C-341/87

OPINION OF MR DARMON — CASE 341/87

OPINION OF MR ADVOCATE GENERAL DARMON delivered on 29 November 1988 *

Mr President, 'sound recordings, even if incorporating Members of the Court, protected musical works, are products to which the system of free movement of goods ... applies.' 1

EMI ELECTROLA v PATRICIA IM- UND EXPORT AND OTHERS

In its judgment in Coditei II the Court also commercial exploitation of the work in expressly indicated that Article 36 is meant question. to protect artistic and intellectual property 4 rights. Most importantly, however, the reasoning which led the Court to consider 6. In my view, that analysis is borne out by that copyright stricto sensu is covered by the the generality of the reasons stated in the concept of industrial and commercial Court's judgment in Keurkoop: property must, in my view, be applied in this case. The Court stated that copyright comprises the right '. .. it should be stated that, as the Court has already held as regards patent rights, trade marks and copyright, the protection of 'to exploit commercially the marketing of designs comes under the protection of the protected work' industrial and commercial property within the meaning of Article 36, inasmuch as its aim is to define exclusive rights which are 7 and that characteristic of that property.

'in the application of Article 36 of the 7. Moreover, if it is accepted that the Treaty there is no reason to make a company which has acquired the right to distinction between copyright and other exploit the copyright in a cinematographical 5 8 industrial and commercial property rights'. work may rely on that right, it is quite clear in my view that an author owning the rights in a musical work must not be placed in a different position. The Court went on to state that

9. However, the application of those rules analysis in this case. In that judgment, the may not, according to the established Court stated that, as regards copyright in case-law of the Court, represent an obstacle literary and artistic works, to the free movement of goods save where 10 they are related to the existence, or to the specific subject-matter, 11 of the right in 'the placing of [such works] at the disposal of 2 question. In Deutsche Grammophon 1 the the public is inseparable from the circulation Court did not expressly consider the of the material form of the works, as in the 5 question whether the exclusive right of case of books or records'. 1 placing a product on the market formed part as such of the 'substance' of the author's right of reproduction and distri­ 12. In view of the emphasis thus placed on bution since in that case the relevant rights the importance of the placing on the market had been exhausted. However, I am of the material form of the work, I consider disposed to the view that there is no reason that the exclusive right to place the product preventing the Court from basing its on the market for the first time may also be reasoning on the solutions it has devised in regarded as forming part of the substance of relation to patents, for, as Mr Advocate 16 the reproduction right concerned here. As General Römer observed, in the case of patent rights, restrictions on the right to place a product on the market for the first time call in question the very 'copyright is certainly more closely related existence of the reproduction and distri­ to a patent right than to a trade-mark right, bution right. If third parties may market the 13 for example'. protected work without the owner of the right being able to prevent them from doing so, it is not the exercise of the right but its 10. According to the Court's case-law substance which is affected, namely the relating to patents and the most recent exclusive right to place the work at the judgment in Pharmon, disposal of the public.

EMI ELECTROLA v PATRICIA IM- UND EXPORT AND OTHERS

constitute a disguised restriction but that is marketing it in a Member State where the a question I shall revert to later. law does not provide patent protection for the product in question. If he decides to do so he must then accept the consequences 14. Yet the limit of the exclusive right to of his choice as regards the free movement market a work for the first time is expressed of the product within the Common by its very definition. Once the work has 18 Market'. been marketed by the owner himself or with his consent, the right may no longer be replied upon with regard to the product in question. 18. In the Pharmon case, in which a patentee relied on his right in order to 15. The Court has laid down what has prevent the importation of products manu­ come to be called the 'exhaustion' principle, factured in another Member State under a according to which the owner of an compulsory licence, the Court stated that industrial property right protected by the legislation of a Member State may not rely on that legislation for the purpose of preventing the importation of a product 'where . . . the competent authorities of a lawfully marketed in another Member State Member State grant a third party a by the owner of that right himself or with compulsory licence which allows him to his consent. 17 carry out manufacturing and marketing operations which the patentee would normally have the right to prevent, the 16. It appears from the Court's case-law patentee cannot be deemed to have that the criterion of consent is essential for consented to the operation of that third determining whether or not the rights on party. Such a measure deprives the patent which the owner relies have been exhausted. proprietor of his right to determine freely the This 'willing consent' test has been laid conditions under which he markets his 19 down in a series of decisions which are products'. extremely clear in this regard.

20. It is therefore clear from the case-law for the management of copyrights ... to of the Court that charge a levy on products imported from another Member State where they were put into circulation by or with the consent of 23 the copyright owner'. 'the licensee's consent is the key which opens the door of the common market to 21 patented products'. It is precisely that consideration which I consider fundamental; it clearly precludes 21. I cannot, however, agree with the any possibility of taking the view in this case Landgericht'sreading of the Court's that the relevant rights have been exhausted. judgment in Musikvertrieb Membran. In that case, the Court held that the copyright management society GEMA could not require the payment of additional royalties 22. The fact that it was possible for the on imports into the Federal Republic of sound recordings to be lawfully placed on records coming from the United Kingdom. the Danish market under Danish legislation Contrary to what the Landgericht appears appears as such to have no effect on the to suggest, however, it was not the system possibility for the owner to rely on his right. of compulsory licences or, more precisely, In Centrafarm the Court held that of maximum royalties applied in that State which seemed to the Court the determining factor for holding that the owner could not assert his right. After referring to the 'an obstacle to the free movement of goods 'exhaustion' principle, the Court stated that of this kind may be justified on the ground of protection of industrial property where such protection is invoked against a product coming from a Member State where it is not 'neither the copyright owner or his licensee, patentable and has been manufactured by nor a copyright management society acting third parties without the consent of the in the owner's or licensee's name, may rely patentee'. 24

The marketing of the products without the very principle of such a solution would be consent of the owner of the right is lawful open to challenge in so far as the relevant under the law of the State of exportation. In powers of the Member States in this field both cases, the solution must be the same in would be disregarded and the protection of so far as the right of the owner cannot be rights provided for in Article 36 sacrificed, exhausted in the State of importation if it might also give rise, in such matters, to there is no personal exploitation of the major risks for artistic creativity in the products in question. Community, an essential aspect of this Europe of culture which everyone desires. 24. The defendants in the main proceedings may well support their case by 26. I would make one last observation. It referring to the requirements of a single concerns the case in which the period of market and arguing that a product lawfully protection provided for by the national marketed in one Member State must legislation appeared discriminatory or liable therefore be considered to be covered by the to restrict trade in a disguised way. It rules on the free movement of goods. But should be noted that the period of that argument totally ignores the existence protection of 25 years at present provided of industrial and commercial property for by the Urheberrechtsgesetz of 9 rights, the protection of which is provided September 1965 is shorter than the period for in Article 36. which existed previously (50 years starting 25 from the author's death ) even though the 25. The possible solution which I propose period begins to run from the date of the should be rejected would in practice lead to entry into force of the law. Like the a harmonization of the period of protection Commission, I therefore consider that there on the basis of the shortest period existing is nothing to suggest that the national in the Community. Whilst, in my view, the provisions constitute disguised restrictions.