Journal of Business Law, p. 413, September 1998

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The European Court of Justice (ECJ) has been asked to decide whether its own seminal jurisprudence on the prerequisites of the completed internal market may be extended into the international arena of trade, or should instead be mandatorily restricted to the European Union (EU) market itself.

The ECJ perceived in the 1960s that completion of the internal market as promised by the Treaty of Rome would be threatened if trade mark holders and other holders of intellectual property rights (IPRs) might use those rights to partition the internal market when tariffs and quotas were eliminated within the Community. From that early date the Court has been addressed by attacks against its intra-Union exhaustion doctrine from many sides.

The Court now is asked to define EU policy on the subject of the international or worldwide exhaustion of IPRs under the guise of a seemingly minor question of interpretation-namely whether Article 7 of the Trade Marks Directive of 1989 should be understood to have limited the power of the Member States to adopt their own rules regarding international exhaustion in respect of trade marks. Yet underlying this seemingly minor question lies years of intensive lobbying of the Member State governments and the Commission by industry groups concerned to assure that the E.U. does not adopt a policy of international exhaustion, not only in the field of trade marks, but also in the fields of copyright, patent and related rights.

A series of Directives has been set up, each with similar text on the question of exhaustion-each with text that fails to address the international exhaustion issue. Now the Trojan Horse has been wheeled into Luxembourg and the Court is asked to construe the text of the Trade Marks Directive. Is the ECJ prepared to foreclose an open world market in IPRs protected goods on the basis of this record? Is the ECJ prepared to open the door in the side of this Trojan Horse?