Important legal notice

61999C0089

European Court reports 2001 Page I-05851

Opinion of the Advocate-General

In this reference from the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), the Court is asked a series of questions concerning the application and interpretation of Article 50(6) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement) in the context of proceedings involving the grant of provisional measures to restrain the alleged infringement of a trade mark.

The genesis of the TRIPs Agreement may be found in the 1986 Ministerial Conference which launched the Uruguay Round of Multilateral Trade Negotiations at Punta del Este. The Uruguay Round (described by the Council as the most complex negotiations in world history ) culminated in the signing of the Agreement establishing the World Trade Organisation, together with a series of more specific agreements, in 1994. Those additional agreements, annexed to the World Trade Agreement, include the TRIPs Agreement. The primary objective of the TRIPs Agreement is to strengthen and harmonise the protection of intellectual property on a world-wide scale.

Article 1 of the TRIPs Agreement, entitled Nature and Scope of Obligations, provides in paragraph 1:

Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

It is clear from the Agreement establishing the World Trade Organisation that the European Communities and the individual Member States are each original Members of the Organisation.

Part III of the TRIPs Agreement contains provisions for the enforcement of intellectual property rights. To that end, Article 41(1) and (2) provide:

Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.

The relevant provisions of Article 50 of the TRIPs Agreement are as follows:

The judicial authorities shall have the authority to order prompt and effective provisional measures:

to prevent an infringement of any intellectual property right from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods immediately after customs clearance;

to preserve relevant evidence in regard to the alleged infringement.

The judicial authorities shall have the authority to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed.

Where provisional measures have been adopted inaudita altera parte, the parties affected shall be given notice, without delay after the execution of the measures at the latest. A review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period after the notification of the measures, whether these measures shall be modified, revoked or confirmed.

Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1 and 2 shall, upon request by the defendant, be revoked or otherwise 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.

Where the provisional measures are revoked or where they lapse due to any act or omission by the applicant, or where it is subsequently found that there has been no infringement or threat of infringement of an intellectual property right, the judicial authorities shall have the authority to order the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by these measures.

To the extent that any provisional measure can be ordered as a result of administrative procedures, such procedures shall conform to principles equivalent in substance to those set forth in this Section.

Article 70(1) provides:

This Agreement does not give rise to obligations in respect of acts which occurred before the date of application of the Agreement for the Member in question.

The TRIPs Agreement and the Community

As far as the Community is concerned, the WTO Agreement and the other agreements concluded in that connection, including the TRIPs Agreement, were approved 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). Those agreements are published as annexes to the Decision. They entered into force on 1 January 1996 for the Community and its Member States.

As a matter of Community law, the TRIPs Agreement is a mixed agreement: competence for concluding it was shared between the Community and its Member States. The Community and the Member States were jointly competent in areas within the scope of the TRIPs Agreement where the Community had already introduced only partial harmonisation measures, as in the field of trade marks. With particular regard to the provisions of the TRIPs Agreement relating to the measures to be adopted to secure the effective protection of intellectual property rights, including the rules regarding provisional measures, the Court has stressed that the Community and its Member States were jointly competent.

The Court in Hermès ruled that it had jurisdiction to interpret Article 50 of the TRIPs Agreement not only in situations where the national courts were called upon to order provisional measures for the protection of rights arising under a Community trade mark but also where the case concerned the rights arising under a trade mark protected under national - and in that case Uniform Benelux - trade-mark law. More recently in Parfums Christian Dior the Court confirmed the ruling in Hermès and explained that its jurisdiction to interpret Article 50 of the TRIPs Agreement was not restricted to situations covered by trade-mark law, but also encompassed situations concerning other intellectual property rights falling within the scope of the TRIPs Agreement.

The scheme and aims of Article 50

Part III of the TRIPs Agreement represents the first attempt to grapple at international level with the problems of enforcement of intellectual property rights and reflects the fact that, at the time of negotiation of the Agreement, the industrialised countries were increasingly concerned about the mounting problems of counterfeit and pirated goods. Thus for example one commentator reports that in 1985 industries in selected countries lost over USD 1.3 billion annually from ineffective international copyright protection. Based on these figures, the International Intellectual Property Alliance stressed in its report of that year to the US International Trade Commission that the US government's goal must be to establish an international trading climate in which intellectual property is respected and protected.

The provisions that now constitute Part III, including Article 50, were prompted by the industrialised nations, in particular the US, Europe, Japan and Australia, in response to those concerns. Article 50 was the subject of relatively few drafting battles in the course of negotiation and hence suffered relatively little amendment. It may accordingly be regarded as broadly reflecting the desires of the industrialised countries.

Provisional measures of the type envisaged by Article 50 are of particular effect where the holder of intellectual property rights learns of a manifest actual or potential infringement of those rights. It enables him in those circumstances to obtain a prompt and effective provisional measure. In that type of case - namely where the infringement is manifest - the granting of such a measure will invariably be sufficient to dispose of the matter: the party marketing (or seeking to market) the counterfeit or pirated goods will have no grounds for contesting the order and no interest in defending proceedings on the merits.

There will, of course, be other cases in which a provisional measure is obtained where the circumstances are less black and white: there may be a genuine defence to the allegation of infringement - a defence which, if the measure is obtained ex parte (inaudita altera parte), the defendant will be unable to advance in the context of the interim application. There may even be cases where it is the defendant whose intellectual property rights are infringed by the conduct of the claimant.

Article 50(6) must accordingly be interpreted so as to accommodate those interests: on the one hand there must be no obligation on the claimant pointlessly to pursue proceedings on the merits in the majority of cases where the provisional measure effectively disposes of the case and the defendant so accepts; on the other hand the defendant must be given an opportunity to put forward his defence on the merits if he wishes to.

The Commission makes an analogous point about Article 50 in general, observing that it represents an equilibrium between prompt and effective provisional protection of intellectual property rights and the defendant's interest in the provisional measures not being manipulated to protectionist ends. That objective, it adds, is in accordance with Article 41(1) and (2) of the Agreement. Those provisions introduce Part III, which includes Article 50. Article 41(1) it will be recalled requires enforcement procedures to be applied so as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. Article 41(2) requires that enforcement procedures should be fair and equitable and should not be unnecessarily complicated or costly. The philosophy underlying those provisions - in summary, equilibrium and fairness - should be respected when interpreting the paragraphs of Article 50.

Finally, I would make the following two points about the effective application of Article 50(6).

First, any lacunae in the detailed procedural rules there set out, applicable to all the WTO Members including the 15 Member States of the European Union, are in my view best filled by national law in the absence of any relevant Community legislation: imposing procedural rules passed over by the negotiators of the TRIPs Agreement is likely to be hazardous. That approach finds support in the last sentence of Article 1(1) of the Agreement, which provides that Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

Second, the court hearing the application for provisional measures (or, if relevant, the court hearing an appeal against the grant or refusal of provisional measures) is clearly best placed to decide on certain procedural matters where the Agreement and national law so permit. That court will be aware of the facts and thus be in a position to ensure that in a particular case the requirements of equilibrium and fairness underlying Article 50(6) are met.

In the light of those factors, I will now turn to the main proceedings and the questions referred.

The main proceedings and the questions referred

The main proceedings in this case concern the alleged infringement of a pictorial trade mark Route 66 registered by Mr Groeneveld, resident in Oosterhout, the Netherlands, in respect of various categories of goods and services including alcoholic beverages, restaurant services and hotel/catering services.

Route 66 was a famous interstate highway in the United States, named in 1926 and running for 2 400 miles through eight states from Michigan Avenue in Chicago to Santa Monica in California. Route 66 has become (and has indeed perhaps always been) something of a cultural icon in the United States and further afield (there are for example Route 66 Associations in Norway, Italy, and Japan). It featured in John Steinbeck's The Grapes of Wrath: described as the mother road it was the route taken by over 200,000 people who in the 1930s abandoned the dust-bowl of the Mid-West and migrated to California. It also appears in Jack Kerouac's On the Road and has given rise to popular songs and television series.

The form of the pictorial marks registered by Mr Groeneveld is derived from the form taken by the road sign indicating Route 66 at the time when the whole of it was still in use. I would in passing mention that it seems surprising to me that such a sign has been registered as a trade mark.

Mr Schieving and Mr Nijstad in partnership operate a discothèque in Meppel, the Netherlands, which incorporates a café called Route 66.

Having to no effect served formal notice to desist on Mr Schieving and Mr Nijstad, Mr Groeneveld brought proceedings against them for summary judgment (kort geding). The application was lodged on 31 October 1995 and the hearing took place on 6 November 1995. On 9 January 1996 the President of the Rechtbank (District Court), Assen, granted the relief claimed by Mr Groeneveld, ordering Mr Schieving and Mr Nijstad (1) to desist and refrain from using the name(s) (Café) Route 66 and the marks ROUTE 66, and/or any other sign similar to the registered marks ROUTE 66, in relation to the goods and services in respect of which those marks are registered (including hotel/catering services) and (2) to desist and refrain from using in any other way the marks ROUTE 66 and/or any similar sign, such as the contested name (Café) Route 66, in such a way that they are unlawfully exploited for economic purposes in circumstances which may infringe the rights of the proprietor(s) of the marks.

By judgment of 3 September 1997 the Gerechtshof te Leeuwarden (Regional Court of Appeal, Leeuwarden) upheld the judgment of the President, subject to a modification of the wording of the judgment so as to bring it into line with the wording of the Uniform Benelux Law on Trade Marks.

Mr Schieving and Mr Nijstad appealed in cassation to the Hoge Raad (Supreme Court). That court dismissed parts 1 to 8 inclusive of the grounds of appeal, which related to the interpretation of various provisions of the Uniform Benelux Law on Trade Marks. Part 9 of the grounds of appeal concerned the rejection by the Gerechtshof of an argument advanced before that court by Mr Schieving and Mr Nijstad concerning the effect of Article 50(6) of the TRIPs Agreement.

Noting that the TRIPs Agreement had entered into force in the Netherlands on 1 January 1996, Mr Schieving and Mr Nijstad had requested the Gerechtshof, in reliance on Article 50(6) of that Agreement, to declare that, if and in so far as the orders made by the President in his judgment of 9 January 1996 may have been capable of being upheld or granted, those orders had remained operative for a period not exceeding 20 working days or 31 calendar days after service, whichever was the longer, after which the orders in question must be regarded as having lapsed, since Mr Groeneveld had not instituted substantive proceedings within that period.

Before the Hoge Raad Mr Schieving and Mr Nijstad complained that, by rejecting that plea and ruling that their application was to be dismissed, the Gerechtshof had misconstrued Article 50(6) of the TRIPs Agreement. The Hoge Raad accordingly referred the following questions for a preliminary ruling:

Does Article 50 of the TRIPs Agreement, in particular Article 50(6), have direct effect?

Is Article 50(6) of the TRIPs Agreement to be interpreted as meaning that provisional measures within the meaning of Article 50(1) and (2) lapse by operation of law either if the substantive proceedings are not instituted within the period prescribed in the provisional measure or, where no period is prescribed, if the substantive proceedings are not commenced within 20 working days or 31 calendar days (whichever is the longer period), or is a request by the party against whom a provisional measure has been ordered (invariably) necessary in order for that measure to lapse?

Where the time-limit within which the substantive proceedings must be brought is not prescribed in the provisional measures ordered, does it commence on:

the day after the date on which the court ordered the provisional measure in question; or

the day after the date on which the decision ordering the provisional measure was served on the defendant; or

the day after the date on which the decision ordering the provisional measure became definitive and no longer open to challenge; or

at any other point in time?

Where a court orders a provisional measure, must it of its own motion fix a time-limit within which substantive proceedings are to be instituted, or may it fix such a time-limit only if an application is made to that effect?

5(5) Where a court is called upon in appeal proceedings to adjudicate on a measure ordered by a lower court in proceedings at first instance, and that appellate court confirms that measure, is it open to the appellate court to prescribe, either of its own motion or on application by one of the parties, a time-limit within the meaning hereinbefore referred to, if the court seised of the matter at first instance has not done so?

6(6) Is Article 50 of the TRIPs Agreement applicable where that Agreement enters into force in the Member State concerned on a date following the closure of the trial procedure at first instance but before the court seised of the first-instance proceedings has delivered its decision?

The national procedure at issue

In all cases in which, having regard to the interests of the parties, an immediate provisional measure is necessary on grounds of urgency, the application may be made at a hearing which the President shall hold for that purpose on working days which he shall fix.

33. In such a case, Article 290(2) of the Code provides that the parties may appear before the President under his voluntary jurisdiction to grant interim measures, in which case the applicant must be represented at the hearing by counsel, whereas the defendant may appear in person or be represented by counsel.

34. According to Article 292 of the Code, an interim measure adopted by the President does not prejudge the examination of the merits of the main proceedings.

35. Under Article 295 of the Code, an appeal against the provisional order may be lodged before the Gerechtshof (Court of Appeal) within two weeks of the delivery of that decision.

The first question

The second question

The third question

58The answer to the national court's third question is thus in principle to be found in national law. As can be seen from the above summary of national rules and practices, however, in a minority of Member States national law does not appear to provide a readily ascertainable rule or practice on the basis of which it may be determined when time starts running where the court ordering the provisional measures does not prescribe a time-limit for the commencement of the main proceedings. In those circumstances, I consider that it will likewise be consistent with the wording and purpose of Article 50(6) for time to run either from the date of the decision ordering the provisional measures or from the date of service of that decision (or again in either case from the day after the relevant date).

The fourth question

The fifth question

64.That approach is in my view consistent with both the purpose and the wording of Article 50(6). I would add that it is not only where the court of first instance has failed to fix a time-limit that the question arises: even where the court of first instance sets a time-limit, it may be appropriate for an appellate court confirming the order to vary that time-limit if it is empowered to do so under national law. For example, if the court of first instance set a time-limit of 15 days from service of the order, and if national law prescribed a time-limit for appealing of 15 days from service of the order, it is clear that the time-limit might have to be varied on appeal depending on when the appeal was lodged, heard and determined.

65.Where however national law permits an appellate court to prescribe a time-limit of its own motion, it seems to me that the wording and purpose of Article 50(6) are best reflected if that court normally does so as a matter of practice even in the absence of application by one of the parties. Although a time-limit set at first instance may, as suggested above, call for variation in certain circumstances, other circumstances may equally be envisaged in which it would be appropriate for the original time-limit to stand notwithstanding an appeal.

66.It may be useful at this stage to summarise the conclusions so far reached on the interpretation of Article 50(6).

67.The answer to the first question is given by the Parfums Christian Dior judgment.

68.Second, a request by the defendant is necessary under Article 50(6) before a provisional measure is revoked or otherwise ceases to have effect.

69.Third, national law determines when the time-limit within which the substantive proceedings must be brought commences where it is not prescribed in the decision ordering the provisional measures. It is consistent with the wording and purpose of Article 50(6) for time to run either from the date of the decision ordering the provisional measures or from the date of service of that decision (or in either case from the day after that date).

70.Fourth, national law determines whether a court which orders a provisional measure must of its own motion fix a time-limit within which substantive proceedings are to be instituted.

71.Fifth, if permitted by national law, an appellate court ordering, confirming or varying a provisional measure may of its own motion prescribe a time-limit within which proceedings on the merits must be commenced.

72.By its sixth question the referring court asks whether Article 50 of the TRIPs Agreement applies where that Agreement entered into force in the Member State concerned after the hearing at first instance but before judgment.

73.Article 70(1) of the TRIPs Agreement provides that the Agreement does not give rise to obligations in respect of acts which occurred before the date of application of the Agreement for the Member in question.

74.In order to answer the national court's final question, it must first be determined whether acts in Article 70(1) means solely the acts of infringement allegedly committed by the defendant or whether acts is intended in the broader sense which would encompass a judicial act such as the interlocutory order given at first instance on 9 January 1996. The former interpretation seems more consistent with the general tenor of Article 70, most of which makes clear links between the date of entry into force of the Agreement and the status of the subject-matter of intellectual property rights: see for example paragraphs (2) and (3). In addition, Article 70(4) uses the term acts in a context which is clearly limited to factual rather than legal acts.

75.Moreover act is used in Article 41(1) in the phrase act of infringement. Judgments in the general sense however are referred to as judicial decisions or decisions (see Article 41(3), 41(4)).

76.Article 50 of the TRIPs Agreement is therefore applicable (subject to the other transitional provisions in Article 70 thereof) where that Agreement enters into force in the Member State concerned after the close of proceedings at first instance but before the court seised of the first-instance proceedings has delivered its decision, provided that the act of infringement in respect of which a provisional measure within the meaning of Article 50(6) is ordered is committed or continues after the TRIPs Agreement has entered into force.

77.Since it may be assumed that the act of infringement allegedly committed by the defendants in the present case (namely the operation of a café called Route 66), being in the nature of a continuing act, continued at least until the date of judgment (9 January 1996) and hence occurred both before and after the date of application of the Agreement for the Netherlands (1 January 1996), it seems clear that Article 50 is applicable.

78.Article 50 was accordingly applicable when the President of the Rechtbank, Assen, ordered the provisional measures at issue (by judgment of 9 January 1996) and when the Gerechtshof te Leeuwarden upheld those measures on appeal (by judgment of 3 September 1997).

79.I accordingly consider that the questions referred by the Hoge Raad should be answered as follows:

(1)In a field to which the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement), as set out in Annex 1 C to the Agreement establishing the World Trade Organisation, approved on behalf of the Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994, applies and in respect of which the Community has already legislated, 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 the TRIPs Agreement.

(2)In a field in 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 the TRIPs Agreement or that it should oblige the courts to apply that rule of their own motion.

(2)Under Article 50(6) of the TRIPs Agreement, a request by the party against whom a provisional measure has been ordered is necessary in order for that measure to be revoked or otherwise cease to have effect.

(3)Where a decision ordering a provisional measure within the meaning of Article 50(6) of the TRIPs Agreement does not prescribe a commencement date for the time-limit within which proceedings on the merits must be initiated, the national law of the Member State concerned determines when that time-limit commences. It is consistent with the wording and purpose of Article 50(6) for time to run either from the date of the decision ordering the provisional measures or from the date of service of that decision (or in either case from the day after that date).

(4)The national law of the Member State concerned determines whether a court which orders a provisional measure within the meaning of Article 50(6) of the TRIPs Agreement must of its own motion fix a time-limit within which proceedings on the merits must be initiated.

(5)The national law of the Member State concerned determines whether an appellate court may of its own motion prescribe a time-limit within which proceedings on the merits must be initiated.

(6)Article 50 of the TRIPs Agreement is applicable where that Agreement enters into force in the Member State concerned on a date following the close of proceedings at first instance but before the court seised of the first-instance proceedings has delivered its decision, provided that the act of infringement in respect of which a provisional measure within the meaning of Article 50(6) is ordered is committed or continues after the TRIPs Agreement has entered into force.