision for industrial or commercial property rights which were

unknown in Italy and in France respectively. However, the Court did not call in question the

Member States' freedom to grant industrial or commercial property rights within the meaning of

Article 36, even though differences between those rights were the source of a potential barrier to

the free movement of goods.

16. Those are the observations which, in my view, are called for with regard to the first sentence

of Article 36, which, in the opinion of the representatives of the United Kingdom and Thetford,

is the only provision to which the Court of Appeal intended to refer.

17. However, in my view the appraisal of the issue would be incomplete were we to ignore the

second sentence of Article 36. The national court asks not only whether a patent granted under

the conditions described constitutes industrial or commercial property, but whether it constitutes

industrial or commercial property entitled to protection under Article 36 of the Treaty of Rome.

18. It would not be entitled to protection if the prohibition or restriction on imports based on the

existence of a patent constituted a means of arbitrary discrimination or a disguised restriction on

trade between Member States within the meaning of the second sentence of Article 36.

19. In fact, it could be that an injunction prohibiting the importation of a product, issued in view

of the existence of a patent, may constitute such discrimination or such a restriction simply

because the patent was granted in circumstances indicative of a protectionist intention.

20. Therefore, in this case the Court is not called upon to consider -- as Fiamma asks it to do --

whether a patent such as the one granted to Thetford constitutes a genuine patent (under United

Kingdom law that is in fact the case), but to consider whether in the light of the circumstances in

which the patent was granted (that is to say, despite the existence of specifications going back

more than 50 years) the prohibition on the importation of products of the type in question

constitutes arbitrary discrimination or a disguised restriction on trade.

21. It is from that point of view that Fiamma's example of the grant of a patent for a perfectly

ordinary football may be helpful. If a Member State were in fact to grant a patent for such an

article in everyday use, without any doubt its motive would be to reserve a monopoly for a

national manufacturer, thereby imposing a disguised restriction on trade within the meaning of the

second sentence of Article 36.

22. It was, moreover, on the basis of the second sentence of Article 36 that the Court held in the

Sekt and Weinbrand case, which Fiamma cites in support of its argument, that Article 30 of the

Treaty had been infringed because German law granted the protection provided for indications

of origin to appellations which, at the time when such protection was granted, were merely

generic in nature.

23. Can the protection of a patented product against imports from another Member State despite

the relative novelty of the invention likewise constitute arbitrary discrimination or a disguised

restriction on imports?

24. Certainly, according to the established case-law of the Court the specific subject-matter of a

patent consists in

according the inventor an exclusive right of first placing the product on the market so as to allow

him to obtain the reward for his creative effort.

25. Consequently, where there is no effort to reward, a prohibition on importation can scarcely

be anything other than the expression of a discriminatory or protectionist attitude (the example

of the football).

26. The United Kingdom and the Commission argue that there is reward for an effort in this case,

namely the effort put in by the author of the re-invention, who makes a forgotten invention

available once again to the country. This reasoning seems to me to be valid, especially since only

patent specifications going back more than 50 years are excluded from the state of the art by

section 50 of the Patents Act 1949. In other words, publication in forms other than patent

specifications and previous use going back more than 50 years may be relied on in order to obtain

the revocation of the patent. (I would observe that the national court asked us to assume simply

as a working hypothesis that Thetford's patent is valid under United Kingdom law.) Anticipation

is ignored only where the old invention exists only in the form of old documents lodged at the

Patent Office. In that context it seems to me to be possible to speak of re-invention and rewarding

re-invention, whether the inventor was wholly ignorant of the old specifications and made an

invention quite independently of them or whether he discovered them on the shelves of the Patent

Office and developed a modern product from them.

27. Other arguments tend to show that this is not one of the cases covered by the second sentence

of Article 36. First, paragraphs (a) and (b) of section 50 of the Patents Act 1949 make no

distinction between specifications describing an invention lodged in connection with a patent

application in the United Kingdom and those lodged in connection with a patent application in

another country: in both cases specifications which are more than 50 years old are not taken into

consideration. (Moreover, it was not contested that specifications relating to patent applications

made abroad are available at the United Kingdom Patent Office).

28. It is also uncontested that foreign nationals applying for a patent in the United Kingdom have

the same rights as British nationals in regard to the 50-year rule. Hence, if Fiamma had lodged its

patent application before Thetford and if its product had not been described in a publication

available in the United Kingdom Fiamma would have obtained a United Kingdom patent. It would

have been able to enforce that patent both with respect to imports (except imports of its own

products marketed with its consent in other Member States) and with regard to any infringers of

that patent in the territory of the United Kingdom.

29. It may be concluded, therefore, that a prohibition or restriction on imports granted with a view

to protecting the exclusive rights of the holder of a patent issued in respect of an invention the

novelty of which in the absence of the 50-year rule could have been contestedwould not constitute

arbitrary discrimination or a disguised restriction on trade between Member States within the

meaning of the second sentence of Article 36.

30. It remains for me to say a few words about a related issued raised by the Commission in

answering the questions put by the Court: under the Patents Act 1949 it was possible to obtain

a patent in the United Kingdom for an invention which was freely used or published (and could

therefore be freely used) in another Member State at the time of the application. Like the

Commission, I take the view that if such legislation still existed now a prohibition on importation

granted in order to protect a patent obtained on that basis would constitute arbitrary

discrimination or a disguised restriction on trade between Member States. As to whether the

Treaty could now be invoked in order to deprive the holder of a patent which was validly granted

in 1969 -- that is to say, before the United Kingdom became a member of the Community -- of

the right to oppose imports, in my view that question raises very complex problems involving,

inter alia, concepts such as the transitional period, legal certainty, legitimate expectations and

vested rights. There can be no question of the Court's dealing with them by way, so to speak, of

an obiter dictum when the Court of Appeal has not even raised the matter.

31. For all the reasons set out above I propose, therefore, that the first question should be

answered as follows:

A subsisting patent which was granted in the United Kingdom under the provisions of the Patents

Act 1949 in respect of an invention which but for the provisions of section 50 of that Act would

have been anticipated (lacked novelty) by a specification as is described in paragraphs (a) or (b)

of section 50 (1) of that Act constitutes industrial or commercial property entitled to protection

under Article 36 of the Treaty of Rome.

The second question

32. In its second question the Court of Appeal asks whether, if a patent such as Thetford's is

entitled to the protection of Article 36, the only relief justified under that article would, as Fiamma

has argued, be an order for the payment of a reasonable royalty (or other monetary award) but

not an injunction.

33. According to the established case-law of the Court:

the substance of a patent right lies essentially in according the inventor an exclusive right of first

placing the product on the market so as to allow him to obtain the reward for his creative effort.

It is therefore necessary to allow the patent proprietor to prevent the importation and marketing

of products manufactured under a compulsory licence in order to protect the substance of his

exclusive rights under his patent (paragraph 26 of the judgment).

34. There is all the more reason to reach such a conclusion where there is not even a compulsory

licence in the country of manufacture or any form of consent on the part of the patentee to the

marketing of the product concerned (see Merck v Stephar, and Centrafarm v Sterling Drug).

35. Consequently, prohibiting importation is the normal method of protecting the specific

subject-matter of the patentee's right and there is no room for considerations based on the

principle of proportionality. Moreover, it would be paradoxical to require United Kingdom law

to tolerate the importation of products manufactured abroad without the patentee's consent

whereas if the products were manufactured in the United Kingdom it would be possible to restrain

the manufacturer's activity by means of an injunction.

36. In contrast, the situation would be quite different if, all other things being equal, an infringer

established in the country in question could only be ordered to pay royalties but could not be

restrained by injunction from manufacturing. In that case an injunction issued against importers

alone would constitute an arbitrary discrimination within the meaning of the second sentence of

Article 36. This follows from the Court's judgment of 3 March 1988 in Case 434/85 Allen and

Hanburys Ltd v Generics (UK) Ltd, where the Court ruled that

Articles 30 and 36 of the Treaty must be interpreted as precluding the courts of a Member State

from issuing an injunction prohibiting the importation from another Member State of a product

which infringes a patent endorsed 'licences of right' against an importer who has undertaken to

take a licence on the terms prescribed by law where no such injunction may be issued in the same

circumstances against an infringer who manufactures the product in the national territory

(paragraph 23 of the judgment; see also paragraph 22).

37. For all those reasons I propose the following answer to the second question:

Article 36 permits the courts of a Member State to issue an injunction prohibiting the importation

and marketing of a product infringing a patent issued in that State where, in the same situation,

an injunction could be issued against an infringer manufacturing the product in the national

territory.