THE HESSISCHES FINANZGERICHT REFERRED TO THE COURT , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , NINE QUESTIONS CONCERNING THE INTERPRETATION OF REGULATION NO 803/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE VALUATION OF GOODS FOR CUSTOMS PURPOSES ( OJ ENGLISH SPECIAL EDITION , 1968 ( I ), P . 170 ) AND OF REGULATION NO 1788/69 OF THE COMMISSION OF 10 SEPTEMBER 1969 DETERMINING CERTAIN EXCEPTIONS WITHIN THE MEANING OF ARTICLE 3 ( 2 ) OF THE ABOVEMENTIONED REGULATION NO 803/68 ( OJ ENGLISH SPECIAL EDITION , 1969 ( II ), P . 387 ).
2 THESE QUESTIONS WERE RAISED IN THE CONTEXT OF A CASE CONCERNING THE VALUE FOR CUSTOMS PURPOSES OF PHARMACEUTICAL PRODUCTS IMPORTED BY FARBWERKE HOECHST , THE PLAINTIFF IN THE MAIN ACTION ( HEREINAFTER REFERRED TO AS ' HOECHST ' ).
HOECHST CONCLUDED A CONTRACT WITH HOFFMAN-LA ROCHE , WHOSE REGISTERED OFFICE IS IN BASEL , SWITZERLAND , UNDER WHICH IT OBTAINED THE RIGHT TO PURCHASE FROM LA ROCHE A PREPARATION PRODUCED BY THE LATTER FIRM FROM TWO SUBSTANCES , SULFADOXIN AND TRIMETHOPRIM , OR TO MANUFACTURE THIS PREPARATION ITSELF FROM THESE SUBSTANCES SUPPLIED BY LA ROCHE AND TO SELL THE PREPARATION THROUGHOUT THE WORLD WITH THE EXCEPTION OF THE UNITED STATES OF AMERICA . IT MAY SELL THE SPECIAL MEDICINAL PREPARATION UNDER ITS OWN TRADE-MARK AND IN ITS OWN NAME BUT IS NOT PERMITTED TO MENTION LA ROCHE IN ITS PUBLICITY WITHOUT THE EXPRESS CONSENT OF THAT FIRM . AS CONSIDERATION ' FOR THE RELEASE OF THE DISTRIBUTION RIGHTS ' HOECHST UNDERTOOK TO PAY TO LA ROCHE A ROYALTY OF 3 % OF THE NET TURNOVER .
3 IN THE COURSE OF 1971 AND 1972 , HAVING IMPORTED TEN CONSIGNMENTS OF THE SPECIAL MEDICINAL PREPARATION MADE UP FROM THE TWO ABOVEMENTIONED SUBSTANCES AND SUPPLIED BY LA ROCHE , HOECHST RE-PACKED THE PRODUCT IN SMALLER PACKAGES ON WHICH IT SUBSEQUENTLY AFFIXED FOR THE FIRST TIME THE TRADE-MARK ' BORGAL ' , REGISTERED IN ITS NAME IN THE FEDERAL REPUBLIC OF GERMANY .
THE CUSTOMS OFFICE , THE DEFENDANT IN THE MAIN ACTION , DISCOVERED THE EXISTENCE OF A LICENSING AGREEMENT BETWEEN HOECHST AND LA ROCHE AND THE AFFIXING OF THE TRADE-MARK ' BORGAL ' AND CONSEQUENTLY , BY AMENDED NOTICE OF ASSESSMENT , DETERMINED THE CUSTOMS VALUE OF THE SPECIAL MEDICINAL PREPARATIONS IN QUESTION BY INCREASING THEIR PRICE BOTH IN RESPECT OF THE ROYALTIES PAID TO LA ROCHE , WHICH INCREASE IS NO LONGER AT ISSUE , AND ALSO IN RESPECT OF THE PRESUMED VALUE OF THE TRADE-MARK ' BORGAL ' .
IT IS THE LATTER INCREASE WHICH IS AT ISSUE AS THE CUSTOMS OFFICE HOLDS THAT IN APPLICATION OF ARTICLE 3 ( 7 ) OF REGULATION NO 803/68 THE TRADE-MARK ' BORGAL ' MUST BE REGARDED AS A FOREIGN MARK IN VIEW OF THE FACT THAT HOECHST WAS ' ASSOCIATED IN BUSINESS ' WITHIN THE MEANING OF ARTICLE 2 ( 2 ) OF THAT REGULATION WITH LA ROCHE , THE VENDOR