Case law from the European Court of Justice

ECJ case law

Theory of exhaustion of rights

The European Court of Justice throughout the theory of exhaustion of rights has tried to find a balance between the intellectual property rights and the free movement of movement within the European Union.

According to this theory, once that a product protected by IPRs are put on sale in an European Economic Area (EEA) Member State, the right-holder will exhaust his/her right and could not stop the sale of the same product in another EEA country. This happens whether the right-holder himself puts the product on the market or the product is put on sale with his/her permission. Although this theory applies to all intellectual property rights, there some exceptions limits and exceptions. For instance, the exhaustion does not regard the marketing of counterfeit goods and trade marks' exhaustion undergo to judge's considerations in order to preserve their essential function of guaranteeing the identity of the origin of the marked product to the consumer. Moreover, the ECJ has clarified that there is no international exhaustion of rights, meaning that the same principle does not apply to imports from outside the EEA.

Existence and exercise of intellectual property rights

In order to draw the juridical borders between the intellectual property rights and the free movement of goods, the ECJ has developed the existence/exercise dichotomy in some landmark decisions (Consten and Grundig v Commission, 1966; Deutsche Grammophon v Metro, 1971). Under this distinction, in case of existence of an intellectual property right, art. 36 TFEU applies and allows some derogations to the free movement of goods in order to preserve the commercial and industrial property. Otherwise, in presence of a mere exercise of right, the free movement of goods will prevail in application of art. 34 TFEU that prohibit all quantitative restrictions and all measures having equivalent effect. However, existence and exercise are abstract concept that cannot be applied without the definition of the specific subject matter of each right provided by the ECJ. So, for instance, the patents' specific subject-matter has been defined as “the exclusive right to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time […] as well as the right to oppose infringements”.

Disclosure of personal data

In the landmark decision Promusicae v Telefonica the ECJ stated that, under EU law, personal data can be disclosed in order to safeguard some general or public interests or some fundamental rights. The measures to be taken must be necessary, appropriate and proportionate, and related to the prevention, investigation and prosecution of criminal offences. However, the ECJ clarified that the disclosure can interest also civil proceedings when it is fundamental to protect rights and freedom of others. The case Promusicae v Telefonica regarded the disclosure of personal data by internet service providers in case of civil proceedings involving copyright infringements. In particular, Promusicae, a Spanish organisation of publishers and producers of musical and audiovisual recordings, asked the Spanish courts to order ISP Telefonica the identities and physical addresses of some of its customers infringing copyright. In this case, the ECJ stated that Member States (and their courts) have to guarantee a fair balance between the protection of fundamental rights (that include copyright) and the principle of proportionality. Moreover, the ECJ has clarified that EU law permits to the Member States to impose an obligation of disclosure of personal data in order to protect copyright in civil proceeding. However, the establishment of this obligation is not compulsory for the Member States.