C-216/01

Rudolf Ammersin GmbH,

on the interpretation of Articles 28 EC, 30 EC and 307 EC, and Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (OJ 1992 L 208, p. 1), as amended by Council Regulation (EC) No 535/97 of 17 March 1997 (OJ 1997 L 83, p. 3),

* Language of the case: German.

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THE COURT,

— the Austrian Government, by C. Pesendorfer, acting as Agent,

— the German Government, by W.-D. Plessing and A. Dittrich, acting as Agents,

— the French Government, by G. de Bergues and L. Bernheim, acting as Agents,

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— the Commission of the European Communities, by A.-M. Rouchaud, acting as Agent, and B. Wägenbaur, Rechtsanwalt,

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2 Those questions were raised in proceedings between Bud jovický Budvar, národní podnik ('Budvar'), a brewery established in the town of České Budjovice (Czech Republic), and Rudolf Ammersin G m b H ('Ammersin'), a company established in Vienna (Austria) which runs a drink distribution business, concerning Budvar's application for an injunction prohibiting Ammersin from marketing beer produced by the brewery Anheuser-Busch Inc. ('Anheuser- Busch'), established in Saint Louis (United States), under the name American Bud on the ground that, pursuant to various bilateral agreements between the Czech Republic and the Republic of Austria, in that Member State the name 'Bud' is reserved for beer produced in the Czech Republic.

Legal background

International law

3 Article 34(1) of the Vienna Convention on Succession of States in respect of Treaties of 23 August 1978 provides:

4 The first and second paragraphs of Article 307 EC state:

'The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of this Treaty.

To the extent that such agreements are not compatible with this Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.'

5 The seventh recital in the preamble to Regulation N o 2081/92 states that 'there is diversity in the national practices for implementing registered designations o[f] origin and geographical indications;... a Community approach should be envisaged;... a framework of Community rules on protection will permit the development of geographical indications and designations of origin since, by providing a more uniform approach, such a framework will ensure fair competition between the producers of products bearing such indications and enhance the credibility of the products in the consumers' eyes'.

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2. For the purposes of this Regulation:

(a) designation of origin: means the name of a region, a specific place or, in exceptional cases, a country, used to describe an agricultural product or a foodstuff:

— originating in that region, specific place or country, and

— the quality or characteristics of which are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors, and the production, processing and preparation of which take place in the defined geographical area;

10 Since examination of an application for registration by the Commission takes a certain amount of time and since, pending a decision on the registration of a name, a Member State must be allowed to confer transitional national protection, Regulation N o 535/97 inserted the following text after the first subparagraph of Article 5(5) of Regulation N o 2081/92:

'That Member State may, on a transitional basis only, grant on the national level a protection in the sense of the present Regulation to the name forwarded in the manner prescribed, and, where appropriate, an adjustment period, as from the date of such forwarding;...

Such transitional national protection shall cease on the date on which a decision on registration under this Regulation is taken....

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The consequences of such national protection, where a name is not registered under this Regulation, shall be the sole responsibility of the Member State concerned.

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2. If a protected name of a third country is identical to a Community protected name, registration shall be granted with due regard for local and traditional usage and the practical risks of confusion.

Use of such names shall be authorised only if the country of origin of the product is clearly and visibly indicated on the label.'

12 Article 17 of Regulation N o 2081/92 sets up a registration procedure, known as the 'simplified procedure', applicable to the registration of names already in existence on the date of entry into force of that regulation. It provides, inter alia, that within six months of the entry into force of Regulation N o 2081/92, Member States are to inform the Commission of the names they wish to register under that procedure.

13 In order to take account inter alia of the fact that the first proposal for registration of geographical indications and designations of origin which the Commission was to draw up pursuant to Article 17(2) of Regulation N o 2081/92 was not submitted to the Council of the European Union until March 1996, when most of the transitional period of five years provided for by Article 13(2) of that regulation had already elapsed, Regulation N o 535/97, which entered into force on 28 March 1997, replaced Article 13(2) with the following:

However, this derogation may not lead to the marketing of products freely within the territory of a Member State where such names were prohibited.'

National law

14 On 11 June 1976, the Republic of Austria and the Czechoslovak Socialist Republic concluded an agreement on the protection of indications of source, designations of origin and other designations referring to the source of agricultural and industrial products ('the bilateral convention').

15 Following approval and ratification, the bilateral convention was published in the Bundesgesetzblatt für die Republik Österreich of 19 February 1981 (BGBl. N o 1981/75). Pursuant to Article 16(2) thereof, the bilateral convention came into force on 26 February 1981 for an indefinite period.

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19 Point 2 of Article 5(1)B of the bilateral convention refers to beers as one of the categories of Czech products concerned by the protection established by that convention.

20 Article 6 of the bilateral convention states:

'Designations of the individual products meeting the conditions laid down in Articles 2 and 5 which enjoy protection under the agreement and which are therefore not generic names will be listed in an agreement to be concluded between the Governments of the two contracting States.'

21 Article 7 of the bilateral convention is worded as follows:

22 Article 16(3) of the bilateral convention provides that the two contracting parties may denounce the convention by giving notice of at least one year, issued in writing and through diplomatic channels.

23 In accordance with Article 6 of the bilateral convention, an agreement on its application ('the bilateral agreement') was concluded on 7 June 1979. Pursuant to Article 2(1) thereof, that agreement came into force at the same time as the bilateral convention, namely 26 February 1981. It was published in the Bundesgesetzblatt für die Republik Österreich of 19 February 1981 (BGBl. N o 1981/76).

24 Annex B to the bilateral agreement states:

'Czechoslovak designations for agricultural and industrial products

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Bud jovický Budvar

...'

25 On 17 December 1992, the Czech National Council declared that, in accordance with the prevailing principles of, and to the extent provided for by, international law, the Czech Republic considered itself bound, as of 1 January 1993, by the multilateral and bilateral agreements to which the Czech and Slovak Federative Republic was party on that date.

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26 By Constitutional Law N o 4/1993 of 15 December 1992, the Czech Republic confirmed that it assumed the rights and obligations of the Czech and Slovak Federative Republic which existed under international law on the date of its dissolution.

26. Agreement implementing the Agreement between the Republic of Austria and the Czechoslovak Socialist Republic on the protection of indications of source, designations of origin and other designations referring to the source of agricultural and industrial products

Prague, 7 June 1979 (BGBl N o 76/1981).

?

The dispute in the main proceedings and the questions referred

28 Budvar markets beer, in particular under the names Bud jovický Budvar and Budweiser Budvar, and exports a beer called 'Budweiser Budvar' in particular to Austria.

29 Ammersin markets inter alia a beer called American Bud, produced by the brewery Anheuser-Busch, which it buys from Josef Sigl KG ('Josef Sigi'), a company established in Obertrum (Austria) which is the sole Austrian importer of that beer.

33 Second, Budvar asserts that the use of the designation American Bud for a beer from a State other than the Czech Republic is contrary to the provisions of the bilateral convention because, pursuant to Article 6 of that convention, the designation Bud, referred to in Annex B to the bilateral agreement, is a protected designation and is therefore reserved exclusively for Czech products.

34 On 15 October 1999, the national court granted the interim measures sought by Budvar.

35 The appeal brought by Ammersin before the Oberlandesgericht Wien (Higher Regional Court, Vienna) (Austria) against those measures was not successful and leave to appeal to the Oberster Gerichtshof (Supreme Court) (Austria) was refused. N o w that the interlocutory proceedings have ended, the Handelsgericht Wien is hearing the main application.

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36 The national court observes that before bringing the action in the main proceedings, Budvar had already brought an action before the Landesgericht Salzburg (Regional Court, Salzburg) (Austria) which was identical with regard to both its purpose and its legal basis, but which was directed against Josef Sigi.

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compliance with the quality or manufacturing standards adopted and monitored by the authorities, or the specific product characteristics. Moreover, the designation Bud enjoys 'absolute protection', that is to say, irrespective of whether there is any risk of confusion or of consumers being misled.

42 In the light of the arguments submitted to it, the national court considers that there is reasonable doubt as to the correct answers to the questions of Community law raised in the main proceedings, in particular because it is not possible to ascertain from the Court's case-law whether 'simple' indications of geographical source, which do not carry any risk of consumers being misled, also come within the scope of the protection of industrial and commercial property within the meaning of Article 30 EC.

43 In those circumstances, the Handelsgericht Wien decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:

'(1) Is the application of a provision of a bilateral agreement concluded between a Member State and a non-member country, under which a simple/indirect geographical indication which in the country of origin is the name neither of a region nor a place nor a country is accorded the absolute protection, regardless of any misleading, of a qualified geographical indication within the meaning of Regulation N o 2081/92 compatible with Article 28 EC and/or Regulation N o 2081/92, if on application of that provision the import of a product which is lawfully put on the market in another Member State may be prevented?

Admissibility of the reference for a preliminary ruling

Observations submitted to the Court

44 Budvar claims that the case at issue in the main proceedings concerns provisions of a bilateral agreement concluded by a Member State and a non-member country to which, pursuant to the first paragraph of Article 307 EC, Community law does not apply. The interpretation of such provisions comes under the exclusive jurisdiction of the national court. In those circumstances, it is neither necessary nor permissible for the Court to give a ruling on the questions referred by the national court.

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45 According to the Austrian Government, the part of the first question relating to the compatibility with Regulation N o 2081/92 of the protection enjoyed under the bilateral convention is inadmissible. The issue is hypothetical inasmuch as the order for reference contains no evidence that any of the products concerned has been registered or is intended to be registered within the meaning of that regulation.

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action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, inter alia, Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraphs 38 and 39).

48 According to Budvar, the national court's questions are not admissible because, given the applicability of the first paragraph of Article 307 EC, the case at issue in the main proceedings concerns only the interpretation of rules of national law, namely the bilateral convention and agreement ('the bilateral instruments at issue'), since Community law does not apply to that case.

49 In that regard, it need only be noted, first, that the third and fourth questions specifically concern the correct interpretation of Article 307 EC in the light of the circumstances of the case at issue in the main proceedings, while the first and second questions concern the interpretation of provisions of Community law, namely those of Articles 28 EC and 30 EC and of Regulation N o 2081/92, in order to enable the national court to determine the compatibility of the national rules at issue with Community law. There can be no doubt as to the relevance of such an examination given the possible application of Article 307 EC to the case in question.

50 As regards, next, the Austrian Government's assertion that the part of the first question which relates to Regulation N o 2081/92 is hypothetical, it must be observed that the case at issue in the main proceedings concerns Budvar's claim to a right which would result in Ammersin being prohibited from marketing certain goods under a protected designation and whose compatibility with the system established by Regulation N o 2081/92 has been called into question, irrespective of whether there has been any registration under the system instituted by that regulation. That question is therefore in no way hypothetical.

53 By its first question, the national court is asking essentially whether Regulation N o 2081/92 or Article 28 EC precludes the application of a provision of a bilateral agreement between a Member State and a non-member country, under which a simple and indirect indication of geographical source from that non-member country is accorded protection in the importing Member State, irrespective of whether there is any risk of consumers being misled, and the import of a product lawfully marketed in another Member State may be prevented.

54 That question deals with the hypothesis that the name Bud constitutes a simple and indirect indication of geographical source, that is to say, a name in respect of which there is no direct link between a specific quality, reputation or other characteristic of the product and its specific geographical origin, so that it does not come within the scope of Article 2(2)(b) of Regulation N o 2081/92 (see Case C-312/98 Warsteiner Brauerei [2000] ECR I-9187, paragraphs 43 and 44), and which, moreover, is not in itself a geographical name but is at least capable of

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informing the consumer that the product bearing that indication comes from a particular place, region or country (see Case C-3/91 Exportur [1992] ECR I-5529, paragraph 11).

— Regulation N o 2081/92

58 In addition, Budvar submits that if the name Bud, as protected under the bilateral convention, is merely a simple indication of geographic source — that is, an indication of geographic source in respect of which there is no link between the characteristics of the product and its geographical source —, the judgment in Warsteiner Brauerei, in particular paragraph 54, a fortiori indicates that Regulation N o 2081/92 does not preclude the application of that national protection, since such indications are clearly beyond the scope of that regulation.

59 According to Budvar, Regulation N o 2081/92 governs only Community protection of the designations to which it refers. It follows that the national court's distinction between simple indications of geographic source and qualified indications is of no relevance when considering the purely national protection accorded by the bilateral convention. In the light of the judgment in Warsteiner Brauerei, in particular paragraphs 43 and 44, that conclusion holds true even where there is no risk of consumers being misled.

60 Ammersin claims that Warsteiner Brauerei does not provide any answer to the question underlying the dispute in the main proceedings, namely the question whether the absolute protection which Regulation N o 2081/92 reserves to qualified geographic indications and designations of origin can be granted at the level of the Member States, in parallel to the system established by that regulation.

61 That question must be answered in the negative since it is clear from the object, intention and scheme of Regulation N o 2081/92 that that regulation is exhaustive to the extent that it grants absolute protection. Ammersin submits, first, that the regulation subjects the protection of a name to strict conditions, according to which the name must be the name of a place and there must be a direct link between the quality of the product concerned and the place where it originates (Article 2(2) of Regulation N o 2081/92), and, second, that that protection is granted only after a compulsory notification, verification and registration procedure involving, in particular, a detailed assessment of compliance with the product specifications (Article 4 et seq. of that regulation).

66 That Government further submits that it is likewise clear from the case-law of the Court that Regulation N o 2081/92 also does not preclude the application of national rules protecting names which are eligible for registration under that regulation.

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67 The German Government submits that if the case concerns a simple indication of geographical source, then protection of the name Bud, as provided for in the bilateral convention, is compatible with Regulation N o 2081/92 because that regulation applies only to qualified indications of geographical source, that is, indications which are intrinsically linked to the characteristics or the quality of the product in question.

68 On the other hand, if the case in the main proceedings concerns a qualified indication of source, that Government considers that it is necessary to bear in mind the fact that Regulation N o 2081/92 provides only for the registration of indications of source from Member States (see Article 5(4) and (5) of that regulation). It is clear from the recitals in its preamble that the regulation is based on the premiss that the system it establishes will be supplemented by cooperation with non-member countries. However, at present there is no agreement between the European Union and the Czech Republic.

69 Therefore, no objections can be raised to the protection accorded under the bilateral convention, provided that, in terms of their content, the qualified indications of source referred to therein meet the requirements of Regulation N o 2081/92.

73 The Court has already held that there is nothing in Regulation N o 2081/92 to imply that simple indications of geographical source cannot be protected under the national legislation of a Member State (see War Steiner Brauerei, paragraph 45).

74 The aim of Regulation N o 2081/92 is to ensure uniform protection within the Community of the geographical designations which it covers; it introduced a requirement of Community registration in respect of those designations so that they could enjoy protection in every Member State, whereas the national protection which a Member State accords to geographical designations that do not meet the conditions for registration under Regulation N o 2081/92 is governed by the national law of that Member State and is confined to its territory (see War Steiner Brauerei, paragraph 50).

75 N o doubt is cast on that interpretation by the fact that the national system of protection of indications of geographical source at issue in the main proceedings provides for absolute protection, that is to say, irrespective of whether there is any risk of consumers being misled.

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76 The scope of Regulation N o 2081/92 is not determined by reference to such factors, but depends essentially on the nature of the designation, in that it covers only designations of products for which there is a specific link between their characteristics and their geographic origin, and by the fact that the protection conferred extends to the Community.

BUD JOVICKÝ BUDVAR

namely the United States, and thus does not involve a barrier to intra-Community trade. Hence, it has no bearing on the internal market and does not come within the scope of Article 28 EC.

80 In addition, Budvar asserts that, according to the case-law of the Court, Articles 28 EC and 30 EC do not preclude the application of rules, laid down in an international agreement between Member States, on the protection of indications of source and designations of origin, provided that at, or after, the date on which that agreement comes into force the protected names have not become generic in the State of origin.

81 According to Budvar, that case-law applies a fortiori to a situation which, as in the main proceedings, concerns an agreement between a Member State and a non-member country according such protection, especially as it is indisputable — in particular since it is expressly stated in Article 6 of the bilateral convention — that the designation Bud is not, and has never been, a generic term.

82 Ammersin submits that it does not follow from the Court's case-law that absolute protection of a name such as Bud is justified under Article 30 EC. Only simple indications of geographical source — essentially, place-names — with a strong reputation, which constitute for producers established in the places to which they refer an essential means of attracting custom, are justified. The designation Bud is not the name of a place, nor does it have a reputation among consumers.

83 Ammersin also submits that protection of the name Bud likewise cannot be justified under Article 28 EC, that is to say, by an overriding reason in the general interest, such as consumer protection or fairness in commercial transactions. Those objectives can be adequately attained by granting protection against the

87 Those names were listed in the annexes to the bilateral agreement at the suggestion of interested national circles, on the basis of consumer expectations and in close concertation with the competent interest groups and administrations.

88 The aim of the bilateral convention was to prevent the protected designations from being improperly used and from becoming generic.

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89 The German Government submits that the protection which the bilateral convention accords to simple indications of geographical source is a measure having equivalent effect to a quantitative restriction within the meaning of Article 28 EC, but is justified under Article 30 EC on the grounds of protection of industrial and commercial property or, alternatively, under Article 28 EC as an overriding reason in the public interest, relating in particular to fairness in commercial transactions or consumer protection.

90 As regards Article 30 EC, the German Government submits that it is clear from the case-law of the Court that the prohibition on the use of the name Bud under the bilateral convention protects the commercial property in the indications of source within the meaning of that article and can, therefore, justify a barrier to trade which is prohibited by Article 28 EC.

The Court's reply

95 Articles 28 EC and 30 EC apply without distinction to products originating in the Community and to those admitted into free circulation in any of the Member States, whatever the real origin of such products. It is therefore subject to those reservations that those articles apply to the American Bud beer at issue in the main proceedings (see, to that effect, Case 125/88 Nijman [1989] ECR 3533, paragraph 11).

96 In the case at issue in the main proceedings, the prohibition on marketing beer from countries other than the Czech Republic under the name of Bud in Austria, which follows from the bilateral convention, is capable of affecting imports of that product under that name from other Member States and thus of constituting a barrier to intra-Community trade. Such a rule is therefore a measure having an effect equivalent to a quantitative restriction within the meaning of Article 28 EC (see, to that effect, Nijman, paragraph 12, and Exportur, paragraphs 19 and 20).

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97 National legislation prohibiting the use of a geographical name for goods originating in a non-member country which are admitted into free circulation in other Member States where they are lawfully marketed does not, it is true, absolutely preclude the importation of those products into the Member State concerned. It is, however, likely to make their marketing more difficult and thus to impede trade between Member States (see, to that effect, Case C-448/98 Guimont [2000] ECR I-10663, paragraph 26).

102 In the light of the foregoing, the answer to the first question, in so far as it concerns Articles 28 EC and 30 EC, must be that those articles do not preclude the application of a provision of a bilateral agreement between a Member State and a non-member country, under which a simple and indirect indication of geographical origin from that non-member country is accorded protection in the Member State concerned, whether or not there is any risk of consumers being misled, and the import of a product lawfully marketed in another Member State may be prevented, provided that the protected name has not, either at the date of the entry into force of that agreement or subsequently, become generic in the State of origin (see Exportur, paragraph 39).

103 The answer to the first question must therefore be that Article 28 EC and Regulation N o 2081/92 do not preclude the application of a provision of a bilateral agreement between a Member State and a non-member country under which a simple and indirect indication of geographical origin from that non-member country is accorded protection in the importing Member State, whether or not there is any risk of consumers being misled, and the import of a product lawfully marketed in another Member State may be prevented.

The second question

104 By its second question, the national court is asking essentially whether Regulation N o 2081/92 or Article 28 EC precludes the application of a provision of a bilateral agreement between a Member State and a non-member country under

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then arises whether the absolute protection of that name, as provided for by the bilateral convention, which constitutes an obstacle to the free movement of goods (see paragraphs 96 and 97 above) can be justified under Community law by reference to Article 30 EC or on some other ground.

108 In that case, and without prejudice to any protection under specific rights such as trade mark rights, the protection of that name cannot be justified on the grounds of protection of industrial and commercial property within the meaning of Article 30 EC (see, to that effect, Exportur, paragraph 37, and Joined Cases C-321/94 to C-324/94 Pistre and Others [1997] ECR I-2343, paragraph 53).

109 In those circumstances, the Court must examine whether such an obstacle can be justified by an imperative requirement in the general interest such as fairness in commercial transactions or consumer protection.

1 1 0If it were established that the name Bud does not contain any reference to the geographical source of the products that it designates, the Court would have to hold that none of the information supplied to it by the national court shows that protection of that name is susceptible of preventing economic operators from obtaining an unfair advantage or consumers from being misled as to any of the characteristics of those products.

Observations submitted to the Court

113 Budvar observes that the bilateral agreement was concluded by the Republic of Austria before its accession to the European Union, which took place on 1 January 1995, and that the Federal Chancellor's communication, issued in 1997, in other words after that accession, is, according to its very wording, of purely declaratory value. According to Budvar, the bilateral convention was not maintained in force by that declaration, but remained in force after the break-up of the Czech and Slovak Federative Republic on 1 January 1993 by virtue of the rules of public international law on the succession of States.

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114 In those circumstances, Budvar claims that the Republic of Austria was entitled under the first paragraph of Article 307 EC, as interpreted by the Court, or even required under public international law, to take all the measures necessary to ensure the protection of the name Bud provided for in the bilateral convention, notwithstanding any provision of Community law.

115 Budvar submits that even assuming that in relation to the protection provided for by the bilateral convention there is a conflict between that convention and Community law, the Community institutions are prevented, under the first paragraph of Article 307 EC, from applying all primary and secondary Community law until that conflict is resolved, possibly by denunciation of the bilateral convention.

120 Therefore, it was only by way of the Federal Chancellor's communication that the Republic of Austria assumed the obligations to the Czech Republic under the bilateral convention. Contrary to its wording, that communication is therefore constitutive in nature.

121 The bilateral convention can be interpreted in such a way that it is consistent with Community law if it is taken to mean that, under that convention, the name Bud is protected only where consumers are in fact misled. Article 7(1) of the convention does not lay down a requirement of absolute protection but instead provides for the application of 'judicial and administrative measures for acting against unfair competition or otherwise suppressing prohibited designations'.

122 Under Austrian law and, more specifically, its provisions on unfair competition, all applications for orders prohibiting the use of names are subject to the condition that those names are used in a misleading manner.

123 Moreover, according to Ammersin, it is Article 7(2) of the bilateral convention which is applicable to the case in the main proceedings, since the name American Bud, used as a registered trade mark, constitutes a modified form of the protected designation for the purposes of that provision. There are significant differences between that mark and the protected designation Bud — specifically in the form used as a bottle label — and it is perceived by consumers as an independent mark.

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128 According to that Government, having regard to the meaning to be given to the relevant terms of the bilateral convention in their context, and in the light of the object and the purpose of that convention, those terms cannot be interpreted as meaning that, as a simple or indirect indication of geographical source, the name Bud only has protection against the risk of consumers being misled and not absolute protection. Such an interpretation is thus a priori excluded.

129 According to the German Government, the bilateral convention contains rights and obligations assumed by the Republic of Austria prior to its accession to the European Union. Pursuant to the first paragraph of Article 307 EC, such a convention is not affected by Community law and its application therefore has priority over Community law.

130 The fact that the non-member country which entered into the bilateral convention, namely the Czechoslovak Socialist Republic, no longer exists does not call that interpretation into question. The Republic of Austria — like the Federal Republic of Germany and, to the best of the German Government's knowledge, a number of other Member States — has recognised the continuity of most international treaties and has therefore acted in accordance with customary practice between States.

131 According to the German Government, an interpretation favourable to Com- munity law would have to take the form of an amendment to the bilateral convention following bilateral negotiations to that end, and, where such negotiations fail, denunciation or suspension of that convention. However, in the meantime, the national courts are entitled to protect the rights concerned even where they are contrary to Community law. That Government submits that the national court has not indicated whether the convention in question can be denounced.

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136 According to that Government, it follows from the wording of Article 7(1) of the bilateral convention, which is utterly unambiguous, that it excludes a priori an interpretation of that provision as meaning that the name Bud is protected as a simple and indirect geographical indication only against the risk of consumers being misled and consequently does not enjoy absolute protection. Therefore, that interpretation cannot be entertained as an interpretation which meets the requirement of compatibility with Community law.

137 The Commission submits that Article 307 EC applies to the bilateral convention since that convention has an effect on the application of the Treaty and, moreover, was concluded between the Republic of Austria and a non-member country well before that Member State's accession to the European Union.

138 However, the question arises whether the first paragraph of Article 307 EC also applies to an agreement which, as in the case at issue in the main proceedings, has been maintained in force to the benefit of the State which succeeded the original non-member country by virtue of a declaration made by the authorities of a Member State after its accession to the European Union.

139 That question also prompts the question whether the declaration concerned is constitutive in nature.

143 The Court must answer this question because it is clear from the answer to the second question that, in the event that the name Bud cannot be regarded as directly or indirectly referring to the geographical source of the products that it designates, Article 28 EC precludes the protection accorded to that name by the bilateral instruments at issue.

144 It follows from the first paragraph of Article 307 EC that rights and obligations under an agreement concluded between a Member State and a non-member country before the date of accession of that Member State are not affected by the Treaty provisions.

145 The purpose of that provision is to make clear, in accordance with the principles of international law, that application of the EC Treaty does not affect the duty of the Member State concerned to respect the rights of non-member countries under an earlier agreement and to perform its obligations thereunder (see, inter alia, Case C-84/98 Commission v Portugal [2000] ECR I-5215, paragraph 53).

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146 Consequently, in order to determine whether a Community rule may be deprived of effect by an earlier international agreement, it is necessary to examine whether that agreement imposes on the Member State concerned obligations whose performance may still be required by the non-member country which is party to it (see, to that effect, inter alia, Joined Cases C-364/95 and C-365/95 T. Port [1998] ECR I-1023, paragraph 60).

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Federative Republic, in particular with respect to rights inuring to the benefit of the Czech Republic, such as the ones at issue in the main proceedings, with the effect that those rights and the corresponding obligations on the Republic of Austria remained in force after that break-up and were consequently still in force at the date of the Republic of Austria's accession to the European Union.

152 It is common ground that at the date of the break-up, there was a widely accepted international practice based on the principle of the continuity of treaties. According to that practice, unless one of the State parties to a bilateral agreement indicates its intention to renegotiate or denounce the agreement, the agreement is considered in principle to remain in force in relation to the States succeeding the State which has broken up.

153 At least as far as concerns the specific case of the complete break-up of States, and notwithstanding the possibility of denouncing or renegotiating agreements, it is apparent that the principle of the continuity of treaties, thus understood, constitutes a reference principle which was widely accepted at the time of the break-up in question.

154 In any event, and without there being any need for the Court to decide the question whether at the time of the break-up of the Czech and Slovak Federative Republic that principle of the continuity of treaties was a customary rule of international law, it cannot be denied that application of that principle in the international practice of the law of treaties was, at that time, fully consistent with international law.

159 As the Advocate General points out in points 141 and 142 of his Opinion, it seems clear from both the case-law of the Austrian courts and the fact that, in particular in relation to the Czech Republic, the Republic of Austria denounced certain agreements concluded with the Czechoslovak Socialist Republic, but solely with regard to the future, that there are indications in the approach of that Member State, also during the period between the break-up of the Czech and Slovak Federative Republic and the Republic of Austria's accession to the European Union, to show that it had moved away from applying the 'tabula rasa' principle.

160 The Austrian practice as regards the States succeeding the Czech and Slovak Federative Republic seems to be based on a pragmatic approach, according to which bilateral agreements remain in force unless they have been denounced by one or other of the parties. Such an approach leads to results which are very similar to those resulting from application of the principle of the continuity of treaties.

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161 In that regard, it is for the national court to ascertain whether, at any time between the break-up of the Czech and Slovak Federative Republic, which took place on 1 January 1993, and the Federal Chancellor's communication in 1997, the Republic of Austria indicated its intention to renegotiate or denounce the bilateral instruments at issue.

162 If confirmed by the national court, that would be particularly significant because, as has been pointed out in paragraph 156 above, at the time of the break-up of its predecessor State, the Czech Republic clearly expressed the point of view that agreements concluded with that predecessor State remained in force. The Czech Republic thus expressly reserved the right to enforce against the Republic of Austria the rights accorded to it under the bilateral instruments at issue in its capacity as the successor State.

167 If, having carried out the checks that are necessary having regard, in particular, to the criteria set out in this judgment, the national court were to reach the conclusion that at the date of the Republic of Austria's accession to the European Union that Member State was bound to the Czech Republic by the bilateral instruments at issue, it would follow that those instruments can be regarded as acts concluded before the date of the Republic of Austria's accession to the European Union for the purposes of the first paragraph of Article 307 EC.

168 It should be added that, in accordance with the second paragraph of that provision, the Member States are required to take all appropriate steps to eliminate the incompatibilities between an agreement concluded before a Member State's accession and the Treaty.

169 It follows that the national court must ascertain whether a possible incom- patibility between the Treaty and the bilateral convention can be avoided by interpreting that convention, to the extent possible and in compliance with international law, in such a way that it is consistent with Community law.

170 If it proves impracticable to interpret an agreement concluded prior to a Member State's accession to the European Union in such a way that it is consistent with Community law then, within the framework of Article 307 EC, it is open to that State to take the appropriate steps, while, however, remaining obliged to eliminate any incompatibilities existing between the earlier agreement and the Treaty. If that Member State encounters difficulties which make adjustment of an agreement impossible, an obligation to denounce that agreement cannot therefore be excluded (see Commission v Portugal, paragraph 58).

173 In the light of the foregoing, the answer to the third and fourth questions must be that the first paragraph of Article 307 EC is to be interpreted as permitting a court of a Member State, subject to the findings to be made by that court having regard inter alia to the criteria set out in this judgment, to apply the provisions of bilateral agreements such as those at issue in the main proceedings, concluded between that State and a non-member country and according protection to a name from the non-member country, even where those provisions prove to be contrary to the Treaty rules, on the ground that they concern an obligation resulting from agreements concluded before the date of the accession of the Member State concerned to the European Union. Pending the success of one of the methods referred to in the second paragraph of Article 307 EC in eliminating any incompatibilities between an agreement predating that accession and the Treaty, the first paragraph of that article permits that State to continue to apply such an agreement in so far as it contains obligations which remain binding on that State under international law.

Costs

174 The costs incurred by the Austrian, German and French Governments and by the Commission, which have submitted observations to the Court, are not recover-

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able. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

JUDGMENT OF 18. 11. 2003 — CASE C-216/01

being misled, and the import of a product lawfully marketed in another Member State may be prevented.

3. T h e first paragraph of Article 307 EC is to be interpreted as permitting a court of a Member State, subject to the findings to be made by that court having regard inter alia to the criteria set out in this judgment, to apply the provisions of bilateral agreements such as those at issue in the main proceedings, concluded between that State and a non-member country and according protection to a name from the non-member country, even where those provisions prove to be contrary to the EC Treaty rules, on the ground that they concern an obligation resulting from agreements concluded before the date of the accession of the Member State concerned to the European Union. Pending the success of one of the methods referred to in the second paragraph of Article 307 EC in eliminating any incompatibilities between an agreement predating that accession and the Treaty, the first paragraph of that article permits that State to continue to apply such an agreement in so far as it contains obligations which remain binding on that State under international law.

Skouris Jann Timmermans

Gulmann Cunha Rodrigues Edward

La Pergola Puissochet Schintgen