C-3/78

JUDGMENT OF 10. 10. 1971 — CASE 3/78

In Case 3/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the Arrondissementsrechtbank (Distria Court), Rotterdam, for a preliminary ruling in the action pending before that court between

Centrafarm B.V., Rotterdam,

and

American Home Products CORPORATION, New York,

Facts and Issues

The facts of the case, the course of the 1 — Facts and procedure procedure and the observations submitted pursuant to Article 20 of the 1. American Home Products Corpor­ Protocol on the Statute of the Court of ation (hereinafter referred to as Justice of the EEC may be summarized "AHPC"), the defendant in the main as follows action, is proprietor of the mark Seresta registered in its name in the Benelux

CENTRAFARM v AMERICAN HOME PRODUCTS CORPORATION

trade-marks register under the head 4. The President of the Arron­ "Preparations médicinales et pharma­ dissementsrechtbank, Rotterdam, made ceutiques, notamment des préparations an order on 2 August 1977 in tranquillisantes, sédatives et anti-spas­ proceedings for the adoption of an modiques" ("Medicinal and pharma­ interim measure prohibiting Centrafarm ceutical preparations, in particular from infringing AHPC's rights arising tranquillizing, sedative and anti from the Seresta mark. spasmodic preparations"). In the United Kingdom AHPC is proprietor of the 5. In the main action before the Serenid D mark for the same type of Arrondissementsrechtbank Centrafarm

product. Those marks are used to claimed that that court should rule that designate a medicament whose active it is entitled to place on the market in the Netherlands under the Seresta constituent is named oxazepamum. AHPC also owns a patent in the mark AHPC's oxazepamum lawfully Netherlands and in the United distributed in other countries of the

JUDGMENT OF 10. 10. 1971 — CASE 3/78

. . can be imported for the by legal measures the putting Surpose of distribution in the into circulation in that country Netherlands only by the person in by others of goods bearing the whose name the product is registered". mark Y; The succeeding paragraphs prescribe do the rules contained in the EEC special rules for parallel importers. Under those rules a parallel importer of Treaty concerning the free move a product may be entered on request in ment of goods, notwithstanding the the register of proprietary medicinal provisions of Article 36, prevent the preparations and medicinal prepara person entitled to the trade-mark tions as proprietor of the registration from making use of the right of that product provided certain referred to under 4 supra? conditions are satisfied.

Communities in this respect (65/65/ January 1965 on the approximation of EEC) on the undemanding that provisions laid down by law, regulation those provisions — possibly in that or administrative action relating to respect in derogation from that proprietary medicinal products (65/65/ directive — are based on the EEC) (Official Journal, English Special presumption that the import of a Edition 1965-1966, p. 20) mentioned in medicinal product from another the second preliminary question by the Member Sute into Member Sute B court making the reference, provides is possible under a mark other than inter alia that no proprietary medicinal that under which it is registered in product may be placed on the market in the other Member Sute?" a Member Sute unless an authorization has been issued by the competent

CENTRAFARM v AMERICAN HOME PRODUCTS CORPORATION

(Article 4). 1. Observations of Centrafarm The authorization provided for in Article 3 shall be refused, and any auth Centrafarm considers that the orization already granted shall be proprietor of the mark can prohibit its suspended or withdrawn if, after veri being affixed, without his consent, on fication of the particulars and products which he has marketed documents listed in Article 4, it proves without a mark. In the present case, that the proprietary medicinal product is however, the proprietor marketed the harmful in the normal conditions of use, relevant goods as a trade-marked or that its therapeutic efficacy is lacking product and thus customers were (Articles 5 and 11). intended to consider it as originating The following particulars shall appear from his undertaking. on containers and outer packages of Centrafarm concedes that the manu proprietary medicinal products: the facturer of а product bearing a mark name of the proprietary product within may have good grounds for the use in the meaning of Article 4; the two Member States of different marks constituents thereof; the reference for the same product.

JUDGMENT OF 10. 10. 1978 — CASE 3/78

are, however, manufactured by him. It the actual original product which he maintains that support for this view can knows under the Seresta mark. be found in the decisions of the Court According to Centrafarm, since the of justice and in legal works. function of the mark indicating the Centrafarm emphasizes that the origin of a product does not operate in decisions of the Court make clear that the interesu of the manufacturer but the specific subject-matter of the trade provides а guarantee to the consumer, mark is a guarantee to the consumer of the third party obtaining the product the identity of the origin of the product, who, as reseller, takes the steps so that the proprietor of the mark can necessary to ensure that the consumer institute proceedings to prevent the use does not get wrong ideas about the of names liable to mislead (judgment of genesis of the original trade-marked 22 June 1976 in Case 119/75 Terrapin v product, does not adversely affect the Terranova [1976] ECR 1039) or to specific subjea-matter of the trade prevent the mark being improperly mark.

It Centrafarm maintains that AHPC's does not seem logical that the intention to establish this connexion is proprietor of a subdivided mark should clear from the fan that it marketed the be in a better position to partition goods as a trade-marked product. On markets than the proprietor of a

oxazepamum coming from the United — Thirdly it disputes Centrafarm's Kingdom with the Serenid D mark: allegation before the court making considerable expense is in fact entailed the reference, that the rules on in launching a new mark on the market, reimbursement by sickness funds especially if there is already another vary according to whether or not mark for the same product which is the product in question is widely known; furthermore the parallel oxazepamum obtained as a parallel imponer must incur expenses for the impon On the contrary, since introduction of as many marks as the 1 November 1977 chemists have manufacturer chooses to use for the received from sickness funds an product in question in other Member additional payment for oxazepamum States; competition between the parallel obtained as a parallel impon, in imponer and the appointed imponer is order to encourage them to procure thus illusory from the outset. supplies through a parallel imponer. If it must be accepted that the proprietor's national mark may not be With regard to the second preliminary affixed to his original produa marked question AHPC emphasizes in the fint as such a must be conceded that, in any place that the manufacturer of a new case, third parties must be permitted to product always thes to devise for it a use the national mark in marketing that single mark valid throughout the entire product. world so that he can enjoy outside a Centrafarm considers that the Court given country the goodwill which it has must in the light of the foregoing obser­ acquired in that country. vations decide that in the circumstances Since the name Se rax used in the of this case AHPC's proceedings are United Sutes for oxazepamum conflicts not intended to protect the specific in other countries with marks which are subject-matter of its trade-mark, or at already in existence AHPC chose the

mark Serepax for most countries. This other countries of the Community latter mark may, however, be used inter AHPC observes that the documents alia in the United Kingdom. The lodged in Case Hoffmann-La 102/77 competent division of the AHPC group Root v Centrafarm (judgment of the for the United Kingdom and Ireland Court of 23 May 1978), concerning the and the competent division for con repackaging and the replacement of the tinental Europe consequently decided same mark, show that in these countries independently of each other to use the the affixing, after repackaging, of name Serenid for the United Kingdom another mark of the same proprietor is and Ireland and Seresta, inter alia for also unlawful. the Netherlands. AHPC states that this result is also dear The Court of Justice, at paragraph 14 from the preliminary draft of the regu of its judgment in Case 192/73 Hag, lation relating to the Community trade ruled that information to consumers as mark. to the origin of a product covered by а In accordance with paragraph 8 of the trade-mark may be ensured by "other means" than those which affect the free judgment in Case 16/74, Winthrop, a person who profits from the goodwill of movement of goods. In the light of this a trade-mark without putting up any judgment it seems reasonable for AHPC capiul in that connexion falls into the to request in the present case the use of "other means" in order to indicate the category of "competitors wishing to take advantage of the status and repu origin of the product by, for example, tation of the trade-mark by selling staling that it is an "original product", products illegally bearing that trade which is Centrafarm's present practice. mark". AHPC considers that Centrafarm is in no way entitled to use the goodwill of To Centrafarm's argument that it does the Seresta mark which it has itself built not "improperly" (in Dutch "valselijk") up as Centrafarm has expended neither put the Seresta mark onto the products effort nor money to that end. If in question since the oxazepamum orig Centrafarm considers that too few inates from AHPC, the latter replies doctors prescribe oxazepamum instead that the word "vals" (in English: of Seresta it should provide publicity for "improper") in Dutch does not merely

It maintains that this view is supported by the AHPC adds that the above-mentioned wording of Article 13 A of the Uniform paragraph shows that protection against Benelux Law on Trade-marks and is unlawful gain from the status of the clear from the opinions of a number of mark constitutes "protection of а writers concerning the affixing of a legitimate interest on the pan of the mark to products not distinguished by proprietor of the trade-mark or business that mark With regard to the law of name" within the meaning of the sixth

paragraph of the judgment in Case its favour since such measures conform 119/75 Terrapin. to the four conditions mentioned by Professor van Gerven: AHPC then refers to an article by Professor van Gerven: The Recent — the unfair competition relates to Case-Law of the Court of Justice industrial and commercial property; concerning Articles 30 and 36 of the EEC Treaty", Common Market Law — AHPC's action satisfies the test of Review, February 1977, p. 5 et seq. proportionality since Centrafarm has Professor van Gerven considers that it is other means by which it can indicate clear from the case-law of the Court the origin of its products; that interests or values other than those enumerated in Article 36 deserve a — there is no Community legislation measure of protection and therefore on unfair competition: allow for a certain deviation from the — AHPC's action is not an arbitrary prohibition of Article 30 provided that: discrimination and does not — the interesu are somehow related to constitute a disguised hindrance to the matten named in Article 36; trade between Member States since — the measures are reasonable; it is directed against the unjustified use of the reputation of a mark as — there is not a Community system was stated by the Court in defining encompassing the interest or value the specific subjea-matter of trade

Such product may covers only safeguarding the function of nevertheless come within the ambit of indicating the origin of the product and Article 30, according to the judgment of does not cover protection against unfair the Court of 16 November 1977 in Case competition which consists in deriving 13/77 GB-INNO-BM v ATAB ([1977] improper benefit from the reputation ECR 2115), if the sale of imported and goodwill of the mark. Furthermore products becomes "if not impossible, AHPC considers that the protection of more difficult than that of domestic the trade-mark right upon which it

JUDGMENT OF 10. 10. 1978 — CASE 3/78

a like nature. If the proprietor had to certain characteristics which are relevant accept that other persons could also use to the consumer and to the choice his mark for such products in the which he makes. The Federal Member Sute in question this would Government considers that such nullify the principal function of a trade infringement is further aggravated if in mark which is to establish the identity, addition the presentation of the product in a form which can be remembered, of differs from that which the proprietor of products to which the mark has been the mark habitually adopts for the

The German Government considers that such The proprietor of a mark is also entitled behaviour also infringes the exclusive to prohibit the use of the mark if a third right of the proprietor of the mark to party affixes it to a product coming decide not only whether a specific from the proprietor which is identical as product, in the way it is presented, shall to origin, characteristics and com in fact be placed on the market as a position with a product which the trade-marked product but also under proprietor has marketed without a what mark the product shall be

The Federal product bearing the mark. The fact that Government considers that such justi-

fication arises from the fact that the chasers can no longer rely on the trade right to prohibit the use of the mark is mark as being an indication that the necessary in order to prevent improper product originated from the proprietor use by competitors of the reputation of of the mark and has been put into circu the original goods produced by the lation by him; the specific subject- proprietor of the mark. Failure to matter of the trade-mark is thus uphold that right would strike at the destroyed. very root of the trade-mark and would Although the therapeutic effect of the render it practically worthless, both to two types of tablet is similar consumers the proprietor of the mark and to the have been wrongly induced to buy

The Terrapin. That being so the exercice by Federal Government does not however AHPC of as rights under the law of the propose to express its views on the Netherlands in relation to the Seresta question whether in a particular case mark is justified under the first sentence products are in fact different where they of Article 36 of the Treaty. can be distinguished only by the taste. Nevertheless, if the proprietor of a It adds that there could be an abuse of a trade-mark were to exercise his rights in trade-mark right if the proprietor respect of it in a way which amounted thereof, in exercise of that right, had an to a disguised restriction on trade intention to commit such an abuse — between Member States, this would and this intention could arise from justify the issue by a national court of objective circumstances. an injunction requiring him to desist It concludes that the reply to the first from doing so but this would not justify preliminary question should be in the anyone else affixing the mark to any negative despite the provision in the product. second sentence of Article 36 of the The Government of the United Treaty Kingdom cannot accept the contention of Centrafarm that its use of the Seresta

JUDGMENT OF 10. 10. 1978 — CASE 3/78

consent. matter of the reference for a preliminary ruling are proprietary medicinal 5. Observations of the Commission products within the meaning of Article 1 of Council Directive 65/65/EEC. The The Commission having first set out the primary purpose of the directive, the case-law of the Court of Justice on the safeguarding of public health, is relation between industrial property frustrated if there is repackaging, rights and the provisions of the Treaty relabelling or renaming of products goes on to emphasize that in the unauthorized by the proprietor of judgment in Case 119/75 Terrapin the the trade-mark with consequential Court inter alia considered that the implications affecting the reputation of basic function of the trade-mark is "to the proprietor of the trade-mark. guarantee to consumen that the product has the same origin".

dealer. mark being altered by such repackaging. Having regard to the present early suge The Commission states that in this of harmonization in the field of context the proprietor of the mark alone proprietary medicinal products, the fact is entitled to identify products in this that under Community legislation and manner: he alone is in a position to, and consequential national legislation repack entitled to, confer upon a product an aging of pharmaceutical products is identity, by affixing a mark to it, required to be carried out under an auth distinguishing it from other products.

CENTRAFARM v AMERICAN HOME PRODUCTS CORPORATION

information which could lead to such a protected by the trade-mark into circu­ lation for the first time". The conclusion and that it is for the court

above. In fact the mark distinguishes the mark, the mark usually used in the product in relation to all others and importing Member Sute, to which the such distinction can only be made by proprietor cannot object. Such a course AHPC or by a person empowered to do should, however, be allowed only so by it, for example by the holder of a subject to the mon stringent reser licence. vations. If this suggestion is rejected The Commission accordingly concludes another solution must be sought for the that the conduct of AHPC is covered in problem created by the cutting off of principle by the first sentence of Article markets through the improper use of different trade-marks.

. . in respect occasions. The following dilemma of any improper exercise of the same therefore remains: either to maintain rights of such a nature as to maintain or provisionally the rights based on the effect artificial partitions within the Common Market". There exists in trade-mark, although they were wrong fully obtained, or to grant the importer principle a right to register a different the right, equally provisional, to rectify mark in each Member Sute. In fact it the situation himself. The Commission may be that the producer in the does not sute any preference for one or importing country can only use the other solution. same mark in the exporting country because there is already a competing It concludes that the reply to the first mark belonging to a proprietor question of the court making the independent of him or, for example, reference should be that in the given for reasons concerned with language. circumstances the provisions of the The Commission considers that the Treaty on the free movement of goods exercise of the above-mentioned right do not in principle rule out a nevertheless constitutes an abuse if its prohibition on the basis of trade-marks. proprietor applies it with the purpose of It considers that it is however appro isolating one or more national markets. priate to make a reservation, namely It emphasizes in this connexion that it that the proprietor of a mark who does not possess in the present case employs for one and the same product

"If it is necessary in principle to refuse do so on the same footing as the manu­ to a parallel importer of a specific facturer or appointed importer. product bearing a mark the right to Secondly it observes that the system adapt the mark used in the exporting advocated in the present case by AHPC, Member Sute to that used in the in so far as it is sanctioned in principle importing Member Sute, must provision by the Netherlands authorities in future be made for an exception in that case in legislation, could bring about a situation respect of proprietary medicinal where a specific proprietary medicinal products bearing a mark, such provision product originating from a given manu­ being in furtherance of the protection of the health of humans within the facturer would circulate not only under one and the same mark but under as meaning of Article 36 of the Treaty?" many marks as there are in countries in Before replying to the second pre­ which the manufacturer wishes to liminary question Centrafarm makes distribute the product. two observations: In reply to the second preliminary First it maintains that in the system of question Centrafarm points out that in refunds applied by sickness funds in the the judgment of 20 May 1976 in Case Netherlands in respect of products sold to their members proprietary medicinal 104/75 Adriaan de Peijper ([1976] ECR prod ucu constitute, under the mark 613) the Court found that the under which the product is notified to provisions of Directive 65/65 do not the national authorities by the manu­ always require to be interpreted to the letter. It considers that the reasons for factur or appointed importer, both the reason for, and the basis of, the refund. this stem from the fact that the authors

Centrafarm proceeds to note that it is Centrafarm concludes by stating that clear from the directive, in particular for the purposes of the reply to be given from Articles 3 to 5 and 8 to 12 thereof, to the second preliminary question that its authors considered that a regard should be had for the fact that proprietary medicinal product would be any national provisions aimed at marketed only under a single manufac preventing a parallel importer of a given turer's or dealer's mark. To ensure the proprietary medicinal product from ben and most effective safeguard for adapting the brand name or mark of a public health — the principle aim of the product to the brand name or mark of directive — the identification of a given such product in the importing Member proprietary medicinal product should Sute constitutes a measure having an not be rendered still more difficult by effect equivalent to restrictions on the fact that the product is marketed imports which is not justified by the under different marks.

Journal 1975, L 147, p. 13). Centrafarm the second preliminary question since maintains that in any case the general the question in fact concerns the scheme of the Treaty implies that a possibility of importing the product into Member Sute B under a mark other parallel importer must be free to adapt the foreign mark to the Netherlands than that under which it was registered in Member Sute B and not in "the mark and also to register and thereby other" Member Sute. market the proprietary medicinal product under the latter mark.

different criteria applied under the EEC, provisions on reimbursement Centrafarm considers that such an — The circumstance that following the option does not make economic sense. prohibition on Centrafarm by way

of interim measure Centrafarm 5. Observations of the Commission markets its oxazepamum without The Commission maintains that it showing the Seresta name. cannot be established on the basis of the 3. Observations of the Federal Republic wording of Article 23 of the Besluit of Germany registratie geneesmiddelen, or the The Federal Republic of Germany statement of reasons accompanying it considers that the authorization issued that the Netherlands legislature in respect of a medicament by the intended by this article to restrict rights competent authorities of a Member conferred under trade-mark law. Sute is in principle irrelevant in Accordingly that provision is irrelevant establishing whether the distribution of a product authorized for sale is in to the reply to the first preliminary accordance with trade-mark law and question. The reply to the second pre­ whether there is an infringement of the liminary question must accordingly second sentence of Article 36 of the establish that, in appraising the situation Treaty. The Federal Government states forming the basis of the first question, that it is in fan clear from Article 9 of account should be taken only of trade­ Council Directive 65/65/EEC that the mark law. authorization to place a proprietary medicinal product on the market does not affect rights and duties under the III — Oral procedure civil law of the Member States. The provisions on proprietary medicinal products must ensure that the manu­ The plaintiff in the main action, facture and composition of such represented by A. F. de Savornin products are in accordance with health Lohman, the defendant in the main legislation. Such provisions do not take action, represented by T. Schaper, the into account differences in composition Federal German Government, which are unobjectionable from the represented by M. Seidel, Ministerialrat standpoint of health legislation. at the Federal German Ministry of Economics, E. Bülow, Ministerial­ 4. Observations of the United Kingdom According to the Government of the dirigent at the Federal German Ministry United Kingdom the fact that national of justice, and the Commission, laws based on Council Directive 65/65 represented by its Legal Adviser, R. do not specifically preclude the Wagenbaur, acting as Agent, assisted by marketing of products under changed Auke Haagsma, a member of its Legal names does not necessarily mean that Service, presented oral argument at the the marketing of such products may not hearing on 13 June 1978. be prevented on the grounds either of the protection of industrial property or The Advocate General delivered his the protection of the health of humans. opinion on 11 July 1978.

5 According to their wording the questions submitted concern one and the same product, despite certain slight differences which may exist between the product as marketed under one or other mark, so that the Court of Justice is not required to give a ruling on the basis that the two marks were used for two products each of which has its own characteristics.

The first question

6 The purpose of the first question is to establish whether, in the given circumstances, the rules of the Treaty, in particular Article 36, prevent the proprietor of a trade-mark from exercising the right conferred upon him under the national law.

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7 As a result of the provisions of the Treaty relating to the free movement of goods, and in particular Article 30, quantitative restrictions on imports and all measures having equivalent effect are prohibited between Member States.

8 Under Article 36 those provisions nevertheless do not preclude prohibitions or restrictions on imports justified on grounds of the protection of industrial and commercial property.

14 The guarantee of origin would in fact be jeopardized if it were permissible for a third party to affix the mark to the product, even to an original product.

CENTRAFARM v AMERICAN HOME PRODUCTS CORPORATION

15 It is thus in accordance with the essential function of the mark that national legislation, even where the manufacturer or distributor is the proprietor of two different marks for the same product, prevents an unauthorized third party from usurping the right to affix one or other mark to any part whatsoever of the production or to change the marks affixed by the proprietor to different pans of the production.

16 The guarantee of the origin of the product requires that the exclusive right of the proprietor should be protected in the same manner where the different parts of the production, bearing different marks, come from two different Member States.

17 The right granted to the proprietor to prohibit any unauthorized affixing of his mark to his product accordingly comes within the specific subject-matter of the trade-mark.

18 The proprietor of a trade-mark which is protected in one Member Sute is accordingly justified pursuant to the first sentence of Article 36 in preventing a product from being marketed by a third party in that Member State under the mark in question even if previously that product has been lawfully marketed in another Member Sute under another mark held in the latter State by the same proprietor.

The second question

24 The second question is whether it is relevant to the answer to be given to the first question, that in the importing Member Sute there are provisions on medicinal products under which it is permissible to impon a medicinal product from another Member Sute under a mark other than that under which it is registered in the latter Sute.

25 Such provisions, in pursuing objectives relating to the protection of public health, are concerned with the names under which proprietary medicinal products may be placed on the market.

26 It must therefore be presumed that such provisions do not have the effect of amending the law on trade-marks.

27 It follows that the imponer of a medicinal product cannot find in the facility afforded him by such provisions any justification for avoiding the restrictions entailed by the requirement that he observe the trade-mark rights belonging to the manufacturer of the product.

28 The reply to the second question must accordingly be that the existence of provisions on the names under which proprietary medicinal products may be marketed is irrelevant to the reply to be given to the first question.

in answer to the questions referred to it by the Arrondissementsrechtbank, Rotterdam, by an order of that court of 19 December 1977, hereby rules:

1. (a) The proprietor of a trade-mark which is protected in one Member Sute is justified pursuant to the first sentence of Article 36 in preventing a product from being marketed by a third party even if previously that product has been lawfully marketed in another Member State under another mark held in the latter Sute by the same proprietor.

(b) Nevertheless such prevention may constitute a disguised restriction on trade between Member States within the meaning of the second sentence of Article 36 of the Treaty if it is established that the proprietor of different marks has followed the practice of using such marks for the purpose of artificially partitioning the markets.

2. The provisions on the names under which proprietary medicinal products may be marketed are irrelevant to the above reply.

Kutscher Menens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait