Chapter 21

Derogations from Articles 34 and 35 TFEU listed in Article 36 TFEU and justifications based on mandatory requirements

Question 1

Which of the following measures can be justified under Article 36 TFEU?

a. Only distinctly applicable measures

b. Both distinctly and indistinctly applicable measures

c. Only measures relating to selling arrangements

a. This is an incorrect answer. Both distinctly and indistinctly applicable measures can be justified under Article 36 TFEU. However, it is important to note that distinctly applicable measures can only be justified on the grounds set out in that article (so they cannot be justified by mandatory requirements.

b. This is the correct answer. Both distinctly and indistinctly applicable measures can be justified under Article 36 TFEU. Whilst distinctly applicable measures can never be justified by mandatory requirements (this was clearly stated by the ECJ in Case 113/80 Commission v Ireland [Re Irish Souvenir]), indistinctly applicable measures can be justified under both Art 36 TFEU and on the grounds of mandatory requirements.

c. This is an incorrect answer. Selling arrangements which satisfy the two conditions set out in Keck are outside the scope of Article 34 TFEU.

Question 2

A Member State is very concerned about the volume of obscene materials being exported from other Member States to that State. Which of the following grounds set out in Article 36 TFEU can be successfully relied upon by the government of the Member State concerned?

a. The requirements of public policy

b. The protection of public morality in a situation where national law prohibits the production and sale of obscene materials in the Member State concerned

c. The protection of public morality in a situation where national law allows the production and sale of obscene materials in the concerned Member State but in fact no such materials have ever been produced in that State.

a. This is an incorrect answer. Public policy refers to the fundamental interests of society and does not constitute an appropriate ground to justify the prohibition of the production and sale of obscene materials.

b. This is the correct answer. Article 36 TFEU allows each Member State to determine in accordance with its own scale of values and in the form selected by it, the requirements of public morality in its territory. However, as exemplified by Case 121/85 Conegate Limited v HM Customs & Excise, Article 36 TFEU does not allow a Member State to impose double standards of morality, one applicable to domestic goods, another to imported goods and thus discriminate against the latter on the ground of public morality. In Case 121/85 Conegate Limited v HM Customs & Excise, the ECJ held that the UK could not rely on Article 36 TFEU to prohibit the importation of products, when no internal provisions had been enacted to prevent the manufacture and distribution of the offending products within the UK.

c. This is an incorrect answer. In Case 121/85 Conegate Limited v HM Customs & Excise, the ECJ rejected the argument of the UK based on the fact that no articles comparable to those imported by Conegate (inflatable dolls) were manufactured in the UK territory. The ECJ stressed that as long as UK law did not exclude the possibility of manufacturing such articles importation from other Member States could not be prohibited.

Question 3

In which of the following circumstances may a Member State be allowed to rely on the precautionary principle?

a. When the potentially dangerous effects of a phenomenon, product or process have been identified by a scientific and objective evaluation, but this evaluation does not allow the risk to be determined with sufficient certainty.

b. When there is a genuine risk that the product in question endangers public health

c. When there is a possibility based on a hypothesis, which may turn out to be flawed, that the product in question might endanger public health but scientific research is contradictory and inconclusive.

a. This is the correct answer. The application of the precautionary principle emphasises that any national measures must be based on the fullest possible scientific evaluation and the careful assessment of the potential consequences of action or inaction.

b. This is an incorrect answer. If the product is question endangers public health a Member State can rely on the derogation set out in Article 36 TFEU. A Member State is allowed to introduce national measures contrary to the requirements of the free movement of goods, in order to protect health and life of humans, animals and plants, if it can demonstrate that the product in question represents a genuine risk to health and life.

c. This is an incorrect answer. In Case C-236/01 Monsanto Agricoltura Italia, the ECJ emphasised that any risk assessment must not be based on purely hypothetical considerations but on the most reliable scientific data and the most recent results of international research.

Question 4

In which of the following situations are the intellectual property rights of patentee A exhausted?

a. Patentee A holds a patent in Member State A. He has manufactured and marketed the protected products in Member State A. B, who has manufactured in Member State B products protected by A’s patent, without the consent of A, wants to export these products from Member State B to Member State A.

b. Patentee A has registered a patent in Member State A, patentee B has registered a patent in Member State B. The patented products are similar in all respects. A and B are legally and economically independent of each other.

c. Patentee A holds a patent in Member State A and has granted a licence to B, to manufacture protected products in Member State B. C, a parallel importer (who has no economic or legal links with A or B) decides to export the protected products manufactured in Member State B by B to Member State A (C hopes to make a profit because in Member State A the protected products sell for higher prices than in Member State B).

a. This is an incorrect answer. Patentee A is entitled to prevent the importation of protected goods into Member State A. His rights have not been exhausted.

b. This is an incorrect answer. Patentee A is entitled to prevent importation of B’s products into Member State A and vice versa, i.e. patentee B can use his patent to keep A’s products out of Member State B.

c. This is the correct answer. Patentee A cannot prevent importation by C of protected products from Member State B to Member State A. Patentee A by giving his consent (by granting a licence to B) has put the protected product into circulation for the first time. His rights are exhausted.

Question 5

In which of the following situations are the intellectual property rights of A, a holder of a trade mark, exhausted?

a. A registered his trade mark in Member State A and has granted a licence to B, to manufacture protected products in Member State B. C, a parallel importer (who has no economic or legal links with A or B) decides to export the protected products manufactured in Member State B by B to Member State A and then to advertise them in accordance with the methods which are customary to his sector of trade.

b. A registered his trade mark in Member State A and has granted a licence to B, to manufacture protected products in State B, which is not a Member State of the EU. B decides to export the protected products manufactured in State B by B to Member State A.

c. A registered his trade mark in Member State A and has granted a licence to B, to manufacture protected products in State B, which is not a Member State of the EU. C, a parallel importer (who has no economic or legal links with A or B) decides to export the protected products manufactured in State B by B to Member State A.

a. This is the correct answer. In Case C-337/95 Parfums Christian Dior SA and Parfums Christian Dior BV v Evora BV, the ECJ decided that the principle of exhaustion applies to advertisement of the protected products. A reseller has to advertise the trade mark protected goods using methods which are customary in the relevant sector of trade, in a manner which will not damage the reputation of the trade mark in question, and must avoid associating luxury products with other non-luxury products he sells.

b. This is an incorrect answer. The principle of the exhaustion of intellectual property rights does not apply to imports from outside the EEA. The holder of intellectual property rights is entitled to prevent parallel import of protected products coming from non-Member States to a Member State, even if the holder was first responsible for putting its goods in circulation. This was confirmed by the ECJ in Case C-355/96 Silhouette International Schmied GmbH & Co Kg v Hartlauer Handelsgesellschaft MbH.

c. This is an incorrect answer (see above). In Joined Cases C-414/99 to C-416/99 Zino Davidoff SA v A & G Imports Ltd, the ECJ held that the trade mark holder must expressly consent to parallel importation of protected goods from outside the EEA into the EEA.