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Trade Marks and the Free movement of goods

Written by on 03 January 2003

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The Trade Mark Directive was implemented into community law; the court has based some of its judgements on community exhaustion, on Articles 28 [30] and 30 [36] of the Treaty instead of the Directive. Joliet explains this in an analysis of HAG GF (HAG 11) by referring to the purpose of Directives-to harmonise differences between the laws of member states. He finds that in most cases in which national trademark rules conflict with the demand of the free movement of goods, the conflict between the set of rules is a consequence of the territoriality of trademark rights, not of differences between national laws. The Directive does nothing to restrict this territoriality of rights, and is therefore not the proper legal source to solve these types of problems. Accordingly, the older case law is of interest also after the introduction of the Directive.   Impediments regarding the free movement of goods between member states have been codified by virtue of Article 28, which covers all kinds of trade restrictions. It reads as follows:   "Quantitative restrictions on imports and all measures having equal effect shall, without prejudice to the following provisions, be prohibited between member states."   Article 30 limits the scope of Article 28:   "The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds (?) the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between member states."   It is now generally believed that this reference means that the rules of free movement of goods generally do apply, save where the exceptions apply. This view is based on the argument that if industrial and commercial property rights were not considered as potentially measures having effect equivalent to quantitative restrictions, neither the reference to them in the Article nor the proviso in the second sentence makes sense.   The ECJ confirmed this in the case of Simmenthal v. Italian Minister for Finance by stating that:   "Article 36 (now Article 30) is not designed to reserve certain matters to the exclusive jurisdiction of member states but permits national laws to derogate from the principle of free movement of goods to the extent to which such a derogation is and continues to be justified for the attainment of the objectives referred to in the article."   The statement emanating from this case seems not only to confirm when Article 30 will apply, but also imposes a further limitation on when it will apply, namely that national laws which are contrary to the free movement of goods must be justified for the attainment of certain objectives. In the case, Officier Van Justitie v. de Peijper held that national law should be proportional.   It is now clear that not only the community rules on the free movement of goods apply to intellectual property rights, but also those relating to the free movement of services and competition. This really is logical, since contrary view would lead to intellectual property rights enjoying a different status in the single market from any other right. However, the community rules do not affect the existence of intellectual property rights granted pursuant to the legislation of a member state. The national legislation can determine, for example, whether a name may constitute a trademark, how a trademark may be transferred, and the grounds upon which it may become extinct.
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