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"In many respects, TRIPs represents a new challenge to the law of the European Union, in particular that concerning the EU's external relationships and the relationships of EU law, international convention law and the legal systems of the individual EU Member States".1 In a judgment of December 14, 2000,2 the European Court of Justice3 provided yet another illustration of this statement. This case offers an interesting opportunity to analyze the possible developments that might take place within European Community law, regarding the WTO Agreements,4 and questions relating to the jurisdiction of the Court and the direct effect5 of the TRIPs Agreement in particular.6
The District Court of The Hague and the Supreme Court of the Netherlands had referred one and three questions respectively concerning the interpretation of Article 50 of the TRIPs Agreement under Article 234 of the EC Treaty. Article 50 lays down some procedural provisions relating to provisional measures granted in order to protect intellectual property rights.7
The national proceedings of Case C-300/98, Parfums Dior, involved an action by Dior SA, proprietor of different trade marks for perfumery products, against Tuk BV. Dior alleged that Tuk had infringed its trade mark rights by selling perfumes bearing those marks when they had not been put on the market in the European Economic Area.8 The District Court considered that the proceedings raised the question of the direct effect of Article 50(6) of TRIPs and made a preliminary reference to the ECJ: "Is Article 50(6) of the TRIPs Agreement to be interpreted as having direct effect in the sense that the legal consequences set out therein take effect even in the absence of any corresponding provision of national law?"9
Case C-392/98 involved an action by Layher Germany and Layher Netherlands against Assco Gerüste.10 Layher Germany designs and manufactures the Allroundsteiger, a type of scaffolding patented in both Germany and the Netherlands, but whose patents expired respectively on 16 October 1994 and 7 August 1995. Layher Netherlands is the exclusive importer of the Allroundsteiger for the Netherlands. Assco also manufactures scaffoldings, including one known as the Rondosteiger, also marketed in the Netherlands, and whose interlocking and measurements system is identical to that of the Allroundsteiger. Layher applied to the President of the Utrecht District Court for interim measures prohibiting Assco from importing into the Netherlands, selling, offering for sale or otherwise trading in the Rondosteiger as then manufactured. Layher alleged Assco was wrongfully copying an industrial design. The application for interim measures was granted and the President of the District Court ruled that the reasonable period referred to in Article 50(6) of TRIPs - a period during which an action on the merits should be initiated, and during which time the interim measures granted according to Article 50 can have effect- was to be one year.11 The interim decision was upheld on appeal, apart from the specified period.
Assco appealed to the Supreme Court of the Netherlands. The Dutch Court sought a preliminary ruling from the ECJ on three questions: "(1) Does the jurisdiction of the Court of Justice to interpret Article 50 of the TRIPs Agreement also extend to the provisions of that Article when they do not concern provisional measures to prevent infringement of trade mark rights? (2) Does Article 50 of the TRIPs Agreement, in particular Article 50(6), have direct effect? (3) Where an action lies under national civil law against the copying of an industrial design, on the basis of the general rules concerning wrongful acts, and in particular those relating to unlawful competition, must the protection thus afforded to the holder of the right be regarded as an intellectual property right within the meaning of Article 50(1) of the TRIPs Agreement?"12
A common element may be deduced from both cases, concerning the economic liberties of the intellectual property rights' holders. These could be fundamentally affected by a decision as to whether TRIPs is recognized as having direct effect or not, and, as a threshold matter, as to whether the Court could even accept its jurisdiction. Both issues are not a foregone conclusion.
As to the national court's query over its jurisdiction, the ECJ ruled that "where the judicial authorities of the Member States are called upon to order provisional measures for the protection of intellectual property rights falling within the scope of TRIPs and a case is brought before the Court of Justice in accordance with the provisions of the Treaty, in particular Article [234] thereof, the Court of Justice has jurisdiction to interpret Article 50 of TRIPs."13
On the question of direct effect, the Court held that the provisions of TRIPs "are not such as to create rights upon which individuals may rely directly before the courts by virtue of Community law".14 However, "in a field to which TRIPs applies and in respect of which the Community has already legislated, as is the case in the field of trade marks ... the judicial authorities of the Member States are required by virtue of Community law, when called upon to apply national rules with a view to ordering provisional measures for the protection of rights falling within such a field, to do so as far as possible in the light of the wording and purpose of Article 50 of TRIPs.15 On the other hand, in a field in respect of which the Community has not yet legislated and which consequently falls within the competence of the Member States, the protection of intellectual property rights, and measures adopted for that purpose by the judicial authorities, do not fall within the scope of Community law. Accordingly, Community law neither requires nor forbids that the legal order of a Member State should accord to individuals the right to rely directly on the rule laid down by Article 50(6) of TRIPs or that it should oblige the courts to apply that rule of their own motion."16
With respect to the substantive interpretation of Article 50 of TRIPs, the Court held that it "leaves the Contracting Parties, within the framework of their own legal system, the task of specifying whether the right to sue under general provisions of national law concerning wrongful acts, in particular unlawful competition, in order to protect an industrial design against copying, is to be classified as an `intellectual property right within the meaning of Article 50(1) of TRIPs'".17
The complexity of the situation originated with the Court's initial statement in relation to TRIPs, in its Opinion 1/94. The Commission sought the opinion of the ECJ on the competence of the European Community to conclude the Agreement establishing the WTO, and in particular the GATS and the TRIPs. The ECJ concluded that the Community institutions and its Member States were jointly competent to conclude the TRIPs Agreement.18
Hitherto, the exact delimitation of the respective competences of the Community and the Member States with respect to TRIPs has been widely discussed in the literature, as were the possible consequences of this joint competence,19 and of TRIPs generally in the European legal order. A close analysis of Parfums Dior will try to put these issues into a new perspective.
This paper will try to demonstrate that, even if the ruling of the Court seems a priori trivial, a closer analysis may reveal that it gives rise to particularly interesting issues related to two core topics of the ECJ's case-law: the jurisdiction of the Court under Article 234 and the relationship between international agreements and the Community and Member States laws. Indeed, the TRIPs Agreement, which `extended' the previous GATT 1947 to the field of intellectual property rights, offers an excellent context in which to analyze these complex problems.
The analysis will focus on two subject-matters developed by the Court in the case under study. The first part of the paper will concentrate on the jurisdiction of the Court, whether the competence of the Court to answer such references was really as obvious as the Court assumed. Specifically, it will examine the admissibility of the reference under Article 234 EC in Case C-300/98 and the jurisdiction of the Court to interpret the provisions of an international agreement for the conclusion of which the Community has been considered only "jointly competent" with the Member States. The second half of this case study will be centered on the Court's treatment of the direct effect of TRIPs, and what could be the eventual outcome of this dicta, especially on the level of protection of individual rights under Community law.
1 Sigrid Dörmer, Dispute Settlement and New Developments Within the Framework of TRIPs - An Interim Review, [2000] Int'l Rev. Ind. Prop. & Copyright L. (31) 1, 28.
2 Judgment of the Court of 14 December 2000, Parfums Christian Dior SA and Tuk Consultancy BV and Assco Gerüste GmbH, Rob van Dijk and Wilhelm Layher GmbH & Co. KG, Layher BV, Joined Cases C-300 and 392/98, not yet reported, available at http://www.curia.eu.int/jurisp/c/s.dll/form.pl?lang=en&Submit=Submit&docrequire=judgements&numaff=C-300%2F98&datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100.
3 Hereinafter "the ECJ" or "the Court".
4 Agreements establishing the World Trade Organization, approved on behalf of the Community by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994), [1994] OJ L 336/1, available at http://www.wto.org/english/docs_e/legal_e/final_e.htm.
5 It seems necessary to clarify from the outset the terminology that we will use in this part of the paper. Even if some authors argue in favor of a distinction between the concepts of direct effect and direct applicability - see e.g. developments of Kees Jan Kuilwijk, The European Court of Justice and the GATT Dilemma: Public Interest versus Individual Rights?, [1996] Nexed Editions, at pp.79-156 - it must be acknowledged that this distinction is not always very clear and that the ECJ uses both concepts interchangeably "without a strict analytical definition for each one", e.g. Carlos D. Esposito, The Role of the European Court of Justice in the Direct Applicability and Direct Effect of WTO Law, with a Dantesque Metaphor, [1998] Berk.eley J. Int'l L. (16) 138, 141.
As an analysis of the semantics of the Court would go beyond the object of this paper, the terms direct effect and direct applicability will be considered as equivalent, both referring to the aptitude for provisions of an international agreement to be relied on by an individual in front of a court, implying that this norm grants rights to individuals. However, we admit that the concept of direct effect as used in connection with international agreements might be different than the one used in internal Community law.
6 Agreement on Trade-Related Aspects of Intellectual Property Rights, hereinafter "TRIPs", as set out in Annex 1 C to the Agreement establishing the WTO, available at http://www.wto.org/english/docs_e/legal_e/final_e.htm.
7 For the content of Article 50 of TRIPs, see Appendix.
8 The claim of Dior was related to the principle of Community-wide exhaustion of intellectual property rights, established in relation to trade marks by Case 16/74 Centrafarm v Winthrop, [1974] ECR 1183. Had Dior put (or given its consent to put) its perfumes on the market in the European Economic Area, the principle of exhaustion would have precluded Dior, other than in exceptional circumstances, to oppose the use of the trade mark by others in subsequent transactions anywhere in the Community. Dior alleged that it did not put the products on the market within the EEA, therefore the principle of exhaustion could not be opposed to it and as a result Tuk was infringing its trade mark.
9 Parfums Dior, supra note 2 at para. 19.
10 Hereinafter respectively "Layher" and "Assco".
11 Article 50(6) provides that interim measures shall cease to have effect if proceedings leading to a decision on the merits of the case are not initiated "within a reasonable period, to be determined by the judicial authority ordering the measures where a Member's law so permits or, in the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever is the longer".
12 Parfums Dior, supra note 2 at para. 27.
13 Id. at para. 40.
14 Id. at para. 44.
15 The ECJ reaffirmed its holding of Judgment of 16 June 1998, Hermès International and FHT Marketing Choice BV, Case C-53/96, [1998] ECR I-3603 at para. 28.
16 Parfums Dior, supra note 2 at para. 47-48.
17 Id. at para. 63.
18 More precisely, the Court held that the Community and its Member States were jointly competent to conclude TRIPs and stressed the necessity to ensure close cooperation between the Member States and the Community institutions, inter alia in the fulfillment of the commitments entered into. The Court found the connection between intellectual property and trade in goods not sufficient to bring intellectual property rights within the common commercial policy of the Community. Therefore, TRIPs could not fall under the exclusive competence of the Community. Moreover, if the Community were to be recognized as having exclusive competence to enter into TRIPs, it would make it possible at the same time to achieve harmonization within the Community and thereby to bypass the internal procedural constraints to which the institutions are subject when they act in order to harmonize internal legislations. Likewise, the theory of implied external powers did not lead to the conclusion that the Community had exclusive competence to conclude TRIPs since the harmonization achieved within the Community in certain areas covered by TRIPs is only partial and in other areas has not yet been envisaged, even if the Community could exercise its powers, in so far as intellectual property rights "directly affect the establishment and functioning of the common market", as provided for in Article 94 EC, giving the scope in which the approximation of laws can take place. See Opinion 1/94 of the Court of 15 November 1994, [1994] ECR I-5276.
19 See for instance James J. Callaghan, Analysis of the European Court of Justice's Decision on Competence in the World Trade Organization: Who Will Call the Shots in the Areas of Services and Intellectual Property in the European Union?, [1996] Loy. L.A. Int'l & Competition. L. Rev. (18) 497; Julio A. Baquero Cruz, Disintegration of the Law of Integration in the External Economic Relations of the European Community, [1997] Colum. J. Eur. L. (3) 257; Josef Drexl, The TRIPs Agreement and the EC: What Comes Next After Joint Competence?, in Friedrich-Karl Beier and Gerhard Schricker (Eds) From GATT to TRIPs - The Agreement of Trade-Related Aspects of Intellectual Property Rights, Munich 1996.