IP case law Court of Justice

Judgment of 4 Nov 1997, C-337/95 (Dior / Evora)



JUDGMENT OF THE COURT

4 November 1997(1)

[234s(Trade mark rights and copyright — Action brought by the owner of those rightsto stop a reseller advertising the further commercialization of goods — Perfume) [s

In Case C-337/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Hoge Raadder Nederlanden for a preliminary ruling in the proceedings pending before thatcourt between

Parfums Christian Dior SA and Parfums Christian Dior BV

and

Evora BV

on the interpretation of Articles 30, 36 and the third paragraph of Article 177 ofthe EC Treaty and of Articles 5 and 7 of the First Council Directive (89/104/EEC)of 21 December 1988 to approximate the laws of the Member States relating totrade marks (OJ 1989 L 40, p. 1)

THE COURT,



composed of: G.C. Rodríguez Iglesias, President, C. Gulmann (Rapporteur),H. Ragnemalm, R. Schintgen (Presidents of Chambers), G.F. Mancini,J.C. Moitinho de Almeida, P.J.G. Kapteyn, J.L. Murray, D.A.O. Edward,J.-P. Puissochet, G. Hirsch, P. Jann and L. Sevón, Judges,

Advocate General: F.G. Jacobs,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

Parfums Christian Dior SA and Parfums Christian Dior BV, by C. Gielen,Advocate, Amsterdam, and H. van der Woude, of the Brussels Bar,

Evora BV, by D.W.F. Verkade and O.W. Brouwer, Advocates, Amsterdam,and P. Wytinck, of the Brussels Bar,

the French Government, by C. de Salins, Deputy Director at the LegalAffairs Directorate of the Ministry of Foreign Affairs, and P. Martinet,Foreign Affairs Secretary in the same directorate, acting as Agents,

the Italian Government, by U. Leanza, Head of the Contentious DiplomaticAffairs Department of the Ministry of Foreign Affairs, acting as Agent,assisted by O. Fiumara, Avvocato dello Stato,

the Government of the United Kingdom, by L. Nicoll, of the TreasurySolicitor's Department, acting as Agent, and by M. Silverleaf, Barrister,

the Commission of the European Communities, by B.J. Drijber, of its LegalService, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Parfums Christian Dior SA and ParfumsChristian Dior BV, represented by C. Gielen and H. van der Woude; of Evora BV,represented by O.W. Brouwer, L. de Gryse, of the Brussels Bar, and P. Wytinck;of the French Government, represented by P. Martinet; and of the Commission,represented by B.J. Drijber, at the hearing on 5 February 1997,

after hearing the Opinion of the Advocate General at the sitting on 29 April 1997,

gives the following

Judgment

By judgment of 20 October 1995, received at the Court on 26 October 1995, theHoge Raad der Nederlanden (Supreme Court of the Netherlands) referred to theCourt for a preliminary ruling under Article 177 of the EC Treaty six questions onthe interpretation of Articles 30, 36 and the third paragraph of Article 177 of thatTreaty and of Articles 5 and 7 of the First Council Directive (89/104/EEC) of 21December 1988 to approximate the laws of the Member States relating to trademarks (OJ 1989 L 40, p. 1, hereinafter 'the Directive‘).

The questions have been raised in proceedings between (i) Parfums Christian DiorSA, a company incorporated under French law established in Paris (hereinafter'Dior France‘) and Parfums Christian Dior BV, a company incorporated underNetherlands law established in Rotterdam (hereinafter 'Dior Netherlands‘) and (ii)Evora BV, a company incorporated under Netherlands law established atRenswoude (hereinafter 'Evora‘), concerning advertising carried out by Evora forDior products which it has put on sale.

Dior France develops and produces perfumes and other cosmetic products whichare sold at premium prices and which are considered to belong to the market forluxury cosmetic products. For the sale of its products outside France it hasappointed exclusive representatives, including Dior Netherlands in the Netherlands. Like other exclusive representatives of Dior France in Europe, Dior Netherlandsuses a selective distribution system to distribute Dior products in the Netherlands,which means that Dior products are sold only to selected retailers who are underan obligation to sell Dior products only to ultimate consumers and never to resellto other retailers unless they are also selected to sell Dior products.

In the Benelux, Dior France has exclusive rights to the Eau Sauvage, Poison,Fahrenheit and Dune picture trade marks, for inter alia perfumes. Those marksconsist of illustrations of the packaging in which the bottles containing the perfumesbearing those names are sold. In addition, Dior France has copyright in both thatpackaging and those bottles and in the packaging and bottles of products marketedunder the name of Svelte.

Evora operates a chain of chemists' shops under the name of its subsidiaryKruidvat. Although they have not been appointed as distributors by DiorNetherlands, the Kruidvat shops sell Dior products which Evora has obtained bymeans of parallel imports. The legality of retailing those products has not beenchallenged in the main proceedings.

In a Christmas promotion in 1993, Kruidvat advertised for sale the Dior productsEau Sauvage, Poison, Fahrenheit, Dune and Svelte and during the promotion itdepicted in advertising leaflets the packaging and bottles of some of those products. According to the judgment making the reference, each depiction of the packagingand bottles related clearly and directly to the goods offered for sale and theadvertising was carried out in a manner customary to retailers in this market sector.

Taking the view that this advertising did not correspond to the luxurious andprestigious image of the Dior marks, Dior France and Dior Netherlands(hereinafter 'Dior‘) brought proceedings before the Rechtbank te Haarlem(District Court, Haarlem) for infringement of those marks and for an orderrequiring Evora to desist and to continue to desist from making use of Dior picturetrade marks and from any publication or reproduction of its products in catalogues,brochures, advertisements or otherwise. Dior claimed in particular that the usemade by Evora of its trade marks was contrary to the provisions of the UniformBenelux Law on Trade Marks in force at that time and was liable to damage theirluxurious and prestigious image. Dior also claimed that the advertising carried outby Evora infringed its copyright.

The President of the Rechtbank granted Dior's application and Evora was orderedwith immediate effect to desist from making use of Dior's picture trade marks andfrom any publication or reproduction of the Dior products at issue in catalogues,brochures, advertisements or otherwise, in a manner not conforming to Dior'scustomary manner of advertising. Evora appealed against that order to theGerechtshof (Regional Court of Appeal), Amsterdam.

That court set aside the lower court's order and refused the measures applied for. In particular, it rejected Dior's argument that Dior could oppose the furthercommercialization of the goods under Article 7(2) of the Directive, which providesthat the proprietor of a trade mark may oppose its use in relation to goods whichhave been put on the market in the Community under that trade mark by theproprietor where there are legitimate reasons, especially where the condition of thegoods is changed or impaired after they have been put on the market. TheGerechtshof considered that this provision envisaged only harm caused to thereputation of a trade mark by some alteration of the physical condition of thegoods to which the mark applies.

Dior appealed in cassation against that judgment to the Hoge Raad. It argued inparticular that the expression 'condition of the goods‘ used in Article 7(2) of theDirective also covers the 'mental‘ condition of the goods, by which it means theallure, prestigious image and aura of luxury surrounding the goods, resulting fromthe manner in which the trade mark owner has chosen to present and advertise thegoods using his trade mark rights.

Evora argued that its advertising — carried out in the manner customary to retailersin this market sector — did not infringe Dior's exclusive rights and that theprovisions of the Directive and Articles 30 and 36 of the Treaty precluded Diorfrom relying on its trade mark rights and copyright to prohibit it from advertisingthe Dior products which it markets.

In those circumstances, the Hoge Raad decided that questions on the interpretationof the Uniform Benelux Law on Trade Marks should be referred to the BeneluxCourt of Justice ('the Benelux Court‘) and questions on Community law shouldbe referred to the Court of Justice of the European Communities. In this context,the Hoge Raad has also raised the question whether in this instance it or theBenelux Court is to be regarded as the court or tribunal against whose decisionsthere is no judicial remedy under national law and which court is therefore obligedunder the third paragraph of Article 177 of the Treaty to make a reference to theCourt of Justice.

The Hoge Raad also points out that, although at the time when it submitted itsreference, the Benelux States had still not adapted their legislation to the Directive,despite the expiry of the period laid down for that purpose, the interpretation ofthe Directive is not without relevance, given the case-law of the Court to the effectthat, where an individual relies on a directive which has not been transposed in thenational legal system within the period laid down, the national rules are to beinterpreted, as far as possible, in the light of the wording and purpose of thedirective (see, in particular, Case C-91/92 Faccini Dori v Recreb [1994] ECR I-3325). In the event that it is not possible to interpret the relevant national rulesin accordance with the Directive, a question as to the interpretation of Articles 30and 36 of the Treaty also arises.

The Hoge Raad has therefore decided to stay proceedings and to refer thefollowing questions to the Court for a preliminary ruling:

'1.    Where, in proceedings relating to trade marks in one of the Beneluxcountries in connection with the interpretation of the Uniform Benelux Lawon Trade Marks, a question relating to the interpretation of the FirstCouncil Directive (89/104/EEC) of 21 December 1988 to approximate thelaws of the Member States relating to trade marks arises, is the highestnational court or the Benelux Court to be regarded as the court or tribunalof the Member State against whose decisions there is no remedy undernational law and which is therefore obliged under the third paragraph ofArticle 177 of the EC Treaty to make a reference to the Court of Justice?

2.    Is it in keeping with the system of the aforementioned Directive, inparticular Articles 5, 6 and 7 thereof, to assume that, where it is a questionof the resale of goods which have been put on the market in theCommunity under a trade mark by the trade mark proprietor or with hisconsent, the reseller is also free to use that trade mark for the purposes ofbringing such further commercialization to the attention of the public?

3.    In the event that the second question is answered in the affirmative, doexceptions exist to that rule?

4.    In the event that the third question is answered in the affirmative, is thereroom for an exception where the advertising function of the trade mark isendangered by the fact that, as a result of the manner in which the reselleruses the trade mark in order to attract public attention in that way, hedamages the luxurious and prestigious image of the trade mark?

5.    Can there be said to be ”legitimate reasons" within the meaning of Article7(2) of the Directive where, as a result of the way in which the reselleradvertises the goods, the ”mental condition" of the goods — that is to say,their allure, prestigious image and aura of luxury resulting from the mannerin which the trade mark proprietor has chosen to present and advertise thegoods using his trade mark rights — is altered or impaired?

6.    Do the provisions of Article 30 and 36 of the EC Treaty preclude theproprietor of a (picture) trade mark or a holder of copyright relating to thebottles and packaging used for his goods from making it impossible, byinvoking the trade mark right or copyright, for a reseller who is free furtherto commercialize those goods to advertise the goods in a manner customaryto retail traders in the relevant sector? Is this the case also where thereseller, as a result of the manner in which he uses the trade mark in hisadvertising material, damages the luxurious and prestigious image of thetrade mark or the publication or reproduction take place in circumstancessuch that damage may be done to the person entitled to the copyright?‘

The first question

According to the judgment referring the question,

the Benelux Court was established by a treaty signed in Brussels on 31March 1965 between the Kingdom of Belgium, the Grand Duchy ofLuxembourg and the Kingdom of the Netherlands and is composed ofjudges of the supreme courts of each of those three States, and,

under Article 6(3) of that treaty and Article 10 of the Benelux Conventionon Trade Marks, concluded on 19 March 1962 between the three BeneluxMember States, the Hoge Raad is in principle bound to submit to theBenelux Court for a preliminary ruling questions on the interpretation of theUniform Benelux Law on Trade Marks annexed to that convention.



Article 6 of the Treaty establishing the Benelux Court is worded as follows:

'1.    In the cases specified below, the Benelux Court shall rule on questions ofthe interpretation of the legal rules designated under Article 1 which arisein proceedings before courts of one of the three countries, sitting in theirterritory in Europe ...

2.    Where it appears that judgment in a case before a national court requiresresolution of a point of interpretation of a legal rule designated underArticle 1, that court may, if it considers that a ruling on the point isnecessary in order for it to give judgment, stay any final judgment, even ofits own motion, in order for the Benelux Court to rule on the question ofinterpretation.

3.    In the circumstances set forth in the previous subparagraph, a national courtagainst whose decisions no appeal lies under domestic law shall be boundto refer the question to the Benelux Court. ...‘

Article 7(2) of the same Treaty provides:

'National courts which then give judgment in the case shall be bound by theinterpretation given in the judgment delivered by the Benelux Court.‘

It is with reference to that legal system that, by its first question, the Hoge Raadasks whether, in a case where a question relating to the interpretation of theDirective is raised in proceedings in one of the Benelux Member States concerningthe interpretation of the Uniform Benelux Law on Trade Marks, it is the highestnational court or the Benelux Court which is the national court against whosedecisions there is no judicial remedy under national law and which is thereforeobliged under the third paragraph of Article 177 of the Treaty to make a referenceto the Court of Justice.

In order to reply to that question, it is necessary to examine first whether a courtlike the Benelux Court may refer questions to the Court of Justice for a preliminaryruling and, if so, whether it may be obliged to do so.

First of all, it appears that the question submitted by the Hoge Raad is based, quiterightly, on the premiss that a court such as the Benelux Court is a court which maysubmit questions to this Court for a preliminary ruling.

There is no good reason why such a court, common to a number of Member States,should not be able to submit questions to this Court, in the same way as courts ortribunals of any of those Member States.

In this regard, particular account must be taken of the fact that the Benelux Courthas the task of ensuring that the legal rules common to the three Benelux Statesare applied uniformly and of the fact that the procedure before it is a step in theproceedings before the national courts leading to definitive interpretations ofcommon Benelux legal rules.

To allow a court, like the Benelux Court, faced with the task of interpretingCommunity rules in the performance of its function, to follow the procedureprovided for by Article 177 of the Treaty would therefore serve the purpose of thatprovision, which is to ensure the uniform interpretation of Community law.

Next, as regards the question whether a court like the Benelux Court may be underan obligation to refer a question to the Court of Justice, it is to be rememberedthat, according to the third paragraph of Article 177 of the Treaty, where aquestion of Community law is raised in a case pending before a court or tribunalof a Member State against whose decisions there is no judicial remedy undernational law, that court or tribunal must bring the matter before the Court ofJustice.

According to the case-law of the Court of Justice, that obligation to refer is basedon cooperation, with a view to ensuring the proper application and uniforminterpretation of Community law in all the Member States, between national courts,in their capacity as courts responsible for the application of Community law, andthe Court of Justice (see, in particular, Case 283/81 CILFIT and Lanificio diGavardo v Italian Ministry of Health [1982] ECR 3415, paragraph 7). It is also clearfrom the case-law that the particular purpose of the third paragraph of Article 177is to prevent a body of national case-law that is not in accord with the rules ofCommunity law from coming into existence in any Member State (see, in particular,Case 107/76 Hoffman-La Roche v Centrafarm [1977] ECR 957, paragraph 5, andJoined Cases 35/82 and 36/82 Morson and Jhanjan v State of the Netherlands [1982]ECR 3723, paragraph 8).

In these circumstances, in so far as no appeal lies against decisions of a court likethe Benelux Court, which gives definitive rulings on questions of interpretation ofuniform Benelux law, such a court may be obliged to make a reference to thisCourt under the third paragraph of Article 177 where a question relating to theinterpretation of the Directive is raised before it.

As regards, further, the question whether the Hoge Raad may be obliged to referquestions to this Court, there is no question that such a national supreme court,against whose decisions likewise no appeal lies under national law, may not givejudgment without first making a reference to this Court under the third paragraphof Article 177 of the Treaty when a question relating to the interpretation ofCommunity law is raised before it.

However, it does not necessarily follow that, in a situation such as that describedby the Hoge Raad, both courts are actually obliged to make a reference to thisCourt.

According to the established case-law of the Court, although the last paragraph ofArticle 177 unreservedly requires national courts or tribunals against whosedecisions there is no judicial remedy under national law to refer to the Court anyquestion of interpretation raised before them, the authority of an interpretationprovided by the Court under Article 177 may deprive that obligation of its purposeand thus empty it of its substance. This is especially so when the question raisedis substantially the same as a question which has already been the subject of apreliminary ruling in a similar case (see, in particular, CILFIT and Lanificio diGavardo, cited above, paragraph 13, and Joined Cases 28/62, 29/62 and 30/62 DaCosta en Schaake and Others v Nederlandse Belastingadministratie [1963] ECR 31). Such is also the case, a fortiori, when the question raised is substantially the sameas a question which has already been the subject of a preliminary ruling in thesame national proceedings.

It follows that, if, prior to making a reference to the Benelux Court, a court like theHoge Raad has made use of its power to submit the question raised to the Courtof Justice, the authority of the interpretation given by the latter may remove froma court like the Benelux Court its obligation to submit a question in substantiallythe same terms before giving its judgment. Conversely, if no reference has beenmade to the Court of Justice by a court like the Hoge Raad, a court like theBenelux Court must submit the question to the Court of Justice, whose ruling maythen remove from the Hoge Raad the obligation to submit a question insubstantially the same terms before giving its judgment.

The answer to be given to the first question must therefore be that, where aquestion relating to the interpretation of the Directive is raised in proceedings inone of the Benelux Member States concerning the interpretation of the UniformBenelux Law on Trade Marks, a court against whose decisions there is no remedyunder national law, as is the case with both the Benelux Court and the Hoge Raad,must make a reference to the Court of Justice under the third paragraph of Article177 of the Treaty. However, that obligation loses its purpose and is thus emptiedof its substance when the question raised is substantially the same as a questionwhich has already been the subject of a preliminary ruling in the same nationalproceedings.

The second question

By its second question, the Hoge Raad asks in substance whether, on a properinterpretation of Articles 5 to 7 of the Directive, when trade-marked goods havebeen put on the Community market by or with the consent of the proprietor of thetrade mark, a reseller, besides being free to resell those goods, is also free to makeuse of the trade mark to bring to the public's attention the furthercommercialization of those goods.

In order to answer that question, it is necessary first of all to consider the relevantprovisions of the Directive to which the Hoge Raad refers.

On the one hand, Article 5 of the Directive, which determines the rights conferredby a trade mark, provides, in paragraph (1), that the proprietor is to be entitled toprevent all third parties from using his trade mark in the course of trade and, inparagraph (3)(d), that he may prohibit all third parties from using the trade markin advertising.

On the other hand, Article 7(1) of the Directive, which concerns the exhaustion ofthe rights conferred by a trade mark, provides that a trade mark is not to entitleits proprietor to prohibit its use in relation to goods which have been put on themarket in the Community under that trade mark by its proprietor or with hisconsent.

If the right to prohibit the use of his trade mark in relation to goods, conferred onthe proprietor of a trade mark under Article 5 of the Directive, is exhausted oncethe goods have been put on the market by himself or with his consent, the sameapplies as regards the right to use the trade mark for the purpose of bringing to thepublic's attention the further commercialization of those goods.

It follows from the case-law of the Court that Article 7 of the Directive is to beinterpreted in the light of the rules of the Treaty relating to the free movement ofgoods, in particular Article 36 (Joined Cases C-427/93, C-429/93 and C-436/93Bristol-Myers Squibb and Others v Paranova [1996] ECR I-3457, paragraph 27) andthat the purpose of the 'exhaustion of rights‘ rule is to prevent owners of trademarks from being allowed to partition national markets and thus facilitate themaintenance of price differences which may exist between Member States (seeBristol-Myers Squibb, cited above, paragraph 46). Even if the right to make use ofa trade mark in order to attract attention to further commercialization were notexhausted in the same way as the right of resale, the latter would be madeconsiderably more difficult and the purpose of the 'exhaustion of rights‘ rule laiddown in Article 7 would thus be undermined.

It follows that the answer to be given to the second question must be that, on aproper interpretation of Articles 5 and 7 of the Directive, when trade-markedgoods have been put on the Community market by the proprietor of the trademark or with his consent, a reseller, besides being free to resell those goods, is alsofree to make use of the trade mark in order to bring to the public's attention thefurther commercialization of those goods.

The third, fourth and fifth questions

By its third, fourth and fifth questions, which must be examined together, the HogeRaad asks in substance whether the rule ensuing from the answer to the secondquestion allows exceptions, in particular

where the advertising function of the trade mark is endangered by the factthat, as a result of the manner in which the reseller uses the trade mark inorder to attract public attention, he damages the luxurious and prestigiousimage of the trade mark, and

where, as a result of the way in which the reseller advertises the goods, their'mental‘ condition, that is to say the allure, prestigious image and aura ofluxury which they have as a result of the manner in which the trade markowner has chosen to present and advertise the goods using his trade markrights, is changed or impaired.



According to Article 7(2) of the Directive, the 'exhaustion of rights‘ rule laid downin paragraph (1) is not applicable where there are legitimate reasons for theproprietor to oppose further commercialization of trade-marked goods, especiallywhere the condition of the goods is changed or impaired after they have been puton the market.

The question therefore is whether the situations envisaged by the Hoge Raadconstitute legitimate reasons, within the meaning of Article 7(2) of the Directive,allowing the proprietor of a trade mark to oppose use of his trade mark by areseller to bring to the public's attention the further commercialization of goodsbearing that trade mark.

According to the case-law of the Court, Article 7 of the Directive comprehensivelyregulates the question of the exhaustion of trade mark rights in relation to goodsput on the market in the Community and the use of the word 'especially‘ inparagraph (2) indicates that alteration or impairment of the condition of trade-marked goods is given only as an example of what may constitute legitimatereasons (see Bristol-Myers Squibb, cited above, paragraphs 26 and 39). Moreover,that provision is intended to reconcile the fundamental interest in the protectionof trade mark rights with the fundamental interest in the free movement of goodswithin the common market (Bristol-Myers Squibb, cited above, paragraph 40).

The damage done to the reputation of a trade mark may, in principle, be alegitimate reason, within the meaning of Article 7(2) of the Directive, allowing theproprietor to oppose further commercialization of goods which have been put onthe market in the Community by him or with his consent. According to the case-law of the Court concerning the repackaging of trade-marked goods, the owner ofa trade mark has a legitimate interest, related to the specific subject-matter of thetrade mark right, in being able to oppose the commercialization of those goods ifthe presentation of the repackaged goods is liable to damage the reputation of thetrade mark (Bristol-Myers Squibb, cited above, paragraph 75).

It follows that, where a reseller makes use of a trade mark in order to bring thepublic's attention to further commercialization of trade-marked goods, a balancemust be struck between the legitimate interest of the trade mark owner in beingprotected against resellers using his trade mark for advertising in a manner whichcould damage the reputation of the trade mark and the reseller's legitimate interestin being able to resell the goods in question by using advertising methods which arecustomary in his sector of trade.

As regards the instant case, which concerns prestigious, luxury goods, the resellermust not act unfairly in relation to the legitimate interests of the trade mark owner. He must therefore endeavour to prevent his advertising from affecting the valueof the trade mark by detracting from the allure and prestigious image of the goodsin question and from their aura of luxury.

However, the fact that a reseller, who habitually markets articles of the same kindbut not necessarily of the same quality, uses for trade-marked goods the modes ofadvertising which are customary in his trade sector, even if they are not the sameas those used by the trade mark owner himself or by his approved retailers, doesnot constitute a legitimate reason, within the meaning of Article 7(2) of theDirective, allowing the owner to oppose that advertising, unless it is establishedthat, given the specific circumstances of the case, the use of the trade mark in thereseller's advertising seriously damages the reputation of the trade mark.

For example, such damage could occur if, in an advertising leaflet distributed byhim, the reseller did not take care to avoid putting the trade mark in a contextwhich might seriously detract from the image which the trade mark owner hassucceeded in creating around his trade mark.

In view of the foregoing, the answer to be given to the third, fourth and fifthquestions must be that the proprietor of a trade mark may not rely on Article 7(2)of the Directive to oppose the use of the trade mark, by a reseller who habituallymarkets articles of the same kind, but not necessarily of the same quality, as thetrade-marked goods, in ways customary in the reseller's sector of trade, for thepurpose of bringing to the public's attention the further commercialization of thosegoods, unless it is established that, given the specific circumstances of the case, theuse of the trade mark for this purpose seriously damages the reputation of thetrade mark.

The sixth question

By its sixth question the Hoge Raad asks in substance whether Articles 30 and 36of the Treaty preclude the owner of a trade mark or holder of copyright relatingto the bottles and packaging which he uses for his goods from preventing a reseller,by invoking the trade mark right or copyright, from advertising the furthercommercialization of those goods in a manner customary to retail traders in therelevant sector. It asks, further, whether this is also the case where the reseller, asa result of the manner in which he uses the trade mark in his advertising material,damages the luxurious and prestigious image of the trade mark, or where thepublication or reproduction of the trade mark takes place in circumstances liableto cause damage to the person entitled to the copyright.

Those questions are based on the following premisses:

that, under the relevant domestic law, in the situations envisaged, the trademark owner or holder of copyright may legitimately prohibit a reseller fromadvertising the further commercialization of the goods, and

that such a prohibition would constitute an obstacle to the free movementof goods prohibited by Article 30 of the Treaty, unless it could be justifiedon one of the grounds set forth in Article 36 of that Treaty.



Contrary to Dior's contention, the national court is quite right in considering thata prohibition such as that envisaged in the main proceedings may constitute ameasure having an effect equivalent to a quantitative restriction, in principleprohibited by Article 30. In this regard, it is enough that, according to thejudgment referring the questions for a preliminary ruling, the main proceedingsconcern goods which the reseller has procured through parallel imports and thata prohibition of advertising such as that sought in the main proceedings wouldrender commercialization, and consequently access to the market for those goods,appreciably more difficult.

The question therefore is whether a prohibition such as that sought in the mainproceedings may be allowed under Article 36 of the Treaty, according to which theprovisions of Articles 30 to 34 are not to preclude prohibitions or restrictions onimports justified on grounds of the protection of industrial and commercialproperty, provided that they do not constitute a means of arbitrary discriminationor a disguised restriction on trade between Member States.

As regards the question relating to trade mark rights, it is to be remembered that,according to the case-law of the Court, Article 36 of the Treaty and Article 7 of theDirective are to be interpreted in the same way (Bristol-Myers Squibb, cited above,paragraph 40).

Consequently, having regard to the answers given to the second, third, fourth andfifth questions, the answer to be given to this part of the sixth question must bethat, on a proper interpretation of Articles 30 and 36 of the Treaty, the proprietorof a trade mark may not oppose the use of the trade mark, by a reseller whohabitually markets articles of the same kind, but not necessarily of the same quality,as the trade-marked goods, in ways customary in the reseller's sector of trade, forthe purpose of bringing the further commercialization of those goods to the public'sattention, unless it is established that, given the specific circumstances of the case,the use of the trade mark for this purpose seriously damages the reputation of thetrade mark.

As regards the part of the sixth question relating to copyright, it is to beremembered that, according to the case-law of the Court, the grounds of protectionof industrial and commercial property referred to in Article 36 include theprotection conferred by copyright (Joined Cases 55/80 and 57/80 Musik-VertriebMembran and K-tel International v GEMA [1981] ECR 147, paragraph 9).

Literary and artistic works may be the subject of commercial exploitation, whetherby way of public performance or by way of the reproduction and marketing of therecordings made of them, and the two essential rights of the author, namely theexclusive right of performance and the exclusive right of reproduction, are notcalled in question by the rules of the Treaty (Case 158/86 Warner Brothers andMetronome Video v Christiansen [1988] ECR 2605, paragraph 13).

It is also clear from the case-law that, while the commercial exploitation ofcopyright is a source of remuneration for the copyright owner, it also constitutesa form of control on marketing exercisable by the owner and that, from this pointof view, commercial exploitation of copyright raises the same issues as that of anyother industrial or commercial property (Musik-Vertrieb Membran and K-telInternational, cited above, paragraph 13). The Court has thus held that theexclusive right of exploitation conferred by copyright cannot be relied on by itsowner to prevent or restrict the importation of sound recordings of protected workswhich have been lawfully marketed in another Member State by the owner himselfor with his consent (Musik-Vertrieb Membran and K-tel International, cited above,paragraph 15).

Having regard to that case-law — there being no need to consider the questionwhether copyright and trade mark rights may be relied on simultaneously in respectof the same product —, it is sufficient to hold that, in circumstances such as thosein point in the main proceedings, the protection conferred by copyright as regardsthe reproduction of protected works in a reseller's advertising may not, in anyevent, be broader than that which is conferred on a trade mark owner in the samecircumstances.

The answer to be given to the sixth question must therefore be that, on a properinterpretation of Articles 30 and 36 of the Treaty, the proprietor of a trade markor holder of copyright may not oppose their use by a reseller who habituallymarkets articles of the same kind, but not necessarily of the same quality, as theprotected goods, in ways customary in the reseller's sector of trade, for the purposeof bringing to the public's attention the further commercialization of those goods,unless it is established that, having regard to the specific circumstances of the case,the use of those goods for that purpose seriously damages their reputation.

Costs

The costs incurred by the French, Italian and United Kingdom Governments andby the Commission of the European Communities, which have submittedobservations to the Court, are not recoverable. Since these proceedings are, for theparties to the main proceedings, a step in the proceedings pending before thenational court, the decision on costs is a matter for that court.

On those grounds,

THE COURT,

in answer to the questions referred to it by the Hoge Raad der Nederlanden byjudgment of 20 October 1995, hereby rules:

Where a question relating to the interpretation of the First CouncilDirective (89/104/EEC) of 21 December 1988 to approximate the laws of theMember States relating to trade marks is raised in proceedings in one ofthe Benelux Member States concerning the interpretation of the UniformBenelux Law on Trade Marks, a court against whose decisions there is noremedy under national law, as is the case with both the Benelux Court andthe Hoge Raad der Nederlanden, must make a reference to the Court ofJustice under the third paragraph of Article 177 of the EC Treaty. However, that obligation loses its purpose and is thus emptied of itssubstance when the question raised is substantially the same as a questionwhich has already been the subject of a preliminary ruling in the same national proceedings.

On a proper interpretation of Articles 5 and 7 of Directive 89/104, whentrade-marked goods have been put on the Community market by theproprietor of the trade mark or with his consent, a reseller, besides beingfree to resell those goods, is also free to make use of the trade mark inorder to bring to the public's attention the further commercialization ofthose goods.

The proprietor of a trade mark may not rely on Article 7(2) of Directive89/104 to oppose the use of the trade mark, by a reseller who habituallymarkets articles of the same kind, but not necessarily of the same quality,as the trade-marked goods, in ways customary in the reseller's sector oftrade, for the purpose of bringing to the public's attention the furthercommercialization of those goods, unless it is established that, given thespecific circumstances of the case, the use of the trade mark for thispurpose seriously damages the reputation of the trade mark.

On a proper interpretation of Articles 30 and 36 of the EC Treaty, theproprietor of a trade mark or holder of copyright may not oppose their useby a reseller who habitually markets articles of the same kind, but notnecessarily of the same quality, as the protected goods, in ways customaryin the reseller's sector of trade, for the purpose of bringing to the public'sattention the further commercialization of those goods, unless it isestablished that, having regard to the specific circumstances of the case, theuse of those goods for that purpose seriously damages their reputation.



Rodríguez Iglesias                Gulmann Ragnemalm

Schintgen                    Mancini

Moitinho de Almeida

Kapteyn            Murray            Edward

Puissochet

Hirsch                        Jann

Sevón

Delivered in open court in Luxembourg on 4 November 1997.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President

1: Language of the case: Dutch.



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