IP case law Court of Justice

Judgment of 5 Oct 1988, C-53/87 (Maxicar)



Judgment of the Court of 5 October 1988. - Consorzio italiano della componentistica di ricambio per autoveicoli and Maxicar v Régie nationale des usines Renault. - Reference for a preliminary ruling: Tribunale civile e penale di Milano - Italy. - Exercise of design rights for car bodywork components - Compatibility with Articles 30 to 36 and 86 of the Treaty. - Case 53/87.

European Court reports 1988 Page 06039


Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

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1 . Free movement of goods - Industrial and commercial property - Designs and models - Protection - Conditions and procedures - Determination by national law - Protection of components forming part of a unit protected as such - Whether permissible

( EEC Treaty, Art . 36 )

2 . Free movement of goods - Industrial and commercial property - Designs and models - Car bodywork components - Exercise of the right by the manufacturer who is the proprietor thereof - Whether permissible

( EEC Treaty, Arts 30 and 36 )

3 . Competition - Dominant position - Designs and models - Car bodywork components - Exercise of right - Abuse - Conditions

( EEC Treaty, Art . 86 )

4 . Competition - Dominant position - Designs and models - Car bodywork components - Sale by the manufacturer who is the proprietor of the right for a price higher than that charged by independent producers - Abuse - None

( EEC Treaty, Art . 86 )

Summary

1 . In the absence of Community standardization or harmonization of laws, the determination of the conditions and procedures under which protection of designs and models is granted is a matter for the national rules of each Member State . It is for the national legislature to determine which products qualify for protection, even if they form part of a unit already protected as such .

2 . The rules on the free movement of goods do not preclude the application of national legislation under which a car manufacturer who holds protective rights in an ornamental design in respect of spare parts intended for cars of its manufacture is entitled to prohibit third parties from manufacturing parts covered by those rights for the purpose of sale on the domestic market or for exportation or to prevent the importation from other Member States of parts covered by those rights which have been manufactured there without his consent, having regard to the fact that such national legislation is intended to protect the very substance of the exclusive right conferred on the proprietor and can be enforced without distinction against both those who manufacture spare parts within national territory and those who import them from other Member States and is not intended to favour national products at the expense of products originating in other Member States .

3 . The mere fact of securing protective rights in respect of ornamental designs for car bodywork components does not constitute an abuse of a dominant postion within the meaning of Article 86 of the Treaty .

However, the exercise of the exclusive right corresponding to those protective rights may be prohibited by Article 86 of the Treaty if it involves, on the part of an undertaking holding a dominant position, certain abusive conduct such as the arbitrary refusal to supply spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation, provided that such conduct is liable to affect trade between Member States .

4 . The fact that a car manufacturer sells bodywork components in respect of which protective rights exist for a price higher than that charged for the same components by independent manufacturers does not necessarily constitute an abuse of a dominant position within the meaning of Article 86 of the Treaty since the proprietor of protective rights in respect of an ornamental design may lawfully call for a return on the amounts which he has invested in order to perfect the protected design .

Parties

In Case 53/87

REFERENCE to the Court under Article 177 of the EEC Treaty by the tribunale civile e penale ( Civil and Criminal District Court ), Milan, for a preliminary ruling in the proceedings pending before that court between

Consorzio italiano della componentistica di ricambio per autoveicoli and Maxicar

and

Régie nationale des usines Renault

on the interpretation of Articles 30 to 36 and 86 of the EEC Treaty,

THE COURT

composed of : Lord Mackenzie Stuart, President, G . Bosco, O . Due and J . C . Moitinho de Almeida ( Presidents of Chambers ), T . Koopmans, U . Everling, K . Bahlmann, Y . Galmot, R . Joliet, T . F . O' Higgins and F . A . Schockweiler, Judges,

Avocate General : J . Mischo

Registrar : D . Louterman, Administrator

after considering the observations submitted on behalf of

Consorzio italiano della componentistica di ricambio per autoveicoli and Maxicar, the plaintiffs in the main proceedings, by Marino Bin, Fabio Bortolotti, Guido Colonna, Giorgio Floridia, Claudio Maria Prado and Enrico Radice,

Régie nationale des usines Renault, the defendant in the main proceedings, by Mario Franzosi, Xavier Desjeux, Antoine Braun and Francis Herbert,

the French Government by Edwige Belliard and Philippe Pouzoulet, acting as Agents,

the Government of the Federal Republic of Germany, by Martin Seidel, Ministerialrat in the Ministry of the Economy, acting as Agent,

the Spanish Government, by Francisco Javier Condo de Saro, Director-General for European Community Legal and Institutional Coordination, and Rafael García-Valdecasas Fernández, Head of the State Legal Department, acting as Agent,

the Italian Government, by Ivo M . Braguglia, avvocato dello Stato,

the United Kingdom by H . R . L . Purse, of the Treasury Solicitor' s Department, acting as Agent,

the Commission, by Giuliano Marenco and Karen Banks, acting as Agents,

having regard to the Report for the Hearing and further to the hearing on 18 May 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 21 June 1988,

gives the following

Judgment

Grounds

1 By order of 18 September 1986 which was received at the Court on 20 February 1987, the tribunale civile e penale, Milan, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 30 to 36 and 86 of the EEC Treaty with a view to determining, on the one hand, whether national legislation enabling protective rights to be registered in respect of an ornamental design for car bodywork components is compatible with the Community rules on the free movement of goods and, on the other, whether the exercise of those rights may, in certain circumstances, constitute an abuse .

2 Those questions were raised in proceedings brought by Consorzio italiano della componentistica di ricambio per autoveicoli ( hereinafter referred to as "the Consorzio "), a trade association comprising a number of Italian undertakings which manufacture and market bodywork spare parts for motor vehicles and Maxicar, a member of the Consorzio, against Régie nationale des usines Renault ( hereinafter referred to as "Renault ").

3 Before the national court, the Consorzio and Maxicar seek, on the one hand, a declaration that the protective rights in respect of ornamental designs of which Renault is the proprietor are void, in so far as they relate to spare parts for the bodywork of cars, such parts having no intrinisic aesthetic value of their own, and, on the other, a declaration that the manufacture and marketing of non-original spare parts do not constitute an offence under the national legislation on unfair competition . By way of counterclaim, Renault seeks a declaration that the plaintiff companies have infringed its protective rights .

4 The national court considers that protective rights in respect of an ornamental design for the car bodywork parts are in conformity with Italian law . However, it considers that the exercise of the exclusive rights deriving therefrom appears, in this instance, to be contrary to the provisions of the Treaty .

5 It points out in that connection that a return for the proprietor of the rights is already guaranteed by the exclusive rights in respect of the bodywork as a whole and that protection of separate bodywork components is therefore unjustified . It adds that Renault, which, as is to be expected, receives some of the orders from consumers for components intended for vehicles manufactured by it, enjoys a monopoly which enables it to eliminate competition from independent manufacturers of spare parts, and at the same time to continue to charge high prices .

6 According to the national court, it follows that the protective rights vested in Renault may constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States within the meaning of Article 36 of the Treaty, and that the monopoly thus enjoyed by Renault might possibly contravene Article 86 of the Treaty .

7 The national court therefore decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling :

"( 1 ) Are Articles 30 to 36 of the EEC Treaty to be interpreted as prohibiting the proprietor of a protective right in an ornamental design which was granted in a Member State from asserting the corresponding exclusive right so as to prevent third parties from manufacturing and selling, and also exporting to another Member State, component parts which, taken as a whole, make up the bodywork of a car which has already been put on the market, that is to say component parts intended to be sold as spare parts for that car?

( 2 ) Does Article 86 of the EEC Treaty apply so as to prohibit the abuse of the dominant position held by each car manufacturer in the market for spare parts for cars of its manufacture which consists in seeking to eliminate competition from independent manufacturers of spare parts by registering protective rights?"

8 Reference is made to the Report for the Hearing for a fuller account of the facts, the legal background to the case, the procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

The first question

9 It is apparent from the order for reference that a number of independent manufacturers of spare parts for cars have invoked the rules on the free movement of goods with a view to persuading the national court not to apply national industrial property legislation under which a car manufacturer may register a protective right in respect of an ornamental design for certain spare parts intended for cars manufactured by it . The independent producers thus sought to protect themselves from infringement proceedings intended to prevent them from manufacturing, for the purposes of sales on the internal market or for export, components covered by the exclusive right in question or to prevent them from importing from other Member States protected components manufactured there without the consent of the proprietor of the protected right in respect of the design .

10 It must first be stated that, as the Court held in its judgment of 14 September 1982 in Case 144/81 Keurkoop v Nancy Kean Gifts (( 1982 )) ECR 2853, with respect to the protection of designs and models, in the present state of Community law and in the absence of Community standardization or harmonization of laws the determination of the conditions and procedures under which such protection is granted is a matter for national rules . It is for the national legislature to determine which products qualify for protection, even if they form part of a unit already protected as such .

11 It should then be noted that the authority of a proprietor of a protective right in respect of an ornamental model to oppose the manufacture by third parties, for the purposes of sale on the internal market or export, of products incorporating the design or to prevent the import of such products manufactured without its consent in other Member States constitutes the substance of his exclusive right . To prevent the application of the national legislation in such circumstances would therefore be tantamount to challenging the very existence of that right .

12 It should also be borne in mind that pursuant to Article 36 restrictions on imports or exports justified on grounds of the protection of industrial and commercial property are permissible provided that they do not constitute a means of arbitrary discrimination or a disguised restriction on trade between the Member States . In that regard it need merely be stated, in the light of the documents before the Court, that the exclusive right granted by the national legislation to the proprietors of protective rights in respect of ornamental models for car bodywork components may be enforced, without distinction, both against those persons who manufacture spare parts within national territory and against those who import them from other Member States, and that such legislation is not intended to favour national products at the expense of products originating in other Member States .

13 Accordingly, it must be stated in reply to the first question that the rules on the free movement of goods do not preclude the application of national legislation under which a car manufacturer who holds protective rights in an ornamental design in respect of spare parts intended for cars of its manufacture is entitled to prohibit third parties from manufacturing parts covered by those rights for the purpose of sale on the domestic market or for exportation or to prevent the importation from other Member States of parts covered by those rights which have been manufactured there without his consent .

The second question

14 By its second question, the national court wishes to establish, essentially, whether the obtaining of protective rights in respect of ornamental models for car bodywork components and the exercise of the resultant exclusive rights constitute an abuse of a dominant position within the meaning of Article 86 of the Treaty .

15 It should be noted at the outset that the mere fact of securing the benefit of an exclusive right granted by law, the effect of which is to enable the manufacture and sale of protected products by unauthorized third parties to be prevented, cannot be regarded as an abusive method of eliminating competition .

16 Exercise of the exclusive right may be prohibited by Article 86 if it gives rise to certain abusive conduct on the part of an undertaking occupying a dominant position such as an arbitrary refusal to deliver spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model remain in circulation, provided that such conduct is liable to affect trade between Member States .

17 With reference more particularly to the difference in prices between components sold by the manufacturer and those sold by the independent producers, it should be noted that the Court has held ( judgment of 29 February 1968 in Case 24/67 Parke, Davis and Co . (( 1968 )) ECR 55 ) that a higher price for the former than for the latter does not necessarily constitute an abuse, since the proprietor of protective rights in respect of an ornamental design may lawfully call for a return on the amounts which he has invested in order to perfect the protected design .

18 In those circumstances, it must be stated in reply to the second question submitted by the national court that :

( i ) the mere fact of obtaining protective rights in respect of ornamental designs for car bodywork components does not constitute an abuse of a dominant position within the meaning of Article 86 of the Treaty;

( ii ) the exercise of the corresponding exclusive right may be prohibited by Article 86 of the Treaty if it involves, on the part of an undertaking holding a dominant position, certain abusive conduct such as the arbitrary refusal to supply spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation, provided that such conduct is liable to affect trade between Member States .

Decision on costs

Costs

19 The costs incurred by the Government of the Federal Republic of Germany, the French Government, the Spanish Government, the United Kingdom, the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable . Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court .

Operative part

On those grounds,

THE COURT,

in reply to the questions submitted to it by the tribunale civile e penale, Milan, by order of 18 September 1986, hereby rules :

( 1 ) The rules on the free movement of goods do not preclude the application of national legislation under which a car manufacturer who holds protective rights in an ornamental design in respect of spare parts intended for cars of its manufacture is entitled to prohibit third parties from manufacturing parts covered by those rights for the purpose of sale on the domestic market or for exportation or to prevent the importation from other Member States of parts covered by those rights which have been manufactured there without his consent .

( 2 ) The mere fact of obtaining protective rights in respect of ornamental designs for car bodywork components does not constitute an abuse of a dominant position within the meaning of Article 86 of the Treaty . The exercise of the corresponding exclusive right may be prohibited by Article 86 of the Treaty if it involves, on the part of an undertaking holding a dominant position, certain abusive conduct such as the arbitrary refusal to supply spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation, provided that such conduct is liable to affect trade between Member States .