Schweppes SA v Red Paralela SL and Red Paralela BCN SL.
Date: 2017-12-20
21


In that regard, it should be borne in mind that, in accordance with the Court’s settled case-law, in the preliminary ruling procedure under Article 267 TFEU, based on a clear separation of functions between the national courts and the Court of Justice, the national court alone has jurisdiction to find and assess the facts in the dispute in the main proceedings. In that context, the Court is empowered to rule solely on the interpretation or validity of EU law in the light of the factual and legal situation as described by the referring court, in order to provide that court with such guidance as will assist it in resolving the dispute before it (judgments of 28 July 2016, Kratzer, C‑423/15, EU:C:2016:604, paragraph 27, and of 27 April 2017, A-Rosa Flussschiff, C‑620/15, EU:C:2017:309, paragraph 35).
23


In addition, the Court has repeatedly held that it is solely for the national court, before which the dispute has been brought and which must assume responsibility for the judicial decision to be made, to determine, in the light of the particular circumstances of the case, both the necessity and the relevance of the questions that it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgments of 26 January 2017, Banco Primus, C‑421/14, EU:C:2017:60, paragraph 29, and of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 19).
24


The Court may thus refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 14 March 2013, Allianz Hungária Biztosító and Others, C‑32/11, EU:C:2013:160, paragraph 26, and of 26 January 2017, Banco Primus, C‑421/14, EU:C:2017:60, paragraph 30).
26


Lastly, it should be borne in mind that the national courts remain entirely at liberty to bring a matter before the Court if they consider it appropriate to do so, and the fact that the provisions whose interpretation is sought have already been interpreted by the Court does not deprive the Court of jurisdiction to give a further ruling (judgments of 17 July 2014, Torresi, C‑58/13 and C‑59/13, EU:C:2014:2088, paragraph 32, and of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 21).
30


On the other hand, it is important to bear in mind that Article 7 of Directive 2008/95 is worded in general terms and comprehensively regulates the question of the exhaustion of trade mark rights for goods traded in the European Union and that, where EU directives provide for the harmonisation of measures necessary to ensure the protection of the interests referred to in Article 36 TFEU, any national measure relating thereto must be assessed in relation to the provisions of that directive and not Articles 34 to 36 TFEU. Like any secondary EU legislation, however, that directive must be interpreted in the light of the TFEU rules on the free movement of goods and of Article 36 TFEU in particular (see, to that effect, judgments of 11 July 1996, Bristol-Myers Squibb and Others, C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282, paragraphs 25 to 27 and the case-law cited, and of 20 March 1997, Phytheron International, C‑352/95, EU:C:1997:170, paragraphs 17 and 18).
34


Article 7(1) of Directive 2008/95 is framed in terms corresponding to those used by the Court in judgments which, in interpreting Articles 30 and 36 of the EC Treaty (later Articles 28 and 30 EC, now Articles 34 and 36 TFEU), have recognised in EU law the principle that trade mark rights may be exhausted. It thus reiterates the case-law of the Court to the effect that a person holding trade mark rights protected by the legislation of a Member State may not rely on that legislation in order to oppose the import or marketing of a product which has been put into circulation in another Member State by him or with his consent (see, to that effect, judgments of 11 July 1996, Bristol-Myers Squibb and Others, C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282, paragraph 31, and of 20 March 1997, Phytheron International, C‑352/95, EU:C:1997:170, paragraph 20).
35


That case-law relating to the principle that trade mark rights may be exhausted, based on Article 36 TFEU, is intended, like Article 7(1) of Directive 2008/95, to reconcile the fundamental interest in protecting trade mark rights, on the one hand, with the fundamental interest in the free movement of goods within the internal market, on the other (see, to that effect, judgment of 11 July 1996, Bristol-Myers Squibb and Others, C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282, paragraph 40).
36


The Court has repeatedly held that trade mark rights constitute an essential element in the system of undistorted competition which EU law seeks to establish and maintain. Within such a system, undertakings must be able to retain customers by virtue of the quality of their goods or services, something which is possible only if there are distinctive signs enabling customers to identify those goods and services. For the trade mark to be able to play that part, it must offer a guarantee that all the goods which bear it have been manufactured under the control of a single undertaking that may be held accountable for the quality of those goods (judgments of 17 October 1990, HAG GF, C‑10/89, EU:C:1990:359, paragraph 13, and of 11 July 1996, Bristol-Myers Squibb and Others, C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282, paragraph 43 and the case-law cited).
37


Consequently, as the Court has ruled on numerous occasions, the specific purpose of trade mark rights is, in particular, to guarantee to the proprietor of a trade mark that he has the right to use that trade mark for the purpose of putting a product into circulation for the first time and thus to protect him against competitors wishing to take advantage of the status and reputation of the trade mark by selling goods illegally bearing that mark. In order to determine the exact extent of this right exclusively conferred on the proprietor of the trade mark, regard must be had to the essential function of the trade mark, which is to guarantee the identity of the origin of the trade marked product to the consumer or end user by enabling him, without any possibility of confusion, to distinguish that product from goods having another origin (judgments of 17 October 1990, HAG GF, C‑10/89, EU:C:1990:359, paragraph 14, and of 11 July 1996, Bristol-Myers Squibb and Others, C‑427/93, C‑429/93 and C‑436/93, EU:C:1996:282, paragraph 44 and the case-law cited).
38


The essential function of the trade mark would be jeopardised if, failing any consent on the proprietor’s part, that proprietor could not oppose the import of an identical or similar product bearing an identical trade mark or one liable to lead to confusion, which had been manufactured and put into circulation in another Member State by a third party having no economic link with that proprietor (see, to that effect, judgments of 17 October 1990, HAG GF, C‑10/89, EU:C:1990:359, paragraphs 15 and 16, and of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraphs 33 to 37).
39


That analysis cannot be altered by the mere fact that the proprietor’s mark and that affixed to the product whose import that proprietor seeks to prohibit originally belonged to the same proprietor, irrespective of whether the division of those marks results from expropriation, and thus an act of public authority, or voluntary contractual assignment, on condition, however, that, notwithstanding their common origin, each of those marks has, from the date of expropriation or assignment, independently fulfilled its function, within its own territorial field of application, of guaranteeing that the trade marked goods originate from one single source (see, to that effect, judgments of 17 October 1990, HAG GF, C‑10/89, EU:C:1990:359, paragraphs 17 and 18, and of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraphs 46 to 48).
43


If those courts should find that the condition set out in paragraph 39 above is satisfied, it should still be borne in mind that the essential function of the trade mark is in no way compromised by the freedom to import where the proprietor of the mark in the importing State and the proprietor of the mark in the exporting State are one and the same, or where, even if they are separate persons, they are economically linked (see, to that effect, judgment of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraphs 34 and 37).
44


As the Court has already held, such an economic link exists where, inter alia, the goods in question have been put into circulation by a licensee, by a parent company, by a subsidiary of the same group, or by an exclusive distributor. In all those situations, the proprietor or the entity of which that proprietor is part can control the quality of the goods to which the mark is affixed (see, to that effect, judgment of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraphs 34 and 37).
45


Moreover, the Court has emphasised that the decisive factor is the possibility of control over the quality of the goods, not the actual exercise of that control. In that context, it has observed by way of example that, if the licensor tolerates the manufacture of poor quality goods by the licensee, despite having contractual means of preventing it, he must bear the responsibility. Similarly, if the manufacture of goods is decentralised within a group of companies and the subsidiaries in each of the Member States manufacture goods whose quality is geared to the particularities of each national market, those differences in quality may not be invoked in order to oppose the import of goods manufactured by an affiliated company, as the group must bear the consequences of its choice (see, to that effect, judgment of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraph 38).
46


As the Advocate General observed in points 72 to 82 of his Opinion, it follows from that case-law that the concept of ‘economic links’, for the purposes of that case-law, refers to a substantive, rather than formal, criterion, which is in no way confined to the situations listed in paragraph 44 above and which, in particular, is also fulfilled where, following the division of national parallel trade marks resulting from a territorially limited assignment, the proprietors of those marks coordinate their commercial policies or reach an agreement in order to exercise joint control over the use of those marks, so that it is possible for them to determine, directly or indirectly, the goods to which the trade mark is affixed and to control the quality of those goods.
50


Moreover, although it is true that the Court has previously found that a contract of assignment by itself, that is, where there is no economic link, gives the assignor no means of controlling the quality of the goods marketed by the assignee and to which the latter has affixed the trade mark, it follows precisely from that finding that that is not the case when economic links exist between the assignor and the assignee (see, to that effect, judgment of 22 June 1994, IHT Internationale Heiztechnik and Danziger, C‑9/93, EU:C:1994:261, paragraphs 41 and 43).
51


It is for the national courts to assess whether such economic links exist, taking into account all the relevant circumstances of the case at hand.
52


In that context, it should be noted that, although it is, in principle, for the trader alleging exhaustion of trade mark rights to prove that the conditions for applying Article 7(1) of Directive 2008/95 are satisfied (see, to that effect, judgment of 20 November 2001, Zino Davidoff and Levi Strauss, C‑414/99 to C‑416/99, EU:C:2001:617, paragraph 54), that rule must be qualified where it is liable to allow the proprietor to partition national markets and thus help to maintain price differences between Member States (see, to that effect, judgment of 8 April 2003, Van Doren + Q, C‑244/00, EU:C:2003:204, paragraphs 37 and 38).