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Súdny dvor Európskej únie·1.6.1994

C-241/91

ECLI:EU:C:1994:210

Súd
Súdny dvor Európskej únie
IČS
61991CC0241

RTE AND ITP v COMMISSION

OPINION OF ADVOCATE GENERAL GULMANN delivered on 1 June 1994 * Summary

A — The background to the cases I - 748

B — Introductory remarks I - 751

C — Delimitation of the subject-matter of the appeals I - 753

D — The question whether the Court of First Instance misconstrued the concept of abuse of a dominant position I - 755 (a) The question whether the concept of specific subject-matter is relevant to an analysis under Article 86 of the Treaty I - 755 (b) The specific subject-matter of copyright I - 757 (c) The question whether Article 86 of the Treaty may be applied to the exercise of rights falling within the specific subject-matter of copyright I - 758 (d) The reasons given by the Court of First Instance for finding that it is possible to interfere with the specific subject-matter of copyright: the essential function of copyright I-767 (aa) Conduct pursuing an aim manifestly contrary to the objectives of Article 86 I - 767 (bb) The definition of the essential function of copyright I - 768 (cc) The application of the concept of essential function I - 769

(e) The emergence of a new product for which there exists a substantial potential demand from consumers I - 773 (f) Use of a dominant position on one market in order to retain for itself a derivative market I - 776 (g) The question of the existence of a discriminatory licensing policy or unreason­ able licensing terms I - 779 (h) The question whether programme listings are works meriting protection I - 780 (i) The question whether the refusals to grant licences were justified I - 783 (j) The further consequences of the judgment of the Court of Justice I-785

E — The question whether the Court of First Instance wrongly failed to take into con­ sideration the Berne Convention I - 787

F — The question of infringement of Article 3 of Regulation No 17 I-794

G — The question whether the Court of First Instance defined the relevant product mar­ ket and applied the concept of a dominant position incorrectly I - 795

H — The question whether the Court of First Instance misconstrued the concept of effects on trade between Member States I - 799

I — The question of infringement of Article 190 of the Treaty I - 803

J — Costs I-805 Conclusion Į - 806

* Original language: Danish.

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OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

1. In these joined cases the Court is to rule A — The background to the cases on whether the Commission, by a decision on the basis of Article 86 of the EC Treaty, can require undertakings to license their copyright works. The Court is thus asked to decide whether it is possible on the basis of the competition rules of the Treaty in special circumstances to interfere with the specific 3. Programme listings are lists of forthcom­ subject-matter of copyright. The cases again ing television programmes which contain raise the fundamental issue of the balancing information as to the title, channel, date and of two conflicting interests, on the one hand time of broadcasts. They are produced by the concern to protect industrial and com­ the television broadcasting organizations in mercial property rights based on national connection with and for the purposes of law and on the other the concern for undis- their programme scheduling. Programme torted competition which it is one of the listings enjoy copyright protection as literary Community's tasks to ensure. works and compilations under the United Kingdom Copyright Act 1956 and the Irish Copyright Act 1963.

4. At the time of the Commission's decision three weekly television guides were mar­ keted in Ireland and Northern Ireland, TV Times, Radio Times and RTE Guide, each containing programme listings for two of the six television channels that could be received by most households in Ireland and 30-40% of households in Northern Ireland. Apart from the actual programme listings, the tele­ vision guides typically contained programme 2. By a decision of 21 December 1988 the summaries — that is information on the con­ Commission required three undertakings to tent of programmes and those taking part — license their television programme listings. 1 comments, background articles and so forth. That decision was upheld by judgments of 2 the Court of First Instance of 10 July 1991. It is those judgments that are being chal­ lenged in these proceedings before the Court of Justice.

5. TV Times contained the weekly pro­ 1 — Commission Decision 89/205/EEC relating to a proceeding under Article 86 of the EEC Treaty (IV/31.851 —Magill TV gramme listings for ITV and Channel Four Guide/ITP, BBC and RTE) (OJ 1989 L 78, p. 43). broadcast by television companies franchised 2 — Case T-69/89 RTE v Commission [1991] ECR 11-485 and Case T-76/89 ITP Limited v Commission [1991] ECR II-575. by the Independent Broadcasting Authority

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(IBA) to broadcast independent television practice of the three undertakings: daily and programmes. It was published by Indepen­ weeldy newspapers and in some case maga­ dent Television Publications Ltd, London zines could receive free on request the (ITP), which had been assigned the copy­ weeldy programme listings together with right in the programme listings by the pro­ any programme summaries. In each case they ducers of programmes for those two chan­ were accompanied by a licence laying down nels. Radio Times contained the weekly conditions for reproduction of the informa­ programme listings for BBC 1 and BBC tion: the newspapers could publish the daily 2 and was published by the wholly owned listings or, at weekends and before public subsidiary BBC Enterprises Ltd, which was holidays, the listings for two days subject to assigned the copyright to the weekly pro­ certain conditions as to the format of the gramme listings by its parent organization, publication. They were also permitted to the BBC. In the United Kingdom the BBC publish highlights of the week's television and IBA had a duopoly for supplying programmes. national television services. RTE Guide con­ tained the weekly programme listings for RTE 1 and RTE 2 and was published by Radio Teleris Eireann (RTE) which has a statutory monopoly for radio and broadcast­ ing services in Ireland.

7. In 1985 the Irish publisher Magill TV Guide Ltd ('Magill') began to publish a weeldy paper in Ireland and Northern Ire­ land containing information on forthcoming 6. Unlike in the other EC Member States, television programmes. At first the paper on the market in Ireland and Northern Ire­ only contained information on the weekend land there was no television guide containing programmes of RTE, BBC, ITV and Chan­ all weeldy programme listings for the chan­ nel Four and highlights from the week's pro­ nels which all or most television viewers grammes. When in May 1986 an edition of could receive ('comprehensive weekly televi­ Magill TV Guide appeared containing all the sion guides'). The reason lay in the licensing weeldy listings for all television channels that could be received in the area, an Irish court, in response to an application from RTE, BBC and ITV, issued an interim injunction 3 — The IBA is a public corporation established in order to pro­ vide independent television and radio services as a public ser­ restraining Magill from publishing the vice in the United Kingdom, the Isle of Man and the Chan­ nel Islands additional to that of the BBC. The IBA awards weeldy programme listings of those under­ contracts to private undertakings to supply programmes for takings on the grounds that such publication the ITV television channel. Channel Four is broadcast by a subsidiary of the IBA. infringed their copyright. That decision was

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OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

upheld by a judgment of the High Court of Accordingly, in Article 2 of the decision the 26 July 1989. Commission required ITP, BBC and RTE to bring the infringement of Article 86 to an end:

'by supplying each other and third parties on request and on a non-discriminatory basis with their individual advance weekly pro­ gramme listings and by permitting reproduc­ 8. Before it published the comprehensive tion of those listings by such parties. This edition of Magill TV Guide, Magill had requirement does not extend to information already lodged a complaint with the Com­ in addition to the listings themselves .... If mission under Article 3 of Regulation No they choose to supply and permit reproduc­ 17 of the Council implementing Articles tion of the listings by means of licences, any 5 85 and 86 of the Treaty. In Article 1 of its royalties ... should be reasonable. Moreover, decision of 21 December 1988 the Commis­ ITP, BBC and RTE may include in any sion held: 'The policies and practices of ITP, licences granted to third parties such terms BBC and RTE, respectively, in relation to as are considered necessary to ensure com­ their individual advance weekly programme prehensive high-quality coverage of all their listings, on programmes which may be programmes, including those of minority received in Ireland and Northern Ireland, and/or regional appeal, and those of cultural, historical and educational significance.' constitute infringements of Article 86 in so far as they prevent the publicaticn and sale of comprehensive weekly TV guides in Ire­ land and Northern Ireland'.

4 — In that judgment the High Court held that programme list­ ings are copyright as literary works and compilations under Irish law. The relevant passages from the judgment are cited in paragraph 10 of the RTE judgment and paragraph 7 of the 9. ITP, BBC and RTE lodged applications ITP judgment. Since the High Court refers to 'weekly pro­ gramme schedules published in RTE Guide' and in TV for the annulment of the Commission's deci­ Times respectively mere may at first sight be some doubt sion to the Court of Justice. By order of whether tne High Court in its judgment really adopted a position on the copyright protection of all the material sent 11 May 1989 the President of the Court of on request by RTE and ITP, that is in addition to the pro­ gramme listings themselves, also programme summaries and Justice suspended the operation of the Com­ so forth. However, Magill published only the actual pro­ mission's decision in so far as it obliged the gramme listings and has stated that it carried out itself the necessary literary and research work and prepared any com­ applicants to permit reproduction of their ments on programmes. It may therefore be assumed that in 6 its judgment tne High Court held that the actual programme programme listings. listings, that is lists with information regarding the title, channel, date and time, enjoy copyright protection under Irish law.

5 — Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty 6 — Joined Cases C-76/89, C-77/89 and C-91/89 R [1989] ECR (OJ, English Special Edition 1959-1962, p. 87). 1141, paragraph 20.

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By order of 15 November 1989 the cases appear as comprehensive weekly television were referred to the Court of First Instance guides. which, by judgments of 10 July 1991, found in favour of the Commission. RTE and ITP, 7 but not BBC, have appealed against those judgments to the Court of Justice.

B — Introductory remarks

By order of 6 July 1989 the Court of Justice gave Magill leave to intervene in support of the form of order sought by the Commission and by order of 25 March 1992 gave Intellec­ 11. Copyright is of fundamental importance tual Property Owners Inc. (IPO) leave to both for the individual owner of the right intervene in support of the forms of order and for society. The Member States have sought by the appellants. By order of entered into international commitments to 21 April 1993 the cases were joined for the give copyright owners sufficient protection purposes of the oral procedure. in order to ensure an appropriate framework for their creative efforts and in their copy­ right legislation have given copyright owners the exclusive right to exploit the protected work. In other words copyright laws give copyright owners the right to restrict compe- tition. 10. For the sake of completeness it should be noted that new rules came into force in 8 the United Kingdom on 1 March 1991, under which broadcasting organizations are obliged to license the reproduction of their programme listings. BBC and ITP have each begun to market their own comprehensive 12. However those laws do not confer unre­ weekly television guides. The Irish legisla­ stricted exclusive rights on copyright own­ tion has not been amended. However, RTE ers. The Berne Convention for the protec­ has obtained licences from BBC and ITP tion of literary and artistic works, as last with a view to marketing a comprehensive revised at Paris on 24 July 1971, envisages weekly television guide and has given and accepts certain limits on the exclusive 9 licences for its own programme listings. right and such limits are indeed contained in The three television guides RTE Guide, the copyright laws of the Member States. Radio Times and TV Times therefore now The limits may consist of provisions confer­ ring a limited right to free exploitation of the protected work or 'compulsory licences' 7 — Sec Case T-70/89 BBC v Commission [1991] ECR 11-535. which confer a right to make a certain use of 8 — Section 176 of the United Kingdom Broadcasting Act 1990. the work on payment of a royalty. A charac­ 9 — RTE lias stated that it gave public notice of its new licensing teristic feature of compulsory licences in the policy but that BBC and ITP were the only parties to SCCK and obtain licences. field of copyright is that permission to make

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OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

certain use of the protected work stems from law confers an exclusive right, that must be general legislative provisions, which may respected by competition law. include provision for the question of royal­ ties being submitted to a public authority. It is generally not the case that, as in the patent field, permission to make certain use of the protected work in the public interest is given by a court or a public authority which then lays down the corresponding terms.

14. The fact that the national rules have bal­ anced the interests of the copyright owners against restrictions on competition resulting from copyright protection in the national ambit does not necessarily preclude further limitations on the copyright owners' exclu­ sive right on the basis of the Treaty's compe­ tition rules, whose aim is to ensure undis­ torted competition in a single market. But the basic relationship between copyright law

13. The copyright laws of the Member States have thus duly balanced the various interests 11 — The legal position in the Member States would appear to be that must be protected by society — includ­ that the competition authorities cannot impose compulsory ing on the one hand the protection of the licences in respect of copyright under French, Irish, Italian and Portuguese law while the issue has not been resolved interests of the copyright owner, and on the under German, Belgian, Dutch, Luxembourg and Danish 10 law. The Spanish competition authorities have relied on other undistorted competition. The natural competition provisions to introduce a general obligation for TV broadcasting organizations which have exclusive rights consequence of that is that compulsory to transmit certain sporting events to license retransmission. licences under competition law, that is As mentioned above, the legal position in the United King­ dom following the adoption of the Broadcasting Act 1990, licences which undertakings are required to which amends the Copyright, Designs and Patents Act 1988, is that, taking account of competition factors and grant by competition authorities on the basis after a procedure involving the United Kingdom competi­ of competition rules, are practically without tion authorities, copyright may be endorsed by the compe­ tent Minister with a licensing clause which signifies that the precedent in the Member States in the field owner cannot refuse a licence to interested parties who sat­ isfy any prescribed conditions. Apart from that, competi­ of copyright. In principle, where copyright tion factors are not relevant for compulsory licences stem­ ming from the copyright rules. By way of comparison, the position under patent law appears to be that in certain Member States, such as Spain, Belgium and Germany, the competition authorities may in 10 — It must not be forgotten that to a certain extent copyright irinciple impose compulsory licences but there is no case- law — like other intellectual property rights —also serves f law on the issue whereas no such possibility exists in other to promote competition. That was, in particular, stressed by Member States, such as France, Ireland, Italy and Portugal. the Commission in its comments in connection with the Only in the United Kingdom have the competition author­ adoption of its proposal for a Council directive on legal ities expressly been given a role, namely in connection with protection of computer programmes (OJ 1989 C 91, p . 16) the abovementioned licensing clause, while the final deci­ in which it pointed out that copyright represented an incen­ sion is still taken by the patent authorities. In certain other tive for the investment of intellectual and economic Member States, such as Germany, Ireland and the Nether­ resources and thus helped to promote technical develop­ lands, the patent authorities may take account of competi­ ment in the interests of society. See, as regards trade marks, tion factors in granting compulsory licences but that is not the judgment of the Court of Justice in Case C-10/89 HAG possible in other Member States, such as France and Portu­ GF [1990] ECR I-3711, paragraph 13. gal.

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and competition law described above shows C — Delimitation of the subject-matter of that it is natural to be cautious in dealing the appeals with issues concerning interference with copyright rights on the basis of the Commu­ nity competition rules.

17. RTE, ITP and IPO have claimed that the judgments of the Court of First Instance should be set aside and the Commission's decision annulled. The Commission has con­ tended that the judgments of the Court of First Instance should be upheld and, in the alternative, that the judgments of the Court of First Instance should be upheld but that 15. It seems to me that the Commission's the grounds of judgment should be amend­ 12 decision and the judgments of the Court of ed. First Instance produce a reasonable result in practice. There are strong reasons to suggest that it should not be possible for television broadcasting organizations to prevent, by means of their copyright in programme list­ 18. RTE, ITP and IPO all claim that the ings, publication of comprehensive weekly Court of First Instance misconstrued the television guides. I do not consider that the concept of abuse of a dominant position copyright interests thus protected can be under Article 86 of the Treaty. RTE further regarded as substantial and the Irish and claims that the Court of First Instance United Kingdom consumers have a clear wrongly refused to take into consideration interest in being given access to a product the Bern Convention and misconstrued the which is common in the other Member concept of trade between Member States. States and which offers a number of advan­ ITP further claims that the Court of First tages by comparison with existing products. Instance infringed Article 3 of Regulation No 17 by holding that the Commission had the power to require a proprietor of intellec­ tual property rights to grant licences and that it disregarded Article 190 of the Treaty by holding that the reasoning of the decision satisfied the principle of the rights of the defence.

16. But that does not necessarily mean that that result which is reasonable in this 19. Finally, IPO claims that the Court of instance can be achieved by means of deci­ First Instance defined the relevant product sions adopted by the Commission under market and applied the concept of a domi- Article 86 of the Treaty. It is possible that that result can be achieved only by rules adopted by the national legislature, as hap­ pened in the United Kingdom, or by rules 12 — The Commission refers in this respect to the judgment of the Court of Justice in Case C-30/91 P Lestelle v Commis- adopted by the Community legislature. sion [1992] ECR I-3755.

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OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

nant position incorrectly. In their replies Statute). It is also clear that an intervener in RTE and ITP state that even if they did not appeal proceedings can only submit pleas in expressly challenge the judgment of the law which fall within the scope of the Court of First Instance on those two points, subject-matter of the proceedings that were that does not mean that they have aban­ brought before the Court of First Instance doned their arguments in that respect. They (see Article 51 of the Statute). The IPO has claim that if the Court should find that there complied with both those conditions since, is an abuse and on that basis is to adopt a in support of the claim by RTE and ITP that position on the substance of the case pursu­ the judgments of the Court of First Instance ant to the first paragraph of Article 54 of the should be set aside, it puts forward pleas in Statute, it must also rule on these pleas in law which were part of the subject-matter of law. the judgment of the Court of First Instance. The question is, therefore, whether the IPO is precluded from raising those pleas in law merely because they have not been put for­ ward by the appellants.

20. The Commission argues, and its conten­ tion must be accepted, that RTE and ITP cannot, in their replies, introduce new pleas in law not set out in their appeals (see Article 23. Article 93(4) of the Rules of Procedure 118 in conjunction with Article 42(2) of the of the Court of Justice provides that an inter­ Rules of Procedure of the Court of Justice). vener must accept the case as he finds it at Matters not expressly appealed against must the time of his intervention. However, that be relied on by the Court of Justice even if it provision is not to be interpreted as meaning is giving final judgment in the case pursuant that a party intervening at first instance is to the first paragraph of Article 54 of the precluded from raising pleas in law that have Statute. not been put forward by the party in sup­ port of whom he is intervening. The Court has held that such an interpretation would deprive the intervention procedure of all meaning (see the judgments in Steenkolen- 13 14 mijnen and in SNUPAT ).

21. Noting that RTE and ITP did not appeal against the judgments of the Court of First Instance on those two points, the Commis­ sion claims that those factors are not within the scope of the appeals and that IPO cannot 24. Article 118 of the Rules of Procedure therefore raise those pleas in law either. provides that, subject to certain provisions, Article 93 applies also to the procedure before the Court of Justice on appeal from a decision of the Court of First Instance. Since

22. An intervener can only intervene in sup­ 13 — Case 30/59 Steenkolenmijnen v High Authority [1961] ECR port of the submissions of one of the parties 1, at p. 18. 14 — Joined Cases 42/59 and 49/59 SNUPAT v High Authority (see the third paragraph of Article 37 of the [1961] ECR 53.

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there is no express provision to the contrary structure gave rise to problems and it is on in the Rules of the Procedure of the Court of this point in particular that the judgments of Justice, that signifies in my view that in the Court of First Instance drew criticism 15 appeal proceedings as well Article 93 is to be from academics. In the following three interpreted as meaning that an intervener sections I shall consider the concept of spe­ may raise pleas in law that have not been put cific subject-matter and in the course of my forward by the appellants. review of the judgments of the Court of First Instance in section (d) I shall consider the significance of the concept of essential function.

D — The question whether the Court of First Instance misconstrued the concept of abuse of a dominant position (a) The question whether the concept of spe- cific subject-matter is relevant to an analysis under Article 86 of the Treaty

25. In its decision the Commission found that the refusals by ITP and RTE to grant licences constituted an abuse of their domi­ nant positions. That finding was upheld by 27. In a number of judgments concerning the Court of First Instance. In its judgments Articles 30 and 36 of the Treaty the Court of the Court of First Instance took as its start­ Justice has considered the balancing of the ing point the case-law of the Court of Justice concern for free movement of goods on the concerning the relationship between the one hand and that of protecting intellectual Treaty rules on the free movement of goods property rights on the other. The Court and intellectual property rights based on weighs up those interests within the frame­ national law and accordingly the concepts of work of its finding that Article 36 only the specific subject-matter of copyright and admits derogation from the fundamental its essential function formed an important principle of the free movement of goods part of its reasoning. within the common market to the extent to which they are justified for the purpose of

15 — See inter alia Georges Bonet, Revne Trimestrielle de Droit Européen 1993, pp. 525-533; Thierry Desurmont, Revue Internationale dit Droit d'Auteur, 151, January 1992, pp. 216-272; Ian S. Forrester, European Competition Law 26. As I shall explain below, that approach is Review 1992, pp. 5-20; André Francon, Revue Trimestrielle de Droit Commercial et de Droit Économique 1992, basically correct. The question does, how­ pp. 372-376; Marie-Angèle Hcrmittc, Journal du Droit ever, arise, whether the conceptual structure Interna-timtal 1992, pp. 471-477; Ronald E. Myrick, European Intellectual Property Review 1992, pp. 298-304; relied on by the Court of First Instance was Jonathan Smith, European Competition Law Review, pp. 135-138; Romano Subiotto, European Competition Law in every respect formulated and applied in an Review, 1992, pp. 234-244; Thomas C. Vinje, European appropriate manner. The submissions in Intellectual Property Review 1992, pp. 397-402; Michel Waelbroeck, Annual Proceedings of the Fordham Corporate these appeals show that that conceptual Law Institute 1992, pp. 134-137 (Ed B. Hawk, 1992).

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safeguarding rights which constitute the 69 of the RTE judgment; paragraph 54 of the 16 17 specific subject-matter of such property. ITP judgment).

28. The application of the concept of the 31. In the light of the case-law of the Court specific subject-matter is an expression of the of Justice that result is correct. reasoning that for each intellectual property right it is possible to identify a number of core rights which the owner of that right enjoys under national law and whose exer­ cise is not affected by the Treaty rules. 18 In its judgment in Consten and Grundig the Court of Justice ruled on the compatibil­ ity with Article 85 of the Treaty, which pro­ hibits anti-competitive agreements, of an exercise of national trade mark rights. The Court took as its starting point Article 29. The question is whether the starting 222 of the Treaty which provides: 'This point for the balancing, pursuant to Article Treaty shall in no way prejudice the rules in 86 of the Treaty, of the concern for undis- Member States governing the system of torted competition on the one hand and that property ownership'; it then drew a distinc­ of protecting intellectual property rights on tion between the existence of trade mark the other may likewise be the determination rights, which are not affected by Article 85, of what constitutes the specific subject- and the exercise of those rights, which is lim­ matter of that intellectual property right. ited to the extent necessary to give effect to the prohibition under Article 85. The same reasoning in a slightly different formulation was put forward in the judgment in Parke,

30. In its judgments the Court of First 17 — However, the Court of First Instance's reasoning on that

Instance answered that question in the affir­ p oint is not wholly convincing. It draws that conclusion rom 'Article 36, as it has been interpreted by the Court of mative stating: 'only those restrictions on Justice in the light of the objectives pursued by Articles 85 and 86 and the provisions governing the free movement freedom of competition, free movement of of goods or services'. It is true that the Court of Justice has held that Articles 30 and 36 are to be interpreted 'in the goods or freedom to provide services which light of the Community's objectives and activities as are inherent in the protection of the actual defined by Articles 2 and 3 of the EEC Treaty' (Case 270/80 Polydor [1982] ECR 329, paragraph 16) and that substance of the intellectual property right 'Articles 2 and 3 of the Treaty set out to establish a market characterized by the free movement of goods where the are permitted in Community law' (paragraph terms of competition are not distorted ... which means that the competition aspect of Article 3(f) of the Treaty has to be taken into account' (Case C-202/88 France v Commission [1991] ECR I-1223, paragraph 41). The fact that in inter­ preting Article 36 account must be taken of the Treaty's objective of undistorted competition does not, in my view, 16 — See for example the judgments of the Court of Justice in justify the converse conclusion that the concept of specific Case 78/70 Deutsche Grammophon [1971] ECR 487 which subject-matter is necessarily relevant for an analysis under concerned a right similar to copyright; Case 15/74 Centra- Article 86. farm v Sterling Drug [1974] ECR 1147 concerning patents; and Case 16/74 Centrafarm v Winthrop [1974] ECR 18 — Joined Cases 56 and 58/64 Consten and Grundig v Com- 1183 concerning trade marks. mission [1966] ECR 299.

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Davis which related to both Articles 85 and property right in question (see in particular 86. its judgment in Volvo v Veng which con­ 21 cerned Article 86 of the Treaty).

The distinction between the existence and the exercise of intellectual property rights is reiterated in a number of judgments relating to both the competition rules and the rules 32. Thus in considering these cases the start 20 on the free movement of goods. It is ing point must be a definition of the specific apparent from the last-mentioned judgments subject-matter of copyright, which is used that the concept of the specific subject- synonymously in the Court's case-law with matter was developed for the purposes of the concepts of the actual substance of copy

21 applying that distinction. An exercise of right and the essential rights of the copyright 24 rights that falls within the specific subject- proprietor. matter of an intellectual property right will relate to its existence. In other words the dis tinction between the existence and the exer cise of rights and the application of the con cept of the specific subject-matter are (b) The specific subject-matter of copyright basically expressions of the same conceptual approach. Accordingly I consider that the distinction between the existence and exer cise of rights has no independent significance for resolving specific questions of delimita

tion. In more recent cases concerning the free movement of goods, the Court of Justice 33. In determining the specific subject- has not considered it necessary to make matter of copyright the Court of First 21 express reference to that distinction. Instance referred in particular to the judg ment in Warner Brothers in which the Court of Justice pointed out that literary and artis tic works may be the subject of commercial exploitation, whether by way of public per In more recent judgments on the competi formance or of the reproduction and market tion rules too, the Court of Justice has ing of the recordings made of them and held expressly taken as its starting point the deter mination of the rights which constitute the specific subject-matter of the intellectual 23 — Case 238/87 Volvo v Veng [1988] ECR 6211, paragraph 8. Compare also Case 53/87 CICRA v Renault [1988] ECR 6039, paragraphs 11 and 15. As regards Article 85, see Case 193/83 Windsurfing [1986] ECR 611, paragrapli 45. 19 — Case 24/67 Parke, Davis v Centrafarm [1968] ECR 55. 24 — The use of different terminology in this way is inappropri 20 — See in this regard Case 40/70 Sirena [1971] ECR 7, para ate as is shown not least by the confusion in the present graph 5. cases to which I shall return later. ITP has — rightly in my view —criticized the judgment of the Court of First 21 — See in particular the judgments of the Court of Justice in Instance in so far as paragraph 54 refers to the actual sub Case 78/70 Deutsche Grammophon [1971] ECR 125, para stance of the intellectual property right, paragraph 55 refers graph 11, Case 102/77 Hoffmann-La Roche v Centrafarm to the specific subject-matter of copyright while at the same [1978] ECR 1139, paragraph 6, and Case 58/80 Dansk time quoting from the judgment in Warner Brothers which Supermarked [1981] ECR 181, paragraph 11. uses the term essential rights of the copyright proprietor, 22 — See in particular Case C-10/89 CNL-SUCAL v HAG and finally paragraph 59 again refers to the actual substance

[1990] ECR I-3711 and compare the Opinion of Advocate of copyright (the respective paragraphs in the RTE judg General Jacobs in that case, point 11. ment arc 69, 70 and 74).

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that the 'essential rights of the author, on Articles 30 and 36 of the Treaty the Court namely the exclusive right of performance of Justice has used the two concepts at the and the exclusive right of reproduction, are same time and held that in order to deter­ not called in question by the rules of the mine the exact scope of the rights conferred 25 Treaty' (paragraph 70 of the RTE judg­ on the owner of an intellectual property ment; paragraph 55 of the ITP judgment). right, that is in defining the specific subject- matter, regard must be had to the essential 28 function of the right.

34. It is common ground that the exclusive right to reproduce the protected work forms part of the specific subject-matter of copy­ right. 37. There is therefore no conflict between finding that the specific subject-matter of copyright includes the exclusive right to reproduce the work and its corollary, the right of first marketing and holding that the essential function of copyright is to protect 35. RTE, ITP and IPO have criticized the the moral rights in the work and ensure a judgments of the Court of First Instance for reward for creative effort. stating that the 'essential function' of copy­ right is 'to protect the moral rights in the work and ensure a reward for the creative 26 effort' (paragraph 71 of the RTE judgment; paragraph 56 of the ITP judgment). They claim that the Court of First Instance has (c) The question whether Article 86 of the thus departed from the definition of the spe­ Treaty may be applied to the exercise of cific subject-matter of copyright and has rights falling within the specific subject- 'omitted' the exclusive right to reproduce the matter of copyright work and its corollary, the right of first mar­ keting.

38. It is plain that a corollary of an exclusive 36. That criticism of the judgments of the right to reproduce the protected work is the Court of First Instance is not justified. As right to refuse licences. Accordingly the right the Commission has stated, the concept of to refuse licences forms part of the specific 27 the essential function is different from that subject-matter of copyright. That is borne of the specific subject-matter. The two con­ out by the judgment of the Court in Volvo v cepts serve different purposes. In its case-law Veng, 29 which concerned products protected by registered designs. The Court held:

25 — Case 158/86 Warner Brothers [1988] ECR 2605, paragraph 13. See also Case 341/87 EMI Electrola [1989] ECR 79, paragraph 7. 28 — See in particular Case C-10/89 CNL-SUCALv HAG GF 26 — Concerns only the Danish text. [1990] ECR I-3711, paragraph 14. 27 — Concerns only the Danish text. 29 — Case 238/87 Volvo v Veng [1988] ECR 6211.

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'an obligation imposed upon the proprietor part of the specific subject-matter. The copy­ of a protected design to grant to third par­ right owner can no longer retain the exclu­ ties, even in return for a reasonable royalty, a sive right to reproduce the protected work licence for the supply of products incorpo­ but must content himself with charging roy­ rating the design would lead to the propri­ alties. etor thereof being deprived of the substance of his exclusive right, and ... a refusal to grant such a licence cannot in itself constitute an abuse of a dominant position' (paragraph 8, emphasis added). 41. RTE and ITP, supported by IPO, claim that they did no more than refuse to grant licences and that such an exercise of rights falling within the specific subject-matter of copyright cannot be affected by Article 86.

39. In these cases it is thus not disputed that the exercise of the exclusive right of repro­ duction by refusing to grant licences does not in itself constitute an abuse of a domi­ nant position. The Commission has stressed 42. The Commission contends that an exer­ that it agrees. cise of rights falling within the specific subject-matter of copyright can be contrary to Article 86 where that exercise takes place under special circumstances. The Commis­ sion stresses that the specific subject-matter of copyright is not immune and that it can­ not be precluded from talcing action against 40. The central and fundamental issue in abuse of a dominant position merely because these cases is whether, and if so under what the means for that abuse is an intellectual circumstances, a refusal to license — that is property right. the exercise of a right falling within the spe­ cific subject-matter of copyright — notwith­ standing the abovementioned premiss may constitute an abuse of a dominant position. The question is whether there may exist such special circumstances in connection with a 43. The Commission points out in particular refusal to license that it can no longer be that while it is logical to take as the starting regarded as a refusal to license in itself. If point the case-law of the Court of Justice on Article 86 can apply where the dominant Articles 30 and 36 of the Treaty, that case- undertaking has done no more than refuse to law is not conclusive for an analysis under grant licences, but where there were special Article 86 since it is important to bear in circumstances in connection with the refusal mind that those provisions have different to license, the position will be that the functions and objectives. Even if the national infringement of Article 86 can be terminated legislation on which the intellectual property only by granting licences. A requirement to right in question is based is compatible with grant licences signifies, as the Court ruled in Article 36, that does not rule out the possi­ Volvo vVeng, interference in rights forming bility of Article 86 being applicable to an

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exercise of those rights. Articles 30 and rules, it is natural that acceptance that it is 36 are directed to the Member States and possible on the basis of Article 86 to inter­ serve to determine whether national provi­ fere with rights forming part of the specific sions restrict the movement of goods. Article subject-matter at first sight gives rise to 86 is directed to dominant undertakings problems. which, in their commercial behaviour, are subject to higher standards than other under­ takings. The analyses and criteria to be applied are not the same in relation to Arti­ cles 30 and 36 and in relation to Article 86. An analysis under Articles 30 and 36 is gen­ 46. However, that reaction seems primarily eral and applies to every case subject to the to stem from a misconception of the Court rules in question while an analysis under of Justice's application of the concept of spe­ Article 86 only relates to a specific case in cific subject-matter in its case-law on Arti­ respect of which account is taken of all the cles 30 and 36. A definition of the specific special circumstances surrounding it. subject-matter laid down by the Court is not absolute in the sense that any exercise of rights falling within the specific subject- matter is then immune from challenge under Article 30. The Court's case-law shows first that questions may arise as to whether or not certain rights — which are new in so far as they are not certainly covered by the Court's 44. As stated in section (a) the Court of Jus­ definition of specific subject-matter — are to tice's case-law shows that the starting point be regarded as falling within that defini­ for consideration of the exercise of intellec­ tion. 30 Second, the Court's case-law also tual property rights with respect to Articles shows — and this is most significant in the 30 and 36 of the Treaty and with respect to present context — that questions may arise Article 86 of the Treaty is the same, namely as to whether a right which is in principle that it is possible to identify a number of within the scope of the specific subject- core rights which the owner of an intellec­ matter has been exercised under such special tual property right enjoys under national law circumstances that that exercise creates an and whose exercise is not affected by the unacceptable obstacle to the free movement Treaty rules on the free movement of goods of goods and for that reason cannot be and undistorted competition. The question is regarded as being covered by the specific whether a more precise formulation of that subject-matter of the intellectual property starting point is necessary in the sense that right. an exercise of rights may in special circum­ stances conflict with the Treaty rules.

47. The Court's case-law concerning Arti­ cles 30 and 36 thus shows that it is possible,

45. Since the purpose of the concept of spe­ cific subject-matter is precisely to define the 30 — See for example Case 158/86 Warner Brothers [1988] ECR rights which cannot be affected by the Treaty 2605.

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and may be necessary, to specify whether a that the proprietor of a right is entitled to right is covered by the specific subject- prevent an importer of a trade-marked prod­ matter even where it is exercised under spe­ uct, following repackaging of that product, cific circumstances. In a number of cases the from affixing the trade mark to the new Court has indicated that it may be necessary packaging without the authorization of the to assess whether conduct — exercise of a proprietor (paragraph 8). However, such an right covered by the specific subject-matter exercise of rights falling within the specific — must be denied protection because it is to subject-matter may constitute a disguised be regarded as an improper exercise of a restriction on trade which is contrary to the right since it may lead to artificial partition­ second sentence of Article 36 if it is estab­ ing of the common market. lished that the use of the trade mark right by the proprietor, having regard to the market­ ing system which he has adopted, for exam­ ple where the same product is marketed in different packaging in different Member States, will contribute to the artificial parti­ tioning of the market between the Member 48. In a few instances the Court has formu­ States (paragraphs 9 and 10). In those cir­ lated its judgments in such a way that such cumstances and provided that the essential specification appears as an actual exception function of the trade mark as a guarantee of from — an interference with — a right cov- the origin of the goods is not jeopardized in ered by the specific subject-matter of the so far as the repackaging has not affected the intellectual property right. But generally the original condition of the product, it will Court approaches such situations as a matter be contrary to Article 36 for the proprietor of specifying whether a right is covered by to exercise his right to prevent imports the specific subject-matter, even when it is of repackaged goods (paragraphs 10, 11 exercised tinder specified circumstances. and 12). 32

50. The Court clearly stated why, in the 49. An example of a judgment falling into event of the existence of special circum­ the former category is the case of 31 stances, it may be necessary to further speci­ Hoffmann-La Roche v Centrafarm, in fy the scope of the specific subject-matter of which the Court held that the essential func­ an intellectual property right in its judgment tion of a trade mark is to guarantee the ori­ 33 in Keurkoop v Nancy Kean Gifts. The gin of the product to the consumer and that Court there took as its starting point the a right to oppose any use of the trade mark finding that 'the protection of industrial and which is likely to impair the guarantee of commercial property established by Article origin is, by extension, part of the specific 36 would be rendered meaningless if a per­ subject-matter (paragraph 7). The Court fur­ ther held that it is accordingly justified under the first sentence of Article 36 to recognize 32 — Similarly see Case 3/78 Centrafarm v American Home Products [1978] ECR 1823. 33 — Case 144/81 Keurkoop v Nancy Kean Gifts [1982] ECR 2853. For other judements in which this was the decisive 31 — Case 102/77 Hoffmann-La Roche v Centrafarm [1978] question, sec those discussed in section (d) subsection (cc) ECR 1139. below.

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son other than the owner of the right to the starting point by stating that the proprietor design in a Member State could be allowed of an intellectual property right may not rely to market in that State a product which is on his rights under the legislation of a Mem­ identical in appearance to the protected ber State in order to oppose the importation design' (paragraph 22). The Court pointed or marketing of a product which has law­ out that restrictions on the free movement of fully been marketed in another Member goods must be justified on grounds of the State by, or with the consent of, the propri­ protection of intellectual property and must etor of the right or a person legally or eco­ not, in particular, constitute disguised nomically dependent on the proprietor of restrictions on trade within the meaning of the exclusive right (principle of exhaustion of 35 the second sentence of Article 36 and further rights). held:

'Article 36 is thus intended to emphasize that the reconciliation between the requirements of the free movement of goods and the 51. If the case-law of the Court of Justice respect to which industrial and commercial concerning Articles 30 and 36 shows that its property rights are entitled must be achieved definition of specific subject-matter is not in such a way that protection is ensured for absolute in the sense that every exercise of the legitimate exercise, in the form of prohi rights falling within the specific subject- bitions on imports which are "justified" matter is immune from challenge under Arti within the meaning of that article, of the cle 30, it may reasonably be assumed that rights conferred by national legislation, but Article 86 can also affect rights which are in is refused, on the other hand, in respect of any improper exercise of the same rights which is of such a nature as to maintain or establish artificial partitions within the com 35 — As is apparent from the two examples, in judgments of this 34 kind the Court of Justice takes as its starting point the sec

mon market. The exercise of industrial and ond sentence of Article 36 of the Treaty under which obsta commercial property rights conferred by cles to trade which are otherwise justified must not consti tute a means of arbitrary discrimination or a disguised national legislation must consequently be restriction on trade between Member States. That may explain why the case-law of the Court is sometimes — but restricted as far as is necessary for that rec in my view not always appropriately — summarized as say ing that the exercise of a right within the specific subject- onciliation' (paragraph 24, emphasis added). matter may be incompatible with Articles 30 and 36 of the Treaty if the right is abused. For example, in the Opinion of Advocate General Mischo in Case 53/87 CICRA v Renault [1988] ECR 6039, at point 20(c) it is stated with reference to the judgment in Kenrkoop v Nancy Kean Gifts: 'where the proprietor of a design "abuses" his right to prevent imports (a right which stems inherently from the specific purpose of registration of the design), he cannot benefit On that basis and by reference to its consis from the exception to the principle of free movement of goods laid down in Article 36'. See also the Opinion of tent case-law, the Court further specified its Advocate General Tesauro in Case C-317/91 Deutsche Renault, [1993] I-6227, point 8, in which he states: 'in fact it is clear from the case-law that Articles 30 and 36 oppose only a clearly abusive exercise of the right in question' and refers to the principle of exhaustion of rights as a principal example of that case-law. In its judgment in that case the 34 — The Court of First Instance refers in its judgments to the Court held that 'the function of this provision, which is judgment of the Court of Justice in Kenrkoop v Nancy designed to prevent restrictions on trade based on the Kean Gifts. However in its indirect quotation from the grounds mentioned in the first sentence of Article 36 from above paragraph the Court of First Instance here adds — as being diverted from their proper purpose and used in such a far as can De seen on its own account — 'or pervert the way as either to create discrimination in respect of goods rules governing the competition within the Community' originating in other Member States or indirectly to protect

(paragraph 67 of the RTE judgment; paragraph 52 of the certain national products' (paragraph 19, emphasis added). ITP judgment).

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principle within the specific subject-matter if in by undertakings in a dominant position. those rights are exercised in special circum­ In other words a number of circumstances 36 stances. may only be of significance if the right is being exercised by a dominant undertaking. That means that a specific exercise of rights which in principle are within the specific subject-matter may be incompatible with Article 86 even if the same conduct is accept­ able with respect to Articles 30 and 36.

52. It is important here, as the Commission pointed out, that the scope of Article 30 and that of Article 86 differ in so far as Article 37 30 relates to all undertakings, while Article 86 only applies to undertakings in a domi nant position. It is undoubtedly true that in 53. For the same reason it is most appropri their commercial conduct undertakings in a ate to treat the restrictions imposed pursuant dominant position must comply with higher to Article 86 on the exercise by undertakings standards than other undertakings.

38 Many of their rights under national intellectual forms of commercial conduct will, in fact, property laws as exceptions from — interfer only affect the proper functioning of the ence with — the specific subject-matter of common market in so far as they are engaged the intellectual property right in question and not as specifying the scope of the spe cific subject-matter, as in an Articles 30 and 36 analysis. It should be affirmed that in 36 — It may be considered whether any significance attaches to principle the concept of the specific subject- the fact that Article 86 does not contain a provision corre sponding to the second sentence of Article 36.

The reason matter has the same content and function in ing might be that the fact that there is no modification of relation to the Treaty rules on the free move the starting point laid down in Article 222 signifies diat in contrast to the situation with respect to Articles 30 and 36, ment of goods and on undistorted competi rights within the specific subject-matter arc absolutely immune from criticism in the context of the application of tion. It will still be lawful under the Treaty Article 86.

I consider that that view must be rejected since Article 86 is in itself a rule concerning abuse of rights and for undertakings which are not in a domi this is borne out, as will be seen below, by the Court's case- nant position to exercise the rights in ques law. tion since they are within the specific 37 — It is clear that Articles 30 and 36 of the Treaty arc addressed to the Member States and lay down requirements regarding subject-matter of the intellectual property the content of their laws. But in fact judgments of the kind referred to above serve to prohibit the misuse by undertak right concerned and since the special circum ings of the rights they have under national laws which arc stances in question are significant for the otherwise regarded as compatible with Articles 30 and 36 of

the Treaty. The national laws will be incompatible with Articles 30 and 36 of the Treaty in so far as they afford a basis for rights which are in principle within the specific subject-matter being exercised in the special circumstances in question. 39 — As the Commission has pointed out, common forms of 38 — See the judgment in Case 322/81 Michelin [1983] ECR conduct which arc not conditional on the undertaking con 3461 in which the Court of Justice held: 'A finding that an cerned holding a dominant position may nonetheless con undertaking has a dominant position is not in itself a stitute an abuse of that position (sec the judgment of the recrimination but simply means that, irrespective of the rea Court of Justice ¡n Case 85/76 Hoffmann-La Roche [1979] sons for which it has such a dominant position, the under ECR 461 and the judgment of the Court of First Instance taking concerned has a special responsibility not to allow its in Case T-51/89 Tetra Pak [1990] ECR II-309 which were conduct to impair genuine undistorted competition on the referred to by the Commission; see also Case 6/72 Conti- common market' (paragraph 57). nental Can [1973] ECR 215).

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proper functioning of the common market could not in itself constitute an abuse of a only if the rights are exercised by a dominant dominant position and stated: undertaking.

'It must however be noted that the exercise 54. The Court's case-law confirms that it is of an exclusive right by the proprietor of a possible to interfere with the specific registered design in respect of car body pan­ subject-matter of an intellectual property els may be prohibited by Article 86 if it right on the basis of Article 86. involves, on the part of an undertaking hold­ ing a dominant position, certain abusive con­ duct such as the arbitrary refusal to supply spare parts to independent repairers, the fix- ing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation ...' 42 55. In its judgments the Court of First (paragraph 9, emphasis added). Instance referred to the judgments of the Court of Justice in Volvo v Veng and 41 CICRA v Renault (paragraph 72 of the RTE judgment; paragraph 57 of the ITP judgment). It has prompted much debate in the submissions to the Court of Justice as to whether those judgments can be relied on in 57. In the first two examples the dominant support of that result. undertaking has carried out other acts, apart from refusing to grant licences, which do not relate to the registered design and which are in themselves expressions of an abuse (see section (f) below on the Court's case-law concerning the refusal to supply and see Article 86(a) on imposition of unfair prices). The characteristic feature of those situations 56. In its judgment in Volvo v Veng the is, as pointed out in particular by ITP, that Court held that a refusal to grant licences the proprietor of the registered design can terminate the infringement of Article 86 without licensing his design, either by 40 — It was therefore not appropriate for the Court of First resuming supplies to persons who were arbi­ Instance to hold in its judgments that: 'the applicant's con­ duct is not related, according to the criteria established in trarily refused supplies or by reducing his the case-law to which the parties refer, to the actual sub- stance of its copyright' (paragraph 74 of the RTE judgment; prices. Application of Article 86 in those cir­ paragraph 59 of the ITP judgment, emphasis added). The cumstances does not therefore lead to inter- specific subject-matter of copyright does unreservedly include a right to refuse to grant licences and the imposition of a compulsory licence pursuant to Article 86 constitutes interference with the specific subject-matter. 41 — Case 238/87 [1988] ECR 6211 and Case 53/87 [1988] ECR 6039. 42 — Similarly see paragraph 16 in CICRA V Renault.

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ference with the specific subject-matter of discriminatory licensing policy. As the Com­ the registered design. mission pointed out, in its judgments in Bas- 45 46 set and in Tournier, the Court of Justice expressly held that the charging by a copy­ right management society of unreasonable royalties for the public performance of recorded musical works may constitute an 58. In the third situation the dominant abuse of a dominant position. The Commis­ undertaking has also done more than simply sion contends that that shows that it is pos­ refuse to license, namely by refraining from sible pursuant to Article 86 to interfere with producing the protected work itself, but this rights forming part of the specific subject- act is itself the exercise of a right falling matter. within the specific subject-matter of the reg­ istered design. The exclusive right to repro­ duce the work thus comprises not merely the right to refuse to grant licences but also the right to determine freely if, where, when and how the protected work is to be exploited, inter alia with the aim of obtaining the great­ 44 est possible reward from it. Regardless of 60. RTE and ITP on the other hand contend the fact that the proprietor of the registered that the dominant undertakings in those sit­ design may choose to terminate the infringe­ uations did something more than merely ment of Article 86 by resuming production exercise rights falling within the specific or by granting licences, the third example in subject-matter and that application of Article Volvo v Veng shows that the Court has 86 does not therefore affect the specific accepted that it is possible pursuant to Arti­ subject-matter of copyright. It is hard to see cle 86 to interfere with rights falling within how that something more differs from the the specific subject-matter of an intellectual situation in which rights within the specific property right. subject-matter are exercised under special circumstances. In the aforesaid situations at least there is no autonomous abusive con­ duct which is independent of the exercise of the intellectual property right in question as was the case in the first two examples in Volvo v Veng. 59. It is common ground that Article 86 may apply where a dominant undertaking demands unreasonable royalties or applies a

43 — The Commission claims that the second example shows that it is possible to interfere with the specific subject- matter. The Commission is thus assimilating the setting of unreasonably high prices for products produced under a registered design with the levying of unreasonably high 61. I consider that in fact, as the Commis­ royalties. I do not agree that those two situations can be assimilated. In the first case the infringement of Article sion has argued, unreasonable royalties and a 86 docs not depend on whether the products are protected by a registered design. Only in the second case would application of Article 86 signify interference with the spe­ cific subject-matter (see below). 44 — See in this regard Case 19/84 Pljarmon v Hoechst [1985] 45 — Case 402/85 [1987] ECR 1747. ECR 2281, paragraph 25. 46 — Case 395/87 [1989] ECR 2521.

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discriminatory licensing policy are examples wise operate in accordance with usual mar­ showing that it is possible pursuant to Arti­ ket conditions (see Article 85). cle 86 to interfere with rights within the spe­ cific subject-matter where those rights are exercised in special circumstances. The domi­ nant undertaking does not do anything more than exercise rights within the specific 47 subject-matter, namely impose royalties and refuse to grant licences. But the exercise of those rights takes place under special cir­ cumstances since the undertaking demands royalties which are considerably higher than 62. It follows that both in an Article 86 in other Member States or refuses a licence at analysis and an Articles 30 and 36 analysis the same time as licences are in fact given to the Court must further specify whether others. Application of Article 86 to the two rights which are in principle within the situations would signify interference with specific subject-matter are exercised in such rights falling within the specific subject- special circumstances that they create matter since the possibility for the owner to unacceptable hindrances to undistorted freely determine his remuneration would be competition or the free movement of goods. restricted and he would be required to grant a licence to the person against whom he had discriminated. There is no reason to define the charging of unreasonable royalties or operation of a discriminatory licensing poli­ cy as conduct which in general is outside the specific subject-matter of copyright and thus as conduct which might potentially be incompatible with Articles 30 and 36 since such conduct will not affect the proper func­ tioning of the common market in so far as it 63. The key question in these cases is, of is engaged in by undertakings which do not course, when there exist such special circum­ have a dominant position and which other­ stances. I shall set out my position on this point in connection with my review of the judgments of the Court of First Instance.

48 — See in this connection paragraph 14 of Tournier where the Court held: 'As regards the abusive or discriminatory nature of the rate of royalty, that rate, which is fixed inde­ pendently by Sacem, must be appraised in relation to the competition rules contained in Articles 85 and 86. The rate of royalty is not a matter to be taken into account in con­ 47 — See Case 62/79 Coditei [1980] ECR 881, paragraph 14, and sidering the compatibility of the national legislation in Case 262/81 Coditei [1982] ECR 3381, paragraph 12, in question with Articles 30 and 59 of the Treaty'. See also which the Court of Justice held that the right of the owner paragraphs 18 and 19 of Basset. Finally, for further support of the copyright in a 61m to demand a fee for any public tor that result, see Case 102/77 Hoffmann-La Roche [1978] showing of that film is part of the essential function of ECR 1139, paragraph 16, and the case-law of the Court of copyright in that Ižind of literary and artistic work. The use Justice on Article 85, in particular Joined Cases 56/64 and of the concept of essential function in that context is not 58/64 Consten and Grundig [1966] ECR 299, at pp . 345-6, correct in my view. The question is one of delimiting the where the Court held: 'Article 36, which limits the scope of rights that are legally conferred on the proprietor of copy­ the rules on the liberalization of trade contained in Title I, right, that is of defining the specific subject-matter of copy­ Chapter 2, of the Treaty, cannot limit the field of applica­ right. The essential function of copyright is to reward the tion of Article 85', Case 24/67 Parke Davis [1968] ECR proprietor's creative effort. As regards the definition and 55 and Case 262/81 Coditei [1982] ECR 3381, paragraphs application of that concept, see section (d) below. 19 and 20.

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(d) The reasons given by the Court of First 65. The Court of First Instance thus reaches Instance for finding that it is possible to inter- the right result in principle but its formula­ fere with the specific subject-matter of copy- tion of the grounds for that result gives rise right: the essential function of copyright to problems in several respects.

(aa) Conduct pursuing an aim manifestly contrary to the objectives of Article 86

64. The Court of First Instance made the following remarks concerning the possibility of interfering with the specific subject-matter of copyright:

66. The Court of First Instance states that the exercise of the exclusive right to repro­ duce a protected work constitutes an abuse when in the light of the details of each indi- vidual case, it is apparent that that right is exercised in such ways and circumstances as in fact to pursue an aim manifestly contrary 'However, while it is plain that the exercise to the objectives of Article 86. of the exclusive right to reproduce a pro­ tected work is not in itself an abuse, that does not apply when, in the light of the details of each individual case, it is apparent that that right is exercised in such ways and circumstances as in fact to pursue an aim manifestly contrary to the objectives of Arti­ cle 86. In that event, the copyright is no 67. The Court of First Instance seems, longer exercised in a manner which corre­ wrongly in my view, to take as its premiss sponds to its essential function, within the that the exercise of copyright will constitute meaning of Article 36 of the Treaty, which is an abuse of a dominant position to the extent to protect the moral rights in the work and that it is found that that exercise pursues a ensure a reward for the creative effort, while manifestly anti-competitive aim. As ITP in respecting the aims of, in particular, Article particular has pointed out, the aim of copy­ 86. ... In that case, the primacy of Commu­ right is precisely to give the proprietor the nity law, particularly as regards principles as possibility of restricting competition and fundamental as those of the free movement that possibility must also be afforded to a of goods and freedom of competition, pre­ dominant undertaking. The Court of First vails over any use of a rule of national intel­ Instance's premiss seems to be that the aim lectual property law in a manner contrary to pursued by Article 86 outweighs the aim of those principles' (paragraph 71 of the RTE copyright. As I understand the case-law of judgment; paragraph 56 of the ITP judg­ the Court of Justice, the contrary premiss is ment). the right one.

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68. That does not of course mean that the aim pursued by the national copyright laws question what aim is being pursued by the and is applied, as stated below, inter alia to conduct in question is not relevant for the determine where, pursuant to Article 86, it is purposes of the application of Article 86. It possible to interfere with rights within the is thus not sufficient to determine whether specific subject-matter of copyright. It does there is anti-competitive conduct within the not make sense therefore to incorporate the meaning of Article 86 where a right within aim of the competition rules in the determi­ the specific subject-matter is exercised in nation of the essential function of copyright. special circumstances. In that case it is fur­ ther necessary to examine whether there is actually valid justification for exercising the right in the circumstances in question or whether that exercise solely pursues aims that are manifestly contrary to Article 86 (see section (i) below).

71. The Court of First Instance is right, on the other hand, in stating that the essential function of copyright is to protect the moral rights in the work and ensure a reward for creative effort. As regards reward for creative (bb) The definition of the essential function efforts, that is supported, as the Court of of copyright First Instance stated, by the case-law of the 49 Court of Justice.

69. The Court of First Instance states that the essential function of copyright is to protect the moral rights in the work and ensure a 72. ITP has claimed that to define the essen­ reward for the creative effort while respecting tial function of copyright as including the the aims of in particular, Article 86. protection of moral rights would signify that assignees of the creator, like ITP, could not avail themselves of such rights which are inalienable and thus could not exercise the right of exclusive reproduction. At the hear­ ing, however, ITP clarified its view by stat­ ing that it can accept that the aim of copy­ right is to protect moral interests provided 70. The Court of First Instance here seems that the economic and commercial interests to be reading the aim pursued by Article 86 into a definition of the essential function of copyright. That cannot be correct. The concept of the essential function is a concept 49 — Paragraph 71 of the RTE judgment and paragraph 56 of the ITP judgment. The Court of First Instance referred in par­ of Community law but it is based on the ticular to the case-law of the Court of Justice on patents national copyright laws. It is an expression but there is no reason for treating copyright differently in this respect. See also the judgments referred to in footnote of the Court of Justice's view of the essential 47.

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linked to copyright, which are the only ones subject-matter when defining the concept of that concern an assignee like ITP, are not for­ essential function (see section (b) above) the gotten. actual definition of the essential function of copyright does not otherwise appear to have been disputed in these proceedings.

73. Copyright does undeniably include eco­ nomic and commercial rights. But that is of 75. On the other hand, ITP, RTE and IPO course not incompatible with the finding do criticize the use made by the Court of that copyright also includes moral rights and First Instance of the concept of essential that the protection of those interests is so function. They claim that in applying that important a component of copyright that it concept the Court of First Instance has must necessarily be taken into consideration reduced the rights of the copyright propri­ in defining the essential function of copy­ etor to the right to exploit the protected right. National laws provide for the protec­ work through licences. tion of moral rights even though the scope of the protection may vary from one country to another. It will however typically include protection of the author's right to claim authorship and protection of his right to oppose any prejudicial alterations of his (cc) The application of the concept of work. Those components of copyright are essential function 50 normally inalienable. That characteristic of copyright law does not affect ITP's possibil­ ity of exercising the economic and commer­ 51 cial rights assigned to it.

76. The Court of First Instance states that where the copyright is no longer exercised in a manner which corresponds to its essential function the primacy of Community law pre- vails over any use of rules of national intel- 74. In so far as the Court of First Instance lectual property law contrary to the principles did not alter the definition of the specific of the free movement of goods and freedom of competition.

50 — Sec Article 6a(l) of the Berne Convention which defines the scope of mora! protection as follows: 'Independently of the author's economic rights, and even after the transfer of the said rights, the author shall have the right to claim author­ ship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in rela­ tion to, the said work, which would be prejudicial to his honour or reputation'. As regards moral rights, sec also the Commission's green paper on copyright and the technolog­ 77. That result is correct in principle. But it ical challenge COM(88)172 dcf. of 21 February 1989, point is necessary to specify in what way the con­ 5.6.27. cept of essential function is relevant to an 51 — See Joined Cases 55 and 57/80 Musik-Verineb Membran v GEMA [1981] ECR 147, paragraph 12. Article 86 analysis.

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78. I have already said that it may be or restrictions on competition. Consequently assumed that Article 86 as well as Articles if an exercise of a given intellectual property 30 and 36 may apply where rights within the right is necessary in order for that right to be specific subject-matter are exercised in spe­ able to fulfil its essential function, that exer­ cial circumstances. The key issue is, as men­ cise is not affected by the Treaty rules. It is tioned above, how the Court of Justice is to only where an exercise is not necessary in determine whether such special circum­ order to fulfil the essential function that the stances exist. It is in this context that the interest of free movement of goods or the concept of the essential function is relevant. interest of free competition must prevail over the interest of the owner of the right to engage in that exercise.

79. The determination of which rights fall under the specific subject-matter depends on a balancing of on the one hand the concern 81. However, the question of what is neces- of protecting the intellectual property right sary in order that the essential function of in question and on the other the concern for the intellectual property right is fulfilled is free movement of goods or undistorted com­ not an absolute concept but a relative one. petition. The question whether there exist special circumstances which signify that an exercise of rights which in principle fall within the specific subject-matter may none the less be regarded as incompatible with the Treaty rules hinges on another balancing of those factors. The concept of the essential function is an auxiliary concept which 82. It is not true, as RTE, ITP and IPO seem enables the Court of Justice to carry out to fear, that interference with the right to those assessments. The purpose of defining refuse licences is justified by the mere find­ the essential function of the right is to deter­ ing that the copyright owner will be able to mine the interests that must be balanced demand royalties and in that way obtain a against contrasting interests of the free reward for his creative effort. movement of goods or free competition.

On the contrary, the starting point for the 80. The fact that there is a balance does not balance carried out by the Court is precisely signify that both interests must be given that rights within the specific subject-matter equal weight. The balance must always be in are regarded as necessary for the intellectual favour of the intellectual property rights. property right in question to be able to fulfil The starting point set out in the Treaty is its essential function. The right of exclusive that intellectual property rights can be exer­ reproduction and thus the right to refuse cised even if that leads to obstacles to trade licences is, as a first principle, necessary in

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order to guarantee the copyright owner a the protected work by the licensee and sufficient reward for his creative effort. would also be able to obtain protection of his moral rights by laying down correspond­ 52 ing terms in the licensing agreement.

83. However, the presence of specified cir­ 85. The Court's case-law concerning Arti­ cumstances may mean that the interests of cles 30 and 36 confirms that that is the mean­ the copyright owner carry less weight or that ing to be attributed to the essential func­ the interests of competition carry more tion. 53

weight than usual. In such a situation an analysis under Article 86 may perhaps lead to the possibility of demanding royalties being regarded as sufficient to guarantee the owner a reward for his creative effort since the right to refuse licences cannot under The Court determines what rights are cov­ those circumstances be regarded as necessary ered by the specific subject-matter on the in order to fulfil the essential function. basis of an assessment of what is necessary in order to fulfil the essential function of the 54 intellectual property right in question.

84. At the same time it is clear that the con­ The presence of specified circumstances may, cept of the essential function sets an absolute however, mean that the interests of the limit on what interference is possible pursu­ ant to Article 86 in rights falling within the specific subject-matter. No such interference 52 — It should be noted in this context that the protection of the is possible if it would mean that the author special moral relationship between the author and bis work cannot obtain a reward for his creative must include a rieht for the owner to oppose completely the publication of liis work. The fact titat the essential func­ efforts or cannot be afforded the protection tion is said to include the protection of moral rights there­ fore signifies that it is not possible on the basis of Article of moral rights that may be recognized by 86 to require an undertaking to grant licences in situations national law. where the author does not wish the work to be made pub­ lic. That issue is not relevant in these cases since RTE and ITP themselves publish the work and have also given a large number of licences for the partial publication of the work. 53 — In some judgments however the Court merely refers to the interests making up the essential function of the intellectual property right in question without expressly applying that concept. 54 — Sec for example the judgments of the Court of Justice in Case C-10/89 HAG Gf [ I990 ] ECR 1-3711, paragraph 14, Case 158/86 Warner Brothers [1988] ECR 2605, paragraph That limit would not be exceeded by a 15, Case 19/84 Pharmon v Hoechst [1985] ECR 2281, para­ graph 26, Case 1/81 Pfizer [1981] ECR 2913, paragraphs 7, requirement to grant licences as it would be 8 and 9, Case 187/80 Merck v Stephar [1981] ECR 2063, paragraph 10, Case 3/78 American Home Products [1978] possible to demand royalties and because the ECR 1823, paragraph 11, and in Case 102/77 Hoffmann-La author could not be precluded from taking Roche v Centrafarm [1978] ECR 1139, paragraph 7. The last-mentioned judgment is considered in more detail in steps against unlawful use or infringement of point 49 above.

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owner carry less weight and/or the interest the basis of Article 86 with a right which, of the free movement of goods carries more according to the Court's case-law, is covered weight than usual and that the result of the by the specific subject-matter of copyright balance is that an exercise in those circum­ and in this connection to consider the signifi­ stances is held to be incompatible with the cance of the concept of the essential function Treaty rules. As described above in section of copyright. (c), in the context of an Articles 30 and 36 analysis, such conduct will generally be defined as conduct not covered by the spe­ 55 cific subject-matter. Judgments of that nature indicate that the Court has found that an exercise of rights which are in principle covered by the specific subject-matter was not necessary in the circumstances in ques­ tion in order for the intellectual property right to be able to fulfil its essential function. There is an inherent risk here that the impression might be given that the concept of specific subject-matter has been so relativ­ ized that it does not have any real meaning. Such a view would be wrong. Once the con­ tent of the specific subject-matter of copy­ right has been laid down, it is always the However, in a number of cases the Court has starting point for the Court's analysis and it also held that an exercise of rights covered is clear that substantial and weighty grounds by the specific subject-matter is to be must be put forward to show that rights cov­ regarded even in specified circumstances as ered by the specific subject-matter of copy­ necessary in order to fulfil the essential func­ right can be exercised in a manner incompat­ tion of the intellectual property right in ible with the Treaty rules. 56 question.

86. It was necessary to show above that in principle it is not impossible to interfere on 87. As regards in particular the right to refuse licences, it is clear that a requirement to grant licences constitutes a serious inter- 55 — See for example paragraph 15 of HAG GF, paragraph 23 of Pharmon v Hoechst, paragraphs 10 and 11 of Pfizer, para­ ference in copyright since it would be graphs 11 and 13 of Merck v Stephar, paragraphs 19 to 23 of reduced merely to the right to receive an American Home Products, paragraph 9 of Hoffmann-La Roche v Centrafarm, and the judgments in Case economic reward. There must therefore exist 434/85 Allen & Hanburys v Generics [1988] ECR 1245, paragraphs 14 to 23, Joined Cases 55 and 57/80 Mutsik-Ver- particularly substantial and weighty competi- trieb Membran v GEMA [1981] ECR 147, paragraphs 14 to 18 and Case 119/75 Terrapin v Terranova [1976] ECR 1039, tion grounds for the right to refuse licences paragraph 6. to be regarded as having been exercised in 56 — See for example paragraph 16 of HAG GF, paragraph 18 of circumstances signifying that that exercise Warner Brothers, paragraphs 25 and 26 of Pharmon v Hoe- chst, paragraphs 12 to 18 of American Home Products, para­ cannot be regarded as necessary for copy­ graphs 10, 11 and 12 of Hoffmann-La Roche and paragraph 7 of Terrapin v Terranova. right to fulfil its essential function.

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88. In the following sections I shall consider prehensive television guide and its decision whether the circumstances cited by the must therefore be interpreted as meaning Court of First Instance in its judgments as that the requirement for the undertakings to special circumstances that may justify appli­ license their programme listings only applies cation of Article 86 meet that condition. to the extent that the listings are to be used to produce comprehensive weekly television 57 guides.

(e) The emergence of a new product for which there exists a substantial potential demand from consumers 91. The interest of consumers in the emer­ gence of a new product is undoubtedly rele­ vant when considering whether there exists conduct restricting competition within the meaning of Article 86. The Commission has stressed that Article 86(b) provides that an 89. In its judgments the Court of First abuse of a dominant position may, in particu­ Instance stressed, as regards both RTE and lar, consist in 'limiting production, markets ITP, that each undertaking 'by reserving the or technical development to the prejudice of 58 exclusive right to publish its weekly televi­ consumers'. sion programme listings, was preventing the emergence on the market of a new product, namely a general television magazine likely to compete with its own magazine' and for which there was 'potential consumer demand' (paragraph 73 of the RTE judg­ ment; paragraph 58 of the ITP judgment). 92. At first sight, therefore, there might appear to be grounds for finding that special circumstances exist which signify that the exercise of rights included in the specific subject-matter may be classified as an abuse where the exercise is carried out in order to prevent the emergence of a new product. 90. A clearly decisive factor for the applica­ Closer consideration shows, however, that tion of Article 86 in these cases was that by their conduct RTE and ITP were preventing the emergence of a new product. No-one 57 — The Commission was at pains to demonstrate in its decision would doubt the fact that RTE and ITP were that the situations in the other Member States and the expe­ rience — albeit limited — with the publication of the Magill entitled to exercise their copyright in order TV Guide showed that there was a substantial potential demand on the market for comprehensive TV guides. In the to prevent the publication of television proceedings before the Court of First Instance the appli­ guides corresponding to their own respective cants contended that the Commission had failed to produce proof of this (paragraph 37 of the RTE judgment; para­ guides. In its decision the Commission speci­ graph 22 of the ITP judgment). I consider that the factors adduced by the Commission arc sufficient to substantiate fied that Article 86 had been infringed in so the potential demand. far as the practice and policy of the under­ 58 — In this connection the Commission referred to the judg­ ment of the Court of First Instance in Case T-51/89 Tetra takings prevented the publication of a com­ Pak [1990] ECR II-309.

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such a conclusion is only right if the concept 94. The Commission contends that in classi­ of a new product is qualified. fying a product as new it is not relevant whether it will compete with the copyright 60 owner's own products.

93. The first condition for there to be a new product is, of course, that the product does not exist on the relevant market. 59 95. I do not believe that the Commission's view is tenable.

But that cannot suffice in itself in order to 96. I consider it appropriate to find that require a copyright owner to grant licences there is an abuse of a dominant position if a (see below concerning products which a pro­ copyright owner by means of his copyright prietor could have produced himself but has prevents the emergence of a product which for the time being chosen not to produce). In does not compete with his product since it the context of the circumstances of these meets other consumer needs than those that cases, it is necessary to consider whether, in are met by his product. order for a product to be regarded as new, it suffices that it is furthermore a product that the copyright owner cannot produce himself, for example because such production pre­ supposes a licence to use works protected by the copyright of other parties. Alternatively, is the relevant criterion whether the product 97. The contrary is true, in my view, if in question competes with the product of the copyright is used in order to prevent the copyright owner? emergence of a product which is produced by means of the work protected by the copyright and which competes with the products produced by the copyright owner 59 — If the undertakings had chosen jointly to produce a com­ prehensive television guide but had otherwise denied third himself. Even if that product is new and bet­ parties that possibility) it would in any event not be pos­ ter, the interests of consumers should not in sible to justify interference with the specific subject-matter on the grounds that the undertakings' conduct prevented the emergence of a new product. However, such conduct might be indicative of discriminatory licensing policy and for that reason incompatible with Article 86. That is in any event the view taken by die Commission which states in 60 — The Commission states that its position in this case is in point 27 of its decision: 'To confine an order for the supply accordance with its earlier practice. For example, in of these listings to ITP, BBC and RTE, inter se, would dis­ 1984 the Commission suspended proceedings against IBM criminate against third parties wishing to produce a com­ in consideration of IBM's commitment, renewed and prehensive weekly guide in a manner which would not be extended in December 1988, to make available to competi­ compatible with Article 86'. ITP and RTE have not chal­ tors information about the functioning of its Systems lenged the Commission's decision on that point and it is 370 mainframe computers. Without that information com­ therefore unnecessary to decide whether the Commission's petitors could have been prevented from entering the mar­ view is correct. The United Kingdom legislation appears to ket for products which competed with those of IBM (Four- have been amended in such a way that licences must be teenth Report on Competition Policy, 1984, p . 79). granted to all interested parties and similarly RTE has cho­ According to ITP, however, the IBM case solely concerned sen to make licences for its programme listings generally the supply of information and intellectual property rights available. were not affected.

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such circumstances justify interference in the sive conduct in its judgments in Volvo v specific subject-matter of the copyright. Veng and CICRA v Renault. The Court of Where the product is one that largely meets First Instance stated: the same needs of consumers as the pro­ tected product, the interests of the copyright owner carry great weight. Even if the market is limited to the prejudice of consumers, the right to refuse licences in that situation must be regarded as necessary in order to guaran­ tee the copyright owner the reward for his 'Moreover, the applicant's conduct stifled the creative effort. emergence on the market of a certain type of product, namely general television maga­ zines. Consequently, in so far as it was in particular characterized, in that regard, by a failure to take consumer needs into considera­ tion, that conduct also presented a certain similarity to a decision by a car manufacturer ... no longer to produce spare parts for cer­ 98. RTE and ITP are not able themselves to tain models even though there was still a produce a comprehensive weekly television market demand for such products' (para­ guide. But a comprehensive weekly televi­ graph 74 of the RTE judgment; paragraph sion guide would undoubtedly, as the Com­ 59 of the ITP judgment). mission has stated, compete with their respective weekly television guides. A com­ prehensive weekly television guide would both be cheaper and give a better overview but it would basically meet the same con­ sumer needs as may be met by buying weekly television guides for the individual 100. This example concerns products which television broadcasting organizations. In the copyright owner is able to produce him­ those circumstances the interests of the self on the basis of his copyright but has for copyright proprietor should prevail over the the time being chosen not to produce. The interests of consumers. There is no new example shows that there may exist an abuse product in a sense that may be relevant for of a dominant position where the owner of a the application of Article 86 and thus no spe­ registered design refuses to grant licences cial circumstance capable of justifying inter­ and at the same time does not himself pro­ ference with the specific subject-matter. duce the products protected by the regis­ tered design. As stated above, both those rights fall within the specific subject-matter of a registered design.

99. I also consider that the Court of First Instance was wrong to compare this situa­ tion with the situation described by the 101. However, the example can hardly be Court of Justice as the third example of abu­ taken to support the view that where a copy-

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right proprietor at one and the same time 102. That example is thus different from the does not himself produce a product and present situations and is not of decisive sig­ refuses to grant others licences for such nificance here since RTE and ITP have each products that in itself constitutes an abuse of provided consumers with the products a dominant position. It cannot be true that a which they were able to produce on the basis dominant undertaking is under a general of their copyright, namely weekly television obligation either to produce itself or to grant guides for their respective television chan­ licences for its products protected by copy­ nels. right. Such an obligation must be conditional on the existence of special circumstances in addition to the fact that consumers do not 61 have access to the product.

(f) Use of a dominant position on one market in order to retain for itself a derivative mar- ket

103. The Court of First Instance attached significance in its judgments to the fact that: 'the applicant was thus using its copyright in the programme listings which it produced as It seems clear to me that the Court attached part of its broadcasting activity [in the ITP decisive importance to the fact that consum­ judgment: "transferred to it by the television ers are particularly dependent on the product companies ... produced as part of the activity where a car manufacturer refrains from pro­ of broadcasting"] in order to secure a ducing spare parts for a particular car model monopoly in the derivative market of weekly even if there are still a large number of cars television guides' (paragraph 73 of the RTE of that model and where the lack of access to judgment; paragraph 58 of the ITP judg­ spare parts for those cars may mean that ment). consumers are obliged to buy a completely new car. The producer has himself created the need for spare parts and is thus abusing his registered design if by means thereof he prevents the need for spare parts from being met. 104. Those paragraphs must be understood as meaning that the market for programme listings is regarded as the main market and 61 — In other words, the interest of consumers in having access to a product must basically be taken into account by the market for television guides as the deriv­ national legislation on intellectual property rights which ative market. They must be read in conjunc­ may afford a basis for granting compulsory licences in the public interest where the owner himself does not exploit tion with the Commission's decision in the protected work to a reasonable extent; as regards such rules in the field of patent law see the judgments of the which it is stated that ITP and RTE each Court of Justice in Case C-30/90 Commission v United have a dominant position on one market, Kingdom [1992] ECR I-829 and Case C-191/90 Generics [1992] ECR 1-5335. namely the market for their own programme

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listings, and use that position to retain for 106. It is true that the fact that an undertak­ themselves a derivative market, namely the ing makes use of its dominant position on market for weekly television guides upon one market in order to retain for itself a which competition could otherwise take derivative market may constitute anti­ place, particularly in relation to comprehen­ competitive conduct which is incompatible sive weekly television guides. with Article 86 (see for example the judg­ ment of the Court of Justice in the Commer- 62 cial Solvents case). The question is, how­ ever, whether such considerations are relevant in a case concerning the exercise of intellectual property rights.

105. With reference to the first example of abusive conduct given by the Court of Jus­ tice in its judgments in Volvo v Veng and in CICRA v Renault, the Court of First 107. RTE, ITP and IPO essentially argue Instance further stated: that it is part of a normal exercise of copy­ right to make use of it in order to exclude competition on a derivative market. A copy­ right owner will often obtain remuneration for his creative effort by producing and sell­ ing products which incorporate the product created on the basis of the copyright, that is to say on a derivative market. ITP adds that 'In the present case, the aim and effect of the it was precisely only on the market for tele­ applicant's exclusive reproduction of its pro­ vision guides that ITP commercially gramme listings was to exclude any potential exploited its copyright in its programme list­ competition from the derivative market rep­ ings. resented by information on the weekly pro­ grammes ..., in order to maintain the monop­ oly enjoyed, through the publication of the RTE Guide [in the ITP case, TV Times], by the applicant on that market. From the point of view of outside undertakings interested in publishing a television magazine, the appli­ 108. The Commission claims that the fact cant's refusal to authorize, on request and on that the copyright is being exercised in order a non-discriminatory basis, any third party to keep out any competition on a derivative to publish its programme listings is therefore market constitutes a special circumstance comparable, as the Commission rightly which may justify application of Article 86. stresses, to an arbitrary refusal by a car manu­ In support of that view the Commission facturer to supply spare parts — produced cites the judgments of the Court of Justice in in the course of his main activity of car mak­ General Motors Continental, 63 in Hugin, 64

ing — to an independent repairer carrying on his business on the derivative market of automobile maintenance and repair' (para­ graph 74 of the RTE judgment; paragraph 62 — Joined Cases 6/73 and 7/73 [1974] ECR 223, paragraph 25. 63 — Case 26/75 [1975] ECR 1367. 59 of the ITP judgment). 64 — Case 22/78 [1979] ECR 1869.

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in Télémarketing, and in British Ley- 110. That difference is precisely crucial. As land, which concerned the conduct of RTE and ITP point out, a distinction must dominant undertakings in connection with be drawn between a refusal to supply a prod­ the supply of services or products which uct to customers who wish to use that prod­ only those undertakings were able to supply uct on a derivative market and a refusal to and which were necessary in order to carry grant a licence to a competitor who wishes out an activity on a derivative market. to produce and sell products incorporating the protected work. In the first case the existence of any infringement of Article 86 does not depend on whether the products concerned are protected by an intellectual property right. The analogy drawn by the Court of First Instance is therefore not apposite, nor are the judgments cited by the Commission relevant to a decision in these cases.

109. The Commission has further claimed that the example from the judgments of the Court of Justice in Volvo v Veng and 111. Instead, as pointed out by ITP and in CICRA v Renault cited by the Court of contrast to what was stated by the Court of First Instance is relevant to a decision in the First Instance in its judgments (paragraph present cases. According to the Commission 74 of the RTE judgment; paragraph 59 of the the situation of Magill corresponds to that of ITP judgment) it is appropriate to draw an an independent repairer in so far as both are analogy with the situations at issue in Volvo dependent on the supply of products from v Veng and CICRA v Renault, namely that an upstream market (in programme listings Volvo and Renault were entitled to refuse a and car parts respectively) in order to carry licence to market spare parts that had been on an activity on a derivative market (the produced without Volvo's and Renault's market for television guides and the market approval. It should be noted that the Court for repairing Volvo and Renault cars respec­ of Justice did not see fit in that connection to tively) where they compete with their sup­ distinguish between licences for the purpose pliers (RTE's and ITP's own weekly televi­ of competing on the market for the sale of sion guides and Volvo's and Renault's spare parts and licences for the purpose of authorized repairers respectively). The Com­ competing on the market for repairing Volvo mission concedes however that the analogy and Renault cars. is not complete since Magill's situation dif­ fers in so far as the supply of a product was not sufficient for Magill to be able to carry out its activity as Magill needed to obtain a licence in order to produce copies of the protected work itself. 112. There is therefore no basis for treating the exercise by a copyright owner of his copyright in order to prevent competitors from using the protected work differently 65 — Case 311/84 [1985] ECR 3261. 66 — Case 226/84 [1986] ECR 3263. according to the market on which such use

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takes place. As ITP points out, the possibil­ week's programmes, but not to other catego­ ity of exploiting the copyright on what is ries of publishers, namely those who wish to described as a derivative market must be publish weekly programme listings. regarded as necessary in order to obtain suf­ ficient reward for creative effort.

(g) The question of the existence of a discrimi- natory licensing policy or unreasonable licensing terms 115. Such a view must be rejected however. Discrimination presupposes the existence of comparable situations. That is not the case here. On the contrary RTE and ITP pre­ cisely grant licences to anybody who wishes to have them and the same terms apply to all. The fact that the undertakings wish to 113. The Court of First Instance attached reserve to themselves a certain use of the significance in its judgments to the fact that protected work cannot be an indication of 'the applicant also authorized, free of charge, discrimination. the publication of its daily listings and of highlights of its weekly programmes in the press in both Ireland and the United King­ dom. Moreover, it authorized the publication of its weekly listings in other Member States, without charging royalties' (paragraph 73 of the RTE judgment; paragraph 58 of the ITP judgment).

116. In respect of the reference by the Court of First Instance to the fact that permission was granted for the publication of pro­ gramme listings on a daily basis it may also be noted that Magill claimed at the hearing 114. The Commission has claimed that the that these cases do not concern refusals of first of the facts cited by the Court of First licences and thus do not entail the imposi­ Instance was rightly taken into account in tion of compulsory licences. Magill points determining these cases. However, the Com­ out that ITP and RTE have granted a large mission has failed to explain why that fact is number of licences and it claims in that con­ relevant. Its view is presumably that the text that these cases are concerned with the undertakings' conduct is an indication of a granting of licences on unreasonable terms, discriminatory licensing policy since licences are granted to certain categories of publish­ ers, namely those who wish to publish daily 67 — Sec paragraph 57 of the RTE judgment and paragraph 40 of programme listings or highlights of the the ITP judgment.

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namely terms which preclude the publication 117. As regards the second fact referred to of programme listings on a weekly basis. by the Court of First Instance — that per mission was given for the publication of pro gramme listings on a weekly basis in other Member States — I would point out that it is apparent from the Commission's decision 69 that ITP, but not RTE, has not sought to prevent the publication outside Ireland and the United Kingdom, namely inter alia in Belgium, the Netherlands and France, of its weekly programme listings in television guides on the ground that it has no interest Magill further seeks to show that while the in pursuing foreign-language publications, right to refuse to grant licences may possibly even if it is suspected that those publications form part of the specific subject-matter of may include material which, depending on copyright, the same is not true of the right to local law, may infringe its copyright.

A deci set licensing terms. As shown in section (c) sion on such grounds to refrain from taking above, that view is incorrect. The right to action against infringements of copyright grant licences also includes the right to do so cannot be assimilated to permission to pub on specified terms. On the other hand it may lish and it is not therefore an indication of a constitute a special circumstance possibly discriminatory licensing policy. Nor does justifying interference in the specific subject- that fact appear to be otherwise significant matter of the copyright if licences are for a decision in these cases. granted on unreasonable terms.

There has been nothing to suggest in these cases that there are any disputed terms other than the fact that the licences which are granted do not include the right to publish programme listings on a weekly basis. In view of the fact (h) The question whether programme listings that the companies themselves publish weekly television guides, that term cannot be are works meriting protection regarded as either discriminatory or unrea sonable. That submission does not, therefore, add anything new. I do not consider that the fact that the undertakings wish to reserve for themselves the reproduction of the pro gramme listings on a weekly basis can be any more or any less objectionable because it is found that they allow others to make a dif

118. The Court of First Instance begins its ferent, more restricted use of those listings. discussion of the existence of an abuse by stating: 'In the absence of harmonization of national rules or Community standardiza tion, the determination of the conditions and 68 — The Commission is presumably expressing the same view in its decision when it states: 'having regard to the actual poli cies and practices of ITP, BBC and RTE, respectively, which are to supply publishers with their advance weekly listings but to limit by means of the terms of licences 69 — RTE has pointed out that the judgment of the Court of granted the reproduction of these listings to one or at most First Instance contains a factual error in this regard but it two days' listings at a time or to refuse licences altogether, adds that the error is not likely to have had any decisive the Commission takes the view that these policies and prac significance for the reasons given by the Court of First tices are unduly restrictive.' Instance for its decision.

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procedures under which copyright is pro­ on the contrary constitute an abuse of a tected is a matter for national rules' (para­ dominant position (paragraph 47 of the RTE graph 66 of the RTE judgment; paragraph judgment; paragraph 30 of the ITP judg­ 70 51 of the ITP judgment). The Court of ment). First Instance concludes its examination on this point by finding that the conduct at issue is not compatible with the Treaty rules 'although the programme listings were at the material time protected by copyright as laid down by national law, which still determines 120. In the proceedings before the Court of the rules governing that protection' (para­ Justice the Commission has stated that it is graph 75 of the RTE judgment; paragraph for the national authorities and courts to 60 of the ITP judgment). determine what works fall under copyright protection. At the same time, however, the Commission has stated that the Court of First Instance was right to take account of the unusual nature of the national right in 71 deciding on the cases. 119. During the proceedings before the Court of First Instance the Commission drew 'attention, in general terms, to the incompatibility with Community rules of a national law which upholds the existence of copyright in programme listings' (paragraph 121. RTE, ITP and IPO claim that both the 44 of the RTE judgment; paragraph 27 of the views of the Commission and the judgment ITP judgment). The Commission submitted of the Court of First Instance illustrate lack that 'the programme listings are not in them­ of respect for the principle that the scope of selves secret, innovative or related to copyright protection is to be determined by research. On the contrary, they are mere fac­ national law. They claim that the decisions tual information in which no copyright taken were in fact intended to censure the could therefore subsist' (paragraph 46 of the copyright protection of programme listings RTE judgment: paragraph 29 of the ITP under Irish and United Kingdom law. judgment). It recognized that programme listings are protected under national law but claimed, on the basis of the factors men­ tioned, that 'the relevant policies and prac­ tices of the applicant are not covered by copyright protection as recognized in Com­ 122. It follows from the foregoing review munity law' (paragraph 43 of the RTE judg­ that I do not otherwise consider that the ment; paragraph 26 of the ITP judgment) but refusals to grant licences in these cases took place under such special circumstances as to

70 — It refers to the judgments of the Court of Justice in Case 144/81 Keurkoop v Nancy Kean Gifts [1982] ECR 2853, paragraph 18, Case 53/87 CICRA v Renault [1988] ECR 71 — The Commission has also drawn a distinction between lit­ 6039, paragraph 10, and Case 238/87 Volvo v Veng [1988] erary and artistic works in the narrow sense and functional ECR 6211, paragraph 7. See also the judgments of the and utilitarian works. However, that distinction seems pri­ Court of Justice in Case 35/87 Thetford v Fiamma [1988] marily to have been applied in order to illustrate the further ECR 3585, paragraph 12, and Case C-317/91 Deutsche consequences of the judgment of the Court of Justice (see Renault [1993] ECR 1-6227, paragraphs 20 and 31. section (j) below).

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justify application of Article 86. I am there­ rights. In that respect national law is sub­ fore more inclined to endorse the undertak­ ject only to the limitations resulting from the ings' view that the actual grounds for apply­ second sentence of Article 36 of the Treaty ing Article 86 in the present circumstances under which restrictions on trade must not must in that case be that the programme list­ constitute a means of arbitrary discrimina­ ings were not regarded as meriting protec­ tion or a disguised restriction on trade tion. between Member States. Those limitations must be interpreted narrowly and there is nothing to suggest that they have been over­ 73 stepped in these cases.

123. As indicated at the outset it may rea­ sonably be claimed that the effort involved in drawing up programme listings is not so deserving of protection as to justify accep­ tance that the author may prevent the emer­ gence of comprehensive weekly television guides. The preparation of the programme 125. In the present cases too the Court listings does not require any incentive since should adhere to that principle which, in my the listings do not consist of anything more view, reflects a fundamentally correct divi­ than the setting out on paper of certain sion of competence between national law information which must in any event be pro­ and Community law. If there is a need under duced and compiled for the purposes of the Community law to restrict the copyright television broadcasting service. If that factor protection of specific products, that must be is taken into consideration I see no difficulty in holding that the refusals to grant licences in these cases are indications of an improper exercise of copyright. The question is, how­ 72 — See the judgments referred to in footnote 70. See also the Opinion of Advocate General Mischo in Case ever, whether the Court of Justice is able to 53/87 CICRA v Renault [1988] ECR 6039, points 21 to 32, attach significance to the nature of the work where he suggested that the Court examine whether protec­ tion of certain products based on national law was 'in con­ protected by copyright. formity with the function assigned by the Court to indus­ trial and commercial property, which is that of providing a "reward for the [inventor's] creative effort"' (point 32). In its judgment the Court confirmed that the question of what products qualified for protection was a matter for national law (paragraph 10). 73 — Compare the judgment of the Court of Justice in Case C-317/91 Deutsche Renault [1993] ECR I-6227 where the Court referred, as an example of a possible overstepping of the limitations resulting from the second sentence of Article 36, to the situation where a producer from another Member State could not enjoy, on the same terms, the protection afforded by German law to a trade mark, whether or not registered, or where such protection varied on the basis of the national or foreign origin of the products bearing the sign in question (paragraph 27). See also paragraph 33. In 124. The Court of Justice has hitherto unre­ his Opinion in that case, Advocate General Tesauro pointed out, rightly in my view, that in the application envisaged by servedly held that it is for the national legis­ the case-law, the actual scope of that reservation — which takes the form of a sort of minimum safeguard clause — is latures to determine what products may confined to extreme cases (almost textbook cases) enjoy the protection of intellectual property (point 14).

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done by rules adopted by the Community (i) The question whether the refusals to legislature. grant licences were justified

128. In its judgments the Court of First Instance states that the 'applicant's refusal to authorize third parties to publish its weekly 126. It may be considered whether it is pos­ listings was ... arbitrary in so far as it was not sible to affirm that principle while at the justified either by the specific needs of the same time opening the possibility of taking broadcasting sector, with which the present account of the nature of the protected work case is not concerned, or by those peculiar to in deciding whether there is an abuse of a the activity of publishing television maga­ dominant position. However, I cannot pro­ zines [in the ITP judgment: in so far as it pose that the Court carry out such a balance was not justified by the requirements pecu­ even though it may be tempting and appear liar to the activity of publishing television actually reasonable in the present cases. To magazines] . It was thus possible for the accept that copyright owners must, in their applicant to adapt to the conditions of a tele­ commercial conduct, comply with different vision magazine market which was open to standards according to how deserving of competition in order to ensure the commer­ protection their works are from the point of cial viability of its weekly publication ...' view of Community law would in any event (paragraph 73 of the RTE judgment; para­ signify that Community law is applied to graph 58 of the ITP judgment). censure rules in national intellectual property legislation on what products may obtain protection.

129. It follows from what I have said above that I do not consider that there exists, in the present cases, anti-competitive conduct within the meaning of Article 86 since the refusals to grant licences did not take place under such special circumstances that they 127. It must therefore be concluded that the may be classified as an abuse of a dominant fact that the programme listings are less- position. There is accordingly no need to deserving of protection is also not a circum­ examine whether there is a valid justification stance that can justify interference with the for the undertakings' conduct (see section exercise of copyright therein. (d), subsection (aa) above). In those circum­ stances RTE and ITP, supported by IPO , are right to challenge the judgments of the 74 — Sec in this connection Council Directive 91/250/ĽEC of Court of First Instance by pointing out that 14 May 199! on the legal protection of computer pro­ grammes (OJ 1991 L 122, p. 42) and Council Directive they cannot be required to justify their 93/98/EEC of 29 October 1993 harmonizing the term of refusals to grant licences. However, in the protection of copyright and certain related rights (OJ 1993 L 290, p. 9). event that the Court of Justice should find

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that the refusals to grant licences took place ITP's submissions are, moreover, incorrect under special circumstances that render them since in its decision the Commission stated: liable to be classified as abusive it is neces­ sary to consider whether there exists objec­ tive justification for such conduct. I would make the following comments.

TTP, BBC and RTE (individually or collec­ tively) claim that their current policies and practices with regard to their advance weekly listings are motivated by the need to ensure comprehensive high-quality coverage of all their programmes, including those of minor­ ity and/or regional appeal, and those of cul­ tural, historical and/or educational signifi­ cance. The Commission is of the opinion that these policies and practices are not nec­ 130. ITP claims that it was not invited to essary to achieve these aims, but can instead justify its exercise of copyright by invoking be achieved by less restrictive means, if nec­ the requirements peculiar to its activities essary by imposing terms to this effect upon since this was not referred to in the Com­ publishers to whom they grant licences to mission's decision. publish their programme listings. The Com­ mission does note, however, that none of the parties have considered it necessary to impose any limitations on the publication by third parties of daily (or two days') listings in order to achieve this purpose.'

131. That objection to the Commission's 132. In the proceedings before the Court of decision is not tenable. It is customary in Justice, RTE and ITP have not claimed that applying Article 86 first to assess whether the Commission's view on that point is erro­ there exists anti-competitive conduct and neous. Nor have they cited other objectively then to decide whether the undertaking has verifiable factors which in this case could established that there is actually valid justifi­ justify the refusals to grant licences. 75 cation for it. The Commission cannot therefore be required expressly to call on the undertaking to justify its conduct.

75 — See for example judgments of the Court of Justice in Case 311/84 Telemarketing [1985] ECR 3261, paragraph 26, and 133. It may therefore be assumed, in my Joined Cases 110, 241 and 242/88 François Lucazeau [1989] ECR 2811, paragraph 25. view,, that, as the Court of First Instance

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held, ITP and RTE did refuse to grant artistic works in the narrow sense, it is essen- licences and thus excluded all competition tial in order to maintain effective competi- from the market for comprehensive televi­ tion, particularly in the computer and tele- 76 sion guides solely in order to secure their communications industries. monopoly on the market for weekly televi­ sion guides (paragraph 73 of the RTE judg­ ment; paragraph 58 of the ITP judgment). In other words, if the Court of Justice were to hold that the refusals to grant licences other­ wise took place in special circumstances which are such as to render them liable to be classified as an abuse, they would be incom­ patible with Article 86.

135. RTE and ITP have disputed the distinc­ tion drawn by the Commission pointing out that the question of what products enjoy (j) The further consequences of the judgment copyright protection is a matter for national of the Court of Justice law. But so far as I can see the Commission does not use the distinction as a basis for submitting that functional and utilitarian works are in general less deserving of protec­ tion than literary and artistic works and are therefore more susceptible to give rise to application of Article 86 (see section (i) above). The Commission in fact applies the 134. The Commission claims that a distinc­ distinction in order to illustrate the far- tion must be drawn between literary and reaching consequences it believes annulment artistic works in the narrow sense and func- of the judgments of the Court of First tional or utilitarian works, relating for exam­ Instance would have for competition in a ple to telecommunications, computing, infor­ number of important areas where it perceives mation technologies and databases. Whereas a greater risk that copyright protection may the former do not create dependence for lead to or strengthen dominant positions. competitors on derivative markets, copyright in the latter works is more likely to create economic dependence and thus dominant 76 — In this connection the Commission referred to its Conclu­ positions that may lead to anti-competitive sions decided on the occasion of the adoption of the Com­ mission's proposal for a Council directive on the legal pro­ conduct. The Commission submits that the tection of computer programmes (OJ 1989 C 91, p. 16) in distinction is significant to a decision in these which it states: 'Companies in a dominant position must not abuse that position within the meaning of Article 86 of cases since it shows the need to confirm the the Treaty. For example, under certain circumstances the exercise of copyright as to the aspects of a programme, principle that a refusal to grant licences may, which other companies need to see in order to write com­ in the context of the circumstances in which patible programmes could amount to an abuse. This could be the case if a dominant company tries to use its exclusive it took place, constitute an abuse of a domi­ rights in one product to gain an unfair advantage in relation to one or more products not covered by these rights'. As is nant position. While the Commission's deci­ apparent from what has been said above, I consider that sion ordering the grant of licences will not those examples arc correct only in so far as concerns pro­ grammes or products which do not compete with the copy­ be of appreciable significance for literary and right product.

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136. As regards the Commission's fear that tion of the judgments of the Court of First these cases may form a precedent in the field Instance are unfounded because it is highly of computer software, ITP has claimed that unlikely that the copyright owners in the sit­ the appropriate solution in that respect is uations mentioned would hold dominant legislation and that the Commission's con­ positions and their conduct cannot therefore cerns do not, moreover, appear to relate to be incompatible with Article 86. It adds that the reproduction of protected works but to in the four years since the judgment of the information concerning them which does not Court of Justice in Volvo v Veng Article affect the copyright. 86 has only once — that is in these cases — formed the basis for a formal decision in order to remedy an abuse of intellectual property rights.

137. ITP, for its part, has claimed if the judg­ ments of the Court of First Instance are con­ firmed, it would have very far-reaching con- sequences for copyright under national law. ITP submits that in that case the following 139. It is difficult to form a view on whether would all be examples of abuses of a domi­ the parties' respective fears as to the further nant position: a writer of short stories who consequences of a judgment in one sense or opposes the publication of one of his stories the other are justified. Not least because of in an anthology; a poster artist who opposes the disagreement on that point, it would not the use of a copyright drawing in a Christ­ be appropriate on the present basis to mas card; the owner of the copyright in Pop- attempt to assess the merits of the examples eye who opposes the use of Popeye on a given. T-shirt; a playwright who opposes the use of one of his plays for the making of a film; the owners of Sunday newspapers who oppose the publication by ITP of their feature arti­ cles at the same time in TV Times; compilers of calendars of the movements of the moon and the tides, cooking recipes or lists of Nor­ man churches in England who oppose the reproduction thereof. IPO has submitted similar examples. 140. But precisely because it is not possible to foresee the consequences of such a result I consider that the Court of Justice should not, in its judgment in these cases, rule out the possibility that in special circumstances a refusal to license may be incompatible with Article 86. The Commission is right in my view in stating that 'copyright law is unable to legislate explicitly for every single 138. The Commission retorts that ITP's and product-specific abuse that may arise. Coun­ IPO's fears of the consequences of confirma­ tervailing policies, such as the competition

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rules, are essential to draw the correct Article 86 may apply to exercise of rights balance between the interests of the right- which in principle fall within the specific holder and those dependent on the subject-matter gives rise to legal uncertainty. right-holder'. That application of Article 86 does not differ 77 from any other application of Article 86. Moreover, national courts will be able to refer questions to the Court of Justice for a preliminary ruling on the precise circum­ stances in which Article 86 may apply.

141. On the other hand the consequences of holding that refusals to license may be incompatible with Article 86 when they take place in special circumstances are not unfore­ 143. The foregoing does not however neces­ seeable. In that case it would be for the sarily finally resolve the question whether Court of Justice itself in deciding future Article 86 constitutes a basis for requiring cases to lay down progressively more spe­ undertakings to grant licences for their copy­ cific guidelines as to the special circum­ right works. It has been contended in the stances under which refusals to licence may course of these proceedings that such a result constitute an abuse of a dominant position. is incompatible with the Berne Convention Moreover, the Court, if it follows my opin­ for the Protection of Literary and Artistic ion, will have held that such special circum­ Works. stances do not exist in the present cases and that result will be an indication that very strict conditions apply to that way of apply­ ing Article 86 to an exercise of rights falling within the specific subject-matter of an intel­ E — The question whether the Court of lectual property right. First Instance wrongly failed to take into consideration the Berne Convention

144. RTE and ITP claimed before the Court 142. Let me finally mention that ITP has of First Instance that the Berne Convention claimed that confirmation of the judgments must be regarded as forming part of Com­ of the Court of First Instance would give munity law and that the Commission's deci­ rise to legal uncertainty, both for the owners sion is incompatible with Article 9 of that of copyrights and for national courts which Convention on the right to reproduce the may also apply Article 86 and may have protected work. problems in determining whether the condi­ tions for applying Article 86 resulting from the judgments of the Court of First Instance 77 — See in this connection the judgment in Case T-51/89 Tetra are met. I do not accept the view that a legal Pak [1990] ECR 11-309, paragraph 37, in which the Court of First Instance stated: 'accordingly, an undertaking cannot situation which presupposes ongoing further rely on the alleged unpredictability of the application of Article 86 in order to escape the prohibition there laid definition of the circumstances in which down'.

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145. The Court of First Instance prefaces its States in order to justify restrictions on trade assessment of that plea by stating 'the Com­ within the Community. munity — to which, as Community law now stands, powers have not been transferred in the field of intellectual and commercial prop­ 78 erty — is not a party to the Berne Con­ vention, which has been ratified by all the Member States' (paragraph 102 of the RTE judgment; paragraph 75 of the ITP judg­ 147. The Court of First Instance draws a ment). distinction between Article 9(1) of the Berne Convention which confers on the author the exclusive right of reproducing the protected work and Article 9(2) under which signatory States may permit the reproduction of pro­ tected works in certain special cases and sub­ ject to specified conditions.

146. The Court of First Instance goes on to consider the significance of the fact that the Convention is binding on the Member States. It refers first to Article 234 of the 148. Article 9(1) was, the Court of First Treaty which provides: 'The rights and obli­ Instance observes, ratified by the United gations arising from agreements concluded Kingdom and Ireland before their accession before the entry into force of this Treaty to the Community on 1 January 1973 and, between one or more Member States on the pursuant to the Court of Justice's interpreta­ one hand, and one or more third countries tion of Article 234, provisions which were on the other, shall not be affected by the pro­ ratified before accession to the Community visions of this Treaty'. It points to the Court cannot, in intra-Community relations, affect of Justice's interpretation of Article the provisions of the Treaty. The Court of 234 showing that the provision affects only First Instance found that the plea that the obligations entered into by Member States decision was in conflict with Article 9(1) towards non-member countries and that could be dismissed on that ground alone. consequently agreements concluded prior to the entry into force of the Treaty may not be relied upon in relations between Member

78 — There is no cause in these proceedings to examine the ques­ As regards Article 9(2), the Court of First tion of the competence of the Community in the field of intellectual and commercial property rights but I would Instance points out that that provision was mention that in its proposal for a Council decision concern­ inserted in the Berne Convention by the ing the accession of the Member States to the Berne Con­ vention (OJ 1991 C 24, p . 5) the Commission states: '... the subject-matter of the Berne Convention (Paris Act) ... falls witnin the competence of the Community; ... at present the accession of the Community as such to these instruments is not possible without a prior modification allowing the 79 — See the judgments of the Court of Justice in Case accession of international organizations as such; ... in view 10/61 Commission v Italy [1962] ECR 1, Case of developments at Community level, the Community as 812/79 Attorney General v Burgoa [1980] ECR 2787, para­ such could be in a position to adhere to the Berne Conven­ graph 8, and Case 121/85 Conegate v HM Customs and tion ...' (seventh recital). Excise [1986] ECR 1007, paragraph 25.

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Paris Act of 1971 to which the United King­ 151. The Court of First Instance treated dom has been a party only since 2 January Article 9(1) and Article 9(2) of the Berne 1990 and which has not been ratified by Ire­ Convention differently because it assumed land. It observes, as far as the United King­ that Article 9(1) had become binding for the dom is concerned, that the Paris revision was United Kingdom and Ireland before their ratified subsequent to its accession to the accession to the Community while that was Community and that consequently Article not the case for Article 9(2). That premiss is, 9(2) cannot affect a provision of the Treaty according to the information I have been 80 since the Member States may not set aside able to obtain, erroneous. Articles 9(1) and the Treaty rules merely by concluding an (2) were inserted in the Berne Convention in international agreement but must use the the context of the revision of that Conven­ Treaty amendment procedure provided for in tion in Stockholm in 1967. However, like the Article 236 of the Treaty. other substantive provisions resulting from the Stockholm revision those provisions did not enter into force. They were revised by the Paris Act and it was therefore in connec­ tion with the ratification of the Paris Act that Article 9 was ratified by the United Kingdom. That means that both Article 9(1) The Court of First Instance therefore con­ and Article 9(2) were ratified by the United cludes that in any event the plea based on Kingdom only after its accession to the infringement of the Berne Convention must Community and that those provisions have be dismissed as unfounded. still not been ratified by Ireland.

149. I believe it is correct, as will be shown below, that the Berne Convention cannot be 152. But it will also be apparent that that a basis for annulling the Commission's deci­ alteration to the premiss for the assessment sion. However, in two respects it is expedi­ of the Court of First Instance does not affect ent to clarify and expand upon the reasons its result since its reasoning regarding Article given by the Court of First Instance. 9(2) of the Convention will now apply equally to Article 9(1).

150. First of all, the Court of First Instance was wrong in the present context to distin­ 153. The Court of First Instance examined guish between Article 9(1) and Article 9(2) the question of the legal situation applying if of the Convention. Secondly, and more there is found to be an actual conflict importantly in my view, it failed to consider the significance which the Berne Convention may have for the interpretation of Article 80 — See Guide to the Berne Convention (Geneva 1978) issued 86 of the Treaty. by the World Intellectual Property Organization.

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between Article 86 of the Treaty and the 155. The rules of the Berne Convention are rules in the Berne Convention. I consider designed to guarantee authors minimum pro- that that approach to the problem is too nar­ tection, and it is a Convention which 8 row. The rules in the Treaty on resolving enjoys broad international support. 3 conflicts between internationally binding rules and the Treaty's own rules only come into play if it is established that there is a conflict between the two sets of rules. That signifies that it is first necessary to determine whether the status of the Berne Convention is such that it must be taken into account as an element in the Court of Justice's interpre­ 156. All Member States have acceded to the tation of the Treaty rules and, if so, whether Berne Convention and only Ireland and Bel­ the provisions of the Convention can be gium have not yet acceded to the Paris Act relied upon in support of a certain interpre­ of 1971. On 14 May 1992 the Council tation of the Treaty. adopted a resolution under which the Mem­ ber States of the Community, in so far as they have not already done so, undertake to become by 1 January 1995 parties to the Paris Act and to introduce national legisla­ tion to ensure effective compliance there­ 8 with. 4 The Resolution further states that it The Court of First Instance should therefore is in the interests of Community copyright- have examined whether account must be taken of the provisions of the Berne Con­ vention in interpreting Article 86 of the Treaty and the implementing provisions, in 82 — The countries which have ratified the Berne Convention form a union (Article 1). In all Union countries other than particular Article 3 of Regulation No 17, in the country of origin of the work as defined in Article 5(4), order, as far as possible, to avoid conflict authors are guaranteed at least the protection afforded by the Berne Convention and are in addition guaranteed the between the two sets of rules. same protection as the country's own nationals (Article 5(1)). The Berne Convention does not guarantee minimum protection in the country of origin of the work where the author is also a national of that country. If the author is a national of another Union country he is entitled in the country of origin to the same protection as national authors (Article 5(3)). Apart from that, Union countries may freely determine the protection they wish to grant to works originating in their own country.

83 — See for example the first recital in the preamble to the 154. I consider that it is appropriate to inter­ Commission's Proposal for a Council decision concerning the accession of the Member States to the Berne Conven­ pret Article 86 in accordance with the Berne tion (OJ 1991 C 24, p. 5) and the second recital in the pre­ Convention. Many factors militate in favour amble to the Council resolution of 14 May 1992 on increased protection for copyright and neighbouring rights of account being taken of the Berne Conven­ (OJ 1992 C 138, p . 1). 81 tion in interpreting the Treaty rules. 84 — Council Resolution on increased protection for copyright and neighbouring rights (OJ 1992 C 138, p . 1). In this con­ nection see also the Commission's Proposal for a Council Decision concerning the accession of the Member States to the Berne Convention (OJ 1991 C 24, p . 5) the fifth recital in the preamble to which states: 'the accession of all the 81 — The judgment of the Court of Justice in Joined Cases Member States to the Berne Convention (Paris Act) ... will 55/80 and 57/80 Musik-Vertrieb Membran GmbH v provide a common basis for harmonization on which to GEMA [1981] ECR 147, in which the parties had relied on pursue more easily the construction of the Community edi­ provisions in the Berne Convention, cannot be construed as fice as regards copyright and neighbouring rights'. See also a rejection of that view. It should also be noted in this con­ Article la in the Amended Proposal (OJ 1992 C 57, p . 13) nection that in many instances the Court of Justice has held according to which: 'In the exercise of its powers concern­ that the rules of the Treaty must be interpreted in the light ing copyright and neighbouring rights, the Community of the European Human Rights Convention (see inter alia shall be guided by the principles and act in accordance with Case 36/75 Rutili [1975] ECR 127 and Case the provisions of the Berne Convention' as revised by the C-353/89 Commission v Netherlands [1991] ECR 1-4069). Paris Act.

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holders that they should be ensured the mini­ itself has also stressed the desirability of mum level of protection afforded by the Community law in the field of copyright Convention in the maximum possible num­ being in accordance with international stan­ ber of third countries and in that connection dards. the Council invites the Commission, when negotiating agreements with third countries to pay particular attention to the ratification of or accession to the Convention by the third countries concerned and to the effective compliance of such countries with the Con­ vention. 159. It is against that background that RTE's plea that Article 2 of the Commission's deci­ sion is incompatible with Article 86 and Article 3 of Regulation No 17, as those pro- visions must be interpreted in the light of the Berne Convention, is to be considered.

157. There are several examples, as RTE has pointed out, of references in secondary legis- lation of the Community to the Berne Con­ vention as an expression of a general and broadly accepted minimum standard, see Council Directive 91/250/EEC of 14 May 160. The Commission contends that the 1991 on the legal protection of computer Berne Convention does not oblige its signa­ programs, 85 Council Directive 93/98/EEC tories to grant copyright protection to a utili­ of 29 October 1993 harmonizing the term of tarian, non-literary list of programme titles protection of copyright and certain related and times and points to Article 2(8) of the rights, 86 and finally the Commission's Pro­ Convention which provides: 'The protection posal for a Council Directive on the legal of this Convention shall not apply to news protection of databases of 15 April 1992. 87 of the day or to miscellaneous facts having the character of mere items of press informa­ tion'. It submits that the Berne Convention does not forbid countries of the Union from extending their copyright protection to works other than literary and artistic works but in such cases it places no constraints on how such countries regulate the exercise of copyright over such works. 158. Finally, I would point out that in its submissions in these cases the Commission

85 — OJ 1991 L 122, p. 42. See the twenty-fifth and twenty-ninth recitals in the preamble and Article 1(1) and in particular Article 6(3) whose wording corresponds in all material respects to Article 9(2) of the Berne Convention. 86 — OJ 1993 L 290, p. 9. See recitals 1, 4, 5, 12, 14, 15, 17 and 161. The World Intellectual Property Orga­ 22 in the preamble and Article 1(1) and Article 7(1). nization (WIPO), which administers the 87 — OJ 1992 C 156, p. 4. See recitals 19, 22 and 26 in the pre­ amble and Article 2(1) and (2). Berne Convention, has issued a Guide to the

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Berne Convention. The commentary on are guaranteed the minimum protection pur­ Article 2(8) states inter alia: 'This exception suant to the Berne Convention. merely confirms the general principle that, for a work to be protected, it must contain a sufficient element of intellectual creation. It is a matter for the courts to judge, case by case, whether this element is sufficiently present and to decide whether the text is a story related with a measure of originality or a simple account, arid and impersonal, of 162. RTE claims that a power for the Com­ news and miscellaneous facts'. mission to require undertakings pursuant to Article 86 and Regulation No 17 to grant licences would be incompatible with Article 9(2) of the Berne Convention which pro­ vides:

The Irish High Court found that the pro­ gramme listings were the result of a great deal of preliminary consideration and work 'It shall be a matter for legislation in the and of the exercise of skill and judgment and countries of the Union to permit the repro­ were consequently entitled to protection as duction of such works in certain special literary works and compilations (paragraph cases, provided that such reproduction does 10 of the RTE judgment; paragraph 7 of the not conflict with a normal exploitation of the ITP judgment). It thereby expressly rejected work and does not unreasonably prejudice the view that programme listings were 'mere the legitimate interests of the author'. items of press information'.

163. RTE claims that Article 9(2) entails the condition that compulsory licences can be On that basis it is appropriate to accept granted only pursuant to specific legislation RTE's submission that programme listings which clearly sets out how and when com­ pulsory licences can be imposed. As an example of legislation which does meet that condition, RTE refers to the legislation 88 — It states at the outset: 'This Guide is not, however, intended recently introduced by the United Kingdom to be an authentic interpretation of the provisions of the Convention since such an interpretation is not within the under which radio and television broadcast­ competence of the International Bureau of WIPO, whose role is to be responsible for the administration of the Con­ ing organizations are obliged to grant vention. The sole aim of this Guide is to present, as simply licences for their programme listings and to and clearly as possible, the contents of the Berne Conven­ tion and to provide a number of explanations as to its Article 8(1) of the Commission's Proposal nature, aims and scope. It is for the authorities concerned, and interested circles, to form their own opinions.' for a Council Directive on the legal protec-

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tion of databases. Article 86 of the Treaty, states: 'This provision gives to member on the other hand, according to RTE, does countries the power to cut down this exclu­ not meet that condition since it is not suffi­ sive right of reproduction and permit works ciently clear in its terms to give copyright to be reproduced "in certain special cases". owners an adequate indication of when they But the freedom allowed them is not total. may be required to grant licences but instead The Convention adds two conditions ... leaves such an obligation to be made precise which apply cumulatively ...'. and adapted from case to case at the Com­ mission's discretion.

166. There thus does not seem to be any autonomous and special significance attached to the fact that Article 9 refers to restrictions 164. That view is not tenable. on the right to reproduce the work being 'a matter for legislation'. It also seems to me to be going quite far to interpret such a neutral formulation, which was intended to 'cover all reasonable exceptions', as referring to leg­ islation of a certain type and certain degree of detail. As the Commission has pointed out, it is hardly likely that all the countries 165. The commentary on Article 9 in the which ratified the Paris Act of 1971 thereby Guide to the Berne Convention includes the intended to renounce the power to impose following: 'Oddly enough this right [of compulsory licences under competition reproduction], which is the very essence of rules. copyright, did not appear in the Convention as one of the minima until as late as Stock­ holm (1967). Though the right was recogn­ ised, in principle, by all member countries, the problem was to find a formula wide enough to cover all reasonable exceptions but not so wide as to make the right illuso­ ry'. With specific regard to Article 9(2) it I do not believe that anything more can be inferred from Article 9(2) than that the Con­ vention does not preclude the possibility that in special cases the exclusive right to repro­ 89 — Anicie 8(1) provides: 'Notwithstanding the right provided for in Article 2(5) to prevent the unauthorized extraction duce the work may be restricted and that it and re-utilization of the contents of a database, if the works is left to the countries of the Union in their or materials contained in a database which is made publicly available cannot be independently created, collected or legislation and in accordance with the condi­ obtained from any other source, the right to extract and re-utilize, in whole or substantial part, works or materials tions set out in that provision to determine from that database for commercial purposes, shall be how they wish to avail themselves of that licensed on fair and on-discriminatory terms'. The Com­ mission criticizes this example pointing out that it relates possibility. It cannot be contrary to that pro­ not to the copyright protection of databases but the sui generis right against unfair extraction which is not covered vision to conclude that a general competition by the Berne Convention. The IPO seems to agree with the Commission on this point. I do not consider it necessary to provision constitutes the necessary legislative adopt a position on the issue here. basis.

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167. Lastly, as regards the condition in Arti­ under special circumstances, to grant licences cle 9(2) that 'such reproduction does not for their copyright works. conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author', it seems clear that the power for the Commis­ sion, acting on the basis of the Treaty com­ petition rules, to require undertakings to grant licences if the very restrictive condi­ 169. For the eventuality that the Court of tions I have described above are met cannot Justice should agree that under special cir­ in general be regarded as incompatible with cumstances it may be incompatible with that provision. As the Commission has Article 86 to refuse to grant licences and, pointed out, compliance with those condi­ contrary to the result I have proposed, find tions will ultimately be subject to review by that such special circumstances do exist in the Court of Justice. these cases, I shall go on to consider the other pleas submitted to the Court of Justice.

F — The question of infringement of Article As regards the specific decision to require 3 of Regulation No 17 RTE and ITP to grant licences for their pro­ gramme listings, I believe that the result set out above that that decision is incompatible with Article 86 of the Treaty is borne out by Article 9(2) of the Berne Convention, in par­ ticular because an obligation to grant licences for the production of products which basi­ 170. Article 3(1) of Regulation No 17 pro­ cally meet the same consumer needs as the vides: 'Where the Commission, upon appli­ copyright owner's product, and which are cation or upon its own initiative, finds that therefore in competition with it, will in my there is infringement of Article 85 or Article view 'conflict with a normal exploitation of 86 of the Treaty, it may by decision require the work'. the undertakings or associations of undertak­ ings concerned to bring such infringement to an end'.

168. On that basis the Court can hold that the Berne Convention does not make it nec­ 171. ITP claims that the Court of First essary to interpret Article 86 of the Treaty Instance was wrong in its judgment to hold as precluding undertakings from being that on the basis of the said provision the required, on the basis of that provision and Commission can require undertakings to

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grant licences for their copyright works. First Instance should have taken into Some of the arguments put forward echo the account. I find it difficult to see how those arguments considered above concerning the circumstances could entail that a requirement question whether it may be incompatible to authorize interested parties, on request with Article 86 to refuse to license and will and on a non-discriminatory basis, to pub­ therefore not be reconsidered here. I con­ lish the undertaking's weekly listings, possi­ cluded above that under special circum­ bly by granting them a licence subject to cer­ 92 stances a refusal to licence may constitute an tain conditions, goes beyond the bounds abuse of a dominant position. All that of what is appropriate and necessary in order remains to be examined, as the Commission to bring to an end an infringement of Article points out, is whether the said provision 86 consisting in this case of the undertaking's gives the Commission power to require the refusal to licence. In this respect too, there­ dominant undertaking to grant licences or fore, I can see no grounds for criticizing the whether the Commission may go no further judgment of the Court of First Instance (see than to require the undertaking to bring the paragraphs 80 and 81 of the ITP judgment). infringement of Article 86 to an end. In this respect I wholly endorse the reasons given by the Court of First Instance for its deci­ sion and I shall merely refer to paragraphs 70 and 71 of the ITP judgment. G — The question whether the Court of First Instance defined the relevant product market and applied the concept of a domi­ nant position incorrectly

173. In its judgments the Court of First Instance, in accordance with the Commis­ sion's decision, defined the relevant product 172. ITP further claims that the Court of markets as weekly programme listings and First Instance was wrong in its judgment to the television guides in which those listings hold that Article 2 of the Commission's are published. It points out that they repre­ decision is in accordance with the principle sent specific markets which cannot be identi­ of proportionality. ITP lists a number of fied with the market for information on tele- considerations which it believes the Court of

91 — ITP points out that: the decision removed not only ITP's exclusive right to reproduce, but also its right to first mar­ 90 — ITP headed the section of its appeal dealing with this pilea ket its product which is particularly important where, as in 'Misuse of Powers'. That has been criticized by the Com­ this case, the product is perishable, with a useful life of only mission which contends that were it to have gone beyond 10 days; there is no reciprocity between ITP and the com­ its competence, that would not signify that a misuse ol petitors (other than BBC and RTE) whom it is required to power had occurred. I must agree with the Commission in license; and many of those competitors, particularly that respect. As far as I can sec ITP is not claiming that the national newspapers, enjoy turnovers and profits greatly in Commission in its decision pursued aims other than those excess of ITP. set out in Article 86 but merely that the Commission relied 92 — As the Commission has stressed, the decision allowed the on the enabling provision in Article 3 of Regulation No undertakings to demand royalties and set such licensing 17 in a manner for which ITP believes there is no basis in conditions as were deemed necessary in order to protect that provision. their legitimate interests.

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vision programmes in general since there is a 176. It remains to be determined, therefore, specific demand for those products both whether RTE and ITP each have a dominant from commercial interests which wish to position on the market as so defined. publish a comprehensive weekly television guide and from television viewers who are thereby enabled to decide in advance which programmes they wish to follow and arrange any leisure activities for the week accord­ ingly (paragraphs 61 and 62 of the RTE judgment; paragraphs 47 and 48 of the ITP judgment). 177. It is common ground that an undertak­ ing does not have a dominant position merely because it owns an intellectual prop­ 93 erty right. It is also not disputed that a dominant position must be defined as 'a position of economic strength enjoyed by an undertaking which enables it to hinder the maintenance of effective competition on the 174. IPO claims that a definition of the rel­ relevant market by allowing it to behave to evant product market based on a division an appreciable extent independently of its into various sub-markets and ancillary mar­ competitors and customers and ultimately of 94 kets is artificial and inappropriate in that it consumers'. ignores the purpose and nature of copyright and the manner in which it is commercial­ ized.

178. IPO claims that the Court of First Instance wrongly found in its judgments that the undertakings held a dominant position 175. I can see no reason to criticize the simply because they owned the copyrights in Court of First Instance's definition of the question and without any examination what­ relevant product markets which is based on a soever of their economic strength on the customary and properly carried out analysis market. IPO further claims that in its deci­ of the substitutability of the products in sion the Commission applied the criterion of question. Moreover, I have the impression position of economic strength incorrectly. that in reality IPO's reservations concern the question whether a copyright proprietor is entitled to retain for himself use of the copy­ 93 — See the judgments of the Court of Justice in Case right work on a derivative market. However, 78/70 Deutsche Grammophon [1971] ECR 125, paragraphs that question concerns the definition of 16 and 17, Case 40/70 Sirena [1971] ECR 7, paragraph 16, and Case 51/75 EMI Records v CBS United Kingdom when there is an abuse of a dominant posi­ [1976] ECR 811, paragraph 36. tion and in any case, as I have already stated 94 — Judgment of the Court of Justice in Case 322/81 Michelin [1971] ECR 3461, paragraph 30. See also inter alia the judg­ in section (f), the answer must be in the affir­ ments of the Court of Justice in Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 38 and mative. Case 311/84 Télémarketing [1985] ECR 3261, paragraph 16.

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179. In its contested decision the Commis­ as they claim protection under the copyright sion gives the following grounds for its find­ laws in the United Kingdom and/or Ireland, ing that RTE and ITP have a dominant posi­ or parties to whom they may have trans­ tion: ferred their claimed legal rights seek the same protection...

As a result no competition from third parties 'Irrespective of any intellectual property is permitted to exist on these markets' (point rights which they may be, or may at least 22, emphasis added). claim to be, entitled to, broadcasting organi­ zations have a factual monopoly over the production and first publication of their weekly listings. This is because programme listings are a by-product of the programme scheduling process, carried out and known only to the programme planners themselves. 180. I consider that the Commission has Moreover the listings only become market­ correctly determined the undertakings' posi­ able products when the schedules themselves tion on the market. The decisive factor must are finalized (subject to last minute changes), be that weekly television guides can only be a short time before transmission. As a result produced using the programme listings for therefore it is not possible for third parties to the television channels which can be received produce reliable listings themselves for pub­ in the relevant market and that the pro­ lication in their own television guides. gramme listings can be supplied only by the Instead they must obtain listings from the broadcasting organizations which carry out broadcasting organizations themselves, or the programme scheduling for their respec­ from undertakings to which the rights in the tive television channels and which in this listings have been granted, in this case ITP, way have a factual monopoly on that market. BBC and RTE. Third parties are therefore in The undertakings' copyrights are not in a position of economic dependence which is themselves decisive but they help to characteristic of the existence of a dominant strengthen the dominant positions. position.

181. IPO criticizes the Commission's appli­ cation of the concept of factual monopoly. It claims that such a monopoly will arise wher­ In addition, the factual monopoly held by ever there exists a primary market and a sec­ the broadcasting organizations in relation to ondary market and a third party unilaterally their individual programme listings is decides to use the products on the primary strengthened into a legal monopoly in so far market in order to carry on business on the

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OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

secondary market. Economic dependence is 183. The Court of First Instance upheld the thus artificially linked to the intention of a Commission's decision on this point on the third party. IPO claims that the Commis­ following grounds: sion's concept of factual monopoly is an arti­ ficial construct intended to justify the use of competition law in order to change the spe­ cific subject-matter of copyright.

'With regard to the applicant's position on the relevant market, the Court notes that RTE enjoyed, as a consequence of its copy­ right in its programme listings [in the ITP judgment: that ITP enjoyed, as a conse­ quence of its copyright in ITV and Channel Four programme listings, which had been transferred to it by the television companies 182. I consider that that view must be broadcasting on those channels], the exclu­ rejected. It is not true that a dominant posi­ sive right to reproduce and market those list­ tion exists wherever there is a primary and ings. It was thus able, at the material time, to secondary market. The decisive factor must secure a monopoly over the publication of be whether the undertaking in question is its weekly listings in ... a magazine specializ­ the only possible source of supply for the ing in its own programmes [in the ITP judg­ products which are produced on the primary ment: in the programmes of ITV and Chan­ market and are necessary in order to carry 95 nel Four] . Consequently, the applicant on business on the secondary market. clearly held at that time a dominant position both on the market represented by its weekly listings and on the market for the magazines in which they were published in Ireland and Northern Ireland. Third parties such as Magill who wished to publish a gen­ eral television magazine were in a position of economic dependence on the applicant, which was thus in a position to hinder the emergence of any effective competition on Here too I have the impression that IPO's the market for information on its weekly reservations in reality concern the question programmes ...' (paragraph 63 of the RTE whether a copyright owner can reserve to judgment; paragraph 49 of the ITP judg­ himself use of the copyright work on a ment). derivative market or whether such conduct constitutes an abuse of a dominant position (see above and section (f)).

95 — See the judgments of the Court of Justice in Case 26/75 Genera Motors Continentul [1975] ECR 1367, para­ graph 9, Case 22/78 Hugin Kassaregister [1979] ECR 1869, 184. There is some justification for IPO's paragraphs 9 and 10, Case 311/84 Telemarketing [1985] criticism of the Court of First Instance's ECR 3261, paragraphs 16,17 and 18, and Case 226/84 Brit- ish Leyland [1986] ECR 3263, paragraphs 5 and 9. judgments. The Court of First Instance does

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appear to have attached decisive weight to 86 of an effect on trade between the Member the undertakings' copyrights, an approach States is met. It gives the following grounds: which, as mentioned above, is not in accor­ dance with the case-law of the Court of Jus­ tice. But since I am, for the rest, in agree­ ment with the result reached by the Court of First Instance and since it does point out that there exists economic dependence, I do not believe that this factor in itself constitutes 'In the present case, the Court finds that the sufficient reason to annul the judgments of applicant's conduct modified the structure of the Court of First Instance. competition on the market for television guides in Ireland and Northern Ireland and thus affected potential trade flows between Ireland and the United Kingdom.

H — The question whether the Court of First Instance misconstrued the concept of effects on trade between Member States

The applicant's refusal to authorize inter­ ested third parties to publish its weekly list­ ings had decisive repercussions on the struc­ ture of competition in the field of television magazines in the territory of Ireland and Northern Ireland. Through its licensing pol­ 185. RTE claims that its licensing policy did icy which prevented, inter alia, Magill from not affect trade between Member States and publishing a general television magazine to that the Community competition rules are be marketed in both Ireland and Northern not intended to remedy situations which are Ireland, the applicant not only eliminated a purely internal to a Member State. If it is competing undertaking from the market for considered unsatisfactory that in Ireland and television guides but also excluded any the United Kingdom, in contrast to the other potential competition from that market, thus Member States, there does not exist a com­ in effect maintaining the partitioning of the prehensive weekly television guide, that markets represented by Ireland and North­ problem must, according to RTE, be ern Ireland respectively. The conduct in resolved by the Member States concerned, as question was therefore undeniably capable of has now been done in the United Kingdom. affecting trade between Member States' (paragraph 77 of the RTE judgment).

186. In its judgment the Court of First 187. RTE disputes the Court of First Instance finds that the condition in Article Instance's finding that RTE's conduct main-

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tained the partitioning of the markets repre­ market, for example because it leads to the sented by Ireland and Northern Ireland elimination of a competitor. respectively. RTE points out that it has never hindered the export or import of television guides and that it has observed one and the same policy in respect of the supply of weekly programme listings and licensing irrespective of the place of establishment of the undertakings concerned.

189. RTE's submission that its conduct did not lead to a partitioning of the national markets, must, I think, be accepted. But there can be no doubt that its conduct affected the structure of competition in the common market since it led to the elimina tion of a competitor and excluded new com 188. It follows from the case-law of the petitors from the relevant market. " That is Court of Justice that for the condition of an the central finding in the judgment of the effect on trade between Member States to be Court of First Instance which, therefore, fulfilled 'it must be possible to foresee with a cannot be criticized in this respect. sufficient degree of probability on the basis of a set of objective factors of law or of fact that the agreement in question may have an influence, direct or indirect, actual or poten 98 — See the judgment of the Court of Justice in Joined Cases 6 and 7/73 Commercial Solvents [1974] ECR 223, para tial, on the pattern of trade between Member graph 33, in which the Court held that a refusal to supply that could lead to the elimination of a competitor who was States' and thus hinders the realization of a also established on the common market could affect the 96 structure of competition within the common market and single market between the Member States. thus have a potential effect on trade between the Member That will be the case not only where conduct States. In Case 27/76 United Brands [1978] ECR 207, para 97 graphs 201 and 202, the Court of Justice similarly held that leads to partitioning of the markets, but 'if the occupier of a dominant position, established in the common market, aims at eliminating a competitor who is also if it can be shown that conduct affects also established in the common market, it is immaterial the structure of competition on the common whether this behaviour relates to trade between Member States once it has been shown that such elimination will have repercussions on the patterns of competition in the common market'. See also the judgments of the Court of Justice in Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 125, and Case 22/78 Hugin [1979] ECR 1869, paragraph 17. 96 — Judgment in Case 56/65 Société Technique Minière [1966] ECR 235, at p . 249.

That judgment concerned Article 99 — At the hearing RTE stressed that the issue of effects on 85 but there are no grounds for interpreting the condition trade must be assessed separately for RTE since the Com relating to effects on trade in Article 86 differendy. See also mission did not base its decision on joint dominance. RTE the judgments of the Court of Justice in Case 322/81 on its own was not in a position to affect the structure of Michelin [1983] ECR 3461, paragraph 104, and Case competition in the common market. RTE could only grant C-41/90 Höfner and Elser [1991] ECR I-1979, paragraph licences for its own programme listings and since it is 32, which both concerned Article 86 and in which the unlikely that other publishers would wish to publish a tele Court held that the condition of an effect on trade is not vision guide containing only RTE's programme listings, only fulfilled if the conduct qualified as an abuse has actu RTE's conduct could not therefore affect trade in weekly ally affected trade but it is sufficient to establish that that television guides in Ireland and Northern Ireland.

That conduct is capable of having such an effect. argument must be rejected. The fact that RTE's licensing 97 — See in this connection the judgment of the Court of Justice policy could only affect the structure of competition in Joined Cases 240/82, 241/82, 242/82, 261/82, 262/82, because other companies applied the same licensing policy 268/82 and 269/82 Stichting Sigarettenindustrie [1985] ECR does not mean that RTE's licensing policy did not affect the 3831, paragraph 48. structure of competition.

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190. As argued by RTE, and contrary to the — only some 100 000 households in North­ Commission's contentions, it is not, how­ ern Ireland, corresponding to 30-40% of ever, sufficient that there exists in the manner the population of Northern Ireland and described an actual or potential effect on to less than 1.6% of the television market trade. The Court of Justice has held that the in the United Kingdom and less than 10 effect must be appreciable. 0 0.3% of the market within the Commu­ nity can receive RTE's broadcasts and only some 5 000 copies of RTE Guide are 10 sold in that area. 1

191. RTE claims that its licensing policy only has insignificant effects on trade between Ireland and the United Kingdom. It 192. RTE further claims that in any event it points out that: is the Commission which must prove that there has been an appreciable effect on trade between Member States. RTE considers that the Commission has failed to adduce such proof since it merely stated in its decision:

— demand for television programme guides containing RTE's programme listings only exists, by the very nature of things, in areas where RTE's broadcasts can be received, that is Ireland and a small bor­ der region of Northern Ireland; 'The abovementioned abuse has an effect on trade between Member States because a com­ prehensive television guide containing the advance weekly listings of ITP and BBC regional programmes and those of RTE would clearly be marketed in both Ireland — RTE has no programmes or commercials and Northern Ireland, which would include which are aimed at or broadcast to cross-border trade in such a guide or guides. Northern Ireland since Northern Ireland In addition trade in the advance weekly list­ has no cabling and RTE's broadcasts can ings themselves would include that of a therefore only be received in Northern cross-frontier nature' (point 24). Ireland because of Overspill';

101 — RTE has further pointed out that sales of RTE's television guide in the United Kingdom are less than 5% of sales in 100 — See for example Case 22/71 Béguelin [1971] ECR 257, Ireland and that experience following the introduction of paragraphs 16, 17 and 18, and Case 28/77 Tepca [1978] RTE's new licensing policy so far shows that the earlier ECR 1391, paragraphs 47 to 51. licensing policy did not affect trade.

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OPINION OF MR GULMANN — JOINED CASES C-24Í/91 P AND C-242/91 P

RTE stresses that the Commission has not 194. In its judgment the Court of First contested the facts alleged by RTE, nor has it Instance found that there was an appreciable put forward factors in the procedure before effect on trade on the following grounds: the Court of Justice demonstrating that there 102 was an appreciable effect on trade.

'It must further be pointed out that clear evi dence of the appreciable effect which the 193. RTE submits that there are grounds for policy at issue had on potential trade flows overturning the judgment of the Court of between Ireland and the United Kingdom First Instance since it did not carry out a may be found in the specific demand for a fundamental analysis of the market in order general television magazine of the Magill TV to determine whether there exists an appre Guide type, demonstrated by the success of ciable effect on trade, and because it did not television magazines specializing in the pro take into consideration the factual informa grammes of a single television channel in the tion and arguments put forward by RTE or absence, at the material time, of a compre properly discuss those factors. hensive television guide on the relevant geo graphical market. The applicant's informa tion policy as regards weekly programmes hindered the production and marketing of 102 — RTE observes in this context that the Commission's deci general television magazines, which were sion refers only to trade between Ireland and Northern Ireland.

The factors relied on by the Commission in the intended for all television viewers in Ireland proceedings before the Court of Justice concerning trade between Ireland and the United Kingdom mainland can and Northern Ireland. The relevant geo not therefore be taken into account. The Commission graphical area, within which a single market denies that there are any new factors and has referred, inter alia, to the facts that: already at the oral hearing in television broadcasting services has before the Commission the BBC had stated that it feared imports of an English-language television guide from Ire already been achieved, likewise represents a land to the United Kingdom mainland; ITP expressed cor responding concerns during the procedure for interim single market for information on television relief before the President of the Court of Justice; and programmes, particularly since trade is RTE itself during that procedure expressed its concern that English publishers would publish an Irish version of greatly facilitated by a common language' their television guides containing information on RTE's

programmes. Since it is sufficient, in my view, in deciding (paragraph 77 of the RTE judgment). on this case to take account of trade between Ireland and Northern Ireland, it is not necessary to determine defini tively whether a possible effect on trade between Ireland and the United Kingdom mainland may be taken into con sideration. I would nevertheless make the following brief comments: the fact that the British television broadcasting organizations were afraid of the import of a Magill TV Gliide from Ireland to the United Kingdom mainland and the fact that amendments to the United Kingdom legisla tion meant that comprehensive weekly television guides produced in the United Kingdom appeared on the Irish market primarily serve to substantiate the significance of 195. The case-law of the Court of Justice the licensing policy applied by ITP and BBC, whose pro grammes — in contrast to those of RTE — could be does not require much for the condition of received both in the United Kingdom and in Ireland.

But on the other hand it is not impossible that Irish publishers an appreciable effect to be regarded as 103 would be interested in publishing television guides with met. In particular there is no basis for information on ITP's and BBC's programmes only in so far as they may also include information about RTE's pro grammes or that there would exist a greater demand in Ireland for television guides from the United Kingdom mainland if they at the same time contain information on RTE's programmes. It is thus possible that RTE's licensing 103 — For an instance where the Court of Justice found that the policy may have affected trade between Ireland and the conduct in question could not be regarded as affecting United Kingdom mainland. trade between Member States see Case 22/78 Hugin [1979J ECR 1869.

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requiring the Commission to carry out an I — The question of infringement of Article economic analysis of the precise extent of 190 of the Treaty potential trade between Member States in the 10 product in question. 4In my view the requirement of an appreciable effect on trade must be held to be met in these cases simply because it can be seen that the conduct in 196. ITP claims that the Court of First question has led to the elimination of a com Instance disregarded Article 190 of the petitor and excludes new competitors who Treaty by holding that the Commission's might wish to produce a product for which decision contained an adequate statement of there would undeniably exist a demand on reasons. According to ITP the statement of the Irish market and on the part of the mar reasons for the decision was inadequate on ket in Northern Ireland where RTE's broad the following grounds: the Commission did

I05 casts can be received. I do not therefore not set out the legal grounds which led it to consider that there are any grounds for crit find for the first time that an exercise of icizing the judgment of the Court of First copyright by refusing to grant licences may 106 Instance in this respect. constitute an abuse of a dominant position in breach of Article 86; the Commission did no more than assert that the conduct in question was outside the specific subject-matter of copyright but gave no grounds or explana tion for that assertion; the grounds on which the Commission is now relying are not set 104 — Sec in this connection the judgment in Case 322/81 out in the decision; and the Commission Michelin [1983] ECR 3461, paragraphs 102 to 105, in which the Court of Justice rejected criticism of the failed to explain why the principles laid Commission's decision to the effect that the reasoning was down by the Court of Justice in Warner based on the existence of a presumption of an effect on 107 trade and indicated a purely abstract and theoretical Brothers and Volvo v Veng are not appli

analysis. See also Case 19/77 Miller [1978] ECR 131, paragraph 15. It is a fact that in a number of judgments cable in these cases. the Court of Justice has held that there did exist an appreciable effect on trade without carrying out a specific economic analysis; see for example Case 27/76 United Brands [1978] ECR 207, paragraph 202, in which the Court merely held that 'the refusal to supply a long-standing regular customer who buys with a view to reselling in another Member State has an influence on the normal movement of trade and an appreciable effect on 197. The Commission submits at the outset trade between Member States'. that even though the duty to state reasons is 105 — Some support for that result is to be found in the judg ment in Case 107/82 AEG [1983] ECR 3151, paragraph a point of law, it is not desirable for the 65, in which the Court of Justice held that a selective dis tribution system could affect trade between the Member Court of Justice to be obliged to re-examine States simply because it could be found that it affected the every detail of a competition decision in export of colour television appliances which were adapted to the differing transmission systems in France and Ger order to verify that the Court of First many and for which there was therefore particular demand in the border regions of Germany and France. Instance was correct in holding that the deci 106 — RTE is right in stating that the Commission docs not sion was adequately reasoned.

The Commis expressly refer in its decision to the fact that RTE's con duct affected the structure of competition in the common sion suggests that in order to avoid needless market and could therefore lead to an appreciable effect on duplication in this respect the Court of Jus trade. But that cannot be conclusive. It is plain from the decision that RTE's conduct led to the elimination of a tice should limit itself to examining the judg competitor and excluded new competitors from the mar kets (see point 23) and that the product concerned was one ment appealed against with a view to deter for which there existed potential demand both on the Irish mining whether it contains a manifest error. market and on part of the Northern Ireland market (see

point 24). That must be sufficient in my view. In other words there is no basis for criticizing the judgment of the Court of First Instance on the grounds that the Commis sion's decision should have been annulled because the statement of grounds was inadequate in this respect. 107 — See in this respect Chapter D, sections (b) and (c) above.

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The Commission then contends that its deci­ factual and legal aspects. The question sion was adequately reasoned and that the whether the statement of the reasons on judgment of the Court of First Instance does which a decision is based meets those not contain an error and in any event not a requirements must be assessed with regard manifest error in that respect. not only to its wording but also to its con­ text and to all the legal rules governing the 108 matter in question.'

198. There is, in my view, no basis for hold­ ing that the Court of Justice's review of the judgments of the Court of First Instance should be of a more limited nature in so far as it is concerned with assessing whether the Court of First Instance was right to hold that a legal act was adequately reasoned. 200. Contrary to ITP's submission, the Even if examination of whether the duty to Commission in its decision expressly stated state reasons has been complied with entails that: ITP, BBC and RTE, by their restrictive an assessment of the context in which the licensing policies, prevented the production decision is placed, I consider that that raises and sale of a new product for which there a point of law which it is within the Court of exists a substantial potential demand; those Justice's ordinary competence to review undertakings, each of which holds a domi­ under Article 51 of the Statute. It is therefore nant position on the market for its own pro­ necessary to examine whether the Commis­ gramme listings, thereby retained for them­ sion's decision was adequately reasoned. selves the derivative markets for weekly television guides; the undertakings' licensing conditions, which confined reproduction of programme listings to one or at most two days were unreasonably restrictive; the 199. According to the consistent case-law of undertakings' conduct was not justified by the Court of Justice, the scope of the duty to the reasons specified but was intended only state reasons pursuant to Article 190 is as to protect their own television guides which follows: did not compete with one another or with any other guides; and the undertakings thereby limited competition to the prejudice of consumers contrary to Article 86(b). On that basis the Commission concluded that 'Although ... the statement of reasons the undertakings were using their copyright required by Article 190 of the Treaty must as an instrument of an abuse in a manner disclose in a clear and unequivocal fashion which falls outside the scope of the specific the reasoning followed by the Community authority which adopted the measure in question in such a way as to make the per­ sons concerned aware of the reasons for the 108 — See Case 203/85 Nicolet Instrument [1986] ECR 2049, paragraph 10, and most recently Case C-104/90 Matsush- measure and thus enable them to defend ita Electric Industrial [1993] ECR 1-4981, paragraph 19. See also Joined Cases 43 and 63/82 VBVB and VBBB v their rights, and to enable the Court to exer­ Commission [1984] ECR 19, paragraph 22, and Case cise its supervisory jurisdiction, the authority 246/86 Belasco v Commission [1989] ECR 2117, para­ graphs 55 and 56, to which the Court of First Instance is not required to give details of all relevant referred.

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subject-matter of that intellectual property J — Costs right.

203. Article 69(2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings and that where there are several unsuccessful parties the Court may decide how the costs 201. The Commission thus listed the cir­ are to be shared. Article 69(4) provides that cumstances which in these cases might if the Court may also order interveners other appropriate justify interference with the spe­ than Member States and institutions to bear cific subject-matter of copyright (see Chap­ their own costs. ter D, sections (e), (f), (g) and (i)). It is expressly indicated that the Commission does not believe that the specific subject- matter of copyright can, in the circumstances thus listed, afford protection against applica­ 204. If the Court were to agree with what I 109 tion of Article 86. That is, in my view, have proposed, the unsuccessful party in sufficient to satisfy the requirements regard­ these cases will be the Commission, sup­ ing a statement of reasons under the case-law ported by Magill. of the Court of Justice since I can see no cause to require further legal basis or refer­ ence to the case-law of the Court of Justice.

205. In its judgments the Court of First Instance ordered RTE and ITP to pay the costs, including those of the intervener. In this respect too the operative part of the judgment must be set aside.

202. There are therefore no grounds for crit­ icizing the judgment of the Court of First 206. RTE has claimed that the Commission Instance in so far as it held that the Commis­ and Magill should be ordered to pay the sion's decision was adequately reasoned costs. ITP has claimed that the Commission (paragraphs 64 and 65 of the ITP judgment). and/or Magill should be ordered to pay ITP's costs before the Court of First Instance and that the Commission should be 109 — The fact that the Commission saw the situation as one of ordered to pay ITP's costs before the Court definition of the scope of the specific subject-matter and not as interference with the specific subject-matter is not of Justice. IPO has claimed that the Com­ sufficient for its decision to be open to criticism (see point mission should be ordered to pay IPO's 53 above). That is purely a matter of form regarding the most appropriate approach. costs before the Court of Justice.

I-805

OPINION OF MR GULMANN — JOINED CASES C-241/91 P AND C-242/91 P

207. I propose that the Court of Justice it is clear that in the proceedings before the make the following decision as to costs: Court of Justice Magill has presented only oral submissions and can therefore hardly have caused RTE and ITP to incur special costs;

The Commission is ordered to pay RTE's and ITP's costs before the Court of First Instance and before the Court of Justice except for the costs relating to Magill's inter­ IPO is to bear its own costs since it was not vention; successful in its fundamental submission that Article 86 cannot apply to the exercise of rights which are within the scope of the spe­ cific subject-matter of copyright and was Magill is ordered to pay the costs incurred unsuccessful in its independent submission by RTE and ITP as a result of its interven­ that the Court of First Instance has incor­ tion both in the proceedings before the rectly defined the relevant product market Court of First Instance and the proceedings and has incorrectly applied the concept of before the Court of justice: in fact, however, dominant position.

Conclusion

208. Accordingly I propose that the Court of Justice:

— set aside the judgments of the Court of First Instance of 10 July 1991 in Case T-69 / 89 RTE v Commission [1991] ECR 11-485 and Case T-76/89 ITP v Com- mission [1991] ECR 11-575;

— give final judgment on the matter pursuant to the first paragraph of Article 54 of the Statute of the Court of Justice and annul Commission Decision 89 / 205 / EEC of 21 December 1988 relating to a proceeding under Article 86 of the EEC Treaty, making the forms of order sought by Radio Telefis Eireann and Independent Television Publications Limited in their applications;

I-806

RTE AND ITP v COMMISSION

— order the Commission to bear the costs incurred by Radio Telefis Eireann and Independent Television Publications Limited before the Court of First Instance and before the Court of Justice except for the costs relating to the intervention of Magill TV Guide Limited;

— order Magill TV Guide Limited to pay the costs incurred by Radio Telefis Eir­ eann and Independent Television Publications Limited before the Court of First Instance and before the Court of Justice as a result of its intervention;

and

— order Intellectual Property Owners Inc to bear its own costs.

I-807

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