CELEX: 61987CJ0035
Language: en
Date: 1988-06-30
Title: Judgment of the Court of 30 June 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.

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61987J0035

Judgment of the Court of 30 June 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

SummaryPartiesGroundsDecision on costsOperative part
Keywords

Free movement of goods -- Industrial and commercial property -- Patent right -- Nationallegislation recognizing the principle of the relative novelty of an invention -- Compatibility withArticle 36 of the Treaty -- Injunction prohibiting the importation of an infringing article --Measure justified(EEC Treaty, Arts 30 and 36) 

Summary

In the present state of Community law, characterized by the absence of harmonization of thepatents legislation of the Member States, and in the absence of international conventions in forceproviding to the contrary, Article 36 of the Treaty must be interpreted as not precluding theapplication of a Member State's legislation which recognizes the principle of relative novelty andprovides that a patent granted for an invention may not be declared invalid by reason only of thefact that the invention in question appears in a patent specification filed more than 50 yearspreviously. Where national law normally provides for the issue of an injunction to prevent anyinfringement, that measure is justified under Article 36 in so far as it aims to preserve the actualsubstance of the patent right. 

Parties

In Case 35/87REFERENCE to the Court under Article 177 of the EEC Treaty by the Court of Appeal, London,for a preliminary ruling in the proceedings pending before that court betweenThetford Corporation and AnotherandFiamma SpA and Others,on the interpretation of Article 36 of the EEC Treaty,THE COURTcomposed of: Lord Mackenzie Stuart, President, G. Bosco, O. Due and J. C. Moitinho deAlmeida (Presidents of Chambers), T. Koopmans, U. Everling, K. Bahlmann, Y. Galmot, C.Kakouris, T. F. O'Higgins and F. Schockweiler, Judges,Advocate General: J. MischoRegistrar: B. Pastor, Administratorafter considering the observations submitted on behalf ofThetford Corporation and Another, the plaintiffs in the main proceedings, by Clifford Chance,Solicitors, London, in the written procedure and by Mr Burkill, Barrister, in the oral proceedings,Fiamma SpA and Others, the defendants in the main proceedings, by Messrs Evershed &Tomkinson, Solicitors, Birmingham, in the written procedure and by Mr Hicks, Barrister, in theoral proceedings.the United Kingdom of Great Britain and Northern Ireland, by S. J. Hay, acting as Agent, and N.Pumfrey, Barrister,the Commission of the European Communities by E. L. White, a member of its Legal Department,having regard to the Report for the Hearing and further to the hearing on 1 March 1988,after hearing the Opinion of the Advocate General delivered at the sitting on 28 April 1988,gives the followingJudgment 

Grounds

1 By an order which was lodged at the Court Registry on 5 February 1987 the Court of Appeal,London, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty twoquestions concerning the interpretation of Article 36 of the EEC Treaty with a view to theassessment of the compatibility with the rules on the free movement of goods of certain provisionsof national patent law and especially the principle of relative novelty.2 Those questions were raised in proceedings brought by Thetford Corporation and Thetford(Aqua) Products Limited (hereinafter referred to as Thetford), the owners of several UnitedKingdom patents relating to portable toilets, and Fiamma SpA, a manufacturer of such toilets inItaly, and Fiamma UK, which imports them into the United Kingdom (hereinafter togetherreferred to as Fiamma).3 It appears from the order of the national court that Thetford sued Fiamma for infringement oftwo United Kingdom patents, granted pursuant to the Patents Act 1949, namely Patent No 1 226235 (hereinafter Patent 235) and Patent No 1 530 155. The articles alleged to constitute aninfringement of those patents are portable toilets manufactured in Italy and sold in the UnitedKingdom. Fiamma has no licence from Thetford in the United Kingdom, in Italy or anywhere else.4 Before the Patents Court Fiamma denied the patent infringement and argued, on the one hand,that Thetford's patent was invalid on grounds of lack of novelty and inventive step and, on theother, that even if the patent were valid, Articles 30 and 36 of the EEC Treaty limited the reliefwhich the courts of the United Kingdom ought to grant to the proprietor of the patent.5 After the Patents Court had granted Thetford's application, Fiamma appealed to the Court ofAppeal, which decided that, bearing in mind that there was no direct authority of the Court ofJustice on the points raised by the defendants, the allegations disclosed an arguable case. Ittherefore decided to refer the following questions to the Court of Justice for a preliminary ruling:(1) Whether a subsisting patent which has been granted in the United Kingdom under theprovisions of the Patents Act 1949 in respect of an invention which but for the provisions ofsection 50 of that Act would have been anticipated (lacked novelty) by a specification as isdescribed in paragraphs (a) or (b) of section 50 (1) of the Act constitutes industrial or commercialpropoerty entitled to protection under Article 36 of the Treaty of Rome?(2) If such a patent is entitled to such protection as aforesaid whether as contended by thedefendants Fiamma in this case the only relief justified under Article 36 of the Treaty would bean order for the payment of a reasonable royalty (or other monetary award) but not an injunction?6 Reference is made to the Report for the Hearing for a fuller description of the facts, theapplicable national legislation and the observations submitted to the Court, which are mentionedor discussed hereinafter only in so far as is necessary for the reasoning of the Court.The first question7 The Court of Appeal's first question seeks to establish whether the derogation from Articles 30to 34 of the EEC Treaty which is set out in the first sentence of Article 36 necessarily applies toany patent granted pursuant to the legislation of a Member State or whether, on the contrary, itdoes not apply to patents granted by virtue of the principle of relative novelty.8 The principle of relative novelty, as adopted at the material time by the legislation of the UnitedKingdom, is the result of section 50 (1) of the Patents Act 1949, which provided as follows:An invention claimed in a complete specification shall not be deemed to have been anticipated byreason 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 Kingdomand 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 inany country outside the United Kingdom made more than 50 years before that date; or(c) ...Consequently, it was not possible under the 1949 Act to base an action to have a patent declaredinvalid on a specification issued in the United Kingdom or any other country more than 50 yearspreviously.9 It should be observed in limine that, as the parties acknowledged at the hearing, the questionput by the Court of Appeal hinges on the question of relative novelty, in so far as it was notpossible under the Patents Act 1949 to have a patent declared invalid solely on the ground thatits specification was published prior to a period of time fixed by statute.10 In that connection, it must be pointed out that the effect of the provisions of the Treaty on thefree movement of goods, in particular Article 30, is to prohibit as between Member Statesrestrictions on imports and all measures having equivalent effect. According to Article 36,however, those provisions do not preclude prohibitions or restrictions on imports justified ongrounds of the protection of industrial and commercial property. However, such prohibitions orrestrictions must not constitute a means of arbitrary discrimination or a disguised restriction ontrade between Member States.11 Fiamma argues that the derogation provided for in Article 36 can apply only if a patent rightgranted pursuant to national legislation fufils certain fundamental conditions. In particular, apatent granted in the absence of novelty or an inventive step cannot be regarded as being coveredby the expression protection of industrial and commercial property.12 In that regard, it must be observed, as the Court held in its judgment of 14 September 1982(in Case 144/81 Keurkoop v Nancy Kean Gifts ((1982)) ECR 2853) on the protection of designs,that in the present state of Community law and in the absence of Community standardization orof a harmonization of laws the determination of the conditions and procedure under whichprotection ... is granted is a matter for national rules.13 However, Fiamma contends that the Court's case-law on designs may not be transposed to thefield of patents in view of the higher degree of harmonization of national legislation which hasalready been achieved in that field and the existence of international conventions based on theprinciple of absolute novelty.14 That argument cannot be upheld. Firstly, no harmonization of the patents legislation of theMember States has yet been effected by virtue of measures of Community law. Secondly, noneof the international conventions in force on patents is capable of supporting Fiamma's argument.The entry into force of the Munich Convention of 1973 on the Grant of European Patents, whichis based on the principle of absolute novelty, did not affect the existence of national legislation onthe granting of patents. Article 2 (2) of that Convention expressly provides that The Europeanpatent shall, in each of the contracting States for which it is granted, have the effect of and besubject to the same conditions as a national patent granted by that State. As for the StrasbourgConvention of 1963 on the unification of certain points of substantive law on patents forinvention, it must be pointed out that, since that Convention entered into force after the patentin question had been granted, it cannot serve as a determining factor for the purposes of theinterpretation of Community law. The only instrument the provisions of which might affordsupport for Fiamma's point of view with regard to the recognition in the Community legal orderof the principle of absolute novelty is the Luxembourg Convention of 1975 on the Europeanpatent for the common market (European Patent Convention) which has close links with theaforementioned Munich Convention but which has not yet entered into force.15 It follows that, as the Court held in the judgment of 29 February 1968 (in Case 24/67 ParkeDavis v Centrafarm ((1968)) ECR 55), since the existence of patent rights is at present a mattersolely of national law, a Member State's patent legislation, such as the legislation at issue, iscovered in principle by the derogations from Article 30 which are provided for in Article 36.16 It must next be considered whether the application of the principle at issue may not constitutea means of arbitrary discrimination or a disguised restriction on trade between Member Stateswithin the meaning of the second sentence of Article 36.17 As regards the first possibility, namely whether a means of arbitrary discrimination is involved,it is sufficient, in order to refute that argument, to point out that before the Court the Agent ofthe United Kingdom stated, without being contradicted by the other parties, that the applicationof section 50 (1) of the Patents Act 1949 does not give rise to any discrimination. On the onehand, that rule prevents consideration from being given to a specification disclosing an inventionwhether it was filed in the United Kingdom or in another State; secondly there is no discriminationbased on the nationality of applicants for patents; foreign nationals applying for patents in theUnited Kingdom have the same rights as United Kingdom nationals.18 It must further be considered whether the application of the principle in question may not giverise to a disguised restriction on trade between Member States.19 In that regard, the justification for the rule of relative novelty, as given in the documents beforethe Court, discloses that the objective pursued by the United Kingdom legislature in introducingthe 50-year rule in 1902 was to foster creative activity on the part of inventors in the interest ofindustry. To that end, the 50-year rule aimed to make it possible to give a reward, in the form ofthe grant of a patent, even in cases in which an old invention was rediscovered. In such cases theUnited Kingdom legislation was designed to prevent the existence of a former patent specificationwhich had never been utilized or published from constituting a ground for revoking a patent whichhad been validly issued.20 Consequently, a rule such as the 50-year rule cannot be regarded as constituting a disguisedrestriction on trade between Member States.21 In view of the foregoing considerations, the answer to the national court's first question mustbe that, in the present state of Community law, Article 36 must be interpreted as not precludingthe application of a Member State's legislation on patents which provides that a patent grantedfor an invention may not be declared invalid by reason only of the fact that the invention inquestion appears in a patent specification filed more than 50 years previously.The second question22 In its second question the Court of Appeal asks essentially whether the national court is freeto choose from among the various forms of relief available under national law in cases ofinfringement or whether the only relief justified under Article 36 of the Treaty is an order for thepayment of a reasonable royalty (or other monetary award) but not an injunction prohibiting theimportation of the infringing article from another Member State.23 Fiamma maintains in that connection that the rule of proportionality as defined in the case-lawof the Court and in particular by the judgment of 20 May 1976 (in Case 104/75 de Peijper((1976)) ECR 613) should also be applied in the field of industrial and commercial property. Inparticular, in view of the particular features of the case at issue, in which the protection conferredby Article 36 relates to a patent obtained by virtue of the rule of relative novelty, the specificsubject-matter of the patent is already adequately protected by conferring on the proprietor of thepatent the right to obtain reward for the marketing of the patented article without going so far asto give him the right to obtain an injunction.24 However, it must be observed in that connection that according to the case-law of the Court(most recently its judgment of 9 July 1985 in Case 19/84 Pharmon v Hoechst ((1985)) ECR 2281)the right of the proprietor of a patent to prevent the importation and marketing of productsmanufactured under a compulsory licence is part of the substance of patent law. There is all themore reason for that conclusion to apply in a case such as this where no licence has been grantedby the proprietor of the patent in the country of manufacture.25 Consequently, the answer to the second question must be that where national law normallyprovides for the issue of an injunction to prevent any infringement, that measure is justified underArticle 36. 

Decision on costs

Costs26 The costs incurred by the United Kingdom and the Commission of the European Communities,which have submitted observations to the Court, are not recoverable. Since these proceedings are,in so far as the parties to the main proceedings are concerned, in the nature of a step in theproceedings pending before the national court, the decision as to costs is a matter for that court. 

Operative part

On those grounds,THE COURT,in reply to the questions submitted to it by the Court of Appeal, London, hereby rules:(1) In the present state of Community law, Article 36 does not preclude the application of aMember State's legislation on patents which provides that a patent granted for an invention maynot be declared invalid by reason only of the fact that the invention in question appears in a patentspecification filed more than 50 years previously.(2) Where national law normally provides for the issue of an injunction to prevent anyinfringement, that measure is justified under Article 36.Mackenzie Stuart, Bosco, Due, Moitinho de Almeida, Koopmans, Everling, Bahlmann, Galmot,Kakouris, O'Higgins, SchockweilerDelivered in open court in Luxembourg on 30 June 1988.J.-G. Giraud, Registrar -- A.J. Mackenzie Stuart, President