C-238/87

OPINION OF MR MISCHO — CASE 238/87

OPINION OF MR ADVOCATE GENERAL MISCHO delivered on 21 June 1988 *

Mr President, Member State, confer on it the sole and Members of the Court, exclusive right to make and import replacement body panels required to effect repair of the body of a car of its manu­ facture (if such body panels are not re­ placeable by body panels of any other 1. The present reference for a preliminary design), is such a manufacturer, by reason ruling derives from proceedings before the of such sole and exclusive rights, in a High Court of Justice, London (Chancery dominant position within the meaning of Division, Patents Court), between AB Volvo Article 86 of the EEC Treaty with respect to (hereinafter referred to as 'Volvo') and Erik such replacement parts?' Veng (UK) Ltd (hereinafter referred to as 'Veng').

* Translated from the French.

VOLVO v VENG

12. But in the present case, it does not seem to me to be necessary to establish beyond 9. Therefore, I likewise cannot share the doubt whether or not a car manufacturer other views which have been put forward, enjoys a dominant position, even if such namely that the market to be taken into industrial property rights as he may possess account is the market in spare parts for cars are disregarded. The situation referred to by in general or even the market which has the national court relates to body panels for grown up around the manufacture and which the manufacturer is the proprietor of maintenance of motor vehicles. a registered design.

OPINION OF MR MISCHO - CASE 238/87

14. But in the present case, the industrial property rights relate to body panels for a motor vehicle and the only products which can be substituted for them are products 16. The second question asked by the High having exactly the same shape as the parts Court of Justice is as follows: Is it prima produced by the manufacturer. As the facie an abuse of such dominant position for Commission rightly pointed out, in the such a manufacturer to refuse to license circumstances of this case no substitutable others to supply such body panels, even goods exist which do not encroach upon the where they are willing to pay a reasonable registered rights of the manufacturer. royalty for all articles sold under the licence Accordingly, as soon as the proprietor (such royalty to represent an award which is exercises the rights deriving from his just and equitable having regard to the registered design and substitutable parts can merits of the design and all the surrounding no longer be produced, there is no doubt circumstances, and to be determined by that the manufacturer holds a dominant arbitration or in such other manner as the position in the market in the spare parts for national court shall direct)? which he registered the design and which is, in the last analysis, the 'relevant market' in the present case.

17. The object of the second question is therefore to determine whether the mere 15. In view of the foregoing considerations, fact of being the proprietor of a registered I suggest the following answer to the first design for a spare part and of exercising the question submitted by the High Court, exclusive rights relating thereto constitutes London : per se an abuse on the part of the vehicle manufacturer, an abuse which could be 1 - Case 40/70 Sirena v Eda [ 1971 ] ECR 69, paragraph 16; brought to an end by the grant of licences 971 ECR Case 78/70 Deutsche Grammophon v Metro L' ] to third parties. 487, paragraph 16.

22. Let us also remember that in the judgment in Pharmon v Hoechst 2the Court was asked whether the rule as to the 'for this prohibition [under Article 86] to exhaustion of exclusive rights also applied apply it is . . . necessary that three elements where the product imported and marketed shall be present together: the existence of a was not one lawfully placed on the market dominant position, the abuse of this position of another Member State by the patent and the possibility that trade between proprietor himself, with his consent or by a Member States may be affected thereby. person economically or legally dependent on him, but a product manufactured in the Member State of exportation by the holder of a compulsory licence in respect of a Although a patent confers on its holder a parallel patent held by the patent proprietor special protection at national level, it does in the Member State of importation. not follow that the exercise of the rights thus conferred implies the presence together of all three elements in question. 23. The Court stated that:

'where ... the competent authorities of a It could only do so if the use of the patent Member State grant a third party a were to degenerate into an abuse of the compulsory licence which allows him to abovementioned protection'. carry out manufacturing and marketing operations which the patentee would normally have the right to prevent, the patentee cannot be deemed to have 20. Further on the Court stated that: consented to the operation of that third party. Such a measure deprives the patent proprietor of his right to determine freely the conditions under which he markets his products'. 'since the existence of patent rights is at present a matter solely of national law, the 2 — Judgment of 9 July 1985 in Case 19/84 f 19851 ECR 2281 use made of them can only come within the at p. 2298.

28. The refusal to grant a licence — in other words the straightforward exercise of and concluded that: the right associated with the registered design — cannot therefore in itself constitute abuse of a dominant position. In addition to the dominant position and the 'it is therefore necessary to allow the patent intellectual property right there must be a proprietor to prevent the importation and further circumstance or element. That marketing of products manufactured under element might for example be discrimi­ a compulsory licence in order to protect the natory conditions of sale (refusal to supply substance of his exclusive rights under his spare parts to independent repairers, for patent'. instance), or refusal to continue to manu­ facture spare parts for a vehicle no longer in production even though many vehicles of that type were still in use. But the case which comes most readily to mind is that of 25. In the same judgment, the Court also applying 'unfair prices' within the meaning made it clear that it was immaterial whether of subparagraph (a) of the second the competent authorities in the Member paragraph of Article 86. Veng in fact State which issued the compulsory licence contends that the front wings of Volvo had fixed royalties payable to the patentee Series 200 cars are sold by Volvo conces­ or whether the patentee had accepted or sionnaires at exaggeratedly high prices. refused such royalties (paragraphs 28 to 30 of the judgment in Pharmon v Hoechst).

(within the meaning of the judgment in 33. As regards the bodywork components Hoffmann-La Roche v Centrafarm, para sold as spare parts the problem displays an graph 16 3)? If that phrase is taken to mean unusual aspect in so far as part of that 'play a role in connection with the abuse', expenditure has probably already been such an assertion might be correct since recovered from the sale of new cars. without the patent or registered design the However, I do not in principle see any manufacturer would probably not have been reason why a manufacturer should be in a position to impose excessive prices.

31. On the other hand it seems to me to be possible that where a dominant position is abused in connection with an industrial property right, the competent national 34. It should be pointed out, finally, that if authority (to the extent to which it is it were to be found that the monopoly empowered to do so) or the Commission of enjoyed by motor vehicle manufacturers the European Communities (on the basis of regarding spare parts produced by them and Article 3 of Regulation No 17) may impose covered by protective rights frequently one or more compulsory licences on the prompts them to abuse their dominant proprietor of the patent or registered design position or if the temptation to engage in if it considers that that is the best way of such abuse were considered too strong, it bringing the abuse to an end. would of course be open to the national legislatures or possibly to the Community legislature (by way of harmonization of national legislation) to regulate the exclusive rights in question by the means considered

OPINION OF MR MISCHO — CASE 238/87

licences which would enable third parties to 37. Since I have established that the refusal to grant a licence does not of itself supply body panels covered by that design constitute abuse of a dominant position, the in return for the payment of a reasonable third question is now devoid of purpose. royalty does not of itself constitute abuse of a dominant position, since that refusal is no more than the consequence of the exercise of the right associated with the registered design.' 38. But what about the effect on trade between the Member States if the proprietor The third question of the registered design abused his dominant position, for example by fixing unfair sale 36. The third question submitted by the prices? High Court of Justice is formulated as follows'.

'Is such abuse likely to affect trade between 39. Like the Commission, I consider that in Member States within the meaning of such cases it would be for the national court Article 86 by reason of the fact that the to investigate whether the undertaking intending licensee is thereby prevented from abusing its dominant position imports the importing the body panels from a second parts in question from one Member State Member State?' into another Member State.

Conclusion

40 . I therefore propose that the Court should give the following answers to the three questions submitted by the High Court of Justice :

' ( 1 ) If a substantial car manufacturer holds registered designs which , under the law of a Member State , confer on it the sole and exclusive right to make and import replacement body panels required to effect repair of the body of a car of its manufacture ( and if such body panels are not replaceable by body panels of any other design ), that manufacturer is in a dominant position within the meaning of Article 86 of the EEC Treaty , by reason both of such sole and exclusive rights and of the fact that it is impossible for the consumer to obtain a substitute product .