C-63/97

3. BMW AG has registered with the Benelux Trade Marks Office the trade name BMW and

* Original language: English. 6. In the present proceedings BMW AG and 1 — First Council Directive 89/104/EEC of 21 December 1988 to BMW BV (collectively 'BMW') submit that, approximate the laws of the Member States relating to trade marks, OJ 1989 L 40, p. 1. when carrying on his business, Mr Deenik

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OPINION OF MR JACOBS — CASE C-63/97

makes unauthorised use, in advertisements, of owner in relation to goods which he or his the trade marks of BMW AG, or at least of licensee had put into circulation under that similar signs. By writ dated 21 February 1994, mark), there were in any event reasonable BMW accordingly sought an order prohib­ grounds for the use of the mark and the pro­ iting Mr Deenik from using the BMW marks prietor of the trade mark could not thereby or any similar signs in advertisements, pub­ be adversely affected. Furthermore, the Recht­ licity statements or other announcements, and bank deemed permissible the use of state­ from using such trade marks or signs in any ments such as 'Specialist in BMWs' or 'spe­ other way for or in connection with his busi­ cialised in BMWs' inasmuch as BMW had ness. BMW relied on its rights under Article not disputed that Mr Deenik had specialist 13A of the Uniform Benelux Law on Trade experience regarding BMW vehicles and it Marks in the version in force at that time was not for BMW to decide who was entitled ('the Benelux Law'). to describe himself as a specialist in BMW vehicles. The Rechtbank also dismissed the claim for damages brought by BMW.

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BMW AND BMW NEDERLAND v DEENIK

11. As mentioned earlier, the writ in the 13. The Hoge Raad also considers it neces­ present proceedings was issued on 21 Feb­ sary to refer further questions to the Benelux ruary 1994. By that time the Trade Marks Court concerning the interpretation of Directive should have been transposed into Benelux Law both before and after the imple­ Benelux law since the deadline for implemen­ mentation of the Directive. Since it recognises tation of the Directive was 31 December that both the previous and the amended ver­ 1992. 2 However, the Benelux Protocol of sions of the Benelux law must as far as pos­ 2 December 1992, amending the Benelux Law sible be interpreted in the light of the wording on Trade Marks pursuant to the Trade Marks and purpose of the Directive, it has referred Directive (in particular Article 13A(1) of the similar questions to this Court concerning Law), did not come into force until 1 January the interpretation of the Directive. 1996. I shall refer to the Benelux Law on Trade Marks as amended by that Protocol as 'the Amended Benelux Law'.

14. The questions referred to this Court are as follows:

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OPINION OF MR JACOBS — CASE C-63/97

purpose of announcing to the public that (3) For the purpose of answering Question he (A) carries out repair and maintenance (2), does it make any difference whether work on the goods which have been announcement (A) or announcement (B) placed on the market under that trade is involved? mark by the proprietor or with his con­ sent, or that he (B) is a specialist or is specialised with regard to such goods, does this, under the scheme of Article 5 of the Directive, involve:

(4) In the light of the provision in Article 7 of the Directive, does it make any differ­ (i) use of the trade mark in relation to ence, with regard to the question whether goods which are identical to those for the proprietor of the trade mark can pre­ which it was registered, as referred to vent use of his trade mark registered exclu­ in Article 5(1)(a); sively for specified goods, whether the use referred to in Question (2) is that under (i), (ii), (iii) or (iv)?

The Trade Marks Directive

16. The Trade Marks Directive constitutes a 2. Any Member State may also provide that first step in the harmonisation of Member the proprietor shall be entitled to prevent all States' trade-mark laws. It harmonises, inter third parties not having his consent from alia, the rights conferred by a trade-mark, using in the course of trade any sign which is albeit leaving the adoption of certain of its identical with, or similar to, the trade mark in provisions to the discretion of the Member relation to goods or services which are not States. Thus Article 5 provides: similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. 'Rights conferred by a trade mark

1. The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in 3. The following, inter alia, may be prohib­ the course of trade: ited under paragraphs 1 and 2:

(a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which (a) affixing the sign to the goods or to the the trade mark is registered; packaging thereof;

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OPINION OF MR JACOBS — CASE C-63/97

5. Paragraphs 1 to 4 shall not affect provi­ sions in any Member State relating to the protection against the use of a sign other than for the purposes of distinguishing goods or (b) indications concerning the kind, quality, services, where use of that sign without due quantity, intended purpose, value, geo­ cause takes unfair advantage of, or is detri­ graphical origin, the time of production mental to, the distinctive character or the of goods or of rendering of the service, or repute of the trade mark.' other characteristics of goods or services;

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BMW AND BMW NEDERLAND v DEENIK

(c) the trade mark where it is necessary to Question (1) indicate the intended purpose of a product or service, in particular as accessories or spare parts;

20. By its first question the Hoge Raad asks whether, in view of the fact that, with regard to the rights conferred by a trade mark, the provided he uses them in accordance with Directive contains transitional provisions only honest practices in industrial or commercial for the purpose of the situation described in matters ...' Article 5(4), Member States are 'otherwise free to lay down rules on the matter'; alter­ natively does Community law in general, or the objective and tenor of the Directive in particular, have the effect that Member States are not entirely free in that regard but must comply with specific restrictions, and, if so, 19. Article 7 is as follows: which?

'Exhaustion of the rights conferred by a trade mark 21. As explained earlier, the Hoge Raad con­ siders that that question arises from the fact that the Directive was not implemented in the Benelux until 1 January 1996, while the facts giving rise to the present case appear to have occurred and the proceedings were com­ menced before that date but after the date by 1. The trade mark shall not entitle the pro­ which the Directive should have been imple­ prietor to prohibit its use in relation to goods mented (31 December 1992). which have been put on the market in the Community under that trade mark by the proprietor or with his consent.

State concerned, the rights conferred by the 25. According to BMW, it is that situation trade mark may not be relied on to prevent which the Hoge Raad has in mind in its for­ the continued use of the sign. Other transi­ mulation of the first question. BMW explains tional provisions are to be found in Article that the aim of the litigation is to obtain both 3(4) and Anicie 4(6), which state that any an injunction m relation to future advertise­ Member State may provide that the grounds ments and damages in respect of past adver­ of refusal of registration or invalidity in force tisements. Although the Amended Law is in that State prior to the date on which the now in force, the Hoge Raad will have to rule provisions necessary to comply with the upon the correctness of the judgment which Directive entered into force shall apply to was given by the Gerechtshof at a time when trade marks for which application was made the Amended Law was not yet in force. prior to that date. According to BMW, if the Hoge Raad con­ siders that the Gerechtshof applied the pre­ vious law correctly, the Gerechtshof's judg­ ment will simply be confirmed; if, however, the Hoge Raad annuls the judgment of the Gerechtshof and either decides the case itself or returns the case to the Gerechtshof, the case will have to be decided on the basis of the Amended Law. 23. The Commission, BMW and the United Kingdom Government submit that the fact that transitional provisions are expressly pro­ vided for in the Directive makes it clear that the Directive allows for no transitional provi­ sions other than those specified.

28. In so far as what is being judged is the continued use of the sign after the date by which the Directive should have been imple­ mented, the rights conferred, by Article 5 of the Directive must be applied, unless the situ­ 30. I accordingly conclude in answer to the ation is that envisaged by Article 5(4), as dis­ first question that, when implementing the cussed above. The Directive envisages no tran­ Directive in national law, Member States are sitional provisions in respect of the use or not free to adopt any transitional provisions registration of a sign subsequent to the date other than those expressly provided for by upon which the Directive should have been the Directive insofar as such transitional pro­ implemented, other than the provisions spe­ visions would prejudice the complete and cifically mentioned therein. With effect from correct transposition of the Directive. that date, whether or not the Directive has been transposed into national law, all provi­ sions of national law must be interpreted as far as possible in accordance with the Direc­ 4 tive. Where however the Directive has not been properly implemented, the question may arise whether its provisions could have direct Questions (2) to (5) effect in proceedings brought against indi­ 5 viduals.

29. In so far as what is being judged is the 31. In so far as questions (2) to (5) are con­ use of the sign before the date for imple­ cerned, it is important to bear in mind that menting the Directive had passed, the pre­ Mr Deenik both sold second-hand BMW cars vious national law can apply, unaffected by and provided a repair and maintenance ser­ 6 the Directive. As the Court held in Salumi, vice for such cars. It is also important to note substantive rules are 'usually interpreted as that the BMW marks were registered for

32. The questions referred concern the use of Mr Deenik's statements 'Specialist in BMWs' or 'specialised in BMWs' and 'Repairs and maintenance of BMWs'. Whilst the last state­ ment clearly concerns the repair and mainte­ nance services provided by Mr Deenik, the Hoge Raad explains that the references to 35. Indeed, even the advertisement of the specialisation in BMW vehicles can be read as repairs and maintenance service falls within referring both to the provision of a repair and that provision in so far as it can be read as maintenance service and to the sale of second­ meaning simply that Mr Deenik's garage is hand BMW cars. capable of servicing BMW cars and not that the servicing provided there is authorised by BMW. As the United Kingdom points out, in that case the mark is being used to describe what can be repaired and serviced and is thus being used 'in relation to' the cars, rather than Mr Deenik's services. 33. In my view it would not be appropriate for the Court to seek to give guidance on the specific forms of words which are in issue in the national proceedings. The Court can, how­ ever, give guidance on the applicable prin­ ciples. 36. The question then is whether the rights conferred on BMW under Article 5(1)(a) are subject to the exceptions provided for under Article 7 (which concerns the exhaustion of trade-mark rights), or under Article 6 (which Use of the mark in relation to goods concerns, inter alia, the right to indicate the purpose of a product or service).

34. To the extent that the statements are used merely to advertise the fact that second-hand BMW vehicles are on sale at Mr Deenik's 37. Article 7(1) of the Directive precludes a garage, use of the trade-mark falls within trade-mark owner from prohibiting use of a Article 5(1)(a) of the Directive since it con­ trade mark 'in relation to goods which have cerns use of the mark in relation to the genuine been put on the market in the Community

40. It was argued in Christian Dior that the ability of a trade-mark owner to object both 8 38. In its recent judgment in Christian Dior to advertising which damages his reputation the Court held that, in addition to being free and to advertising which suggests that the to resell such goods, a reseller is also free to reseller is an authorised distributor would make use of the trade mark in order to bring effectively prohibit all parallel trade, since in to the public's attention the further commer­ upgrading their advertising to avoid the former cialisation of those goods; however, the trade­ objection, resellers would expose themselves mark owner may object to the use of his mark to the latter. It must however in my view be in such advertising if it seriously damages the open to the reseller to upgrade his advertising reputation of the mark. without the conclusion being drawn that he is an authorised distributor; and the same must apply to the provision of services by an independent trader. It would be an undue restriction on trade in goods or the provision of services if his use of advertisements of a respectable standard were to be regarded as tantamount to presenting himself as an autho­ rised distributor. 39. Christian Dior did not concern adver­ tising which was alleged to lead the public to believe the advertiser to be an authorised dis­ tributor: Dior's complaint was, on the con­ trary, that the advertising in question was not up to its required standards. However, in cases in which there is a genuine and properly substantiated likelihood of advertising leading the public to believe that the reseller is an 41. Thus in circumstances such as those of authorised distributor, it should be permis­ the present case BMW can object to Mr Deenik's advertising only in so far as it seriously damages the reputation of BMW or 8 — Case C-337/95, judgment of 4 November 1997. if there is a genuine and properly substanti-

44. In order to resolve that issue it is first necessary to consider whether services can be 42. With reference to the last question raised identical or similar to goods for the purposes by the Hoge Raad, it should be noted that of Article 5(1) of the Directive. It seems clear BMW argues that Mr Deenik uses the BMW that goods and services cannot be identical so marks to advertise his own business since the as to make Article 5(1 )(a) applicable, but can mere fact of advertising that he stocks and be similar so as to make Article 5(1 )(b) appli­ repairs their products creates a high quality cable in principle. image for his own business. However, if there is no likelihood of the public being confused into believing that there is some sort of trade connection between the reseller and the trade­ mark owner, the mere fact that the reseller obtains an advantage by the use of the trade mark because the sale of the trade-marked 45. Goods and services may well be similar goods gives his own business an aura of where, as in this case, the services provided quality is not, in my view, a legitimate reason are for the repair or maintenance of the goods within the meaning of Article 7(2) of the in question. But, as the United Kingdom Directive for a trade-mark owner to object to points out, whether they are similar is a matter the advertising of his own goods. Otherwise for the national court to decide. It may be it would be unduly difficult for the trader appropriate for the national court to take effectively to inform the public of the busi­ account of the fact that servicing is provided ness in which he is engaged. at the same place as cars are sold and other

46. As for Article 5(2) of the Directive, that provision applies (where Member States so provide) in cases where a registered trade mark has a reputation in the Member State 48. The national court also refers to Article and where use of a sign in relation to dis­ 5(5) of the Directive, which provides that the similar goods or services without due cause preceding paragraphs of Article 5 shall not takes unfair advantage of, or is detrimental to, affect provisions in any Member State relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services where use of that sign 9 — Case C-251/95 SABEL v Puma, judgment of 11 November without due cause takes unfair advantage of, 1997. or is detrimental to, the distinctive character 10 — See my Opinion in Case C-39/97 Canon, delivered on 2 April 1998. or repute of the trade mark.

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52. BMW, observing that Article 6(1)(c) pre­ cludes the trade-mark owner from prohib­ 50. The national court has put no questions iting the use of the mark where it is 'neces­ directly on Article 6 of the Directive. Yet in sary' to indicate the intended purpose of a the scheme of the Directive, although Article product or service, submits that in a case such 5 sets out the rights of the trade-mark owner, as the present there is no such necessity. Article 6 imposes certain limits on those rights. Article 6 was however considered by the United Kingdom Government in its written observations and by BMW, the Italian Gov­ 11 — At paragraph 18.

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BMW AND BMW NEDERLAND y DEENIK

54. BMW submitted, with some measure of support from the Italian Government, that it would be open to Mr Deenik to offer the ser­ vices of car maintenance and repair without the need to name any specific make of car. That seems an unrealistic suggestion. As the United Kingdom Government observed at the hearing, if Mr Deenik does in fact specia­ lise in maintaining and repairing BMW cars it 56. It is for the national court to assess in is difficult to see how he could effectively relation to any particular use of a mark whether communicate that fact to his customers the conditions set out in Article 6 are ful­ without using the sign BMW. As mentioned filled. In doing so, however, the national court earlier, BMW considers that he benefits from should take into account the need to ensure using the BMW marks because they give his that the concept of 'honest practices in indus­ own business an aura of quality and that that trial or commercial matters' is not interpreted is unfair. I agree with the United Kingdom so broadly as to constitute an unjustified Government, however, that whether there is impediment to trade or to fair competition. any benefit to Mr Deenik is not the key issue. The issue is the extent to which a trader in his position should be free to describe the nature 12 — See paragraph 39 above. of the services he is offering. 13 — See paragraph 38 above.

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Conclusion

57. Accordingly the questions posed by the Hoge Raad should in my opinion be answered as follows:

(1) Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks must be interpreted as meaning that, when implementing the Directive in national law, Member States are not free to adopt any transitional provisions other than those expressly provided for by the Directive in so far as such transitional provisions would prejudice the complete and correct transposition of the Directive.