JUDGMENT OF THE COURT

11 November 1997(1)

(Article 36 of the EC Treaty — Trade mark rights — Relabelling of whiskybottles)

In Case C-349/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Hoge Raadder Nederlanden for a preliminary ruling in the proceedings pending before thatcourt between

Frits Loendersloot, trading as F. Loendersloot Internationale Expeditie,

and

George Ballantine & Son Ltd and Others

on the interpretation of Article 36 of the EC Treaty,

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, C. Gulmann (Rapporteur),H. Ragnemalm, M. Wathelet (Presidents of Chambers), J.C. Moitinho de Almeida,P.J.G. Kapteyn, J.L. Murray, D.A.O. Edward, G. Hirsch, P. Jann and L. Sevón,Judges,

Advocate General: F.G. Jacobs,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

• Frits Loendersloot, trading as F. Loendersloot Internationale Expeditie, byG. van der Wal, of the Hague Bar,
  
  
• George Ballantine & Son Ltd and Others, by W.A. Hoyng, of theEindhoven Bar,
  
  
• the United Kingdom Government, by S. Braviner, of the Treasury Solicitor'sDepartment, acting as Agent, and M. Silverleaf, Barrister,
  
  
• the Commission of the European Communities, by H. van Lier, LegalAdviser, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Frits Loendersloot, trading as F. LoenderslootInternationale Expeditie, represented by G. van der Wal, of George Ballantine &Son Ltd and others, represented by W.A. Hoyng, of the United KingdomGovernment, represented by L. Nicoll, of the Treasury Solicitor's Department,acting as Agent, and M. Silverleaf, and of the Commission, represented by H. vanLier, at the hearing on 7 January 1997,

after hearing the Opinion of the Advocate General at the sitting on 27 February1997,

gives the following

Judgment

1. By judgment of 3 November 1995, received at the Court on 13 November 1995, theHoge Raad der Nederlanden (Supreme Court of the Netherlands) referred to theCourt for a preliminary ruling under Article 177 of the EC Treaty four questionson the interpretation of Article 36 of that Treaty.
   
   
2. Those questions were raised in proceedings between Frits Loendersloot, residingin the Netherlands, trading as F. Loendersloot Internationale Expeditie (hereinafter'Loendersloot‘), and George Ballantine & Son Ltd and 14 other companiesestablished in Scotland or England (hereinafter 'Ballantine and others‘).
   
   
3. Ballantine and others produce and market alcoholic drinks, particularly whisky.Their products enjoy a high reputation and are sold in almost all countries of theworld.
   
   
4. Those drinks are marketed in bottles to which the manufacturers affix labelsbearing their respective trade marks. Those marks also appear on the packagingof the bottles. In addition, Ballantine and others place identification numbers bothon the labels or elsewhere on the bottles and on the packaging.
   
   
5. Loendersloot is a transport and warehousing firm. Its customers include traderswho engage in 'parallel‘ trade. They buy the products of Ballantine and others incountries where prices are relatively low, and resell them in countries where pricesare higher.
   
   
6. In 1990 Ballantine and others brought proceedings against Loendersloot in theArrondissementsrechtbank (District Court) Breda seeking an order restrainingLoendersloot from doing certain actions which infringed their trade mark rights orwere otherwise unlawful, in particular:
   
   
   • removing the labels bearing their trade marks and reapplying them byreaffixing the original labels or replacing them with copies,
     
     
   • removing the identification numbers on or underneath the original labelsand on the packaging of the bottles,
     
     
   • removing the English word 'pure‘ and the name of the importer approvedby Ballantine and others from the original labels, and in certain casesreplacing that name by the name of another person, and
     
     
   • exporting the products thus treated to traders in France, Spain, England, theUnited States and Japan.

   
   
   

7. Loendersloot argued that even if it had carried out those actions, they did notconstitute infringements of trade mark rights, nor were they unlawful on othergrounds. It submitted in particular that the actions were necessary to allow paralleltrade in the products in question on certain markets.
   
   
8. The Arondissementsrechtbank held that the removal of the identification numbersconstituted an unlawful act for reasons not connected with trade mark rights, andprohibited Loendersloot from removing them from the bottles and packaging andfrom exporting the products thus treated. It also found that removing the trademarks from the bottles and packaging and reapplying them constitutedinfringements of trade mark rights, and therefore ordered Ballantine and others toproduce evidence of the trade mark rights they claimed.
   
   
9. Loendersloot appealed against that judgment to the Gerechtshof (Regional Court)'s-Hertogenbosch. Ballantine and others cross-appealed.
   
   
10. The Gerechtshof set aside the judgment of the Arrondissementsrechtbank in so faras it prohibited the removal of the identification numbers and the export of theproducts in question. With respect to the alleged infringements of trade markrights, however, the Gerechtshof held that the Arrondissementsrechtbank hadrightly concluded that the removal and reapplication of a trade mark by a thirdparty constituted an unlawful use of that mark. It rejected Loendersloot's argumentthat Articles 30 and 36 of the EC Treaty precluded the court from ordering theinjunctive relief sought by Ballantine and others, on the ground that the exclusiveright of a trade mark owner to affix that mark formed part of the specific subject-matter of trade marks.
    
    
11. Loendersloot appealed on a point of law to the Hoge Raad, and Ballantine andothers cross-appealed. Loendersloot argued in particular that the possibility for theowner of a trade mark, under his national legislation, to prevent a third party fromremoving and reapplying his mark did not form part of the specific subject-matterof trade mark rights, and that Ballantine and others were using their trade markrights in order to be able to maintain a system of identification numbers whose solepurpose was to combat parallel trade by means incompatible with Community law.
    
    
12. Ballantine and others argued that the exclusive right they relied on formed part ofthe specific subject-matter of trade mark rights, and that the identification numberspursued only legitimate interests such as the recall of defective products and theneed to combat counterfeiting.
    
    
13. In the judgment making the order for reference, the Hoge Raad held that theremoval and reapplication of a trade mark by a third party without the consent ofthe trade mark owner were prohibited by the relevant national law. Since itconsidered that it could not rule on the arguments relating to Article 36 of theTreaty without first making a reference to the Court of Justice, the Hoge Raadstayed the proceedings and referred the following questions to the Court for apreliminary ruling:
    
    '1.    Is the specific subject-matter of the rights attaching to a trade mark to beregarded as including the possibility afforded to the proprietor of a trademark under national law to oppose, with regard to alcoholic drinksmanufactured by him, the removal by a third party of labels affixed by theproprietor on bottles and on the packaging containing them, and bearing hismark, after the drinks have been placed by him on the Community marketin that packaging, and the subsequent reapplication of those labels by thatthird party or their replacement by similar labels, without thereby in anyway damaging the original condition of the product?
    
    2.    In so far as the labels are replaced by other similar labels, is the positiondifferent where the third party omits the indication ”pure" appearing on theoriginal labels and/or, as the case may be, replaces the importer's name withanother name?
    
    3.    If Question 1 falls to be answered in the affirmative, but the proprietor ofthe trade mark avails himself of the possibility referred to in that questionin order to prevent the third party from removing the identification markswhich the trade mark proprietor has affixed on or underneath the labels inorder to enable the trade mark proprietor to detect shortfalls within hissales organization and thus to combat parallel trade in his products, mustsuch an exercise of the trade mark right be regarded as a ”disguisedrestriction on trade between Member States" aimed at achieving an artificialcompartmentalization of the markets?
    
    4.    To what extent is the answer to Question 3 affected where the trade markproprietor has affixed those identification marks either pursuant to a legalobligation or voluntarily, but in any event with a view to making a ”productrecall" possible and/or in order to limit his product liability and/or tocombat counterfeiting, or, as the case may be, solely in order to combatparallel trade?‘
    
    Preliminary remarks
    
    
14. The national court put its questions on the basis of the following three premisses:
    
    
    • the removal and reapplication or replacement of the trade marks ofBallantine and others constitute infringements of their trade mark rightsunder national law;
      
      
    • the injunctive relief sought by Ballantine and others create barriers to thefree movement of goods between Member States, which are contrary inprinciple to the relevant provisions of the Treaty, and
      
      
    • such barriers may be permitted under Article 36 of the Treaty if they arejustified for reasons of the protection of industrial and commercial property,provided that they constitute neither an arbitrary means of discriminationnor a disguised restriction on trade between Member States.

    
    
    

15. As to the second premiss, Ballantine and others deny that the injunctive reliefsought constitutes barriers to intra-Community trade, since there is nothing toprevent Loendersloot from exporting the products in question in their originalcondition to other Member States.
    
    
16. On this point, as the Advocate General has observed in point 25 of his Opinion,there is no reason to question the national court's assessment that prohibitorymeasures such as those sought by Ballantine and others constitute barriers to thefree movement of goods between Member States laid down by Articles 30 and 34of the EC Treaty.
    
    
17. As to the third premiss, it has been suggested that the national court's questionsshould be answered within the framework not of Article 36 of the Treaty but ofFirst Council Directive 89/104/EEC of 21 December 1988 to approximate the lawsof the Member States relating to trade marks (OJ 1989 L 40, p. 1), which was tobe transposed into the national laws of the Member States by 31 December 1992at the latest.
    
    
18. On this point, it suffices to note that it is for the national court to determinewhether, from the point of view of the national rules applicable to orders such asthose sought in the main proceedings, the dispute before it is to be resolved on thebasis of Article 36 of the Treaty or of Directive 89/104, Article 7 of which regulatesthe question of exhaustion of trade mark rights in relation to goods which havebeen put on the market in the Community. However, Article 7 of that directive,like Article 36 of the Treaty, is intended to reconcile the fundamental interest inprotecting trade mark rights with the fundamental interest in the free movementof goods within the common market, so that those two provisions, which aim toachieve the same result, must be interpreted in the same way (Joined CasesC-427/93, C-429/93 and C-436/93 Bristol-Myers Squibb and Others v Paranova [1996]ECR I-3457, paragraph 40; Joined Cases C-71/94, C-72/94 and C-73/94 Eurim-Pharm v Beiersdorf and Others [1996] ECR I-3603, paragraph 27, and Case C-232/94MPA Pharma v Rhône-Poulenc Pharma [1996] ECR I-3671, paragraph 13).
    
    The questions
    
    
19. By its four questions, which should be considered together, the national courtessentially asks whether Article 36 of the Treaty is to be interpreted as meaningthat the owner of trade mark rights may, even if that constitutes a barrier to intra-Community trade, rely on those rights to prevent a third party from removing andthen reaffixing or replacing labels bearing the mark which the owner has himselfaffixed to products he has put on the Community market, where the originalcondition of the products is not affected.
    
    
20. The questions concern more particularly situations where the relabelling is done forthe purpose of
    
    
    • removing the identification numbers placed by the trade mark owner on orunderneath the labels and on the packaging of the bottles, and
      
      
    • removing the English word 'pure‘ and the name of the approved importerfrom the labels, and in certain cases replacing that name with the name ofanother person.

    With respect to the first situation, the Court is asked to rule on whether it issignificant, first, that the trade mark owner makes use of his rights in order toprevent a third party from removing the identification numbers which enable himto detect weaknesses in his sales organization and so combat parallel trade and,second, that the identification numbers have other purposes, such as complying witha legal obligation, making it possible to recall the product, limiting themanufacturer's liability or combating counterfeiting.
    
    The case-law of the Court
    
    

21. In answering those questions, it should be noted that, according to the Court's case-law, Article 36 allows derogations from the fundamental principle of the freemovement of goods within the common market only in so far as such derogationsare justified in order to safeguard the rights which constitute the specific subject-matter of the industrial and commercial property in question.
    
    
22. With respect to trade mark rights, the Court has held that they constitute anessential element in the system of undistorted competition which the Treaty isintended to establish. In such a system, undertakings must be able to attract andretain customers by the quality of their products or services, which is made possibleonly by distinctive signs allowing them to be identified. For the trade mark to beable to fulfil that function, it must constitute a guarantee that all products whichbear it have been manufactured under the control of a single undertaking to whichresponsibility for their quality may be attributed (see, in particular, Case C-10/89CNL-SUCAL v HAG GF (hereinafter 'HAG II‘) [1990] ECR I-3711, paragraph13, and Bristol-Myers Squibb, cited above, paragraph 43). Consequently, the specificsubject-matter of a trade mark is in particular to guarantee to the owner that hehas the exclusive right to use that mark for the purpose of putting a product on themarket for the first time and thus to protect him against competitors wishing totake unfair advantage of the status and reputation of the trade mark by sellingproducts illegally bearing it (see, in particular, Case 102/77 Hoffmann-La Roche vCentrafarm [1978] ECR 1139, paragraph 7; HAG II, paragraph 14; and Bristol-Myers Squibb, paragraph 44).
    
    
23. It follows in particular that the owner of a trade mark protected by the legislationof a Member State cannot rely on that legislation in order to oppose theimportation or marketing of a product which has been put on the market inanother Member State by him or with his consent (see, in particular, Bristol-MyersSquibb, paragraph 45). Trade mark rights are not intended to allow their ownersto partition national markets and thus assist the maintenance of price differenceswhich may exist between Member States (see Bristol-Myers Squibb, paragraph 46).
    
    
24. With respect more particularly to the question whether a trade mark owner'sexclusive right includes the power to oppose the use of the trade mark by a thirdparty after the product has been repackaged, the Court has held that account mustbe taken of the essential function of the trade mark, which is to guarantee to theconsumer or end user the identity of the trade-marked product's origin by enablinghim to distinguish it without any risk of confusion from products of different origin. That guarantee of origin means that the consumer or end user can be certain thata trade-marked product offered to him has not been subject at a previous stage ofmarketing to interference by a third party, without the authorization of the trademark owner, in such a way as to affect the original condition of the product (see,in particular, Hoffmann-La Roche, paragraph 7, and Bristol-Myers Squibb, paragraph47).
    
    
25. The Court has thus held that the right conferred upon the trade mark owner tooppose any use of the trade mark which is liable to impair the guarantee of origin,as so understood, forms part of the specific subject-matter of the trade mark right,the protection of which may justify derogation from the fundamental principle ofthe free movement of goods (Hoffmann-La Roche, paragraph 7, Case 1/81 Pfizerv Eurim-Pharm [1981] ECR 2913, paragraph 9, and Bristol-Myers Squibb, paragraph48).
    
    
26. Applying those principles in the context of disputes concerning the repackaging ofpharmaceutical products for purposes of parallel trade, the Court has held thatArticle 36 of the Treaty must be interpreted as meaning that a trade mark ownermay in principle legitimately oppose the further marketing of a pharmaceuticalproduct where the importer has repackaged it and reaffixed the trade mark (see,in particular, Hoffmann-La Roche, paragraph 8, and, with respect to Article 7(2)of Directive 89/104, Bristol-Myers Squibb, paragraph 50).
    
    
27. Contrary to Loendersloot's assertion, that case-law applies also to cases such as thatin the main proceedings. The product bearing the trade mark has in the presentcase likewise been subject to interference by a third party, without the authorizationof the trade mark owner, which is liable to impair the guarantee of origin providedby the trade mark.
    
    
28. It should be noted, however, that according to the case-law of the Court (see, inparticular, Hoffmann-La Roche, paragraph 10, Case 3/78 Centrafarm v AmericanHome Products [1978] ECR 1823, paragraphs 21 and 22, and Bristol-Myers Squibb,paragraphs 49 and 50) Article 36 does not permit the owner of the trade mark tooppose the reaffixing of the mark where such use of his trade mark rightscontributes to the artificial partitioning of the markets between Member States andwhere the reaffixing takes place in such a way that the legitimate interests of thetrade mark owner are observed. Protection of those legitimate interests means inparticular that the original condition of the product inside the packaging must notbe affected, and that the reaffixing is not done in such a way that it may damagethe reputation of the trade mark and its owner.
    
    
29. It follows that under Article 36 of the Treaty the owner of trade mark rights mayrely on those rights to prevent a third party from removing and then reaffixing orreplacing labels bearing the trade mark, unless:
    
    
    • it is established that the use of the trade mark rights by the owner tooppose the marketing of the relabelled products under that trade markwould contribute to the artificial partitioning of the markets betweenMember States;
      
      
    • it is shown that the repackaging cannot affect the original condition of theproduct, and
      
      
    • the presentation of the relabelled product is not such as to be liable todamage the reputation of the trade mark and its owner.

    
    
    

30. According to the Court's case-law a person who repackages pharmaceuticalproducts is also required to inform the trade mark owner of the repackaging, tosupply him, on demand, with a specimen of the repackaged product, and to stateon the repackaged product the person responsible for the repackaging (see, inparticular, Bristol-Myers Squibb).
    
    
31. The application of those conditions to circumstances such as those of the mainproceedings must therefore be examined.
    
    
32. As to the original condition of the product, the wording of Question 1 indicates thatin the national court's opinion the relabelling at issue in the main proceedings hasno adverse effect upon it.
    
    
33. As to protection of the reputation of the trade mark, a third party who relabels theproduct must ensure that the reputation of the trade mark — and hence of its owner— does not suffer from an inappropriate presentation of the relabelled product (see,in particular, Bristol-Myers Squibb, paragraphs 75 and 76). To assess whether thatis the case in the main proceedings, the national court must take into account inparticular the interest of Ballantine and others in protecting the luxury image oftheir products and the considerable reputation they enjoy.
    
    
34. It appears from the case-file that the crux of the dispute is, in particular,application of the condition relative to the owner's use of the trade markcontributing to artificial partitioning of the markets between Member States.
    
    
35. On this point, the Court held in Bristol-Myers Squibb, paragraph 52, that use oftrade mark rights by their owner in order to oppose the marketing under that trademark of products repackaged by a third party would contribute to the partitioningof markets between Member States, in particular where the owner has placed anidentical pharmaceutical product on the market in several Member States invarious forms of packaging and the product may not, in the condition in which ithas been marketed by the trade mark owner in one Member State, be importedand put on the market in another Member State by a parallel importer.
    
    
36. The Court went on to hold, in paragraphs 56 and 57 of that judgment, that thepossibility for the owner of trade mark rights to oppose the marketing ofrepackaged products under his trade mark should be limited only in so far as therepackaging undertaken by the importer is necessary in order to market theproduct in the Member State of importation. It need not be established, on theother hand, that the trade mark owner has deliberately sought to partition themarkets between Member States.
    
    
37. In the main proceedings Loendersloot submits that the owner's use of trade markrights to prevent it from carrying out the relabelling at issue contributes to artificialpartitioning of the markets between Member States thereby maintaining pricedifferences which are not justified by differences in real costs. It considers that therelabelling is necessary for two reasons. First, it is essential in order to make itpossible to remove the identification numbers placed on the bottles by Ballantineand others, that being necessary to preserve the anonymity of the dealers engagedin parallel trade. Without that anonymity Loendersloot would be unable to obtainsupplies from traders authorized by Ballantine and others, who fear the impositionof sanctions on them by the producers if they know the identity of the dealersengaged in parallel sales. Second, relabelling is necessary in order to make itpossible to remove the word 'pure‘ or alter the references to the importer, so asto permit marketing in the country of destination.
    
    
38. It should be observed that the task of the national courts, who have to assesswhether the relabelling is necessary in order to prevent artificial partitioning of themarkets between Member States, is different in cases such as that in the mainproceedings and cases concerning the repackaging of pharmaceutical products. Inthe latter the national courts must consider whether circumstances in the marketsof their own States make repackaging objectively necessary. In the present case, onthe other hand, the national court must assess whether the relabelling is necessaryto protect the sources of supply of the parallel trade and to enable the products tobe marketed on the various markets of the Member States for which they areintended.
    
    Removal of the identification numbers
    
    
39. With respect to the removal and reaffixing or replacing of labels in order to removethe identification numbers, Ballantine and others observe that that removal is notnecessary to enable the products in question to be marketed on the markets of thevarious Member States in accordance with the rules in force there.
    
    
40. It should be observed that, while that statement is correct, removal of theidentification numbers might nevertheless prove necessary, as Loendersloot hasobserved, to prevent artificial partitioning of the markets between Member Statescaused by difficulties for persons involved in parallel trade in obtaining suppliesfrom distributors of Ballantine and others for fear of sanctions being imposed bythe producers in the event of sales to such persons. Even if, as Ballantine andothers state, such conduct on the part of the producers would be in breach of theTreaty rules on competition, it cannot be excluded that identification numbers havebeen placed on products by producers to enable them to reconstruct the itineraryof their products, with the purpose of preventing their dealers from supplyingpersons carrying on parallel trade.
    
    
41. It must also be acknowledged, however, that for the producers application ofidentification numbers may be necessary to comply with a legal obligation, inparticular under Council Directive 89/396/EEC of 14 June 1989 on indications ormarks identifying the lot to which a foodstuff belongs (OJ 1989 L 186, p. 21), or torealise other important objectives which are legitimate from the point of view ofCommunity law, such as the recall of faulty products and measures to combatcounterfeiting.
    
    
42. In those circumstances, where identification numbers have been applied forpurposes such as those mentioned in the preceding paragraph, the fact that anowner of trade mark rights makes use of those rights to prevent a third party fromremoving and then reaffixing or replacing labels bearing his trade mark in order toeliminate those numbers does not contribute to artificial partitioning of the marketsbetween Member States. In such situations there is no reason to limit the rightswhich the trade mark owner may rely on under Article 36 of the Treaty.
    
    
43. Where it is established that the identification numbers have been applied forpurposes which are legitimate from the point of view of Community law, but arealso used by the trade mark owner to enable him to detect weaknesses in his salesorganization and thus combat parallel trade in his products, it is under the Treatyprovisions on competition that those engaged in parallel trade should seekprotection against action of the latter type.
    
    Removal of the word 'pure‘ and the importer's name on the labels
    
    
44. Loendersloot submits that the interest of its customers in removing the word'pure‘ and the importer's name from the labels, and in certain cases substitutingthe parallel importer's name, is bound up with the provisions on labelling in forcein the country of destination. By those actions Loendersloot merely makes theproduct marketable on the markets in question. Loendersloot observes here thatsome countries prohibit the use of the word 'pure‘ and that it may be necessaryto remove the name of the official importer on the label or substitute for it thename of the parallel importer in order to comply with the rules of the country ofdestination of the product, even though those rules were harmonized in theCommunity by Council Directive 79/112/EEC of 18 December 1978 on theapproximation of the laws of the Member States relating to the labelling,presentation and advertising of foodstuffs for sale to the ultimate consumer (OJ1979 L 33, p. 1).
    
    
45. On this point, it must be stated that use by Ballantine and others of their trademark rights to prevent relabelling for the purposes mentioned by Loenderslootwould contribute to artificial partitioning of the markets between Member Statesif it were established that the use of the English word 'pure‘ and the name of theapproved importer on the original labels would prevent the products in questionfrom being marketed in the Member State of destination because it was contraryto the rules on labelling in force in that State. In such a situation, relabelling wouldbe necessary for the product to be marketed in that State.
    
    
46. The person carrying out the relabelling must, however, use means which makeparallel trade feasible while causing as little prejudice as possible to the specificsubject-matter of the trade mark right. Thus if the statements on the original labelscomply with the rules on labelling in force in the Member State of destination, butthose rules require additional information to be given, it is not necessary to removeand reaffix or replace the original labels, since the mere application to the bottlesin question of a sticker with the additional information may suffice.
    
    Other possible requirements
    
    
47. Finally, it is necessary to consider the other requirements of the Court's case-lawas regards repackaging of pharmaceutical products and referred to in paragraph30 above, namely that a person who repackages products must inform the trademark owner of the repackaging, must supply him, on demand, with a specimen ofthe repackaged product, and must state on the repackaged product the personresponsible for the repackaging. Ballantine and others submit that if, in cases suchas that in the main proceedings, Community law limits their right in accordancewith national rules on trade marks to oppose the reaffixing of the trade marks, thenthose same conditions must apply. Loendersloot, on the other hand, considers thatthose conditions apply only to the repackaging of pharmaceutical products.
    
    
48. On this point, the Court has considered that the imposition of such conditions onthe person carrying out repackaging is justified by the fact that the essentialrequirements of the free movement of goods mean that that person is recognizedas having certain rights which, in normal circumstances, are reserved for the trademark owner himself (see Bristol-Myers Squibb, paragraph 68). In formulating thoseconditions, account was taken of the legitimate interests of the trade mark ownerwith regard to the particular nature of pharmaceutical products.
    
    
49. However, in circumstances such as those in the main proceedings, having regardto the nature of the action of the person carrying out the relabelling, the interestsof the trade mark owner, and in particular his need to combat counterfeiting, aregiven sufficient weight if that person gives him prior notice that the relabelledproducts are to be put on sale.
    
    
50. In the light of the foregoing, the answer to the national court's questions must bethat Article 36 of the Treaty is to be interpreted as meaning that the owner oftrade mark rights may, even if that constitutes a barrier to intra-Community trade,rely on those rights to prevent a third party from removing and then reaffixing orreplacing labels bearing the mark which the owner has himself affixed to productshe has put on the Community market, unless:
    
    
    • it is established that the use of the trade mark rights by the owner tooppose the marketing of the relabelled products under that trade markwould contribute to artificial partitioning of the markets between MemberStates;
      
      
    • it is shown that the relabelling cannot affect the original condition of theproduct;
      
      
    • the presentation of the relabelled product is not such as to be liable todamage the reputation of the trade mark and its owner; and
      
      
    • the person who relabels the products informs the trade mark owner of therelabelling before the relabelled products are put on sale.

    
    
    

51. It is for the national court to assess whether those conditions are satisfied in thecase before it, taking account of the considerations mentioned above.
    
    Costs
    
    
52. The costs incurred by the United Kingdom Government and by the Commissionof the European Communities, which have submitted observations to the Court, arenot recoverable. Since these proceedings are, for the parties to the mainproceedings, a step in the action pending before the national court, the decision oncosts is a matter for that court.
    
    On those grounds,

    THE COURT,

    in answer to the questions referred to it by the Hoge Raad der Nederlanden byjudgment of 3 November 1995, hereby rules:
    
    Article 36 of the EC Treaty must be interpreted as meaning that the owner of trademark rights may, even if that constitutes a barrier to intra-Community trade, relyon those rights to prevent a third party from removing and then reaffixing orreplacing labels bearing the mark which the owner has himself affixed to productshe has put on the Community market, unless:
    
    —    it is established that the use of the trade mark rights by the owner tooppose the marketing of the relabelled products under that trade markwould contribute to artificial partitioning of the markets between MemberStates;
    
    —    it is shown that the relabelling cannot affect the original condition of theproduct;
    
    —    the presentation of the relabelled product is not such as to be liable todamage the reputation of the trade mark and its owner; and
    
    —    the person who relabels the products informs the trade mark owner of therelabelling before the relabelled products are put on sale.
    
    
    

Rodríguez IglesiasGulmann Ragnemalm WatheletMoitinho de Almeida Kapteyn MurrayEdward Hirsch Jann Sevón

Delivered in open court in Luxembourg on 11 November 1997.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President

1: Language of the case: Dutch.