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2. In regard to the initial proceedings the referring court merely mentions that the French company Régie Renault (known today as Renault SA; hereinafter 'the appli- 3. The Corte d'Appello di Torino dis- missed — on 25 February 1997 according to the Commission — an application for * Original language: German. enforcement of that judgment, which was 1 — OJ 1978 L 304, p. 36; as amended by the Convention of 9 October 1978 on the accession of the Kingdom of upheld on appeal in France, and Renault — Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. II, the Conven- on 28 March 1997 according to the defen- tion of 25 October 1982 on the accession of the Hellenic dants — lodged an appeal against that Republic (OJ 1982 L 388, p. 1) and the Convention of 26 May 1989 on the accession of the Kingdom of Spain and decision at this same court. In those the Portuguese Republic (OJ 1989 L 285, p. I). proceedings the Corte d'Appello di Torino

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now turns to the Court of Justice with a the principle of the free movement of reference for a preliminary ruling. goods.

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proprietor of industrial or intellectual manufacturing, selling, transporting, property rights in a Member State from importing or exporting in that Member asserting the corresponding exclusive State such component parts, which right so as to prevent third parties from taken as a whole, make up the body- manufacturing, selling and exporting work of a car already on the market, to another Member State component or, in any event, by sanctioning such parts which, taken as a whole, make up conduct?'' the b o d y w o r k of an a u t o m o b i l e already on the market, that is to say, component parts intended to be sold as spare parts for that automobile?

B — Applicable provisions of the Conven- tion and the Protocol

2. Is Article 86 of the EEC Treaty to be applied so as to prohibit the abuse of the dominant position held by each automobile manufacturer in the market 7. Under Article 26(1) of the Convention, a for spare parts for automobiles of its judgment given in a Contracting State is to manufacture, which consists in seeking be recognised in another Contracting State to eliminate any competition from w i t h o u t any special procedure being independent manufacturers of spare required therefor. parts through the exercise of its indus- trial and intellectual property rights and the attendant judicial sanctions?

8. Article 27 slates the exceptions to this rule. A judgment is not to be recognised:

It should be noted at this stage, that 10. Where leave to enforce is granted, the Article 40 — appeal against refusal of an party against whom enforcement is sought application for enforcement — is not may appeal, pursuant to Article 36, against expressly mentioned in Article 2 of the that decision. In Italy the court with Protocol. jurisdiction to hear such an appeal is, pursuant to Article 37, the Corte d'Ap- pello. Article 40 provides that if the appli- cation for enforcement is refused, the applicant may appeal, in Italy, to the Corte d'Appello. C — Judgment of the Court of Justice in Case 53/87 Cicra and Another v Renault 2

11. Under Article 1 of the Protocol the Court of Justice of the European Commu- 12. In the above case questions were refer- nities 'shall have jurisdiction to give rulings red to the Court involving the same set of on the interpretation of the Convention ... problems as in Questions 1 and 2 in the and also on the interpretation of the present Protocol'. However, not every court is entitled to request preliminary rulings on 2 — Case 53/87 Consorzio italiano delia componentistica di recambio per autoveicoli and Maxicar v Régie nationale des questions of interpretation. Article 2(1) of usines Renault [1988] ECR 6039.

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13. The Court began by stating that 'with It should also be borne in mind that respect to the protection of designs and pursuant to Article 36 restrictions on models, in the present state of Community imports or exports justified on grounds of law and in the absence of Community the protection of industrial and commercial standardisation or harmonisation of laws property are permissible provided that they the determination of the conditions and do not constitute a means of arbitrary procedures under which such protection is discrimination or a disguised restriction on granted is a matter for national rules. It is trade between the Member States. In thai- for the national legislature to determine regard it need merely be stated, in the light which products qualify for protection, even of the documents before the Court, ... that if they form part of a unit already protected such legislation is not intended to favour as such.' 3 national products at the expense of pro- ducts originating in other Member States.' 4

14. The Court continued:

15. With respect to Article 86, the Court stated that the mere fact of securing an 'It should then be noted that the authority exclusive right granted by law, the essence of a proprietor of a protective right in of which is to enable the manufacture and respect of an ornamental model to oppose sale of protected products by unauthorised third parties to be prevented, cannot be regarded as an abusive means of eliminat- 3 — Ibid., paragraph 10. It should be noted that the state of ing competition. 5 Community law with respect to protection of models for spare parts has not been changed by Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 concerning the legal protection of designs (OJ 1988 L 289, p. 28), because Article 14 of the Directive expressly 4 — Ibid., paragraph 11 et seq. excludes this area from harmonisation. 5 — Ibid., paragraph 15.

'(1) The rules on the free movement of goods do not preclude the application of national legislation under which a car manufacturer who holds protective D — Question 3 rights in an ornamental design in respect of spare parts intended for cars of its manufacture is entitled to prohi- bit third parties from manufacturing parts covered by those rights for the purpose of sale on the domestic market or for exportation or to prevent the 18. The present proceedings are particu- importation from other Member States larly concerned — as has been confirmed of parts covered by those rights which by the referring court itself — with the have been manufactured there without question of whether or not the concept of his consent. public policy within the meaning of Arti- cle 27(1) of the Convention covers also Community law. Should this question be answered in the negative, then a further examination of the first two questions on the interpretation of Community law will (2) The mere fact of obtaining protective no longer be necessary. It is for this reason rights in respect of ornamental designs that it would seem reasonable to examine for car bodywork components does not the third question first, which, incidentally, is also the way the majority of participants have chosen to proceed, at least at the 6 — Ibid., paragraph 17. hearing.

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Admissibility liminary ruling is admissible. The defen- dants maintain that in the present dispute the referring court is acting in an appellate capacity within the meaning of Article 2(2) 19. In connection with the third question and (3) of the Protocol. Its decision on the referred to the Court it must first be appeal can only be contested, pursuant to determined whether the referring Court is at all entitled to submit questions on the Article 41, by an appeal in cassation. The interpretation of the Convention to the Jenard Report 8 also confirms that the Court. referring court is to be considered as acting in an appellate capacity. The case cited by the applicant may not be relied upon here, because it concerned a reference for a preliminary ruling of a court which was deciding at first instance. Observations of the parties

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without regard to the scope of the decision The substance of Question 3 in the lower court'. 11 It thus becomes clear that the referring court is sitting at second instance. A court called upon to decide a dispute pursuant to Article 40 of the Con- vention is therefore entitled to submit a reference for a preliminary ruling to the The concept of public policy Court of Justice. The order of the Court in Case 56/84 referred to by the applicant does not lead to a contradictory conclusion in the present case, because that matter concerned a reference for a preliminary ruling from a court which had been called upon to authorise enforcement and which Observations of the parties was thus sitting at first instance. The reference for a preliminary ruling in that case was considered inadmissible 12.

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32. Referring to the the Opinion in Case be governed by the courts of another 220/95, 14 the applicant argues that the Member State. A refusal by the Italian term 'public policy' could only be applied court to recognise a French judgment, to situations which could result in very sanctioning infractions committed on grave effects on the collective sensibilities French territory, would be a violation of of a Member State. The present case is, French sovereignty. however, only concerned with whether an error' of interpretation is capable of violat- ing public policy. This cannot be the case.

36. According to the defendants, it is not for the Court to substantively review the judgment at issue in the present case, 33. The applicant further submits that to but — on the contrary — to define the extend the scope of the term 'public policy' notion of 'public policy in economic mat- in such a way would lead to a judge being ters,' i.e. one of the limits set out in the able to substantively review the decision at Convention on granting leave to enforce a issue under the pretext that the foreign foreign judgment. In doing so, the term court had committed an error of interpre- must be considered as meaning interna- tation. Yet the Brussels Convention prohi- tional public policy, which also comprises bits precisely this in two places, namely Community public policy and hence the Articles 29 and 34, as is also confirmed by principles of the free movement of goods the Jenard Report. and freedom of competition.

this p o i n t , to the O p i n i o n in Case 42. It is by this reasoning that the defen- 220/95. 15 In this case, Advocate General dants come to the conclusion that it is Jacobs stated that even economic issues possible to refuse recognition of and leave were capable of calling fundamental inter- to enforce a judgment which is incompa- ests of public policy into question. tible with fundamental principles of the free movement of goods in another Mem- ber State for reasons of public policy. This is also the case for a judgment which is the expression of a legal point of view which is incompatible with the established case-law 39. Recognition of the French judgment in the State in which enforcement is sought. and thus of French law in regard to spare parts would, argue the defendants, be tantamount to sacrificing freedom of com- petition in favour of the Community-wide 43. Because Article 27(1) refers to 'public enforceability of judgments. More is at policy in the State in which recognition is stake here than merely two contradictory sought', the French Government firstly rulings, namely a systematic contradiction raises the question as to whether the Court- between two systems of case-law. is at all entitled to rule on the meaning of this term, or whether this is exclusively a matter for national courts. It then goes on to reason that, even if the term 'public policy' does not contain any Community aspect, an examination, pursuant to the 40. In the defendants' view it is an undis- Convention, of the compatibility of a puted fact, moreover, that the social order judgment with public policy is not simply of a Member State would be called into a matter of determining whether or not any question if a party were able to rely on two contradictions exist between the law contradictory judgments. The defendants applied by the State in which the judgment refer, in connection with this point, to the was handed down and the State in which judgment in the Hoffman case. 16 enforcement is sought. Were this to be otherwise, then only a small number of judgments would be enforceable and the Convention's aim would not be achieved. Article 27(1) refers to the international public policy of the State in question. In 4 1 . They argue that, if one were not to respect to the recognition of foreign judg- consider the French judgment a violation of ments this term only comprises a reduced Community law on the ground that protec- scope, that is to say, it concerns solely the tion for spare parts is a matter for the question as to whether recognition of the Member State in question, then this would judgment violates public policy. The judg- inevitably have the result that leave to ment itself may no longer be the subject of enforce could not be granted for reasons of material review. public policy in economic matters.

Community-wide enforceability of judg- 47. With respect to the term itself, the ments, also implies that Article 27(1) be Netherlands Government has stated, refer- narrowly interpreted. According to the ring to the Jenard Report and the judgment Jenard Report, the term is to be interpreted in the Hoffmann case, 17 that the scope of by analogy to that contained in more recent the term must be limited to fundamental Conventions. Here the French Government principles. This could include fundamental refers to the Hague Convention of 1 Feb- principles of the Community legal system. ruary 1971, in which recognition can be refused, inter alia, where it is manifestly incompatible with public policy. The use of the word 'manifestly' demonstrates that a judgment may be refused recognition on 48. On the question of whether the Court is the ground that to do so would violate able to determine the substance of the public policy only on the most exceptional notion of public policy, the Commission is of occasions. of the opinion that in an area such as that of the Brussels Convention it is not possible to leave the interpretation of the scope of a term that is capable of having far-reaching consequences in regard to attaining the underlying aim of the Convention in the sole hands of national authorities. Accord- ing to the Commission, it was precisely in 45. In respect to what constitutes public order to avoid disputes in respect to policy, the French Government furthermore interpretation between the courts of the submits that Community-wide enforceabil- individual Member States that the Protocol ity of judgments may only be subject to was adopted which provides that the Court restrictions where ethical, religious or is to be responsible for ensuring uniform moral values are at issue. This is the case, application of the Convention, particularly for instance, in respect to the physical by means of preliminary rulings. It was integrity of human beings, but can surely against this background that the Court not be applied to the concepts of Commu- ruled that there must be a uniform applica- nity law in economic matters. tion in all Contracting States of the Con- vention and the case-law developed in connection therewith. 18

capable of contravening public policy. In systems are so fundamental that to enforce making this point, the Commission refers such a judgment would severely threaten to the underlying aim of the Convention, basic, indispensable principles, as well as namely the Community-wide enforceability the very underlying values of those legal of judgments. To this end the Convention systems. A court must, however, authorise relies upon the principle of mutual trust in enforcement of a judgment even when, on the judicial systems of the various Con- the basis of its own legal system, it would tracting States in question. It is for this have given a different ruling. It is no reason that no material review of a foreign different, for example, between two sepa- judgment is permitted. This can be inferred rate courts within Italy. Here also, a from Articles 29 and 34 of the Convention, judgment which is res judicata has to be as well as the Jenard Report. recognised. The same applies where the judgment has been handed down in another State.

5 1 . In respect to the substance of the term 'public policy' the Commission submits that the fact that a foreign judgment is 53. According to the Commission, it is based upon legislation which does not neither necessary nor useful to answer the exist, or which exists in a different form, question in abstract terms, and thus it has in the other State does not itself, simply limited itself to examining the matter at because of the difference, constitute a issue. The exceptional circumstance which circumstance that would allow a court to led the national court in this case to refuse recognition on the ground that it question whether it was faced with a contravenes public policy. To refuse recog- violation of public policy was an alleged nition on this ground is only possible where error of interpretation of certain provisions the differences between the two legal of Community law. Thus the problem docs not lie in the fact that the judgment rests 19 — Case C-78/95 Hendrikman and Feyen v Magenta Druck & Verlag [1996] ECR I-4943, and Case 145/86, cited in n o t e 13. 20 — Cited in note 14.

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55. The Commission then goes on to ask whether this conclusion is any different where — as is the case here — provisions 57. In answering the third question it is of Community law are involved. The first necessary to examine whether the Commission answers this in the negative Court has jurisdiction to interpret the term on the grounds that Community law does 'public policy' in Article 27(1) of the Con- not contain any particularities in compar- vention. Doubts may arise due to the ison with national law, in so far as national wording of Article 27(1), which refers to courts, according to the established case- 'public policy in the State in which recog- law of the Court of Justice, must guarantee nition is sought'. This could be a purely the legal protection available under the internal concept to be interpreted by the provisions of national as well as Commu- relevant national court. nity law with equal effectiveness. Any errors of interpretation may be challenged by appeals to the superior courts in either case.

58. Article 1 of the Protocol provides, 56. At the hearing the Commission even however, that the Court is to have jurisdic- went so far as to ask whether considera- tion to rule on the interpretation of the tions pertaining to economic matters could Convention. This jurisdiction thus extends be included in the concept of 'public to the Convention in its entirety, as no

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61. Thus the Convention has established a system of recognising foreign judgments which is based upon trust in the legal system of the other State, in order to ensure the free movement of judgments 23 . To deny 59. In respect to the question itself, the recognition of a foreign judgment can referring court would like to know whether therefore only be permissible in exceptional the judgment at issue is contrary to public cases. From this reasoning it follows that policy, in other words it would like to know the concept of 'public policy' may only how the concept of public policy is to be operate in exceptional cases. 24 This must interpreted in this context. Article 27 lists be borne in mind when interpreting this generally the reasons for not recognising a term. Were the entirety of a State's law to judgment. It represents an exception clause, belong to its public policy, then Commu- since, as stated in its preamble, the Con- nity-wide enforcement of judgments would, vention is intended to facilitate recognition for all practical purposes, cease to exist. of judgments and to introduce an expedi- Any judgment could be refused recognition tious procedure for securing their enforce- where its enforcement would be contrary to ment. Mutual recognition and enforcement any legal provision in the other State. The of judicial decisions is thus to be ensured, concept of public policy can therefore thereby strengthening the legal protection comprise only fundamental principles. The of persons residing in the Community. fact that the ruling was handed down on

the basis of another, differing legal system interpreting provisions of Community law is not, in itself, sufficient to constitute a equally applicable in both States. The violation of public policy. Commission is of the opinion that this does not constitute an exceptional case, i.e. one that severely threatens fundamental inter- ests of the national community. In such a case there is always the possibility of 62. As has already been demonstrated, an appealing the judgment in the State in error of interpretation by the initial court is question. not, in itself, sufficient grounds for refusing recognition. This also applies in respect to errors of interpretation of Community law, because, as correctly pointed out by the Commission, Community law does not play any exceptional role in this regard. The Court has consistently held that national courts are required to ensure the legal protection which individuals derive from the direct effect of Community law. 25 65. The Commission is right in so far as it observes that a refusal to recognise a foreign judgment because of an error of interpretation would probably not be a typical case of non-recognition of a judg- 63. To summarise, one may affirm that ment for reasons of public policy. There public policy is not violated by a foreign would no doubt be such a case where a judgment solely because it was handed judgment given under foreign law could not down on the basis of another, differing possibly be enforced due to irreconcilable legal system, or because of an error in differences in the fundamental attitudes of interpretation. Any such 'errors' in a ruling the State in which enforcement was sought. must be accepted and leave to enforce The issue in the present case, however, is granted. The concept of public policy must merely that a court is said to have com- thus be limited to fundamental principles, mitted an error of interpretation when and a refusal to recognise a foreign judg- handing down a judgment. In such an ment on that ground can only be permitted event it is possible to appeal against the in those cases where enforcement is com- judgment in the State of origin, but this pletely incompatible with those fundamen- does not necessarily lead to the judgment tal principles. being quashed. In the present case the French judgment was indeed upheld on appeal in France. Judgments which are upheld on appeal or against which no appeal is filed, became res judicata and must be recognised in spite of any 'error'. 64. In this context the Commission points Res judicata of a judgment can be set aside out that it is the referring court's view that only with great difficulty. But to refuse to the French court committed an error in grant leave to enforce that judgment by invoking the public policy of the State in which recognition is sought would, in 25 — Case C-312/93 Peterbroeck v Belgian State [1995] ECR I-4599. effect, be to do precisely that.

66. Erroneous rulings can also be handed in its order for reference, that the protec- down and acquire res iudicata in the State tion of designs and models on automobile in which recognition is sought. In other bodyparts must be considered compatible words, these judgments would also have to with Italian law. They state that, at that be recognised in that State despite their time, the principle of protecting car body- errors. Recognition of foreign judgments parts by means of industrial and intellectual thus cannot in itself constitute a breach of property rights had also been confirmed by the public policy of the State in which all Member States concerned and by the recognition is sought. Commission. This means that the legal point of view in Italy, as now presented, which allegedly renders enforcement of the French judgment impossible, was not always valid. It was previously much closer to the French legal point of view. The latter can therefore not be considered as standing in such stark contradiction to the former that enforcement of the contested judgment 67. This problem is further accentuated in would breach fundamental principles. A the present case by the fact that an alleged violation of public policy can therefore not erroneous interpretation of Community be entertained in the present case. law is at issue. Community law is applic- able in both States, taking precedence over any potentially contradictory provisions of national law. Thus there can not be any fundamental differences in legal points of view. Nevertheless, it cannot be completely ruled out that because of such an erroneous Article 27(3) of the Convention interpretation the enforcement of the judg- ment could breach fundamental principles, including those of Community law. This is however, in the situation described, only conceivable in the most exceptional of cases. There would have to be a clear Observations of the parties violation of fundamental principles. In the present case it is even questionable whether freedom of competition and the free move- ment of goods constitute such fundamental principles. In respect to the free movement of goods, for example, Community law already provides restrictions for reasons of 68. The French Government points out — internal public policy, which is understood in the alternative — that in the order for in broader terms than public policy under reference there is a brief mention of a the Convention. Nor can a very blatant judgment of the Tribunale di Milano which violation be concerned here since, as the could stand in the way of enforceability defendants have themselves pointed out, under Article 27(3). However, because the the domestic legal situation in Italy has referring court raised no questions in this changed. The defendants note that the regard, the Court of Justice is not required referring court in the Cicra case had stated, to examine the matter any further.

72. However, the order for reference does not contain sufficient information in order 70. The order for reference mentions an to decide whether Article 27(3) of the Italian judgment which is in contradiction Convention in fact relevant in the present to the French judgment and thus refers to case. Article 27(3). However, because the ques- tions referred relate expressly to Arti- cle 27(1), only this provision should be examined here. It should, nevertheless, be noted at this point that in the event of incompatibility with an Italian judgment within the meaning of Article 27(3), the public-policy exception under Article 27(1) E — Questions 1 and 2 would not be applicable.

26 — This would be the case here if it ruled differently on the same issue, or if it relied on premises that were incompa- 73. In view of the answer to Question 3, tible with the res judicata or judicial effects of the Italian judgment. Questions 1 and 2 need be considered only 27 — Case 145/86, cited in note 13, paragraph 21. on an alternative basis.

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79. Furthermore, the original judgment 82. The French Government further holds was handed down at a time when harmo- that, because in the present case the refer- n i s a t i o n of n a t i o n a l p r o v i s i o n s w a s ring Court is only concerned with the assumed to be just around the corner. enforcement of a judgment within the Convention, it is only entitled to submit questions on the interpretation of the Convention.

80. By way of an additional important argument in favour of re-examining the problem at issue, the defendants point to 83. The Court is also obliged, according to the recent case-law of the Court which no the French Government, to declare the longer distinguishes between the existence questions referred to it inadmissible, and the use of a protective right 31, or because it has already answered them in which extends the notion of exercising such the Gera 3 4 case. a right. 3 2

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In answer to Question 1 the Directive, which confirms the existing rules in force in the Member States for a transitional period of at least three years. Recital 20 in the preamble to the Directive, Observations of the parties which states that Article 14 is in no case to be construed as constituting an obstacle to the free movement of a product, does not permit any other conclusion either. It merely recalls Articles 30 and 36 of the 89. The applicant refers here to the Cicra Treaty, which are still applicable. judgment from 1988 and the conclusion arrived at by the Court on that occasion, namely that protection of designs and models, in the absence of harmonisation of laws, was subject to national rules. 35 At that time the Court came to the conclusion that the rules on the free movement of goods did not preclude the application of 9 1 . The applicant furthermore observes national rules which allow a car manufac- that the facts underlying the dispute go turer who holds protective rights on an back to 1985. As regards the cases cited by ornamental design in respect of spare parts the referring court, 38 these too do not to prevent third parties from manufactur- permit any other conclusion. ing the protected parts. 36

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93. The defendants observe that protection favour and thereby put an end to the afforded to individual components of the mischief in this area. bodywork of a car must be considered a measure having equivalent effect within the meaning of Article 30 of the EC Treaty. Furthermore, such a practice is not justified under Article 36, because it consists of a disguised restriction of trade. In support of 96. The Netherlands Government first this statement the defendants reason that refers to the Cicra judgment and then there is an abuse of such protection where examines whether the more recent case- it is extended to an object which is not law of the Court cited in the reference for a suited to such protection. This is even more preliminary ruling 39is capable of altering the case, because the French court failed to the conclusions arrived at in that case. It examine whether the conditions for afford- answers this in the negative on the ground ing such protection had been fulfilled in that it is not apparent, from the informa- this particular case. tion provided in the order for reference, that the French rules in respect to industrial and intellectual property are discrimina- tory.

94. The defendants reason that, although 97. The Commission first makes general the Court ruled in the Cicra case that it is statements on Articles 30 and 36 and for the national legislature to decide which observes, on the basis of the Cicra judg- parts could be subject to protection, this ment, that the Court has already ruled that discretionary power does not go so far as to no disguised restriction on trade is extend protection to products which, involved. There have been no subsequent according to the spirit and purpose of changes in regard to the case-law or design and copyright laws, do not deserve legislation which could change the conclu- such protection. sion arrived at in that judgment. The cases cited in the order for reference are of no relevance here.

Opinion are allowed by Article 36 of the Treaty only subject to the express proviso that they do not constitute a means of arbitrary discri- mination or a disguised restriction on trade between Member States. 42 However, it was precisely this point that the Court had already examined in the Cicra judgment in Case 53/87, ruling that in light of the 99. Because the wording of the first ques- documents submitted to it, the exclusive tion in the Cicra case is almost identical to rights in respect of car bodywork compo- that submitted in the present case, the nents was not intended to favour national Court has already answered the referring products. 4 3 On this point, the 1992 ruling court's first question in the Cicra judgment, does not go any further than the 1988 Cicra at which time it concluded that there was judgment. no incompatibility with Community law. It is now argued that a new tendency has become apparent from the more recent case-law of the Court. The order for reference refers to the judgment of the Court in Case C-30/90. 40 Here the refer- 101. Moreover, it should be noted that in ring court relies mostly upon the Court's Case C-30/90 it was essentially the fact that statement that 'the provisions of the Treaty, national provisions distinguished between and in particular Article 222 according to the manufacture of a product on national which the Treaty in no way prejudices the territory and the importation of that pro- rules in Member States governing the duct from the territory of another Member system of property ownership, cannot be State, thereby placing imports at a disad- interpreted as reserving to the national vantage, which was contested. 44 It was on legislature, in relation to industrial and the grounds of this discrimination that the commercial property, the power to adopt Court ruled that the United Kingdom had measures which would adversely affect the violated its obligations under Article 30 of principle of free movement of goods within the EC Treaty. It is, however, not apparent the common market'. 41 from the documents provided by the refer- ring court — which it must be said do not provide much detail — that foreign spare parts manufacturers are discriminated against in this manner in the present case.

concerned with whether the Council was 105. The defendants are of the opinion that able to adopt a regulation on the creation a further difference in respect to the of a supplementary protection certificate situation in the Cicra case is that the for medicinal products, even though the present case also involves the granting of Court had ruled, in a 1992 judgment — the copyright protection. In this regard, how- judgment in Case C-30/90 — that it was ever, reference should be made to the for the national legislature to determine the judgment in Joined Cases 55/80 and conditions and rules regarding the protec- 57/80. 47 Here the Court ruled: tion conferred by patents. The Court ruled that 'neither Article 222 nor Article 36 of the Treaty reserves a power to regulate substantive patent law to the national 'However, Article 36 of the Treaty provides legislature, to the exclusion of any Com- that the provisions of Article 30. to 34 shall munity action in the matter'. 46 not preclude prohibitions or restrictions on imports justified on grounds of the protec- tion of industrial and commercial property. The latter expression includes the protec- tion conferred by copyright ... '. 48

103. The present case, however, is not 106. In the area of Articles 30 and 36 no concerned with whether the Community distinction is therefore to be made between legislature was allowed to adopt a certain the protection of industrial and commercial harmonisation measure. The problem is property and copyright. For this reason rather that even following the adoption of there is no visible change in case-law, Directive 98/71 harmonisation has not legislation or in the facts which would taken place in the area of spare parts. This justify any deviation from the ruling han- judgment too would therefore not seem to ded down in the Cicra case. indicate a change in the Court's case-law as against the 1988 Cicra judgment.

as the Court ruled in that case that a 109. The applicant is of the opinion that dominant position could result solely from the Magill judgment 4 9 referred to by the the fact that protective rights in respect of national court confirms the principles set ornamental designs on car bodywork com- out in the 1988 Cicra judgment and that ponents had been obtained, the applicant the former even expressly refers to the observes that this is not the case here. In latter, as well as to the judgment in Case support of this reasoning it states that the 2 3 8 / 8 7 . 5 0 In the Magill judgment the Court car market cannot be separated from the ruled that the exercise of an exclusive right market for spare parts. This market is by the proprietor may, in exceptional characterised by strong competition, but a circumstances, involve abusive conduct. 5 1 dominant position is not automatically Such exceptional circumstances could be achieved because of protective rights in the introduction to the market of a new respect of ornamental designs on particular product for which strong potential demand car bodywork components. In denying the exists, or in the unjustified refusal to grant existence of a dominant position one must licenses and finally in the creation of a also dismiss the notion of an abuse thereof. derivative market in which all competition is excluded. The normal exercise of an exclusive right by the proprietor of a protective right for designs and models, which consists of opposing the manufac- ture of components by third parties, could, argues the applicant, under no circum- stances represent one of the exceptional circumstances referred to in the Magill case.

grant licenses for the manufacture of spare 114. The Netherlands Government points parts. An undertaking which enjoys a out that the order for reference contains dominant position has a special responsi- only limited information. It considers it- bility, which is why it should not be improbable, however, that in this case the allowed to restrict competition in any form. introduction of a new product is being impeded by the refusal to grant licences. Moreover, research and development require significant investment, so that the proprietor of a protective right has a 111. An ornamental design which does not legitimate interest in recuperating these fulfil the necessary requirements and which costs. Were he to be denied this possibility, was obtained in an abusive manner could then significant price increases would not, argue the defendants, fulfil the same ensue. Regarding the question as to whe- function as the rights referred to by the ther car manufacturers have reserved a Court in the Cicra judgment. This is even derivative market to the exclusion of all more the case because it is not a single competition, the Netherlands Government ornamental design, but rather a widely is of the opinion that a distinction must be spread practice which is involved. The drawn between the market for manufacture rights were furthermore obtained in an of spare parts, the market for their sale and abusive manner in France, without exam- the market for their consumption. It further ining whether the requirements had been observes that the manufacture of spare fulfilled, and then extended to other Mem- parts is protected by exclusive rights in ber States. respect of ornamental designs. Regarding the sale of spare parts, the Netherlands Government refers to Regulation (EC) No 1475/95. 52 The lawfulness of exercis- ing a dominant position must be judged according to whether or not the freedom of 112. The defendants finally undertake a the (authorised) distributors and other sell- detailed analysis of the Magill judgment ers is guaranteed. and come to the conclusion that the similarities between the facts which formed the basis of the Magill judgment and those in the present case make any further 115. The Netherlands Government further comment superfluous. An abuse of a domi- observes that it would seem that the nant position must therefore, in the defen- manufacturers had reserved the market dants' opinion, be acknowledged. for the consumption of spare parts. How- ever, such parts should also be available to independent repairers. The Government observes that, in the final analysis, it is for national courts to assess whether the facts allow one to determine that there is abuse 113. The Belgian and Netherlands Govern- of a dominant position. ments also undertake an analysis of the Volvo and Magill judgments in this con- text. The Belgian Government comes to the 52 — Commission Regulation (EC) No 1475/95 of 28 June conclusion that there is no reason to change 1995 on the application of Article 85(3) of the Treaty to certain categories of motor vehicle distribution 'and the answer to the question as given in the servicing agreements (OJ 1995 L 1 4 5 , S. 25). (Article 85 of the EC Treaty, mentioned in the title of the regulation, is Cicra judgment. now Article 81 EC.)

116. By way of answering the second liable to affect trade between Member question the Commission, finally, refers to States. Such conduct is not apparent in the 1988 Cicra judgment as well as a the present case, insofar as the sparse further judgment from the same year, information contained in the order for namely the Volvo judgment in Case reference can be relied upon. In the present 238/87. It comes to the conclusion that, proceedings Question 2 should therefore be on the basis of the very sparse information answered in the same manner as in the contained in the order for reference, the previous judgment. applicant cannot be accused of conduct of the kinds listed as abusive in the above mentioned cases. Furthermore, the Com- mission observes that the scope of the questions referred to the Court in this case is much more restricted than in the Volvo case. Question 2 must therefore be 118. The defendants, however, also con- answered to the effect that there is no sider it an abuse of a dominant position abuse of a dominant position. that exclusive protective rights are granted in respect to spare parts, which do not, in themselves, have any independent aesthetic value. As has been stated several times, the establishment of requirements for confer- ring protective rights in respect of designs and models is a matter for Member States. Opinion Where a manufacturer obtains the protec- tive rights in respect of bodywork compo- nents pursuant to the rules of a Member State, then this does not constitute abusive conduct, even though the defendants are of the opinion that the components in ques- 117. The wording of this question is also tion do not deserve protection. Directive largely similar to that of the second ques- 98/71 did not alter this situation, as tion in the Cicra case. Reference must Article 14 provides that 'Member States therefore firstly be made to that judgment, shall maintain in force their existing legal in which the Court came to the conclusion provisions relating to the use of the design that the simple acquisition of rights in of a component part used for the purpose respect of ornamental designs for body- of the repair of a complex product so as to work components for automobiles did not restore its original appearance' for as long constitute the abuse of a dominant position as amendments to the directive are not within the meaning of Article 86 of the adopted on a proposal from the Commis- Treaty. As examples of abusive conduct in sion. the exercise of such exclusive rights the Court named the arbitrary refusal to deliver spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in 119. With respect to the distribution of circulation, provided that such conduct is compulsory licences as mentioned by the

defendants, the Court ruled, in Case weekly television guide existed in Ireland or 238/87, 53 also in 1988, that 'the right of in Northern Ireland. 55 the proprietor of a protected design to prevent third parties from manufacturing and selling or importing, without its con- sent, products incorporating the design constitutes the very subject-matter of his exclusive right. It follows that an obligation imposed upon the proprietor of a protected design to grant to third parties, even in return for a reasonable royalty, a licence for 121. The Court of First Instance had ruled the supply of products incorporating the that, while it was plain that the exercise of design would lead to the proprietor thereof the exclusive right to reproduce a protected being deprived of the substance of his work was not in itself an abuse, that did exclusive right, and that a refusal to grant not apply when, in the light of the details of such a licence cannot itself constitute an each individual case, it was apparent that abuse of a dominant position. 54 It would this right was being exercised in such ways follow that also the applicant in the present and circumstances as in fact to pursue an case would not be obliged to grant com- aim manifestly opposed to the objectives of pulsory licences. Article 86. In that event, the copyright could no longer be considered as being exercised in a manner which corresponded to its essential function, within the meaning of Article 36 of the Treaty, which was to protect the moral rights in the work and ensure a reward for the creative effort, while respecting the aims of, in particular, 120. The defendants, however, invoke the Article 86. From this the Court of First- Magill case in order to argue that the abuse Instance concluded that the primacy of of a dominant position must be acknowl- Community law, particularly as regards edged in the present case. The following principles as fundamental as those of the facts formed the basis of the Magill case: free movement of goods and freedom of three television stations whose programmes competition, prevailed over any use of a could be received by most households in rule of national intellectual property law in Ireland and between 30 and 40% of house- a manner contrary to those principles. 56 holds in Northern Ireland allowed only their own programme listings to be pub- lished and opposed any reproduction thereof by third parties by claiming copy- right protection for their own weekly programme listings under national law. Either they published their own weekly television guide, or they did so through a 122. The Court of First Instance acknowl- company established for this purpose. Thus edged the existence of such abusive con- at the material time no comprehensive duct, in that the television companies, by

reserving the exclusive right to publish their that a refusal to grant such a licence in the weekly television programme listings, were case of automobile spare parts does not in preventing the emergence on the market of itself constitute abuse of a dominant posi- a new product, namely a general television tion. 60 magazine likely to compete with their own magazines. They were thus using their copyright in the programme listings in order to secure a monopoly in the deriva- tive market of weekly television guides in Ireland and Northern Ireland. This judg- ment was upheld on appeal by the Court of Justice. 124. For the particular circumstances of the Magill case the Court of Justice con- firmed the existence of abusive conduct. In doing so it particularly emphasised the fact that there was, according to the findings of 123. Even if a distinction between the the Court of First Instance, no actual or existence and the exercise of an industrial potential substitute for a weekly television property right is no longer drawn to the guide which would have enabled users to extent that restrictions on the free circula- decide in advance which programmes they tion of goods are considered justified by the wished to follow and arrange their leisure function of trademark law, 5 7the Court activities accordingly. Moreover, it was again confirmed in the Magill ruling, in pointed out that the Court of First Instance which it referred to the Volvo judgment, had established that there was a specific, that in the absence of Community standar- constant and regular potential demand on disation or harmonisation of laws, deter- the part of consumers. 61 mination of the conditions for granting protection of an intellectual property right is a matter for national rules. Furthermore, the exclusive right of reproduction forms part of the author's rights, so that refusal to grant a licence, even if it is the act of an undertaking holding a dominant position, cannot in itself constitute abuse of a dominant position. 58 The Court then goes 125. The issue in the present case is, on to state — again referring to the Volvo however, not that the exercise of protective judgment — that the exercise of an exclu- rights impeded the introduction of a com- sive right by the proprietor may, in excep- pletely new product. Automobile spare tional cases, involve abusive conduct. 59 parts cannot represent such a new product, Thus the Magill judgment did not bring because they must be identical to the about any change to the case-law in original components. For this reason, one comparison with the Volvo judgment. In cannot deduce from the Magill judgment the latter case the Court had already ruled that Question 2 must be answered in any other way than in the Cicra and Volvo judgments in 1988. 57 — Case C-10/89 CNL-SUCAL v HAG GF [1990] ECR I-3711. 58 — Magill, cited in note 32, paragraph 49. 60 — Case 238/87, cited in note 50, paragraph 8. 59 — Ibid., paragraph 50. 61 — Magill, cited in note 32, paragraph 52.

129. When making the planned future amendments to the directive, the legislature will have to examine whether the granting of compulsory licences should not indeed 127. It is likewise true that the mere be taken into consideration. This would acquisition of an ornamental design right seem especially appropriate because not all in respect of automobile bodywork com- spare parts play an important role in ponents does not constitute abuse of a respect to the external appearance of an dominant position within the meaning of automobile, and because the intellectual Article 86 of the Treaty. The same applies achievement of the design of each compo- for the exercise of the exclusive right nent also tends to vary and may, in inherent to such protective rights, insofar individual cases, not be of a standard as this does not entail abusive conduct such which would justify a restriction of free as setting prices for spare parts at an unfair trade. Yet for as long as a corresponding level or the arbitrary refusal to deliver spare European regime has not been adopted, one parts to independent repairers. must accept the result as outlined above. This means that — on the basis of the limited information provided — the French court cannot be said to have wrongly interpreted Articles 30 to 36 and 86, and moreover — even if this had been the case — it would not have contravened general fundamental legal principles severely enough to be considered a viola- tion of public policy. 128. As has already been mentioned, Direc- tive 98/71 on the legal protection of designs 62 — Article 1 4of Directive 98/71.