C-177/83

and RINGELHAN EiNRiCHTUNGS GMBH, Oberhausen, Federal Republic of Germany,

on t h e interpretation of Article 30 of t h e E E C T r e a t y ,

THE COURT

composed of: L o r d M a c k e n z i e Stuart, President, G. Bosco, O . D u e a n d C. K a k o u r i s , Presidents of Chambers, A. O'Keeffe, T. Koopmans, U . Everling, K. Bahlmann a n d Y. G a l m o t , J u d g e s ,

Advocate G e n e r a l : C. O . L e n z Registrar: P . H e i m

gives t h e following

The French company Ringelhan & Paragraph 3 of the Gesetz gegen den Rennett SA, the first defendant in the unlauteren Wettbewerb reads as follows: main proceedings, was founded in 1971 as a subsidiary of the German company Ringelhan & Rennett which was wound up as a result of insolvency in 1982. Before the winding-up the French "Whosoever in the conduct of business company was sold to a third party and for purposes of competition makes since the winding-up the second de- misleading statements regarding com- fendant, Ringelhan Einrichtungs GmbH, mercial matters, in particular regarding has looked after its commercial interests the quality, origin, method of manu- in Germany. The old German company facture or of calculating the price of Ringelhan & Rennett and Theodor Kohl specific goods or services or the whole KG, the plaintiff in the main pro- range of his products or services, price ceedings, were two of the main manu- lists, the manner in which supplies are facturers and installers of pharmacy obtained or their source, the winning of equipment on the German market. awards, the cause or purpose of the sale or the quantities available may be sued for an injunction restraining him from making such statements." The old German company Ringelhan & Rennett and its subsidiaries in other Member States, including in particular the French company, offered the same The plaintiff asserted before the Land- range of pharmacy equipment under a gericht that the use of the mark in joint business name, their trade symbol question gave the false impression that being "r + r" in white letters on a red the old German company, which had an background. Since the winding-up of the excellent reputation, was involved when German company the French company there were no longer any links with that and its new representative in Germany company and that the defendants were have continued to use that mark for the therefore unfairly exploiting the goodwill presentation and marketing of their of the old company. products on the German market.

4. The order for reference was registered at the Court on 16 August 3. In view of that dispute the Land- 1983. gericht München I, by order of 9 June 1983, submitted the following question to the Court for a preliminary ruling under Article 177 of the EEC Treaty: In accordance with Article 20 of the Protocol on the Statute of the Court of Justice written observations were lodged by Theodor Kohl KG, the plaintiff in the main proceedings, represented by Hermann Schwanhäusser, Rechtsanwalt, "If a company symbol (in this case Munich, Ringelhan & Rennett SA and "r + r" in white lettering on a Ringelhan Einrichtungs GmbH, the contrasting background) has hitherto defendants in the main proceedings, been lawfully used by a foreign under- represented by Jochen Pagenberg, taking (in this case French) in its own Rechtsanwalt, Munich, the Government country (France) to designate that under- of the Federal Republic of Germany, taking in business or trade and that represented by Martin Seidel, Ober- undertaking used to form a group with amtsrat at the Ministry of Economic an undertaking in the Federal Republic Affairs, acting as Agent, the Government of Germany which used the same of the French Republic, represented by company symbol to designate that Jean-Paul Costes, attached to the Secre- (German) undertaking in the Federal tariat General of the Interministerial Republic of Germany until the German Committee for Questions of European undertaking went into liquidation and as Economic Cooperation, acting as Agent, a result ceased to exist and if under and by the Commission of the European national (German) competition law the Communities, represented by Christoph use of the company symbol in question Bail, a member of its Legal Department, by the foreign (French) undertaking in acting as Agent. the Federal Republic of Germany is unlawful on the ground that persons seeing the symbol perceive it as designating the non-existent German Upon the application of the Federal undertaking or in any event the (likewise Republic of Germany for the case to be non-existent) group of undertakings and decided in plenary session the case was such use is therefore misleading assigned to the full court pursuant to (Paragraph 3 of the Gesetz gegen den Article 95 (2) of the Rules of Procedure. unlauteren Wettbewerb [Law against Unfair Competition], does Community law (in particular Article 30 of the EEC Treaty) prevent the foreign (French) undertaking from being prohibited from Upon hearing the report of the Judge- using the symbol in the Federal Republic Rapporteur and the views of the of Germany? Advocate General the Court decided to

In the view of the Government of the Federal Republic of Germany consumer Kohl KG, the plaintiff in the main protection is in any case part of a broad proceedings, and the German Govern- concept of public policy referred to ment argue that Community law does in Article 36 of the Treaty. It is also not preclude the application of national clear from Article 2 (1) of the Paris legislation which enables the misleading Convention that the protection of use of a mark to be brought to an end in industrial and commercial property circumstances such as those described in includes protection against unfair the question submitted to the Court. competition in this field. If an injunction such as that applied for in the present According to the REWE decision, case were caught by Article 30 of the obstacles to intra-Community trade EEC Treaty, it would nevertheless be resulting from disparities between justified under Article 36 of the Treaty. national laws must be accepted in so far as, in the absence of common legislation, such laws applying to national and imported products alike, are necessary to The German Government recognizes meet overriding requirements relating in that the aforementioned legal interests particular to consumer protection and must be protected by means pro- fair trading. In a series of judgments the portionate to the object in view, that is Court has taken into account disparities to say by measures causing the least between national legislation on, for hindrance to the movement of goods example, fraudulent imitation (Case between Member States. In some 6/81, Industrie Diensten Groep v Beele, circumstances an absolute prohibition on [1982] ECR 707), the hallmarking of using a mark might be disproportionate articles made from precious metals (Case to the object in view if the requirement 220/81, Robertson, [1982] ECR 2349), of additional information about the designs (Case 144/81, Kenrkoopv Nancy origin of the mark were sufficient. In this Keen Gifts, [1982] ECR 2853) and on regard reference must be made to the the offering of free gifts with purchases marketing usages considered proper and (Case 286/81, Oosthoek, [1982] ECR fair in the Member State of importation 4575). Those decisions have been (see the judgment delivered by the Court

on 22 January 1981 in Case 58/80, which it formed with the first defendant Dansk Supermarked v Imerco, [1981] cannot have the effect of allowing third ECR 181). Consequently it is for the parties to plead the existence of a risk of national court to investigate whether confusion which they could not have according to national law the elements of pleaded previously. a misleading practice are present and secondly to determine the measures to be adopted to remedy that situation. In this regard it may also take account of the degree to which a practice may be Ringelhan states that the principle of misleading. the exhaustion of trade-mark rights in Community law also operates where the formerly joint ownership of rights is split as a result for example of compulsory winding-up. Even writers who reject the The Ringelhan companies, the defendants exhaustion principle where rights are in the main proceedings, and the French split as result of State measures accept its Government consider that a prohibition operation in the event of compulsory of the kind referred to in the question winding-up. The disposal of a trademark submitted to the Court is incompatible following insolvency ought to have the with the rules of Community law on the same legal effect as the private, voluntary free movement of goods. To support transfer of the trade mark before the their view they refer to decisions of the commencement of the insolvency Court on industrial and commercial proceedings. In the present case the property rights and in particular to the liquidator of the old German company judgment delivered on 3 July 1974 in agreed to the use of the mark in Case 192/73 Van Zuylen Frères v Hag Germany by the first defendant. In that AG, [1974] ECR 731). It is clear from regard the facts of this case are therefore that judgment that before it went into different from those of the Kaffee Hag liquidation the old German company case. could not have prevented the marketing in the Federal Republic of Germany of products manufactured by its subsidiary in France bearing with its consent their joint symbol. In the case it was held that No different assessment is rendered the exclusiveness of the right in question, necessary by the decisions of the Court which may be the consequence of recognizing that the free movement of the territorial limitation of national goods does not in principle affect legislation, may not be relied upon by national provisions on unfair com- the owner of the right with a view to petition. prohibiting the marketing in a Member State of goods lawfully produced in another Member State under an identical trade mark having the same origin. A fortiori third parties could not have relied In the present case the application of at that time upon Paragraph 3 of the the Gesetz gegen den unlauteren Gesetz gegen den unlauteren Wett- Wettbewerb affects only products orig- bewerb on the ground of an alleged risk inating in France owing to the fact of confusion as to the origin of the that they are imported bearing a mark products in question. The winding-up whose use alone cannot be challenged. of the old German company and However, such application does not consequently the break-up of the group affect national and imported products in

If that is not the case, the foreign user of a mark may not be required under national law on unfair competition to use a different form of mark on his products It points out that German law or in his advertisements at trade fairs, distinguishes between trade marks in newspapers or in his brochures or to distinguishing goods or services whose add additional information not normally protection is governed exclusively by the required for fair trading purposes and Warenzeichengesetz [Law on Trade which may detract from the promotional Marks] and company symbols which arc value of the mark. The foreign user of a not registered as marks and whose mark whose ownership has been split protection arises from their usage within may continue to use it in ways con­ the national territory and is governed by forming to normal marketing practices the Civil Code and the Gesetz gegen den throughout the Community. unlauteren Wettbewerb.

JUDGMENT OF 6. 11. 1984 — CASE 177/83

Ill — Oral procedure

However, even if Article 36 cannot be relied upon to prevent the mere use of a mark on the ground that consumers may- be misled, national law on unfair competition remains relevant for the At the hearing on 28 June 1984 oral assessment of additional factors argument was presented by the indicating unfair practices on the part of following: the plaintiff in the main the user of the mark. The application of proceedings, Theodor Kohl KG, provisions of national law allowing an represented by Helmut Eichmann, action to be brought for an injunction is, Rechtsanwalt, Munich; the defendants in however, restricted by the requirements the main proceedings, Ringelhan & of Community law. In this regard the Rennett SA and Ringelhan Einrichtungs Commission emphasizes in particular GmbH, represented by Jochen Pagen- that a general prohibition restraining an berg, Rechtsanwalt, Munich; the undertaking which previously belonged Government of the Federal Republic of to a group of undertakings from Germany, represented by Martin Seidel, continuing to use in a Member State the Ministerialrat at the Federal Ministry of mark jointly used by that group on the Economic Affairs, acting as Agent, and ground that the consumer is likely to be the Commission of the European

KOHL v RINGELHAN Sc RENNETT

Communities, represented by Christoph The Advocate General delivered his Bail, a member of its Legal Department, opinion at the hearing on 19 September acting as Agent. 1984.

Decision

1 By an order of 11 August 1983, which was received at the Court on 16 August 1983, the Landgericht München I [Regional Court, Munich I] referred to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 30 of the Treaty, so as to enable it to reach a decision on the compatibility with that article of a provision of German law regarding unfair competition.

5 The gravamen of Kohl's complaint is that Ringelhan & Rennett SA (the French company) and Ringelhan Einrichtungs GmbH (the new German company) refer in their business correspondence and advertisements on the German market to the "r + r" symbol without indicating that there is no longer any legal or economic connection with the old Ringelhan & Rennett company, which formerly had a considerable reputation in the sector in question. Thus, according to Kohl, the two existing Ringelhan companies have misled the German public.

6 Kohl's contention was upheld in interlocutory proceedings before the German courts on the ground that the advertising of the two existing Ringelhan companies could, in the absence of any indication that there was no connection with the old German company, give the impression that the goods came from -the old campany and not from a foreign undertaking. Interlocutory injunctions were granted prohibiting the two companies from using the distinctive symbol.

7 The case before the Landgericht München I, which took the view that the use of the distinctive symbol in the Federal Republic of Germany by the French firm was prohibited by German competition law even though the symbol was lawfully used in France, since the relevant business sector in Germany might regard the symbol as a reference to the defunct German undertaking or, in any event, to the group of undertakings, which had also ceased to exist, and that such use might therefore be misleading, contrary to Article 3 of the Law on Unfair Competition.

s The national court therefore referred to the Court of Justice for a pre- liminary ruling the questions whether under Community law, in particular

1 1 Thus the question raised concerns the compatibility with the Treaty of a legal provision in one Member State making it possible to prohibit the use of a distinctive symbol by an undertaking established in another Member State where its use is lawful in that other Member State and was also lawful in the first Member State until the dissolution of the group which associated the undertaking in question with a company established in the first Member State.

" JUDGMENT OF 6. 11. 1984 — CASE 177/83

i2 Theodor Kohl KG, the plaintiff in the main proceedings, and the Government of the Federal Republic of Germany pointed out in that regard that the Court has held in previous judgments that, in the absence of common rules, obstacles to intra-Community trade resulting from disparities between national legislation must be accepted in so far as such legislation, being applicable to domestic products and imported products without distinction, is necessary in order to satisfy imperative requirements reläting inter alia tö Consumer protection and fair trading.

1 3 According to the Ringelhan companies, the defendants in the main proceedings, the Government of the French Republic and the Commission, that principle does not apply to a case such as this, where the obstacle to trade created by the application of national legislation is a result of the liquidation of a German company and the dissolution of the group composed of it and a French undertaking. It is contended that such circumstances cannot have the result of allowing a competitor on the German market to invoke consumer protection where he could not do so before the dissolution of the group.

is The German Government further argued that even if the provision of national law in question was contrary to Article 30 it could be justified by reference to Article 36 of the Treaty, since consumer protection falls within a broad interpretation of the concept of public policy referred to in that article.

19 That argument cannot be accepted. Whatever interpretation is to be given to the term "public policy", it cannot be extended so as to include considerations of consumer protection. According to the aforesaid judgment of 17 June 1981, such considerations may in certain circumstances be taken into account in establishing whether national measures applicable without distinction to domestic and imported products are caught by the prohibitions laid down in Article 30; they cannot, however, serve to justify restrictions on imports under Article 36.

20 The answer to the question raised must therefore be that Article 30 of the EEC Treaty must be interpreted to mean that the prohibitions laid down therein apply to a Member State's legislation on unfair competition in so fai- as it makes it possible to prohibit the use, by an undertaking established in

JUDGMENT OF 6. U. 1984 — CASE 177/83

another Member State, of a distinctive symbol lawfully used in that other Member State, on the sole ground that the symbol was formerly used by a group of undertakings to which it belonged, in common with an undertaking established in the first Member State which has since been wound up, and that the symbol might therefore be regarded by the public as a reference to the defunct undertaking or group.

KOHL v RINGELHAN & RENNETT

taking established in the first Member State which has since been wound up, and that the symbol might therefore be regarded by the public as a reference to the defunct undertaking or group.

M a c k e n z i e Stuart Bosco Due Kakouris O'Keeffe Koopmans Everling Bahlmann Galmot

Delivered in open court in L u x e m b o u r g on 6 N o v e m b e r 1984.

For the Registrar H. A. Rühi A. J. M a c k e n z i e Stuart Principal Administrator President

OPINION OF MR ADVOCATE GENERAL LENZ DELIVERED ON 19 SEPTEMBER 1984 »