GAZETTE
JANUARY/FEBRUARY 1979
TRADE MARKS IN E.E.C. LAW
PRESENT POSITION
Treaty Provisions
Ireland's accession to the E.E.C. in 1973 brought a
new dimension to our law on trade marks. The Treaty of
Rome contains certain provisions, pertaining to trade
marks, which are of direct applicability.
Article 222 contains one such provision: it states that
the
Treaty I shall in no way prejudice the rules in
Member States governing the system of property owner-
ship. That provision, if taken is isolation, would appear to
guarantee the unfettered assertion of, inter alia, national
conferred trade mark rights. It must, however, be read in
the light of articles 85, 86 and 30-36 of the Treaty.
52
Agreements or practices having as their object or effect
the erosion of competition in transnational trade within the
common market are prohibited by article 85. Article 86
strikes at the abuse by an undertaking of a dominant
position within the common market or in a substantial
part of it. Finally, articles 30-36 embody general
principles designed to promote the free movement of
goods between member states. Article 36 expressly refers
to industrial property (which includes trade mark rights):
impediments on the export and import of goods my be
imposed for the protection of such property provided,
however, that these shall not "[Constitute] a means of
arbitrary discrimination or a disguised restriction on trade
between Member States."
Case Law
Reconcilliation of the foreging Treaty provisions
which on first view seem to comprise the proverbial "can
of worms"
has been achieved by the Court of Justice in
a number of cases on trade marks.
53
A central feature of
the Court's approach has been to hold that, while the
Treaty of Rome does not affect the
existence
of national
trade mark rights, the
exercise
of these rights may be
curtailed in order to promote competition and the free
movement of goods between the member states.
A number of illustrations will indicate the approach of
the Court. It has, for example, occasionally been alleged
that agreements on trade mark rights have been used to
divide up or allocate markets. The case of
Sirena
v
Eda
54
concerned a mark "Prep", which was registered in Italy
in respect of shaving cream by an American company,
Mark Allen. That company transferred the mark in Italy
to Sirena, which commenced to use the mark in its
trading. The Mark Allen company subsequently
permitted a German enterprise to use the mark.
Sirena sued in an Italian court for infringement when
the German enterprise began to market in Italy a shaving
cream under the "Prep" mark.
The Court of Justice
to which the case was referred
under article 177 ruled in part as follows: "Article 85 is
applicable where the trade mark is invoked to prohibit
imports of products coming from other Member States
and carrying the same trade mark, if the owners of the
trade mark acquired the mark or the right to use it under
agreements between themselves or agreements with third
parties."
55-
Even in the absence of a restrictive agreement or
practice, the exercise of national trade mark rights may be
restrained in order to prevent the abuse of a dominant
postion within the meaning of article 86. In
Sirena
v
Eda
(noted above), the Court of Justice elaborated on this
possibility: "The owner of a trade mark does not enjoy a
'dominant position' within ... Article 86 of the Treaty
merely because he can prohibit third parties from
marketing products bearing the same trade mark in the
territory of a Member State ... (It) is necessary in
addition that the trade mark owner should have the
power to prevent the maintenance of effective competition
in a considerable part of the market in question ... With
regard to the improper exploitation of a dominant
position, the higher price of the product, although it does
not
per se
constitute sufficient proof, may nevertheless
become so, in view of its size, if it does not seem
objectively justified."
56
Contention has also arisen where, although again no
restrictive practice or agreement existed, it has been
alleged that trade mark rights have been exercised so as to
derogate from the principle of free movement of goods.
Van Zuylen Fréres
v
Hag A. G.
is a case in point.
57
Hag
A. G. was the holder of trade marks in Germany,
Belgium and Luxembourg. The most important element in
these marks — which were registered in respect of coffees
was the term 'Hag'. The marks registered in Belgium
and Luxembourg came, by a series of transactions, into
the hands of the plaintiff.
When Hag A.G. began to deliver its coffees to
Luxembourg under the German Hag trade mark, Van
Zuylen Fréres sued for infringement.
The Court of Justice on a request for a preliminary
ruling, held that "[One] cannot allow the holder of a trade
mark to rely upon the exclusiveness of a trade mark —
which may be the consequence of the territorial limitation
of national legislations —with a view to prohibiting the
marketing in a Member State of goods legally produced in
another Member State under an identical trade mark
having the
same origin".
58
The Hag case made inroads on the territorial
protection afforded by national trade marks. The con-
finement of the holding in the case to conflicts involving
marks of common origin was, however, confirmed in
the more recent case of
Terrapin
v
Terronora
Industrie
.
59
The plaintiff, an English company, was the
owner of the mark 'Terrapin', registered in the U.K. in
respect of prefabricated houses. The defendant, which
had a German subsidiary, was the owner of the mark
'Terranova'; this mark was registered in Germany in
respect of building materials.
Proceedings ensued when the plaintiff company sought
registration of its 'Terrapin' mark in Germany.
It was held, on a referral to the Court of Justice for a
preliminary ruling, that "IAn] industrial or commercial
property right legally acquired in a Member State may
legally be sued to prevent under the first sentence of
Article 36 of theTreaty the import of products marketed
under a name giving rise to confusion where the rights in
question have been acquired by different and independent
proprietors under different national laws."
60
This
decision, thus, substantially reverted the balance in favour
of national trade mark systems.
One theme recurs, whtether explicitly or implicitly, in
the foregoing cases; namely, the interplay between
nationally conferred monopoly rights and the European
ideal of a single and competitive market. The Court of
Justice has furnished substantial guidelines. Further
litigation is, however, inevitable, according as the balance
in emphasis swings between the two opposing concepts.
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