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6. Hence we are not faced with the situa- the CICRA and Maxicar 2and Renault 3 tion which forms the subject of the bulk of cases, which likewise concerned spare parts the Court's existing case-law, namely that used for repairing motor vehicles. in which the goods at issue are intended to be imported into, that is to say placed on the market in, the territory of a Member State whose legislation makes it possible to obtain an exclusive right. 11. There can be no doubt that these two cases differ fundamentally from the present case.

15. Since the purpose of the action is a declaration that there has been a breach of the provisions of the Treaty on the free movement of goods, it is necessary to 19. The defendant mentions various other determine, first of all, whether the national decisions which confirm that case-law, in measures in question are capable of particular, a judgment of the Cour de obstructing intra-Community trade. Cassation of 17 February 1999.

16. Both the Commission and the defen- 20. In these circumstances, I find myself dant consider this to be the case. The obliged to agree with the parties that the national provisions cited by the Commis- detention procedures criticised by the Com- sion authorise the customs authorities to mission do, in fact, constitute a measure detain goods, on an application from the having effect equivalent to a quantitative intellectual property right holder, when the restriction since they have the effect, at latter considers that his right has been best, of delaying the passage of the goods in infringed. transit and, at worst, they could constitute the essential preliminary to the prohibition of the goods' passage, or even their con- fiscation.

17. The goods may be detained for up to 10 days. If, before this period expires, the holder of the right initiates legal proceed- ings, he can have the application of the measure prolonged. Ultimately, at the end 21. However, the Commission and the of those proceedings, the court may order defendant adopt different analyses of the the confiscation of the goods at issue. precise nature of the measure in question.

29. In any event, in the present case, this finding is of only relative importance since, as noted by the Commission in the reply, the defendant has not invoked in its defence 25. The Commission responds by noting the various 'overriding requirements' to that the defendant is unable to quote any which it had referred in the pre-litigation specific case in which the goods detained procedure. were manufactured in France and can only quote one case in which they might have been.

Possibility of justifying the obstacle 26. It must be noted, however, that the Commission is unable to cite a single relevant provision to show that the deten- tion measures in question can be applied 30. Thus, the dispute relates only to the possibility of justifying the measures in question on the basis of Article 36 of the 4 — Case 120/78 Rewe v Bundesmonopolverwaltung für Treaty, since there is no relevant secondary Branntwein [1979] ECR 649, 'Cassis de Dijon'. legislation which might provide a solution.

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31. Clearly, and on this the parties are Accordingly, it is indeed to the Treaty that agreed, no solution is offered by Directive we must refer in order to assess the 98/71/EC of the European Parliament and compatibility of the national provisions of the Council of 13 October 1998 on the with Community law. 6 legal protection of designs. 5

34. Clearly, the abovementioned Arti- 32. With respect to the protection of spare cle 14, relied on by the defendant, does parts used for the repair of motor vehicles, not imply that any measure maintained in Article 14 of the Directive reads as follows: force by a Member State is automatically consistent with Community law, since that provision cannot exempt the national authorities from compliance with the Treaty.

37. Admittedly, as pointed out by the counterfeit goods from non-member coun- Commission, the defendant acknowledges tries. that the fact that a measure is subject to notification under this procedure in no way establishes a presumption that the measure is valid. However, it considers that this decision shows that a national control measure is not prima facie contrary to Community law. 41. In particular, Regulation No 3295/94 allows the holder of a right to lodge an application in writing with the customs authorities for them to take action where counterfeit goods are entered for free circulation, export or re-export or are 38. Even if this deduction is correct, nor found when checks are being made. does it follow that such a measure could never be contrary to Community law. Each particular case should be examined in the light of the provisions of the Treaty and the case-law of the Court.

42. The defendant also cites the Opinion of the Advocate-General in Polo/Lauren 9 which, it says, confirms that Regulation No 3295/94 authorises Member States to 39. The French Government also seeks prevent the transit across their territory of support for its case in Council Regulation counterfeit goods originating in a non- (EC) No 3295/94 of 22 December 1994 member country which are intended for laying down measures to prohibit the re-export to another non-member country. release for free circulation, export, re- export or entry for a suspensive procedure of counterfeit and pirated goods. 8

43. However, the French Government accepts the Commission's argument that Regulation No 3295/94 applies only to 40. It argues that the detention measures goods from non-member countries, which, criticised are consistent with the provisions unlike goods lawfully manufactured in a of that regulation which grants Member Member State, do not benefit from the States wide powers to protect the rights of principle of free movement of goods. intellectual property right holders against

47. The French Government then shades its argument by noting that the action by the customs authorities for which Regulation 50. Moreover, the application must relate No 3295/94 provides can be taken only if to a precisely defined situation, that is to importation infringes the law in the Mem- say one in which the goods in question are ber State in which the intervention of the entered for free circulation, export or re- authorities is requested. It follows that export or found when checks are made on there is nothing to prevent a non-member goods placed under a suspensive procedure country operator from obtaining the release within the meaning of the Community into free circulation in another Member Customs Code.

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51. Both sides agree that in French law the the specific subject-matter of the industrial possibility of detaining the goods is not property protected. conditional upon the existence of such a situation.

56. In this respect, the French authorities' reliance on the Court's case-law on trade 52. It must therefore be concluded that the mark law is not directly relevant inasmuch detention measures criticised by the Com- as the spare parts in question did not mission have a much wider scope than involve counterfeit trade marks. those for which Regulation No 3295/94 provides and, accordingly, cannot be regar- ded as justified by the latter's objectives.

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upheld in IHT Internationale Heiztechnik that would be contrary to the principle and Danziger, 10 cannot have the effect of upheld by the Court according to which it protecting that right on other markets. In is for each national legislature to determine the present case, the goods in question are the goods eligible for industrial protection. neither manufactured in France nor inten- The extra-territorial effect would be further ded to be placed on the French market. enhanced by France's geographical position Therefore the detention measures applied at the centre of the European Community. by the French authorities cannot be inter- Thus, it would be enough for an operator preted as protecting the specific subject- to acquire industrial protection in France to matter of the right as defined by the Court. assure himself of exclusive rights through- out the Community, to the detriment of goods lawfully manufactured in Spain and Portugal.

59. Admittedly, in CICRA and Maxicar, the Court considered that a prohibition not only on importing, but also on exporting the goods infringing the exclusive right was 62. In the Commission's view, these exam- justified, but the judgment makes it clear ples show that the balance to be struck that it was manufacture in the national between the protection of industrial prop- territory, in breach of the exclusive right, erty and the principle of free movement of which could lawfully be prohibited, no goods, to which the Keurkoop judgment matter whether the goods were manufac- refers, 11 would clearly be upset, to the tured for sale on the domestic market or for detriment of free movement. export.

measures are not disproportionate since the vehicle spare parts in transit, in cases in goods are detained only temporarily and which copies of designs are placed on the are preserved intact. market without the consent of the holder of the right, actions to prevent the import, export, transit or first sale of those goods in the national territory constitute no more than the legitimate exercise of industrial property rights. 65. In the field of industrial property, the Court has established a balance between the free movement of goods and the legitimate protection of intangible property rights. Thus, it has ruled that a measure is proportionate, and hence lawful, if inten- ded to protect the specific subject-matter of the property right in question. 68. In support of this analysis, the French Government cites a passage from the Com- mission's observations in the new Renault case, C-38/98, currently pending before the Court, which, it says, reflects the gist of the operative part of the Court's judgment in CICRA and Maxicar: 'as Community law 66. Where designs are concerned, the now stands, Articles 30 and 36 of the benchmark should be the judgment in Treaty must be construed as not precluding Keurkoop. In that case the Advocate Gen- national legislation which allows the holder eral, taking up the observations of the of specific industrial property rights in Commission, defined the specific subject- spare parts, which together make up the matter as 'the exclusive right of the pro- bodywork of a type of motor vehicle prietor... to market a product of a given... already placed on the market, to exercise design'. Thus, measures taken by the pro- those specific exclusive rights by prohibit- prietor of the rights form part of the ing third parties from manufacturing, sell- specific subject-matter of the ownership of ing, importing or exporting non-original the design when they are intended to replacements for those parts and by invok- enforce his exclusive rights. ing the protection of the courts in order to make such prohibitions effective'.

73. Accordingly, the fact that the Court has ruled that the right to prevent manufacture is part of the very essence of the intellectual property right cannot be taken to mean that The specific subject-matter of the design the same would apply to the right to right prevent mere transit.

77. Like the parties, I shall concentrate my analysis on the protection of the design 74. For similar reasons, I am not convinced by the arguments which the defendant seeks to base on Keurkoop. In that case 12 — Case 78/70 Deutsche Grammophon v Metro [1971] the Court ruled that, in principle, the right ECR 487.

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right since it follows from the documents 80. In any event, it is clear that the specific before the Court that the motor vehicle subject-matter of the right is the power to parts which form the subject of the com- prevent the 'use' of the product. What does plaints that led the Commission to bring its this concept involve? action did not involve a counterfeit trade mark and were protected by such a right.

81. Obviously, the manufacture of goods identical, at least in appearance, to the product protected involves a 'use' of the 78. Initial guidance is provided by Direc- design. Indeed, such manufacture presup- tive 98/71 itself. 13 Thus, Article 12(1) of poses the copying of the appearance of the the Directive, entitled 'Rights conferred by product, that is to say precisely the char- the design right', reads: acteristic covered by the design right.

is inseparable from its appearance, which 87. Thus, it is only within the context of a the right is intended to protect. subsequent marketing operation that the transportation of the goods is likely to harm the interests of the right holder. On the other hand, considered in isolation, it has no bearing on those interests and 84. Accordingly, it is perfectly logical that therefore, unlike manufacture and market- the holder of the right should be entitled to ing, cannot fall within the protection of the obtain the payment of royalties from those specific subject-matter of the right. to whom he grants a manufacturing or distribution licence. On the other hand, it is much more difficult to imagine him per- suading a carrier to pay him royalties for the honour of transporting goods protected by his right. 14 88. This analysis is confirmed by all the case-law of the Court in the field of intellectual property. Whatever the right concerned, 15 in defining the specific sub- 85. Thus, there is an intrinsic difference ject-matter of that right the Court has between mere transportation, on the one always made explicit reference to placing hand, and manufacture or marketing, on on the market. the other.

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90. I can see no reason for setting aside all 94. Thus, to accept this argument would be these precedents and granting to designs to give effect in the territory of that other protection more extensive than that accor- Member State to the prohibition in force in ded to, for example, copyright or patents, France. As the Commission explains, this especially as the design directive itself also would constitute an extra-territorial effect highlights manufacture and marketing. of French law, contrary to the principle of territoriality of intellectual property law. This principle goes to the very essence of the right, which must be regarded as a monopoly in the territory to which it applies, and is enshrined in the case-law of the Court. 17

91. It follows that national measures aimed not at preserving the exclusive right of the proprietor to manufacture or market the object protected but at preventing the mere transit of the object through the territory to 95. Moreover, it would be paradoxical, in which the right applies cannot be justified this instance, to allow an operator to on the grounds that they protect the prevent the transportation of goods across specific subject-matter of the intellectual one Member State and thus, indirectly, the property right. marketing of those goods in another, where it was lawful, when transportation is inci- dental to marketing. That would be putting the cart before the horse.

92. It could, of course, be argued that, in the present case, the measures in dispute are nevertheless aimed at protecting the 96. The defendant also claims that the specific subject-matter of the right since, by detention measures form part of the pro- resorting to them, the holder of the right tection of the specific subject-matter of the can prevent the goods concerned from intellectual property right because, in any reaching another Member State in which event, the latter includes the right of the they are to be marketed. holder to put the protected goods into circulation for the first time.

100. Thus, if, as in the present case, goods 103. The action brought by the Commis- are moved physically across the territory of sion therefore seriously jeopardises Com- one Member State before being put on the munity's objectives. market in another, then, contrary to the view taken by the defendant, it is in the second State that the first 'putting into circulation' takes place.

104. More specifically, the French Govern- ment explains that the detention measures, with the possibility of subsequent prohibi- 101. The dubiousness of relying on a tion, are necessary to prevent any risk of purely physical interpretation of the term parts manufactured in another Member is further illustrated by the circumstances of State being clandestinely sold in France the case. Physically, the goods at issue were rather than being transported to their

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purported destination in a third Member which the right applies, an exclusive right State. which, of course, it is possible to exploit by granting licences.

105. In other words, the measures in ques- tion should not be understood as being 108. However, it follows from the settled aimed at bringing mere transit within the case-law of the Court that it is not suffi- specific subject-matter of the intellectual cient for a measure which restricts a property right, but simply as intended to fundamental freedom laid down by the safeguard the prerogatives which Commu- Treaty to be covered by one of the grounds nity law accords to the holder of the right, for exemption listed in Article 36 of the namely, as we have seen, the exclusive right Treaty; it must also be proportionate to the to manufacture and market the product objective to be achieved. 18 protected.

110. The principle of proportionality can- not be said to be observed by measures such as those at issue, taken to avoid the risk that cargo allegedly intended for the mar- 107. It is true that detention measures ket of another Member State will be put on intended solely to prevent the marketing the market in France, measures from which in France of parts manufactured without there is no escape even if it is established the consent of the holder of the right that the goods really are intended for would, indeed, form part of the protection another Member State. of the specific subject-matter of the intel- lectual property right, since that right consists of the exclusive right of the holder 18 — Case 104/75 De Peijper [1976] ECR 613, and Campus Oil to manufacture the protected product and and Others. 19 — Case 406/85 Procureur de la République v Gofette and place it on the market in the territory to Cilliard [19871 ECR 2525, paragraph 10.

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111. Moreover, the Court has already to be considered sufficient. 21 This should stressed, in Monsees, 20 the gravity of apply with even greater force to a transit measures that make transit totally impos- ban. sible.

116. I find it very hard to believe that a 112. Bans of this sort seriously impede the check based on an examination of the flow of trade across a would-be single documents accompanying the load would market. They should therefore be a mea- not be sufficient for the purpose. Such a sure of last resort and not, as in this case, a document check would clearly be a less measure of ordinary law. restrictive measure than the detention mea- sures criticised by the Commission.

competent services do not carry a single 123. In any event, the argument is imma- document which could be produced to the terial. The fact that some operators might authorities. not respect even an obligation to carry documents cannot justify prohibiting all of them from exercising a fundamental free- dom guaranteed by the Treaty. There is nothing to prevent the French authorities, within the context of a document check, from applying detention procedures to 120. This is indeed surprising. Even though those carrying no documents at all. the Commission does not refer to any general rules requiring the possession of appropriate documentation, it should be recalled that transport services are provided not only within a certain legislative and regulatory context but also on the basis of contractual arrangements, which are unli- kely not to take written form. The defen- 124. Accordingly, even if the purpose of the dant itself makes reference to the fact that detention measures at issue is considered to commercial transactions normally generate be the protection of the specific subject- documents such as order forms, contracts, matter of the intellectual property right, by delivery notes and invoices. ruling out any risk of a 'transit' operation turning into a clandestine importation, they nevertheless fall foul of Community law since they are disproportionate to the objective pursued.

121. It is clear from the file that the operators subjected to the detention mea- sures which gave rise to the complaints that led the Commission to bring its action had documents such as invoices in their posses- sion. Detention as a temporary measure?

130. The fact that, in practice, this period may be shorter is irrelevant since, in accordance with the case-law, a Member 127. It follows from the documents before State cannot invoke the existence of a the Court that, in accordance with the practice that is in accordance with Com- apparently well established case-law of the munity law in order to maintain in force a French courts, the mere transportation in provision that is not. French territory of spare parts lawfully manufactured in another Member State which are intended for marketing in a third Member State is considered to constitute the offence of counterfeiting and is there- fore liable to various sanctions, including 131. It should also be pointed out that the prohibition. check that would have to be carried out by the services concerned would not be a complicated technical examination, like that at issue in Commission v France, 22 where the Court did not explicitly consider a time-limit of 21 days for inspecting imported wine to be contrary to the Treaty. 128. That said, I am nevertheless prompted to consider whether the detention measures criticised by the Commission would be compatible with Community law if, instead of leading to a ban on transit, they had only 132. The authorities would not be required the effect of delaying the passage of goods to establish that the spare parts at issue lawfully manufactured in one Member complied with a national or Community State which were intended to be lawfully technical standard but solely to verify their marketed in another Member State, assum- origin and destination on the basis of ing that such passage were authorised once documents. This should take a matter of the true origin and destination of the goods hours rather than days. detained was established.

— declare that, by implementing, pursuant to the French Code de la Propriété Intellectuelle, procedures for the detention by the customs authorities of goods lawfully manufactured in a Member State of the European Community which are intended, following their transit through French territory, to be placed on the market in another Member State where they may be lawfully marketed, the French Republic has failed to fulfil its obligations under Article 30 of the EC Treaty (now, after amendment, Article 28 EC);

— order the defendant to pay the costs.

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