IP case law Court of Justice

Judgment of 12 May 1989, C-320/87 (Ottung)



Judgment of the Court (Sixth Chamber) of 12 May 1989. - Kai Ottung v Klee & Weilbach A/S and Thomas Schmidt A/S. - Reference for a preliminary ruling: Licensing agreement - Patent - Royalty and termination clause - Article 85 of the EEC Treaty. - Case 320/87.

European Court reports 1989 Page 01177


Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

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1.Competition - Agreements, decisions and concerted practices - Industrial and commercial property rights - Patent - Exercise of rights - Permissible in principle

( EEC Treaty, Art . 85(1 ) )

2 . Competition - Agreements, decisions and concerted practices - Industrial and commercial property rights - Patent licensing agreement - Obligation to continue to pay a royalty after expiry of the patent - Permissible in principle

( EEC Treaty, Art . 85(1 ) )

3.Competition - Agreements, decisions and concerted practices - Industrial and commercial property rights - Patent licensing agreement - Prohibition on manufacture and marketing after expiry of the patent and termination of the agreement - Unlawfulness - Condition - Appreciable effect on trade between Member States

( EEC Treaty, Art . 85(1 ) )

Summary

1.Restrictions which are imposed by way of contract by the proprietor of a patent upon the reproduction, use or exploitation of a patented invention otherwise than under a licence granted for that purpose and which derive from the application of national legislation intended to protect industrial property rights cannot, in themselves, be regarded as preventing, restricting or distorting competition within the common market within the meaning of Article 85(1 ).

2.A contractual obligation under which the grantee of a licence for a patented invention is required to pay royalty for an indeterminate period, and thus after the expiry of the patent, does not in itself constitute a restriction of competition within the meaning of Article 85(1 ) of the Treaty where the agreement was entered into after the patent application was submitted and immediately before the grant of the patent .

3.A clause contained in a licensing agreement prohibiting the manufacture and marketing of the products in question after the expiry of the patent and the termination of the agreement comes within the prohibition laid down in Article 85(1 ) only if it emerges from the economic and legal context in which the agreement was concluded that it is liable to appreciably affect trade between Member States .

Parties

In Case 320/87

REFERENCE to the Court under Article 177 of the EEC Treaty by the Soe - og Handelsret((Maritime and Commercial Court ), Copenhagen, for a preliminary ruling in the proceedings pending before that court between

Kai Ottung

and

( 1 ) Klee & Weilbach A/S

( 2 ) Thomas Schmidt A/S

on the interpretation of Article 85 of the EEC Treaty,

THE COURT ( Sixth Chamber )

composed of : T . Koopmans, President of Chamber, T . F . O' Higgins, G . F . Mancini, C . N . Kakouris and F . A . Schockweiler, Judges,

Advocate General : G . Tesauro

Registrar : H . A . Ruhl, Principal Administrator

after considering the observations submitted on behalf of

Klee & Weilbach A/S and Thomas Schmidt A/S, the defendants, by S . Lassen, of the Copenhagen Bar,

the United Kingdom, by H . R . L . Purse, Treasury Solicitor, acting as Agent,

the Commission of the European Communities, by its Legal Adviser A . McClellan and by I . Langermann, a member of its Legal Department, acting as Agents,

having regard to the Report for the Hearing and further to the hearing on 9 November 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 25 January 1989

gives the following

Judgment

Grounds

1 By order of 23 September 1987, which was received at the Court Registry on 14 October 1987, the S


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