The Gazette 1979

JANUARY/FEBRUARY 1979

GAZETTE

TRADE MARKS IN E.E.C. LAW

(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.

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

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