European Court of Justice rules that a trade name ...

On 11th May 1999 the European Court of Justice ruled on case C-255/97, Pfeiffer and Lowa. The ECJ held that Articles 52 and 30 of the EC Treaty do not exclude a provision of Austrian law which prohibits a trade name being used as the specific designation of an undertaking where there is a risk of confusion.

Pfeiffer, the plaintiff in the main proceedings, operates a large supermarket in Austria under the name "Plus KAUF PARK". Lowa, the defendant at national level, operates discount stores in Austria and in 1994 started to market goods under the trade name "Plus". Pfeiffer brought a case against Lowa seeking an order restricting Lowa from using the trade name "Plus". Under Austrian law, the use of trade names may be prohibited where they are likely to be confused with specific designations lawfully used by another person.

Article 52 lays down the principle of freedom of establishment in the territory of the Community. The ECJ held that the Austrian provision does operate to the detriment of undertakings established in another Member State where they lawfully use a trade name which they would like to use beyond the boundaries of that State. However, the Austrian law is aimed at safeguarding trade names against the risk of confusion, and is therefore justified by overriding requirements in the general interest concerning the protection of industrial and commercial property. The Austrian law is thus compatible with Article 52.

The Austrian law was also declared compatible with Article 30 which prohibits any restriction on the free movement of goods within the Community. The ECJ considered that, even supposing that there was a restriction to the free movement of goods, there was nothing to suggest that such a restriction did not flow indirectly from the restriction on the freedom of establishment. Since the restriction to the freedom of establishment is justified in view of the protection of industrial and commercial property, any consequences of such a restriction are also justified.

For further details please telephone or e-mail Richard Eccles in our Brussels office (Tel: +32 2 735 3836 e-mail: [email protected]) or John Armstrong in London (Tel: 0171 367 2701 e-mail: [email protected]).