C-53/96

OPINION OF MR TESAURO — CASE C-53/96

OPINION OF ADVOCATE GENERAL TESAURO delivered on 13 November 1997

1. The reference for a preliminary ruling behalf of the European Community, as from the Arrondissementsrechtbank (Dis­ regards matters within its competence, of the trict Court), Amsterdam, that is the subject agreements reached in the Uruguay Round 1 of these proceedings concerns the interpreta­ multilateral negotiations (1986-1994). tion of Article 50(6) of the Agreement on Those agreements are published as annexes 2 Trade-Related Aspects of Intellectual Prop­ to the Decision. erty Rights (hereinafter 'the TRIPs Agree­ ment') contained in Annex 1C to the Agree­ ment establishing the World Trade Organisation (hereinafter 'the WTO Agree­ ment').

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intellectual property right, immediately after 2. The judicial authorities shall have the customs clearance of such goods. Members authority to adopt provisional measures are not obliged to accord such authority in inaudita altera parte where appropriate, in respect of protected subject matter acquired particular where any delay is likely to cause or ordered by a person prior to knowing or irreparable harm to the right holder, or having reasonable grounds to know that where there is a demonstrable risk of evi­ dealing in such subject matter would entail dence being destroyed. the infringement of an intellectual property right' (Article 44(1)).

Lastly, it should be noted that the relevant provisions of Article 50 of the TRIPs Agree­ ment, on which the national court is seeking an interpretation, are as follows: 4. Where provisional measures have been adopted inaudita altera parte, the parties affected shall be given notice, without delay after the execution of the measures at the lat­ est. A review, including a right to be heard, shall take place upon request of the defen­ dant with a view to deciding, within a rea­ '1 . The judicial authorities shall have the sonable period after the notification of the authority to order prompt and effective pro­ measures, whether these measures shall be visional measures: modified, revoked or confirmed.

(a) to prevent an infringement of any intel­ lectual property right from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods, immediately after customs clear­ ance; 6. Without prejudice to paragraph 4, provi­ sional measures taken on the basis of para­ graphs 1 and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings leading to a (b) to preserve relevant evidence in regard to decision on the merits of the case are not ini­ the alleged infringement. tiated within a reasonable period, to be

The interim measure adopted by the Presi­ dent, which must be reasoned and delivered in writing, may be challenged before the Gerechtshof (Regional Court of Appeal) within two weeks of its enactment, even if it 8. To the extent that any provisional meas­ is not enforceable (Article 295(1), (2) and ure can be ordered as a result of administra­ (3)). Any application for a review of the tive procedures, such procedures shall con­ Gerechtshof's decision must be made within form to principles equivalent in substance to six weeks of the date on which the judgment those set forth in this Section.' is handed down (Article 295(4)). Lastly, it should be noted that Article 292 of the said Code states the principle that provisional decisions are without prejudice to the exami­ nation of the merits. However, the effective­ ness of the interim measure is not condi­ tional upon proceedings on the merits and 4. As regards the relevant national provi­ no time-limit is set for initiating such pro­ sions, it should be noted first that Article 289 ceedings. It is not inapposite to point out of the Netherlands Code of Civil Procedure here that, as the national court has remarked provides that: 'In all cases in which, having in the order for reference, although it is pos­ regard to the interests of the parties, an sible for the parties subsequently to initiate immediate provisional measure is necessary proceedings on the merits, 'in practice, in on grounds of urgency, the application may cases to which TRIPs relates, they generally be made at a hearing which the President abide by the interim decision'.

On 21 December 1995, after obtaining leave from the President of the court, Hermès As regards time-limits, however, the court seized two lots of neckties bearing the held that its request could not be accepted, as Hermès trade mark and offered for sale by Article 50(6) of the TRIPs Agreement sets FHT Marketing Choice BV (hereinafter no time-limit for submitting an application 'FHT' ), one from FHT itself and the other for the annulment of provisional measures from a third party, consisting of 10 and 453 that have been adopted. This means that the neckties respectively. Hermes then applied to determination of a period within which pro­ the President of the court on 2 January 1996 ceedings on the merits are to be initiated for interim measures requiring FHT to desist cannot in any case be made to turn on a from infringing Hermes copyright and trade time-limit of three months set, in this mark rights and, in particular, to state the instance for FHT, to make such an applica­ total number of neckties bought and already tion. The national court nevertheless won­ sold and to keep the neckties in stock until dered whether, even so, it might not be nec­ they were recovered. In addition, Hermes essary to set a time-limit for initiating sought an injunction ordering FHT to pay proceedings on the merits, adding that this damages for the injury caused. In the same would certainly be the case if it were to be application for interim measures, Hermes concluded that a measure adopted pursuant

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to Article 289 of the Netherlands Code of succinctly) in the order for reference, first, Civil Procedure is to be regarded as a provi­ that the TRIPs Agreement, having also been sional measure within the meaning of Article ratified by the Community as such, 'forms 50 of the TRIPs Agreement. part of European Community law and the question may be referred to the Court of Justice pursuant to Article 177 of the EC Treaty' and, second, that Article 50 of that Agreement 'has direct effect'.

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9. These are the two issues that must there­ in products, intellectual property does not fore be addressed before we proceed, if nec­ fall within the scope of the common com­ essary, to examine the substance of the ques­ mercial policy. To be more precise, the Court tion referred by the national court. And it is considered in particular the case of measures no accident that these are also the issues on to prevent counterfeit goods entering the which the Member States and the institutions Community, which are already the subject of have concentrated in the observations they Community regulations based on Article 113 have submitted in the course of these pro­ and consequently fall within the exclusive ceedings. external competence of the Community. For the rest, while recognising the connection between intellectual property and trade in goods, and the effects intellectual property rights may have on such trade, the Court held that that was not enough to bring them within the specific scope of Article 113 and, The jurisdiction of the Court consequently, within the exclusive external 6 competence of the Community. Nor did the Court consider that such competence could be founded on other legal bases, such as Article 100a and/or Article 235 of the Treaty, or on the parallelism of internal and external competence. In this connection, the Court held, first, that those articles cannot in 10. The starting point for investigation into themselves confer exclusive competence on these issues must of necessity be Opinion the Community and, second, that internal 1/94. Having been asked to establish inter competence can give rise to exclusive exter­ alia whether the European Community has nal competence only if it is exercised, for the the competence to conclude all parts of the whole of the sector concerned and when WTO Agreement concerning the trade- related aspects of intellectual property rights, including trade in counterfeit goods, on the basis of Article 113 of the Treaty alone, or in combination with Article 100a and/or Article 235 of the Treaty, the Court held that 'the Community and its Member States are jointly competent to conclude TRIPs'. 5

11. For the purposes of the present case, it should also be noted that in the observations submitted in connection with Opinion 1/94 In other words, the Court did not consider some Member States argued that 'the provi that the sector relating to instruments for the sions of TRIPs relating to the measures to be protection of intellectual property rights adopted to secure the effective protection of could be reserved for the Member States, intellectual property rights, such as those since the Community is certainly competent ensuring a fair and just procedure, the rules to harmonise that sector too if the function regarding the submission of evidence, the ing of the common market is affected; but it right to be heard, the giving of reasons for also recognised that that power had not hith decisions, the right of appeal, interim mea- erto been exercised at internal level, except to sures and the award of damages, fall within a marginal extent, and that the requisite con the competence of the Member States'. dition for establishing exclusive external Replying to that argument, the Court stated Community competence had consequently that the 'Community is certainly competent not yet been fulfilled. In short, with respect

The of intellectual property rights", except in terms of the problem are therefore unaltered, in that the competence to conclude an agree ment such as TRIPs is still held jointly by the Member States and the Community 9 7 — In this connection, the Opinion states that such parallelism occurs when subordinate legislative acts adopted in the Community context could be affected by international obli- gations (paragraph 102). The competence in respect of TRIPs cannot therefore be exclusive inasmuch as, while it is true that some secondary legislation has been adopted in the area 8 — Opinion 1/94 (cited in footnote 3), paragraph 104; my of intellectual property in exercise of this internal compe- emphasis. tence, it is equally true that such harmonisation has been 9 — This state of affairs could change only if Article 113(5) of the only partial and that, in many areas, no harmonisation has Treaty, inserted under the Treaty of Amsterdam, were to be been either envisaged or achieved (paragraph 103). Nor does applied after it enters into force. That provision states that the Court accept that exclusive external competence can be the Council, acting unanimously on a proposal from the derived from a particular interpretation of Opinion 1/76 of Commission and after consulting the European Parliament, 26 April 1977, [1977] ECR 741, according to which when- may extend the application of paragraphs (1) to (4) to inter- ever internal powers have been conferred for the purposes of national negotiations and agreements on services and intel- attaining a specific objective (coherence of the internal mar- lectual property insofar as they are not covered by these ket, for example), international competence implicitly flows paragraphs. In other words, Article 113(5) allows provisions from those provisions.

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and, more particularly, in cases where the the expression 'joint competence' were to be Community's competence is (still and only) interpreted as meaning that the competence potential, the competence to conclude agree­ belonged equally and concurrently to the ments remains vested in the Member States. Community and the Member States, so that any decision in an area of joint competence would have to be adopted by mutual agree­ 10 ment between Community and States.

also appears in the title of the decision. A of authority and not of concurrent authority', sec Pesca-

different conclusion could be reached only if tore, The Law of Integration, Leiden, 1974, p. 47.

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nity and its Member States. 1I therefore agreement. In short, the expression 'joint consider that, particularly as Opinion 1/94 is competence' must, in my view, mean that so clear on this point, it must be recognised Member States and Community have the last that the competence to conclude an agree­ word in their respective areas of competence, ment is vested in the Community as regards at least in cases where the required coopera­ matters on which a Community regulation tion does not produce agreement. has already been implemented — and not only in a partial or marginal manner — but that it continues to be vested in the Member States in the absence of such a regulation.

14. This is how matters stand on the Com­ munity side but it must not be forgotten that This view is confirmed in the final part of both the Community and the Member States Opinion 1/94. Replying to the Commis­ signed all the WTO agreements and are sion's complaints about the practical difficul­ therefore contracting parties vis-à-vis con­ ties associated with the allocation of compe­ tracting non-member States. And while it is tence that is shared with the Member States, true that the approval of those agreements the Court emphasised that close cooperation on behalf of the Community is restricted to is essential, both in the process of negotia­ 'matters within its competence', it is also true tion and conclusion of such agreements and that the Final Act and the WTO Agreement 12 in their implementation. This would contain no provisions on competence 13

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and the Community and its Member States that the Community is required to comply are cited as original members of equal with the provisions of the TRIPs Agreement standing. only 'as regards matters within its compe­ tence', that is to say solely and exclusively as regards the parts falling within its compe­ tence to conclude an agreement, and that its obligation in that connection should conse­ quently end there.

In these circumstances, it should be recog­ nised that the Member States and the Com­ munity constitute, vis-à-vis contracting non- member States, a single contracting party or at least contracting parties bearing equal responsibility in the event of failure to implement the agreement. This clearly means that, in that event, the division of compe­ 15 Such a conclusion would also suggest that, tence is a purely internal matter. This con­ contrary to the view taken by the national clusion, as we shall see, may not be without court in the present case, only those parts of bearing on the answer to the question with the agreement or sets of provisions that the which we are concerned in the present case. Community has competence to conclude are an 'integral part of Community law' and that the Court consequently has jurisdiction to interpret only those provisions, the intention being that the national courts should retain their independent right of interpretation in 15. That being so, it is now necessary to relation to the sectors and the provisions for consider the status of the TRIPs Agreement which the Member States still have compe­ in the Community legal order, particularly tence (at least for the time being). with respect to the substantive aspects of binding force and jurisdiction to interpret and apply the provisions in question. At first sight, I should be inclined to take the view

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for uniform interpretation and application regards the more general subject of mixed throughout the Community. agreements, in a wide variety of ways in the legal literature. The Court, for its part, has not so far made a clear statement of prin­ ciple. It has interpreted provisions of mixed agreements on a number of occasions, but without stating whether it had jurisdiction because the provisions in question undoubt­ edly fell within the area of Community com­ It is true that the Commission — realising petence or because its jurisdiction extended that, in the light of the Opinion and of the to all the provisions of a mixed agreement. 17

Others, on the contrary, consider that a may be based on 'potential' Community mixed agreement falls into two parts: a Community section, powers; (b) a mixed agreement is a single which becomes an integral part of the Community legal order in the same way as an agreement that falls within the agreement between the Community and the exclusive competence of the Community, and a second part, which remains within the competence of the Member States Member States, on the one side, and non- (on this view, see inter alia Ehlermann: 'Mixed agreements: member States, on the other, and the inter a list of problems', in O'Kecffe, Schermers:

all problems. It is scarcely necessary to point out that, in consistent with the interpretation of the pro that case, the Court confined itself to stating that there was a general obligation of cooperation and it seems to me that, tection measures; (d) the WTO agreements given the lack of provisions on the subject, it could not form a whole that requires interpretation have done otherwise). The following authorities, too, are opposed to the Court interpreting all the provisions of a based on the same criteria, avoiding the risk mixed agreement, independently of any investigation to determine whether competence is vested in the Community of divergent interpretations by the Court or the Member States: Schermers-Waelbroeck:

17 — See, for example, the judgments in Case 181/73 Haegeman v Belgium [1974] ECR 449, concerning the interpretation of the Association Agreement with Greece; Case 87/75 Bres- ciani v Amministrazione Italiana delle Finanze [1976] ECR 129, concerning the interpretation of the Yaoundé Conven- tion of 1963; and Case 65/77 Razanatsimba [1977] ECR 2229, concerning the interpretation of the Lomé Conven- tion. See also, more recently, the judgments in Case C-18/90 Kziber [1991] ECR I-199 and Case C-103/94 Krid v CNAVTS [1995] ECR I-719, concerning the interpreta- 17. The points raised by the Commission tion of the Cooperation Agreements concluded with have been addressed and answered, as Morocco and Algeria respectively.

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It appears to follow from these statements, which are, of course, not decisive for the 18. The Court's reply is based on two sepa­ purpose of solving the problem with which rate arguments. In the first place, noting the we are concerned, first, that the Court itself considers that the only matters on which it

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has no interpretative jurisdiction pursuant to 19. Returning to the present case, the first Article 177 are matters within the exclusive point I should like to make is that, if it were competence of the Member States and, sec­ to be accepted that there are sectors for ond, that in the case of an agreement (even a which the Member States have sole compe­ mixed agreement) concluded by the Com­ tence (or which are reserved solely for them), munity institutions the Community is com­ it would certainly follow that it need not be petent with respect to the agreement in its necessary to have perfect harmony in the 23 entirety. I should add that I do not think application, and consequently in the inter­ these considerations can be confined solely pretation of the various provisions of a to association agreements, where the Com­ mixed agreement. There would be no need munity's exclusive competence to conclude for a centralised interpretation by the Court the agreement is based on the Treaty itself, in of Justice for all the areas of the subject- this case Article 238. While it must be recog­ matter in question, especially in view of the nised that mixed agreements vary consider­ trouble it would cause if the Court were to ably in nature and type, depending on the be given the last word on the interpretation 24 degree of participation by States, the fact of all the provisions of mixed agreements. remains that the problem with which we are For example, it would naturally be asked concerned in the present case inevitably why — in applying agreements to which, in arises in the same terms in the case of an effect, the State alone (not the Community) association agreement, when it is concluded is a party — the national courts or authori­ in the form of a mixed agreement, and in the ties should be obliged to follow the interpre­ case of agreements (also mixed) which have tation handed down by the Court in prefer­ no ad hoc legal basis in the Treaty. ence, let us suppose, to their own interpretation or that of a WTO panel, under the mechanism for the settlement of disputes, bearing in mind the inevitable implications 25 with respect to responsibility.

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on the application of the WTO agreements solely within the domestic preserve. Nor was quite clear: '... resolution of the issue of can the possibility be ruled out that a given the allocation of competence cannot depend national interpretation may affect the appli­ on problems which may possibly arise in cation of Community provisions and/or the 26 28 administration of the agreements'. How­ functioning of the system as a whole. The ever, it is equally true that in the same Opin­ requirement of uniformity in the interpreta­ ion the Court also stated that sectors in tion and application of all the provisions of which competence is shared are not the 'pri­ vate preserve' of the Member States and are consequently outside the scope of Commu­ nity law.

28 — In this context, it should be observed that the Court's juris- diction to interpret the provisions of the TRJPs Agreement 20. In these circumstances, it must be recog­ on measures for the protection of intellectual property may nised that the application of the above- be considered to be established, not only as regards the aspects falling within the scope of the Community rules mentioned principle that the Court has juris­ prohibiting the release into free circulation of counterfeit goods but also as regards the rules on the Community trade diction to interpret only the provisions that mark contained in Regulation (EC) No 40/94 (OJ 1994 L are within the Community's competence to 11, p. 1). That regulation contains a specific provision (Art. 99) on provisional measures, with the truly paradoxi- conclude an agreement and not those that cal consequence that jurisdiction to interpret the same pro- vision of the same agreement, in this case Article 50 of the remain within the competence of the States, TRIPs Agreement, may lie either with the Community court or with the national court, depending on the circum- is only superficially clear and simple. In fact, stances. It must also be noted that the very fact that the it proves to be fraught with problems, if only interpretative jurisdiction is divided between the Commu- nity court and the national courts has important conse- because provisions of one and the same quences for the functioning of the system as a whole, if only for example because of the (by no means remote) pos- agreement may be interconnected, in the sibility that they may come to different conclusions on the sense that it may not be easy to establish question of direct effect. In this connection, the view expressed by the French Government at the hearing is cer- precisely whether a given provision falls tainly significant, albeit somewhat unorthodox and conten- tious, in that it said the Court had no jurisdiction to inter- within the Community preserve (too) or pret Article 50 of the TRIPs Agreement but nevertheless advised it to give the national court some indication as to whether or not the provisions of the WTO Agreement, including those of the TRIPs Agreement have direct effect, precisely in order to forestall differences of interpretation on such an important matter. 26 — Opinion 1/94 (cited in footnote 3), paragraph 107.

31 — It is not inapposite to recall, in this connection, that Case 104/81 Hauptzolaamt Mainz v Kupferberg, [1982] ECR 29 — It should be pointed out that the purpose of such a funda- 3641, which admittedly concerned a non-mixed agreement, mental requirement is not in fact 'to forestall future differ- particularly emphasised the need for uniform interpretation ences of interpretation', as the Court has shown in asserting of provisions that form an integral part of the Community its jurisdiction to interpret provisions of national law which legal order, including international agreements.

28). One might well be tempted to employ the same sort of nificant and which has been repeated in connection with a reasoning in the present case, with the necessary adjust- mixed agreement such as the agreement at issue in Demirel ments of course, notably by linking the aim of forestalling (cited in footnote 19, paragraph 11). And if the provisions future differences of interpretation with the potential com- of agreements form an integral part of Community law, petence of the Community. I must observe, however, that even if they are provisions of mixed agreements, as the the situation is decidedly different since, in the first place, Court held in Haegeman (cited in footnote 17), it follows the provision at issue does not refer to, or use the same that the statement that 'their effect in the Community may terms as, any rule of Community law and, in the second not be allowed to vary according to whether their applica- place, the need for uniform interpretation is actual, not tion is in practice the responsibility of the Community potential, in the case in question. I feel impelled to add that, institutions or of the Member States and, in the latter case, in any event, to extend the approach adopted in Dzodzi to according to the effects in the internal legal order of each the present case would be, more generally, contrary to the Member State which the law of that State assigns to inter- Court's case-law on the admissibility of references for pre- national agreements concluded by it' (paragraph 14) applies liminary ruling, particularly on hypothetical and/or purely also, and above all, to such agreements. internal questions (in this connection, see the remarks in 32 — For confirmation of this view, see Ruling 1/78 (cited in my Opinion in Case C-346/93 Kleinwort Benson [1995] footnote 15), paragraph 36; Opinion 2/91 [1993] ECR ECR I-615, I-617, in particular points 25 to 27). I-1061, paragraph 36; and, most recently, the judgment in 30 — See points 14 and 18 in this connection. Commission v Council (cited in footnote 13), paragraph 48.

important, in the fulfilment of the commit Lastly, I should like to make a comment of a ments entered into. In short, they must more general nature. The Community legal endeavour to adopt a common position. system is characterised by the simultaneous application of provisions of various origins, international, Community and national; but it nevertheless seeks to function and to rep resent itself to the outside world as a unified system. That is, one might say, the inherent nature of the system which, while guarantee ing the maintenance of the realities of States and of individual interests of all kinds, also seeks to achieve a unified modus operandi. Its steadfast adherence to that aim, which the If this is the case, it must also be recognised Court itself has described as an obligation of that the absence of centralised interpretation solidarity, is certainly lent considerable could completely undo the results achieved weight by the judicial review mechanism by the obligation to cooperate in the nego which is defined in the Treaty and relies on tiation and conclusion of the provisions in the simultaneous support of the Community

1/94. 22. Once established that the Court has jurisdiction to give preliminary rulings on all the provisions of the TRIPs Agreement, it is 33 — The absence of close cooperation between Community institutions and Member States — in view of the ineffec- necessary to consider — before addressing tiveness that would inevitably result from a failure to speak the substance of the question referred by the with one voice and, above all, from a lack of common rules of conduct and common procedures — would certainly be national court — whether or not Article a considerable drawback in any future negotiations within the WTO and also, more generally, whenever it was neces- 50(6) of that Agreement, on which it has sary to adopt a position on a matter governed by the TRIPs requested an interpretation, has direct effect. Agreement (in this connection, see Vellano: 'La Comunità europea e i suoi Stati membri dinanzi al sistema di risoluzi- It should be noted that the national court has one delle controversie dell'Organizzazione Mondiale del Commercio: alcune questioni da risolvere', in La Comunità not put any question to the Court on this Internazionale, 1996, p. 499 et seq.). In particular, as the subject, since — as it appears from the order Commission has argued before the Court, in areas where competence is shared, the cross-retaliation measures estab- for reference — it considers that the provi lished under Article 22 of the Dispute Settlement Under-

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should not cause us to lose sight of the fact I therefore take the view that the Court may that, if it were to be found that Article 50(6) rule on the direct effect of the provision of of the TRIPs Agreement was not directly the TRIPs Agreement at issue, even in the effective, it would follow that Hermès could absence of any specific question on the sub­ not rely on it before the national court to ject, precisely in order to provide a useful support its claim that the relevant national answer to the national court which, as I have rules in question are incompatible and may already said, has assumed that the provision therefore be inapplicable to the facts at issue on which it has requested an interpretation in the present case. has direct effect.

34 — See, inter alia, Case C-306/93 SMW Winzersekt [1994] To solve the problem with which we are ECR I-5555, paragraph 15, and Case C-85/95 Reisdorf v concerned in the present case, I therefore Finanzamt Köln-West [1996] ECR I-6257, paragraph 15. 35 — Joined Cases 16/79 to 20/79 Dana [1979] ECR 3327, para- consider it essential to determine first graph 8. For a more general view, see Case C-147/91 Ferrer whether such a 'declaration', which expressly Laderer [1992] ECR I-4097, in which the Court states that 'under the cooperation procedure between the national rules out the possibility of individuals rely­ courts and the Court of Justice, laid down in Article 177, it is for the Court to provide the national court with an ing on the provisions of the WTO agree­ answer enabling the latter to resolve the dispute before it, ments before courts having jurisdiction in by interpreting such provisions of Community law as may be applicable' (paragraph 6). the matter, may, or even must, be held to

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37 — In this connection, see Pescatore: 'Drafting and analysing decisions on dispute settlement', in Pescatore, Davey, Lowenfeld: Handbook of WTO/GATT Dispute Settlement, New York 1997. The author states, in particular that these attempts to modify the effect of a multilateral treaty after the event, by means of internal legislation adopted unilater- This is enough, in my opinion, to justify the ally, are incompatible with good faith in international rela- tions or with the principle of the legal protection of indi- view that, as there is no provision for the vidual rights in a democratic society (p. 11, footnote 3). See also Mengozzi: 'Les droits des citoyens de l'Union europ- purpose agreed by all the contracting parties, éenne et 1 applicabilité directe des accords de Marrakech', in the recital in question cannot in any case be Revue du marché unique europeeën, 1994, p. 171, and Gaja: 'Il preambolo di una decisione del Consiglio preclude al held to be susceptible of preventing the "GATT 1994° gli effetti diretti nell'ordinamento comuni- tario?' in Rivista di diritto intemazionale, 1995, p. 407 et Court from coming to a different conclu­ seq. On the contrary view, that the recital in question is not without relevance, see point 127 of Advocate General Cos- mas's Opinion in Case C-183/95 Afisb [1997] ECR I-4315 and points 28 and 29 of Advocate General Elmer's Opinion in Joined Cases C-364/95 and C-365/95 T. Port, still pend- 36 — Kupferberg (cited in footnote 31), paragraph 17. ing.

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26. In its judgment in International Fruit, on the premiss that to determine whether a pro­ vision of GATT has direct effect 'the spirit, the general scheme and the terms of the 39 General Agreement must be considered', the Court stated that 'this agreement which, These arguments, which have been strongly criticised in the legal litera-

38 — In other words, for the purpose of deciding whether or not the provisions of the WTO agreements have direct effect, it is not sufficient, or even relevant, that the Commission, the Council and the Parliament are of one mind in considering 40 — Idem, paragraph 21. that the factors that have so far led the Court to exclude 41 — Idem, paragraphs 27 and 28. direct effect of the provisions of GATT 1947 are still valid 42 — Judgment in Case C-280/93 Germany v Council [1994] as regards the provisions of the WTO agreements. Speaking ECR I-4973, paragraph 110. The Court gave more reasons for myself, I think there can be little doubt that it is for the for its decision in that case than it had done in earlier judg- Court, by providing an interpretation, to decide whether ments on the subject. It emphasised, in particular, the non- that is the case. binding nature of decisions taken in the context of GATT, 39 — Joined Cases 21/72 to 24/72 International Fruit Company v the 'sympathetic consideration' to be given to proposals, Produktschap voor Groenten en Fruit [1972] ECR 1219, and the power to suspend certain obligations unilaterally paragraphs 19 and 20. (paragraphs 107 and 108).

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ture , are consistently adduced in all the tures of the GATT system, with the result case-law on the subject. that it has always come down against direct 45 effect.

Community. This is because the Court has 45 — The judgments in Case 70/87 Fediol v Commission [1989] never gone beyond its initial investigation, ECR 1781 and Case C-69/89 Nakajima v Council [1991] which was concerned with the principal fea ECR I-2069 are only apparently, or at any rate only partly, inconsistent with this general tendency. The implication of those judgments is that whenever a Community rule refers to the provisions of GATT (as in Fediol) or has been adopted for the purpose of implementing them (as in Naka- jima), the Court accepts that individuals mav rely on those 43 — It has been pointed out, in particular, that the undeniable provisions as a measure of the legality of the Community flexibility of some provisions of this Agreement (a charac- act in question. It is true that in such cases the option of teristic, incidentally, that is common to all multilateral inter- invoking the GATT provisions is not based on the direct national agreements) is no greater than that of many provi- effect of those provisions but on the fact that there is a sions of other agreements, which the Court has held to have Community act which has implemented them or at least direct effect (on this view, see inter alia Giardina: 'La Corte expressed the intention of implementing them.

This in turn raises further ally, that the system for the settlement of disputes has questions about the 'monist' consistency of the Court's proved to be particularly effective, so much so that Com- case-law, which is openly at odds with the approach in munity representatives have even complained, within Nakajima (sec inter alia Eeckhout: The domestic legal sta- GATT, that it is excessively judicial (on this view, sec inter tus of the WTO Agreement: interconnecting legal systems',

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GATT that have been brought to the Court's factors on which the case-law has been attention less clear, precise and unconditional based. The WTO has the structure of an than other provisions of agreements to international organisation, the relationship which the Court has, with deliberate gener­ between rules and exceptions appears to be osity, attributed direct effect. It is therefore functional and not very far removed from scarcely necessary to point out that in that that of more reputed experiments, and the regard no difference should be made between mechanism for the settlement of disputes the provisions of GATT 1947 and the provi­ shows a great improvement in that the 47 sions of the WTO agreements, in that there results have more binding force. is no perceptible difference between the lat­ ter provisions and all the other provisions of agreements to which the Court has attrib­ uted direct effect.

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governing the granting of waivers are now for the purposes of the present case that quite strict. panel reports, which formerly required a consensus in favour in order to be approved by the Council, now require a consensus against acceptance in order to be rejected by that body. This is a truly Copernican innova­ tion: previously, the unsuccessful party could 51 block the adoption, now it no longer can. It is of no avail, though it has been done in the course of these proceedings, to maintain stoutly that the results of the procedure can be replaced by a system of compensatory An equally important change has occurred, measures and that the mechanism in question in both form and substance, in the area of cannot therefore be regarded as capable of the settlement of disputes, always regarded overriding the reasons that have led the as one of the weakest points in the GATT Court to rule that the provisions of GATT system. The fundamental trouble with the do not have direct effect. Compensation is a old system was that the mechanism could be purely provisional measure and is conse­ blocked by 'resistance' from the unsuccessful quently not a method of settling disputes but party, since the panel could only suggest a simply a temporary instrument to ensure solution to the Council, that is to say to all that any benefits accruing to the other con­ the contracting parties, and the Council tracting parties are not nullified or impaired could then approve it if there were no objec­ as a result of the failure to comply within the tions. The new Understanding on Rules and reasonable period of time set in the particu- Procedures Governing the Settlement of Dis­ putes has changed the situation signifi­ 50 cantly. In particular, it must be pointed out

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lar case and that the defaulting party is not respect of flexibility and the element of encouraged to persist indefinitely in its fail­ negotiation in the settlement of disputes. 52 ure to comply.

munauté européenne', in Revue du marché unique europ- directly effective, make it look more like a forum for nego- éen, 1994, p. 175 et seq., that it cannot in any way be tiating and finding solutions than a binding agreement, excluded that the compensation may ultimately be a 'provi- when The GATT is not a caricature of an international soire qui dure' (p. 178). Amongst other things, I must point agreement, but is obligatory on the Community and Mem- out that, under Article 171 of tne Treaty, an infringement of ber States. It must be taken seriously by the institutions and Community law on the part of a Member State may also the Court' (Everling: 'Will Europe slip on Bananas?

. .', cited in footnote 43, p. 381). These compliance with the rules. remarks, I need hardly add, apply a fortiori to the (new) 53 — Advocates General Cosmas and Elmer have expressed a system introduced with the WTO which, despite all differ- contrary view in their Opinions in the Affish and T. Port ences, is unanimously agreed to represent a definite change, cases (cited in footnote 37), in respectively paragraphs 118 in the sense of being more open to judicial control and to 128 and paragraphs 27 to 29. more binding.

In this connection, I note first that the Court has already referred to the principle of reci­ procity and the consequences it may have for the recognition of direct effect in its judg­ This circumstance is clearly not without seri­ ment in Bresciani. In that case, on the ous consequences, since it must be admitted assumption that the Yaounde Convention that, in the absence of reciprocity, to recog­ 'was not concluded in order to ensure equal- nise that the provisions in question have ity in the obligations which the Community direct effect would place Community traders assumed with regard to the Associated at a disadvantage compared with their for­ States, but in order to promote their deve­ eign competitors. While the latter would be lopment', the Court held that 'this imbalance able to invoke provisions in their favour between the obligations assumed by the directly before the courts of the Member Community towards the Associated States, States, Community traders would be unable which is inherent in the special nature of the to do likewise in the States that refused to Convention, does not prevent recognition by recognise that the provisions of the WTO the Community that some of its provisions 56 58 agreements may have direct effect. have a direct effect'. I also note that the Court came to a similar conclusion in its more recent judgment in Chiquita Italia after expressly considering whether 'a quite appreciable imbalance in the level of obliga­ tions undertaken by the contracting parties' precluded the provisions of the Fourth 32. These considerations, it is scarcely neces­ ACP-EEC Convention from having direct 59 sary to add, ought not logically to have any effect.

33. It appears to follow from those judg­ contracting parties does not in itself neces­ ments, a contrario, that recognition of the sarily mean that there is no reciprocity in the direct effect of provisions contained in an implementation of the agreement. It follows, international agreement concluded by the on the one hand, that an absence of reciproc­ Community could well depend upon reci­ ity in the recognition of direct effect could procity in cases where the agreement in well be a decisive factor if it led to an question imposes equal obligations on the absence of reciprocity in the implementation contracting parties and therefore, ultimately, of the agreement as a whole and, on the requires reciprocity in its implementation. In other, that what is important is that the com­ its judgment in Kupferberg, however, the mitments undertaken should be fulfilled and Court — ruling on the interpretation of an it scarcely matters what legal means are used agreement on free trade, that is an agreement so long as they are appropriate for attaining 60 based on the principle of reciprocity — that end. held that such a conclusion was by no means automatically correct. In that case, on the assumption that each contracting party is responsible for executing fully, in good faith, the commitments which it has undertaken and consequently for determining the legal means appropriate for attaining that end in its legal system, the Court held that '... the fact that the courts of one of the parties con­ sider that certain of the stipulations in the 34. The case-law cited so far therefore agreement are of direct application whereas appears to imply, when applied to the WTO the courts of the other do not recognise such agreements, that the decision as to whether direct application is not in itself such as to or not they have direct effect cannot, in the constitute a lack of reciprocity in the imple­ absence of an express provision to that 61 mentation of the agreement'. effect, 62 depend on the attitude of the other parties on the subject. In view of the fact that, as far as GATT 1947 is concerned, the case-law since the judgment in International Fruit has consistently emphasised that the agreement is based on the principle of nego­ tiations undertaken on the basis of 'recipro­ cal and mutually advantageous arrange­ 63 ments', I consider that it nevertheless still remains to be seen whether the absence of reciprocity in the recognition of direct effect may be regarded, in relation to the Thus, in the Court's view, the mere fact that WTO agreements, as being such as to lead the question of direct effect was resolved in to an absence of reciprocity in their imple­ different ways by the courts of the various mentation.

In this connection, I must first say that, in the particular requirements of a multilateral view of the aim and object of the WTO agreement. Nevertheless, I consider that it Agreement, I do not think there can be any would certainly be more correct to link rec­ doubt that reciprocity is required not only in ognition of direct effect with the principle of the negotiation of the agreement but also in reciprocity in the implementation of the its performance. 64 I should add that the agreement than to repeat formulas that were absence of recognition of direct effect by perfectly acceptable in the context of GATT some other contracting parties cannot but 1947 but are no longer relevant in the con­ lead, at the very least, to an imbalance in the text of the WTO Agreement and would fulfilment of the respective and reciprocal merely lend weight to the already wide­ commitments undertaken. The fact remains, spread view that this is a political, not a legal, of course, that it is by no means easy to solution. I therefore suggest that the Court establish a prion up to what point and to — if it intends to leave to the 'political' insti­ what extent such an imbalance leads to an tutions, that is to say the Commission and absence of reciprocity in the implementation the Council, the interpretation and, more of the agreement as a whole. generally, the 'management' of the provisions 65 at issue in this case — should opt for reci­ procity. The practical outcome would prob­ ably be the same but the reasoning would gain in consistency and be more open to judicial control.

That said, I am aware of the difficulties of adapting the concept of reciprocity to meet 65 — That impression comes over very strongly in the judgment in Germany v Council, cited in footnote 42, in which the Court held that those features of GATT that prevent it from being recognised as having direct effect also preclude its provisions from being taken into consideration to assess the lawfulness of a Community regulation in an action 64 — This was already abundantly clear, as far as GATT 1947 was brought by a Member State under Article 173 (paragraph concerned, from the judgment in Chiquita Italia (cited in 109). That impression is reinforced by the fact that, accord- footnote 44), in which the Court expressly noted that the ing to the Court, those same provisions may constitute a Fourth ACP-EEC Convention 'is not of the same nature as valid criterion for assessing, in the context of proceedings the GATT' (paragraph 31), before stating that the provi- brought by the Commission under Article 169, whether sions of the Convention may have direct effect despite the national practice or regulations are compatible with the appreciable imbalance in the obligations undertaken by the commitments undertaken in the context of GATT (see Case contracting parties. C-61/94 Commission v Germany [1996] ECR I-3989).

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OPINION OF MR TESAURO — CASE C-53/96

present case, that is to say Article 50(6) of II of the Agreement and, more generally, the the TRIPs Agreement, has direct effect. I whole of the TRIPs Agreement cannot be must say at once that there can be no reason­ invoked directly in proceedings before the 67 able doubt here, as this provision is obvi­ national courts. ously sufficiently clear and precise, and does not depend on the adoption of any subse­ quent act.

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HERMES v FHT

The substance of the question submitted by the purpose of such interpretation'. The the national court Court has also had occasion to state in a recent judgment that 'the primacy of interna­ tional agreements concluded by the Commu­ nity over provisions of secondary Commu­ nity legislation means that such provisions must, so far as possible, be interpreted in a manner that is consistent with those agree­ 38. I should point out first that, even if the ments'. 70 Needless to say, that statement Court were to conclude that Article 50(6) of must also apply to national provisions. the TRIPs Agreement does not have direct effect, the answer to the question submitted by the national court would not be alto­ gether without interest. It is sufficient to observe here that the Court has long held that applications relating to provisions of In these circumstances, it is perfectly clear secondary legislation which are not directly that the interpretation supplied by the 68 effective may be admissible. With regard, Court, in some cases explaining that the pro­ more particularly, to the interpretation of vision in question is not directly effective, agreements concluded by the Community, I can nevertheless be very useful to the recall that the Court stated in connection national court in determining whether the with GATT 1947 that 'it is important that relevant national provision can be inter­ the provisions of GATT should, like the pro­ preted in conformity with the provision of visions of all other agreements binding the the agreement concerned. It should be noted Community, receive uniform application that, in any case, the agreement in question throughout the Community' and that those binds the Community and the Member provisions are amongst those 'which the States. 71

68 — See, for example, the judgments in Schlüter (cited in foot- 39. That being so, I note that the national note 44) and in Case 59/75 Pubblico Ministero v Manghera [1976] ECR 91, in which the Court interpreted Council court is asking the Court whether the Resolutions even though it held that they cannot create legal consequences of which parties might avail themselves expression 'provisional measures' in Article in court. Similarly, in Case C-322/88 Grimaldi v Fonds des 50(6) of the TRIPs Agreement covers maladies professionnelles [1989] ECR I-4407, the Court fur- nished the national court with an interpretation of a recom- measures such as those provided for in mendation, to the effect that, although recommendations cannot in themselves confer rights on individuals upon which they may rely before national courts, they can be useful to those courts in casting light on the interpretation of national measures (paragraphs 16 to 19). The Court has also ruled, in its judgment in Case 111/75 Mazzalai v Fer- 69 — Joined Cases 267/81 to 269/81 Amministrazione delle rovia del Renon [1976] ECR 657, that under Article 177 it Finanze dello Stato v SPI and SAMI [1983] ECR 801, para- has jurisdiction to give preliminary rulings 'concerning the graphs 14 and 19, our emphasis. interpretation of acts of the institutions of the Community, 70 — Commission v Germany (cited in footnote 65), paragraph regardless of whether they are directly applicable' (para- 52. graph 7). It is scarcely necessary to recall, lastly, the judg- 71 — On the possibility of invoking the provisions of an agree- ment in Case C-106/89 Marleasing [1990] ECR I-4135, in ment not producing direct effect, see inter alia Monin: 'A which the Court laid down the principle that national law propos de l'accord instituant l'organisation mondiale du must be interpreted in conformity with a Community commerce et l'accord sur les marchés publics: la question de directive so that, in the absence of direct effect, 'a national l'invocabilité des accords internationaux conclus par la court ... is required to interpret its national law in the light Communauté européenne' in Revue trimestrielle de droit of the wording and the purpose of that directive' (para- européen, 1997, p. 399 et seq., in particular pp. 407 and 412 graph 13). et seq.

40. I must observe, first, that Article 50 of the TRIPs Agreement expressly covers all On the basis of these very characteristics, measures adopted 'to prevent an infringe­ though for somewhat different reasons, Her­ ment of any intellectual property right from mes, the Netherlands Government and the occurring' (paragraph 1), including those Commission suggest that the Court should adopted 'inaudita altera parte' where appro­ answer the question submitted by the priate (paragraph 2). I should add at once national court in the negative. To be precise, that the measure requested by Hermes Hermes emphasises the practical advantages clearly meets that objective and the fact that of the Netherlands procedure and argues it was adopted after hearing the parties is that Article 50 of the TRIPs Agreement only certainly not such as to place it outside the covers measures adopted by the public pros­ ambit of the provision in question. This view ecutor's office or the customs authorities. is supported by the wording of Article 50(6) The Netherlands Government, while empha­ which, I recall, refers expressly to measures sising the advantages of the Netherlands pro­ taken on the basis of paragraphs (1) and (2) cedure, argues that Article 50 only covers the of that article, thus also, but not only, to measures referred to in Article 700 of the 72 measures adopted inaudita altera parte. Code of Civil Procedure, that is to say interim protective measures granted on the authority of the president of the court inau- dita altera parte. Lastly, the Commission 72 — Furthermore, in stipulating that provisional measures shall cease to have effect if proceedings leading to a decision on observes, first, that the Netherlands pro­ the merits are not initiated within a certain time, Article 50(6) expressly states that that rule is without prejudice to cedure, inasmuch as it results in the adoption paragraph (4), which in turn stipulates that, where provi- of a measure that is almost always definitive, sional measures have been adopted inaudita altera parte, 'a review, including a right to be heard, shall take place upon could be regarded as accelerated proceedings request of the defendant with a view to deciding, within a reasonable period after the notification of the measures, on the merits and, second, that even if it whether these measures shall be modified, revoked or con- is admitted that the measures in question firmed'. Clearly, there would be no reason for such a state- ment if Article 50 covered only provisional measures are covered by the expression 'provisional adopted inaudita altera parte.

Nor do I find the second objection convinc such a practice can be of importance, still less ing, namely that an interim measure such as of decisive importance, for the purpose of the Netherlands measure is already covered resolving the present case. I must observe, in 73 by Article 44(1) of the TRIPs Agreement this connection, first, that the measure thus and that Article 50 must therefore necessar adopted is still in law a provisional meas 74 ily refer to measures of a different kind — ure and, second, that the undoubted prac provisional measures. The only observation I tical advantages attaching to the fact that in have to make on this subject is that, whereas most cases no time-limit is set for initiating Article 44 deals with possible remedies, that the proceedings on the merits are certainly is with the substantive rules for the protec not such as to alter the provisional nature of

It is true that the proceedings in question, allowing the parties if they so wish to regard the pro visional measure in question as a definitive 41. It is true that the arguments invoked by decision, might enable an effective and Hermes, the Netherlands Government and definitive result to be achieved with the the Commission are found, on close inspec expenditure of less time and effort but the tion, to be based essentially on the fact that in most cases, 95 % according to the Nether lands Government, the parties accept the 74 — It is not without bearing to note, in this connection, as the provisional measure in question as a defini Netherlands Government has pointed out, that the measure adopted is described as an interim decision, precisely tive decision. I do not think, however, that because interim proceedings, in which the court is not required to respect the legal rules on evidence, may always be followed by proceedings on the merits. 75 — It should be noted that in some cases the judge hearing an application for interim measures grants the measure 73 — For present purposes, I recall that that provision states that referred to in Article 289 of the Code of Civil Procedure 'the judicial authorities shall have the authority to order a only on condition that proceedings on the merits are initi- party to desist from an infringement inter alia to prevent ated within a certain time. At all events, it is perfectly obvi- the entry into the channels of commerce in their jurisdic- ous that the unsuccessful party may in any case initiate such tion of imported goods that involve the infringement of an proceedings even if no time-limit is set in this connection intellectual property right .

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fact remains that the measure adopted cannot as meaning that it also covers provisional even so be regarded as affording intellectual measures adopted after hearing the parties, in property rights more extensive protection written form, duly reasoned and open to than proceedings leading to a decision on the challenge, notwithstanding the fact that those merits. It is scarcely necessary to add that the measures are accepted by the parties as fact that the parties may reach a compromise definitive. I would add that, should the or in any case an agreement as a result of, Court inform the national court that the and on the basis of, the measure in question provision in question is not directly effective, affords no guarantee in this regard and, what there appears to be nothing to prevent that is more important, has nothing to do with court from interpreting the Netherlands the degree of protection. Moreover, it would rules in a manner consistent with the rel­ be reductive, in the absence of any explicit evant provision of the TRIPs Agreement. provision to that effect, to hold that Article Indeed, even on the basis of national provi­ 50 of the TRIPs Agreement applied only to sions, the judge hearing an application for interim protective measures adopted inaudita interim measures may in some cases, as we 76 altera parte. have already pointed out, set a time-limit for the parties to initiate proceedings on the merits; the provision in question, I recall, leaves it to the judicial authorities to deter­ mine a reasonable period, where the relevant 42. In short, I consider that Article 50(6) of law so permits, and sets a period itself, the TRIPs Agreement should be interpreted should they be unable to do so.