C-255/97

PFEIFFER GROßHANDEL v LÖWA WARENHANDEL

OPINION OF ADVOCATE GENERAL MISCHO delivered on 7 July 1998 *

1. 'Is Article 30 or Article 52 et seq. of the 5 August 1969. Pfeiffer also sells various EC Treaty to be interpreted as precluding the goods, primarily in the food and drink sector, application of national provisions which under the trademark 'Plus wir bieten mehr' require that, in the case of trademarks or des- (priority from 22 September 1989). The super- ignations of undertakings which are liable to market 'Plus KAUF PARK' was integrated be confused, the one with earlier priority is to into a shopping centre, the 'Plus City', opened be protected, and hence prohibit an under- in October 1989, which includes over 100 taking from using, in three provinces of Aus- retail outlets of all current sectors. In the tria, a trademark or designation under which course of the construction of 'Plus City', the companies in the same group lawfully operate predecessors in law of Pfeiffer granted to the in other Member States?' various retailers who were installed there very wide rights of use over the abovementioned trademarks and other names containing the word 'Plus'. By virtue of the lease agreements, each operator is obliged, when making refer- ence to 'Plus City', to use the original logo of this shopping centre. 2. This question is submitted to the Court in the context of a dispute between the com- pany Pfeiffer Großhandel G m b H (hereafter 'Pfeiffer') and the company Löwa Waren- handel G m b H (hereafter 'Löwa').

5. The Tengelmann Warenhandelsgesellschaft and Plus Warenhandelsgesellschaft operate in Germany, Italy, Spain, the Czech Republic and Hungary in the discount store sector 9. The request for a preliminary ruling under the trading name 'Plus'. Tengelmann, informs us that Paragraph 9(1) of the Gesetz the parent company, aims to have a uniform gegen den unlauteren Wettbewerb (Law appearance throughout Europe, which would against unfair competition, hereafter the allow similar advertising throughout Europe 'UWG') prohibits the use of names, trading and the further development of a corporate names or specific designations of an under- identity. taking, in a manner liable to cause confusion with names, trading names or specific desig- nations which another person lawfully uses. According to subparagraph 3 of the same paragraph, registered trademarks and business symbols which are regarded in trade circles concerned as distinguishing signs of the under- taking and the other devices intended to dis- tinguish the undertaking from other under- 6. For those reasons, Löwa started in 1994 to takings, including in particular the market its goods under the designation 'Plus' presentation of goods, their packaging or and to change the name of 17 of the 139 wrapping, and business documents, are supermarkets that it operates in Austria from equated with the specific designation of an 'Zielpunkt' to 'Plus prima leben und sparen', undertaking. the graphical presentation of which corre- sponds completely to the text and picture mark of its German sister company, Plus Warenhandelsgesellschaft.

their bearer from other persons, or if they defendant of the designation “Plus”, with or have acquired a distinctive force — indepen- without additions, infringes Paragraph 9 of dent of their originality — as a result of trade the UWG, since Pfeiffer has priority'. acceptance. According to settled Austrian case-law, invented fantasy words or words which, although belonging to general lin- guistic usage, have no connection with the goods for which they are intended, thus more purely descriptive, have a distinctive char- acter. These principles apply to word marks 13. However, since the prohibitory injunc- in the same way as to specific designations of tion which it would be obliged to grant by undertakings. Descriptive indications are how- virtue of Paragraph 9 of the U W G would ever capable of protection, in the case of an affect intra-Community trade, the Handels- unusual description of an undertaking which gericht Wien decided to stay proceedings and is out of the ordinary. to submit to the Court the abovementioned question.

12. The referring court concludes, as a result, 2 — See above paragraph 8. that 'under Austrian law, use by the 3 — OJ 1989 L 40, p. 1.

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15. As a result, it is sufficient, in order to 18. In accordance with the national court's provide to the national court with an answer wishes, I will consider the problem from the allowing it to decide the case before it, to point of view first of the free movement of limit myself to an interpretation of Articles goods (Article 30 et seq.) and then of the 30 and 52 of the Treaty with regard to the right of establishment (Article 52 et seq.). conflict between two specific designations of undertakings.

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21. In order to show that this renunciation of advertising concept on the Community level. a global business strategy would constitute a O n the contrary, Löwa goes on to say, in its hindrance to the free movement of goods, judgment in Mars 9 the Court stated unequiv- Löwa relies on the judgment in Yves Rocher 6 ocally, referring to its decision in Keck and where the Court pointed out that: Mithouard, that a prohibition which, although applying to all products without distinction, relates to the marketing in a Member State of products bearing the same publicity markings as those lawfully used in other Member States, is by nature such as to hinder intra- Community trade. According to the Court, 'national legislation which restricts or pro- such a restriction 'may compel the importer hibits certain forms of advertising or certain to adjust the presentation of his products means of sales promotion may, although it according to the place where they are to be does not directly affect imports, be such as to marketed and consequently to incur addi- restrict their volume because it affects mar- tional packaging and advertising costs.' 10 . keting opportunities for the imported prod- ucts. To compel an economic operator either to adopt advertising or sales promotion schemes which differ from one Member State to another or to discontinue a scheme which he considers to be particularly effective may constitute an obstacle to imports even if the legislation in question applies to domestic 23. From this Löwa concludes that 'the same products and imported products without dis- applies in the case of a prohibition in the tinction.' present case under Paragraph 9 of the UWG, which prevents a group of companies from appearing under a uniform name of establish- ment in the Member States of the European Community ...'. Consequently, Article 30 of the Treaty is applicable.

25. Pfeiffer also points out that the desire of 27. The Commission points out, moreover, Löwa to have a uniform advertising concept that the Court has ruled that a national mea- for the Member States of the European Com- sure having no link to the importation of munity and the attempt to create a corporate goods does not fall within the ambit of Article identity conflicts with commercial property. 30 et seq. of the Treaty. 12 That would also be According to Pfeiffer, prohibitions and restric- the situation in the present case given that the tions on importation justified for commercial provision set out in Paragraph 9(1) of the and industrial property reasons are permis- U W G has neither the object nor effect of sible, with the express reservation that they regulating cross-border trade in goods. The are not to constitute a means of arbitrary dis- defendant, who is already established in Aus- crimination or a disguised restriction on trade tria continues, regardless of its business name, between Member States. to have the opportunity of importing and selling goods in Austria.

29. The Court has held in (and since) the the requirements laid down by that State is decision in Keck and Mithouard: not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic prod- ucts. Such rules therefore fall outside the scope of Article 30 of the Treaty.' 'That definition [of a measure having equiva- lent effect to a quantitative restriction] covers obstacles to the free movement of goods which, in the absence of harmonisation of legislation, are the consequence of applying to goods coming from other Member States where they are lawfully manufactured and marketed, rules that lay down requirements 31. In the present case, we are not dealing to be met by such goods (such as those relating with a national provision that lays down con- to designation, form, size, weight, composi- ditions which goods must satisfy or that seeks tion, presentation, labelling, packaging). This to regulate trade in goods between Member is so even if those rules apply without dis- States. tinction to all products unless their applica- tion can be justified by a public-interest objec- tive taking precedence over the free movement of goods.'

32. The provision is one, moreover, that does 30. By contrast, not affect the marketing of products from another Member State in a different manner to that of domestic products.

37. Finally, a rule such as that contained in Paragraph 9 of the U W G does not even con- 34. This is also the reason for which the stitute a selling arrangement. The a fortiori argument Löwa seeks to derive from the Mars reasoning of the Commission set out above judgment cannot be accepted. That judgment should, therefore, be accepted. concerns restrictions on the free movement of goods resulting from a prohibition on the use of certain advertising names on the packaging of products. However, as stated above, the subject of the dispute in the main proceed- 38. I thus arrive at the conclusion that the ings is solely the designation of the two under- prohibition on the use of a specific designa- takings and not the trademark which one or tion of an undertaking does not fall within other undertaking gives its products. the scope of Article 30 of the Treaty. Quite superfluous though it may be, I would add that, even if a provision such as Paragraph 9 of the U W G did constitute a measure of equivalent effect, it would benefit from the exemption provided for in Article 36 of the 35. As regards the judgment in Yves Rocher, Treaty. Since it applies without distinction to it does not seem relevant to me for three rea- undertakings whose share capital is Austrian- sons. First of all, we are not concerned here owned and undertakings whose share capital with 'a national measure which restricts or is foreign-owned, it cannot be considered as prohibits certain forms of advertising'. The a 'means of arbitrary discrimination'. N o r inability of Löwa to use the forms of adver- does it constitute a 'disguised restriction on tising devised by its parent company for other trade between Member States', since, as I have markets is only the indirect consequence of already pointed out, it does not affect the the provisions protecting commercial prop- marketing of goods from other Member States erty. in a different manner to that of domestic products.

43. According to the defendant in the main proceedings, Löwa, 'prohibiting the name of 41. Pfeiffer adds that the principle of non- an undertaking could also restrict in an imper- discrimination inherent in the freedom of missible manner freedom of establishment, as establishment prohibits all discrimination on contemplated by Articles 52 and 58 of the grounds of nationality in the commencement Treaty, for the parent company'. In support and the pursuit of a self-employed activity in of its argument, Löwa cites the Gebhard 14 another Member State. Only national rules case, in which the Court stated that: which are formally discriminatory, that is those based on nationality and which treat nationals and foreigners openly and deliber- ately in a different manner on the ground of their nationality, cannot be accepted. How- ever, Pfeiffer points out, the legal consequence of Paragraph 9 of the Austrian U W G applies, without distinction, to nationals and non- nationals. 'It follows, however, from the Court's case-law that national measures liable to hinder or make less attractive the exercise of funda- mental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements 42. Again according to Pfeiffer, in so far as in the general interest; they must be suitable freedom of establishment is also — especially for securing the attainment of the objective on the basis of the most recent case-law of which they pursue; and they must not go the Court — construed partially as consti- beyond what is necessary in order to attain tuting a prohibition on introducing restric- it'. tions, it does not imply a general prohibition, the contrary of what is the case in relation to the free movement of goods. Restrictions on the freedom laid down in Article 52 of the 14 — Case C-55/94 [1995] ECR I-4165, paragraph 37.

48. The Commission points out that it is necessary, moreover, to take account of the fact that the defendant was already established 45. The Commission, for its part, is of the in Austria when it changed the name of 17 of opinion that Article 52 et seq. of the Treaty its subsidiaries in 1994, replacing 'Zielpunkt' does not preclude the application of a provi- by 'Plus prima leben und sparen'. sion such as Paragraph 9(1) of the Austrian UWG. National provisions relating to com- pany names or trading names may, admit- tedly, affect the freedom of establishment when, for instance, the bearing of a company name is made subject to specific authorisation 49. In my opinion, the reasoning put forward or when such authorisation is granted subject by the Commission is convincing. to specific conditions, of a linguistic or similar nature. However, the provision set out in Paragraph 9(1) of the Austrian U W G does not involve such a type of regulation con- cerning directly the 'if' and/or 'how' of estab- lishment. As a result, it has no link or, at 50. Here is a company established under Aus- least, no sufficient link, with freedom of estab- trian law whose share capital is German- lishment. owned and which has been running for a

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54. The ground put forward by Löwa in 57. The scope of the passage quoted by the order to change the name of its shops (inter- defendant in the main proceedings from the national development of the corporate Gebhardt case, where reference is made to

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'national measures liable to hinder or make Court, according to which obstacles to the less attractive the exercise of fundamental exercise of the right of establishment must be freedoms guaranteed by the Treaty', might accepted only if the national measures liable lead to confusion — and Löwa's arguments to hinder or make less attractive the exercise are evidence of this — and would for this of fundamental freedoms guaranteed by the reason benefit from clarification. Treaty fulfil four conditions.

59. For national legislation to require justifi- cation vis-à-vis Article 52 of the Treaty, it 62. Secondly, the said measures must be justi- must have a sufficiently close link with the fied by overriding reasons in the general freedom of establishment. I agree with the interest. However, as the Coditei judgment 15 Commission that such is not the case as far shows, the Court has upheld, for overriding as Paragraph 9(1) of the U WG is concerned. reasons in the general interest, restrictions resulting from the application of national leg- islation on the protection of intellectual prop- erty. Even though, in that judgment, the Court had expressed itself on the legitimacy of the protection of intellectual property to justify a restriction on freedom to provide services, such an interest must still be considered as an 60. In case the Court should nevertheless disagree, I would now like to examine the present case in light of the case-law of the 15 — Case 62/79 [1980] ECR 881, paragraph 15.

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overriding reason in the general interest 66. In addition, the extent of the geographical deserving of protection in the context of a territory for which a prohibition may be restriction on the freedom of establishment. ordered constitutes a question of fact which it is for the national court to determine.

64. It remains to be seen if such a prohibi- tion fulfils the fourth condition set by the case-law, namely that it must not go beyond what is necessary in order to attain the objec- tive pursued. 69. However, Löwa is not satisfied with this situation. It would like to have the Court uphold the submission that the concept of risk of confusion is not a matter for national courts and that it must, by virtue of Com- munity law, be interpreted strictly. It is seeking 65. In that regard, what is important to bear in this way to force the national court to in mind is the fact that Pfeiffer limits its claim accept that there is no risk of confusion. Löwa to three federal Länder of the Republic of submits that, owing to the harmonisation of Austria. A prohibition covering the national trademark law by Directive 89/104, it is nec- territory may be considered as dispropor- essary to take into account, at the level both tionate where the undertaking benefiting from of the law laid down by the Treaty and of protection operates only on a regional or a secondary legislation, the objective of the local market. European legislature, which is to achieve the

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70. Pfeiffer, for its part, relies on the line of case-law developed by the Court in the field of trademarks in relation to Articles 30 and 72. Quoting the Advocate General, the Court 36 of the Treaty. More specifically, it relies on justifies this conclusion in the following terms: the judgment in Deutsche Renault 16 according to which, in the field of trademarks, determi- nation of the existence of a risk of confusion is a matter for the national court. What applies to the packaging of goods, should, argues Pfeiffer, also apply to the name of the under- taking. A name of a supermarket which is liable to be confused should be prohibited just as are product lines which are liable to be confused. 'Further ... a trademark right as an exclusive right and protection against marks giving rise to risk of confusion are in reality ... two sides of the same coin: reducing or extending the scope of protection against the risk of confu- sion simply reduces or extends the scope of the right itself. Both aspects must accordingly 71. Like Pfeiffer, I consider that the question be governed by a single homogeneous whether the 'risk of confusion' is real is a

17 — Paragraph 31. 16 — Case C-317/91 [1993] ECR I-6227. 18 — Paragraph 32.

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source of law — that is, at present, by national include the concept of risk or danger of con- law.' 1 9 fusion, are, in the absence of any harmonisa- tion in Community law, a matter for national law.

73. The Court points out, of course, that national law is subject to the limits set out in the second sentence of Article 36 of the Treaty. 20 Under this provision, prohibitions 76. Consequently, the question whether the or restrictions on imports justified on grounds use by Löwa of the specific designation 'Plus', of the protection of industrial and commer- with or without addition, is likely to result in cial property are not to 'constitute a means of a risk of confusion with the designation used arbitrary discrimination or a disguised restric- by Pfeiffer since 1969, should be left for tion on trade between Member States'. determination by the national court.

Articles 30 and 52 of the EC Treaty, properly construed, do not preclude, in cir- cumstances such as those in the present case, the application of national provisions requiring that, in the case of specific designations of undertakings which are liable to be confused, the one with earlier priority is to be protected, and thus prohibiting an undertaking from using, in three Länder of the Republic of Austria, a specific designation of undertaking under which companies in the same group lawfully appear in other Member States.

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