MAGILL EEC CASE DATABASE/COMPULSORY LICENSING April 6, 1995

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MAGILL EEC CASE DATABASE/COMPULSORY LICENSING April 6, 1995

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JUDGMENT OF THE COURT
6th April 1995

(Competition - Abuse of a dominant position - Copyright)

In joined cases C-241/91 P and C-242/91 P,

Radio Telefis Eireann (RTE), a public authority having its office
in Dublin represented by W Alexander and G. van der Wal,
Advocates, instructed by G.F. McLaughlin , Director of legal
affairs of Radio Telefis Eireann, and E. Murphy, Solicitor with
an address for service in Luxembourg at the Chambers of Arendt
and Harles, 4 Avenue Marie-Therese (C-241.91 P),

and Independent Television Publications Ltd (ITP), a company
incorporated under English Law, having its registered office in
London, represented by M.J. Reynolds and R. Strivens, Solicitors
and Alan Tyrell, QC with an address for service in Luxembourg at
the Chambers of Zeyen, Beghin & Feider, 4 Rue de l'Avenir
(C-242/91 P0,

Appellants,
supported by

intellectual Property Owners Inc. (IPO), having its registered
office in Washington D.C., United States of America represented
by D.R. Barrett and F.I.F. Leigh, Solicitors with an address for
service in Luxembourg at the Chambers of N`Bonn & Schmitt, 62
Avenue Guillaume.

intervener,

APPEALS against two judgments of the Court of First Instance of
the European Communities of 10th July 1991 in Case T-69/89 RTE v
Commission [1991] ECR II-575, seeking to have those judgments set
aside,

the other party to the proceedings being:

Commission of the European Communities, represented by Julian
Currall, of its Legal Service acting as Agent and I.S. Forrester,
QC with an address for service in Luxembourg at the office of G.
Kremlis, also of the Legal Service, Wagner Centre, Kirchber,

supported by

Magill TV Guide Ltd, having its registered office in Dublin,
represented by Gore & Grimes, Solicitors and J.D. Cooke, SC, with
an address for service in Luxembourg at the Chambers of Louis
Schiltz, 83 Boulevard Grande-Duchesse Charlotte,

intervener at first instance,

THE COURT

Composed of G.C. Rodriguez Iglesias (Rapporteur), President, F.A.
Schockweiler and P.J.G Kapteyn (Presidents of chambers), G.F.
Mancini, C.N. Kakouris, J.C. Moitinho de Almeida and J.L. Murray,
Judges,

Advocate General: C. Gulmann,

Registrar: L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument form the parties at the hearing on 1
December 1993, at which Radio Telefis Eireann was represented by
W. Alexander and G. van der Wal, Advocates; Independent
Television Publications Ltd by A. Tyrell, QC, R. Strivens,
Solicitor, and T. Skinner, Barrister; the Commission by J.
Currall of its Legal Service and I.S. Forrester, QC; Magill TV
Guide by J.D. Cooke, SC; and Intellectual Property Owners by
G.I.F Leigh, Solicitor, and D. Vaughan, QC,

after the hearing the Opinion of the Advocate General at the
sitting on 1st June 1994, gives the following

Judgment

1 By application lodged at the Court Registry on 19 September
1991, Radio Telefis Eireann ('RTE'), notified of the judgment of
the Court of First Instance in Case T69/89 RTE v Commission
[1991] ECR II-485 ('the RTE judgment') on 10th July 1991, the
date of judgment, appealed against that judgment on the ground of
non-compliance with Community law.

2 By application lodged at the Court Registry on 19th September
1991, Independent Television Publications ('ITP'), notified of
the judgment of the Court of First Instance of 10th July 1991 in
Case T-76/89 ITP v Commission [1991] ECR II-575 ('the ITP
judgment') on 12th July 1991, appealed against that judgment on
the ground of non-compliance with Community law.

3 By two applications lodged at the Registry on 6th January 1992,
Intellectual Property Owners INC. ('IPO') sought leave to
intervene in the two cases in support of the forms of order
sought by the appellants. By two orders of 25th March 1992 the
Court granted IPO leave to intervene.

4 By an order of the President of the Court of Justice of 21st
April 1993, Cases C-241/91 P and C-242/91 P were joined for the
purposes of the oral procedure.

Since the two cases concern the same subject matter, it is
appropriate for them to be joined for the purposes of the
judgment, in accordance with Article 43 of the Rules of
Procedure.

6 According to the judgments of the Court of First Instance, most
households in Ireland and 30% to 40% of households in Northern
Ireland can receive television programmes broadcast by RTE, ITV,
and BBC.

7 At the material time, no comprehensive weekly television guide
was available on the market in Ireland or in Northern Ireland.
Each television station published a television guide covering
exclusively its own programmes and claimed that under Irish and
United Kingdom legislation, copyright protection for its own
weekly programme listings in order to prevent their reproduction
by third parties.

8 RTE itself published its own weekly television guide, while ITV
did so through ITP, a company established for that purpose.

9 ITP, RTE and BBC practised the following policy with regard to
the dissemination of programme listings. They provided their
programme schedules free of charge, on request to daily and
periodical newspapers, accompanied by a licence for which no
charge was made setting out the conditions under which that
information could be reproduced. Daily listings and, if the
following day was a public holiday, the listings for two days,
could thus be published in the press, subject to certain
conditions relating to the format of publication. Publication of
'highlights' of the weeks was also authorised. ITP, RTE and the
BBC ensured strict compliance with the licence conditions by
instituting legal proceedings, where necessary, against
publications which failed to comply with them.

10 Magill TV Guide Ltd ('Magill') attempted to publish a
comprehensive weekly television guide but was prevented from
doing so by the appellants and the BBC, which obtained
injunctions prohibiting publication of weekly television
listings.

11 Magill lodged a complaint with the Commission on 4th April
1986 under Article 3 of Regulation No 17 of the Council of 6th
February 1962, the First Regulation implementing Articles 85 and
86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87)
('Regulation No 17') seeking a declaration that the appellants
and the BBC were abusing their dominant position by refusing to
grant licences for the publication of the respective weekly
listings. The Commission decided to initiate a proceeding, at the
end of which it adopted Decision 89/205/EEC of EEC of 21th
December 1988 relating to a proceedings under Article 86 of EEC
Treaty (IV/31.851 - Magill TV Guide/ITP, BBC and RTE) (OJ 1989 L
78, P. 43) ('the decision') which was the subject matter of the
proceedings before the Court of First Instance.

12 In that decision the Commission found that there had been a
breach of Article 86 of the EEC Treaty and ordered the three
organisations to put an end to that breach, in particular 'by
supplying .....third parties on request and on a
non-discriminatory basis with their individual advance weekly
programme listings and by permitting reproduction of those
listings by such parties'. It was also provided that, if the
three organisations chose to grant reproduction licences, any
royalties requested should be reasonable.

13 By order of 11 May 1989 in Joined Cases 76, 77 and 91/89 R RTE
and others v Commission [1989] ECR 1141, the President of the
Court of Justice, at the request of the applicants, ordered
suspension 'of the operation of Article 2 of the... decision in
so far as it obliges the applicants to bring the infringement
found by the Commission to an end forthwith by supplying each
other and third parties on request and on a non-discriminatory
basis with their individual advance weekly programme listings and
by permitting reproduction of those listings by such parties'.

14 At first instance the two appellants sought annulment of the
Commission decision and an order requiring it to pay the costs of
the proceedings.

15 The Court of First Instance dismissed the apellants'
applications and ordered them to pay costs.

16 RTE claims that the Court of Justice should:

'1. quash the judgement of the Court of First Instance;

2. annul the decision of the Commission of 21 December 1988;

3. order the Commission and the intervener to pay the costs.'

17 ITP requests the Court of Justice to:

'1. quash the judgement of the Court of First Instance dated 10
July 1991 in Case T-76/89 ITP v Commission and itself give final
judgement in the matter;

2. declare Commission Decision IV/31.851 of 21 December 1988
(Magil TV Guide/ITP, BBC and RTE) void; and

3. order the Commission and/or the intervener to pay the costs of
ITP in the Court of First Instance and the Commission to pay the
costs of ITP in this Court.'

18 The Commission contends that the court should dismiss the
appeals, order each appellant to bear the costs of the
proceedings brought by it and order IPO to bear the costs
incurred by the Commission by virtue of IPO's intervention.

19 In the alternative, in the event that the Court of Justice
should hold, contrary to the Commission's submissions, that the
judgments of the Court of First Instance must be quashed on a
particular point, the Commission submits that the Court the
Justice should none the less confirm the operative parts of the
judgments of the Court of First Instance while substituting its
own reasoning in accordance with the judgment in Case C-30/91 P
Lestelle v Commission [1992] ECR I-3755. The Commission contends
that the operative parts of the judgments, which upheld the
Commission's decision, are sound since the conduct complained of
in this case was evidently abusive, harmed the interest of
consumers, drove Magill's multi-channel guide out of the market,
restricted trade between Member States and was intended (at least
by two of the three applicants) to restrict such trade.

20 IPO claims that the Court should set aside the two judgments of
the Court of First Instance, annul the decision of the Commission
and order the Commission to bear all IPO's costs before the Court
of Justice.

21 RTE relies on three pleas in law to support its appeal. the
first is that the Court of First Instance misconstrued the
concept of abuse of a dominant position contained in Article 86
of the Treaty. The second is that the Court Of First Instance
misconstrued the concept of effects on trade between Member
States. The third is that the Court of First Instance wrongly
refused to take into consideration the Berne Convention of 1886.

22 ITP, in support of its appeal relies on the first plea raised
by RTE, along with two further pleas in law. The first is that
the Court of First Instance misconstrued Article 3 of Regulation
No 17 by holding that the Commission had the power to require a
proprietor of intellectual property rights to grant compulsory
licences. The second is that Article 190 of the Treaty was
infringed in so far as the Court of First Instance held that the
reasoning of the decision satisfied the conditions relating to
observance of the rights of the defence.

23 In its two statements in intervention, IPO particularly
supports the plea common to both ITP and RTE, namely that the
Court of First Instance misconstrued the concept of abuse of a
dominant position within the meaning of Article 86 of the Treaty.

The existence of an abuse of a dominant position

24 So far as the existence of a dominant position is concerned,
the Court of First Instance held that 'ITP enjoyed as a
consequence of its copyright in ITV and Channel 4 programme
listings which had been transferred to it by the television
companies broadcasting on those channels, the exclusive right to
reproduce and market those listings. It was thus able at the
material time to secure a monopoly over the publication of its
weekly listings in the TV Times a magazine specialising in the
programmes of ITV and Channel 4'. Consequently in the opinion of
the Court of First Instance, the applicant clearly held at that
time a dominant position both on the market represented by its
weekly listings and on the market for the magazines in which they
were published in Ireland and Northern Ireland. Third parties
such as Magill who wished to publish a general television
magazine were in a situation of economic dependence on the
applicant, which was thus in a position to hinder the emergence
of any effective competition on the market for information on its
weekly programmes' (ITP judgment, paragraph 49). With regard to
RTE, the Court of First Instance reached the same conclusion in
nearly identical terms (RTE judgment, paragraph 63).

25 So far as the existence of an abuse of that dominant position
was concerned the Court of First Instance considered that it was
necessary to interpret Article 86 in the light of copyright in
programme listings. It pointed out that in the absence of
harmonisation of national rules or Community Standardisation,
determination of the conditions and procedures under which
copyright was protected was a matter for national rules (ITP,
paragraphs 50 and 51). The relationship between national
intellectual property rights and the general rules of Community
law was governed expressly by Article 36 of the EEC Treaty, which
provided for the possibility of derogating from the rules
relating the free movement of goods on the grounds of
protection of industrial or commercial property, subject to the
conditions set out in the second sentence of Article 36. Article
36 thus emphasised that the reconciliation between the
requirement s of the free movement of goods and the respect to
which intellectual property rights were entitled had to be
achieved in such a way to protect the legitimate exercise of such
rights, which alone was justified within the meaning of that
article, and to preclude any improper exercise likely to create
artificial partitions within the market or pervert the rules
governing competition within the Community. The Court of First
Instance took the view that the exercise of intellectual property
rights conferred by national legislation had consequently to be
restricted a far as necessary for that reconciliation 9ITP
judgmetn, paragraph 52).

26 The Court of First Instance found, in the light of case-law of
the Court of Justice, that it followed from Article 36 of the
Treaty that only those restrictions on freedom of competition,
goods or freedom to provide services which were inherent in the
protection of the actual substance of the intellectual
property right were permitted in Community Law. It based its view
in particular on the judgment of the Court of Justice in Case
78/70 Deutshe Grammophon v Metro [1971] ECR 487, paragraph 11, in
which the Court of Justice held that, although it permitted
prohibitions or restrictions on the free movement of products
which were justified for the purpose of protecting industrial and
commercial property, Article 36 only admitted derogations from
that freedom to the extent which they were justified for the
purpose of safeguarding rights which constituted the specific
subject-matter of such property (ITP judgment, paragraph 54).

27 The Court of First Instance then observed that in principle
the protection of the specific subject-matter of a copyright
entitled the copyright-holder to reserve the exclusive right to
reproduce the protected work (ITP judgment, paragraph 5).

28 However, the Court of First Instance rook the view that, while
it was plain that the exercise of an exclusive right to reproduce
a protected work was not itself an abuse, that did not apply
when, in the light of the details of each individual case, it was
apparent that the right was being exercised in such a ways and
circumstances as in fact to pursue an aim manifestly contrary to
the objectives or Article 86. In the event, the Court of First
Instance continued, the copyright was no longer being exercised
in a manner which correspond to its essential function, within
the meaning of Article 36 of the Treaty, which was to protect the
moral rights in the work and to ensure a reward for the creative
effort, while respecting the aims of, in particular, Article 86.
>From this the Court of First Instance concluded that the primacy
of Community Law, particularly as regards principles as
fundamental as those of free movement of goods and freedom of
competition, prevailed over any use of rule of national
intellectual property law in a manner contrary to those
principles (ITP judgment, paragraph 56).

29 In the present case, the Court of First Instance noted that
the applicants, by reserving their exclusive right to publish
their weekly television programme listings, were preventing the
emergence on the market of a new product, namely a general
television magazine likely to compete with there own magazines.
The applicants activity of broadcasting in order to secure a
monopoly in the derivative market of weekly television guides in
Ireland and Northern Ireland. The Court of First Instance also
regarded it as significant in that regard that the applicants had
authorized, free of charge, the publication of their daily
listings and highlights of their weekly programmes in the press
in both Ireland and the United Kingdom.

30 The Court of First Instance accordingly took the view that
conduct of that type- characterised by preventing the production
and marketing of a new product, for which there was potential
consumer demand, on the ancillary market of weekly television
guides and thereby excluding all competition from that market
solely in to secure the applicants' respective monopolies -
clearly went beyond what was necessary to fulfil the essential
function of the copyright as permitted in community law. The
applicants' refusal to authorise the parties to publish their
weekly listings was, in this case, the Court of First Instance
ruled, arbitrary in so far as it was not justified by the
requirements peculiar to the activity of publishing television
magazines. It was thus possible for the applicants to adapt to
the conditions of a television magazine market which was open to
competition in order to ensure the commercial viability of their
weekly publications. The applicants' conduct could not, in those
circumstances, be covered in Community law by the protection
conferred by their copyright in the programme listings (ITP
judgment, paragraph 58).

31 In the light of the foregoing considerations, the Court of
First Instance found that, although the programme listings were
at the material time protected by copyright as laid down by
national law, which still determining the rules governing that
protection, the conduct at issue could not qualify for such
protection within the framework of the necessary reconciliation
between intellectual property rights and the fundamental
principles of the Treaty concerning the free movement of goods
and freedom of competition. The aim of that conduct was clearly
incompatible with the objectives of Article 86 (ITP judgment,
paragraph 60).

32 The Court of First Instance accordingly dismissed the plea in
law based on breach of Article 86.

33 RTE, supported by IPO, relies in the judgment in Case 238/87
Volvo v Veng [1988] ECR 6211 in arguing that the exercise by an
owner of intellectual property rights of his exclusive rights, in
particular his refusal to grant a licence, cannot itself be
regarded s an abuse of a dominant position.

34 According to RTE, ITP and IPO, one of the essential rights as
an owner of a copyright, without which that right would be
deprived of its substance, is the exclusive right of
reproduction. That right, which has not been placed in question
by the Treaty rules, entitles its holder to be rewarded by the
exclusive sale of the products incorporating the protected work
and to prevent competition by a third party in respect of those
products.

35 ITP denies that the exercise of the exclusive right of
reproduction is itself an abuse where it is in pursuit of an aim
manifestly contrary to objectives of Article 86 (ITP judgment,
paragraph 56) since copyright owners ordinarily and naturally
exercise their copyright in order to restrict competition with
their own product by other products made using their copyright
material, even on a derived market. That, it continues, is the
essence of copyright.

36 IPO considers that copyright is by nature beneficial for
competition, pointing out that it attributes exclusive
proprietorial rights only to a particular expression of an idea
or concept, not to the concept or idea itself.

37 RTE and IPO point out that, in the absence of Community
harmonisation, the scope of national copyright laws can be
defined only by the legislature of each Member State. The
definition of that scope cannot be altered by a measure adopted
in implementation of Article 86, but only by specific Community
legislation.

38 Moreover, according to RTE, the right of first marketing has
been considered in the case law of the Court of Justice as the
specific subject matter of all industrial property rights.

39 RTE contends that the owner of an intellectual property right
is under no obligation to offer justification for his refusal to
grant a licence, contrary to the view taken by the Court of First
Instance. ITP adds that this view of the Court of First Instance
is not supported by the case law of the Court of Justice and
that, due to the imprecision of the criteria used, it undermines
legal certainty for copyright owners.

40 According to RTE and IPO, a refusal by the owner of a right to
grant a licence forms part of the specific subject matter of his
exclusive right. RTE consider that this would constitute an
abuse only in very particular circumstances and IPO adds that the
use of an intellectual property right is justified if it is
within the scope of the specific subject matter of the right in
question.

41 IPO and RTE criticise the approach adopted by the Court of
First Instance and the Commission in this case of seeing
copyright as a mere combination of the right of attribution of
authorship and the right to compensation for exploitation. IPO
clams that this is in marked contrast not only to the laws of the
various Member States but also to the Berne Convention and would
represent a significant diminution of the protection afforded by
copyright. ITP adds that this view overlooks the right of
exclusive reproduction and distinguishes between the protection
of moral rights and the protection of commercial rights with the
result that assignees of the creator - such as ITP - cannot avail
themselves of moral rights, which are inalienable, and will
therefore be unable to exercise the right of exclusive
reproduction.

42 RTE submits that consumer demand cannot justify application of
Article 86 to the present cases and that it is for the national
legislature alone to remedy such a situation, as has been done in
the United Kingdom. ITP adds that it is ordinarily the case that
a copyright owner who sells his own product made from his
copyright material deprives consumers of the opportunity of
obtaining it elsewhere.

43 Next, according to IPO, there is no presumption that the
holder of an intellectual property right is in a dominant
position within the meaning of Article 86 (judgments in Case
40/70 Sirena v EDA and Others [1971] ECR 69 and Case 78/70
Deutsche Grammophon, cited above). Relying in particular on
judgment in Case 322/81 Michelin v Commission [1983] ECR 3461,
IPO takes the view that a dominant position presupposes a
position of economic strength and for that reason it calls in
question the analysis of the Court of First Instance that the
appellants were dominant merely because they held copyrights
without reference to any analysis whatever of economic power in
the marketplace.

44 IPO also criticises the Commission for having failed to apply
the criterion of the dominant position based on economic power
and having taken the view that the appellants and the BBC held a
factual monopoly. In doing so, the Commission takes the view
that a factual monopoly is likely to arise wherever there exists
a primary market and a secondary market and a third party wishes
to avail itself of the products or services on the primary market
i order to carry on business on the secondary market. According
to IPO, the Commission considers that such a situation will
result in a position of economic dependence which is
characteristic of the existence of a dominant position.

45 IPO criticises this conception in so far as it artificially
links economic dependence with the intention of a third party,
who would always have the possibility of undertaking some other
economic venture. For IPO the concept of 'factual monopoly'
appears to be an artificial construct whereby the Commission
seeks to justify the use of competition law in order to change
the specific subject matter of copyright.

(a) Existence of a dominant position

46 SO far as dominant position is concerned it is to be
remembered at the outset that mere ownership of an intellectual
property right cannot confer such a position.

47 However, the basic information as to the channel, day, time
and title of the programmes is the necessary result of
programming by television stations which are thus the only source
of such information for an undertaking like Magill which wishes
to publish it together with commentaries or pictures. By force
of facto monopoly over the information used to compile listings
for the television programmes received in most households in
Ireland and 30% to 40% of households in Northern Ireland. The
appellants are thus in a position to prevent effective
competition on the market in weekly television magazines. The
Court of First Instance was therefore right in confirming the
Commission's assessment that the appellants occupied a dominant
position (see the judgment in Case 322/81 Michelin, cited above,
paragraph 30).

(b) Existence of abuse

48 With regard to the issue of abuse, the arguments of the
appellants and IPO wrongly presuppose that where the conduct of
an undertaking in a dominant position consists of the exercise of
a right classified by national law as 'copyright', such conduct
can never be reviewed in relation to Article 86 of the Treaty.

49 Admittedly, in the absence of Community standardisation or
harmonisation of laws, determination of the conditions and
procedures for granting protection of an intellectual property
right is a matter for national rules. Further, the exclusive
right of reproduction forms part of the author's rights, so
refusal to grant a licence, even if it is the act of a dominant
position (judgment in Case 238/87 Volvo, cited above, paragraphs
7 and 8).

50 However, it is also clear from judgment (paragraph 9) that the
exercise of an exclusive right by the proprietor may, in
exceptional circumstances, involve abusive conduct.

51 In the present case, conduct object to is the appellants'
reliance on copyright conferred by national legislation so as to
prevent Magill - or other undertaking having the same intention - from
publishing on a weekly basis information (channel, day, time
and title of programmes) together with commentaries and pictures
obtained independently of the appellants.

52 Among the circumstances taken into account by the Court of
First Instance in concluding that such conduct was abusive was,
firs, the fact that there was according to the findings of the
Court of First Instance, no actual or potential substitute for a
weekly television guide offering information on the programmes
for the weeks ahead. On this point, the Court of First Instance
confirmed the Commission's finding that the complete lists of
programmes for a 24 hour period - and for a 48 hour period at
weekends and before public holidays - published in certain daily
and Sunday newspapers, and the television sections of certain
magazines covering, in addition, 'highlights' of the week's
programmes, were only to a limited extent substitutable for
advance information to viewers on all the week's programmes.
Only weekly television guides containing comprehensive listings
for the weeks ahead would enable users to decide in advance which
programmes they wished to follow and arrange their leisure
activities for the week accordingly. The Court of First Instance
also established that there was a specific, constant and regular
potential demand on the part of consumers (see RTE judgment,
paragraph 62, and the ITP judgment, paragraph 48).

53 Thus the appellants - who were, by force of circumstance, the
only sources of the basic information on programme scheduling
which is the indispensable raw material for compiling a weekly
television guide - gave viewers wishing to obtain information on
the choice of programmes for the week ahead no choice but to buy
the weekly guides for each station and draw from each of them the
information they needed to make comparisons.

54 The appellants' refusal to provide basic information by
relying on national copyright provisions thus prevented the
appearance of a new product, a comprehensive weekly guide to
television programmes, which the appellants did not offer and for
which there was a potential consumer demand. Such refusal
constitutes an abuse under heading (b) of the second paragraph of
Article 86 of the Treaty.

55 Second, there was no justification for such refusal either in
the activity of television broadcasting or in that of publishing
television magazines (RTE judgment, paragraph 73 and ITP
judgment, paragraph 58).

56 Third, and finally, as the Court of First Instance also held,
the appellants, by their conduct, reserved to themselves the
secondary market of weekly television guides by excluding all
competition on that market (see judgment in Joined Case 6/73 and
7/73 Commercial Solvents v Commission [1974] ECR 223, paragraph
25) since they denied access to the basic information which is
the raw material indispensable for the compilation of such a
guide.

57 In the light of all those circumstances, the Court of First
Instance did not err in law in holding that the appellants
conduct was an abuse of a dominant position within the meaning of
Article 86 of the Treaty.

58 It follows that the plea in law alleging misapplication by the
Court of First Instance of the concept of abuse of a dominant
position must be dismissed as unfounded. It is therefore
unnecessary to examine the reasoning of the contested judgments
in so far as it is based on Article 36 of the Treaty.

Effects on trade between Member States (second plea in the appeal
in Case C-241/91 P)

59 With regard to the effects on trade between Member States, the
Court of First Instance first reviewed the case-law of the Court
of Justice (paragraph 76 of the RTE judgment) before finding (at
paragraph 77) that 'the applicant's conduct modified the
structure of the competition on the market for television guides
in Ireland and the United Kingdom.'

60 The reasons given by the Court of First Instance for this
conclusion were based on the effects or RTE's refusal to
authorise third parties to publish its weekly listing on the
structure of competition in the territory of Ireland and Northern
Ireland. These, the Court of First Instance found, excluded all
potential competition on the market in question, 'thus in effect
maintaining the partitioning of the markets... [of] Ireland and
Northern Ireland respectively.' It found that the appreciable
effect which the policy in question had on potential commercial
exchanges between Ireland and United Kingdom was evidenced by the
specific demand for a general television magazine. The Court of
First Instance added that 'the relevant geographical area, within
which a single market in television broadcasting services has
already been achieved, likewise represents a single market for
information on television programmes, particularly since trade is
greatly facilitated by a common language' (paragraph 77).

61 RTE states that Community competition rules ate not intended
to remedy situations which are purely internal to a Member State
and it disputes the finding of the Court of First Instance that
RTE had in 'effect maintain[ed] the partitioning of the markets
represented by Ireland and Northern Ireland respectively.' RTE
asserts that it has observed one and the same policy in respect
of supply of weekly programme listings and licensing,
irrespective of the place of establishment of the undertakings
concerned. It denies ever having stopped or hindered the export
or import of television guides.

62 RTE also recalls the following facts, which are supported by
the findings of the Commission and the Court of First Instance:

(i) outside Ireland, RTE's programmes are received only in part
of Northern Ireland, which represents less than 1.6% of the
United Kingdom television market and less that c.33% of the EEC
television market;

(ii) according to the findings of the High Court of Ireland, the
RTE signal is received by 30% to 40% of the population of
Northern Ireland;

(iii) sales of RTE's television guide in the United Kingdom are
less than 5% of sales in Ireland.

63 RTE adds that it does not have programme or commercials aimed
at or broadcast to Northern Ireland. Its programmes can be
received in Northern Ireland only because of 'overspill'. In
Northern Ireland, approximately 100 000 households receive RTE
programmes and 5 000 copies of RTE's television guide are sold.

64 According to RTE, these facts demonstrate the marginal
importance of the cross-border sales of weekly guides containing
RTE's programmes.

65 Moreover, following a new licensing policy applied to RTE, it appears that:

(i) sales in Ireland of Radio Times and TV Times, originating in
the United Kingdom, have decreased;

(ii) sales in northern Ireland of the RTE Guide, originating in
Ireland, have not increased; in general the inclusion of RTE's
programme listings in a multi-channel guide does not appreciably
affect sales figures of such a guide in Northern Ireland;

(iii) no other publishers have availed themselves of the new
possibility of publishing comprehensive weekly television guides,
including RTE's programmes, and of selling them across the
border.

66 RTE concludes from this information that its licensing policy,
condemned by the Commission decision, has no effect, or no more
than an insignificant effect, on commercial exchanges between
Ireland and the United Kingdom. In any event, RTE states, the
Commission must prove that there is an appreciable effect on
trade between Member States (judgment in Case 27/76 United Brands
v Commission [1978] ECR 207), and that is something which the
court of First Instance failed to take into account. It points
out that the Commission's arguments on this aspect relate only to
sales in Great Britain, to ITP and to the BBC.

67 It is to be noted at the outset that the Court of Justice has
consistently held that, pursuant to Article 168a of the Article
51 of the Statute of the Court of Justice of the EEC, an appeal
may rely only on grounds relating to infringement of rules of
law, to the exclusion of any appraisal of the facts (judgment in
Case C-53/92 P Hilti v Commission [1994] ECR I-667, paragraph
10). The arguments relied on by RTE must therefore be rejected in
so far as they question the appraisal of the facts by the Court
of First Instance.

68 Nevertheless, the condition that trade between Member States
must be affected is a question of law and as such, subject to
review by the Court of Justice.

69 In order to satisfy the condition that trade between Member
States must be affected, it is not necessary that the conduct in
question should in fact have substantially affected that trade.
It is sufficient to establish that the conduct is capable of
having such an effect (judgments in Case 332/81 Michelin v
Commission, cited above, paragraph 104, and in Case C-41/90
Hofner and Elser v Macrotron [1991] ECR I-1979, paragraph 32).

70 In this case, the Court First Instance found that the
appellant had excluded all potential competitors on the
geographical market consisting of one Member state (Ireland) and
part of another Member State (Northern Ireland) and had thus
modified the structure of competition on that market, thereby
affecting potential commercial exchanges between Ireland and the
United Kingdom. From this the Court of First Instance drew the
proper conclusion that the condition that trade between Member
States must be affected and been satisfied.

71 It follows that the plea in law alleging misapplication by the
Court of First Instance of the concept of trade between Member
States being affected must be dismissed.

The Berne convention (third plea in the appeal in Case C-241/91
P)

72 So far as the Berne Convention ('the Convention') is
concerned, RTE had submitted before the Court of First Instance
that Article 9(1) thereof conferred an exclusive right of
reproduction and that Article 9(2) allowed a signatory State to
permit reproduction only in certain special cases, provided that
such reproduction did not conflict with normal exploitation of
the work and did not unreasonably prejudice the legitimate
interests of the author. From this RTE deduced that Article 2 of
the contested decision was incompatible with the Convention in as
much as it conflicted with the normal exploitation of RTE's
copyright in the programme listings and seriously prejudice its
legitimate interests (RTE judgment, paragraph 100).

73 In response to those arguments, the Court of First Instance
considered whether the Convention was applicable. Its first
finding was that the Community was not a party to it. After
reviewing Article 234 of the EEC Treaty and the case law of the
Court of Justice (RTE judgment, paragraph 102), the Court of
First Instance pointed out that 'In the present case concerning
Ireland and the Unity Kingdom, ....under Article 5 of the Act of
Accession, Article 234 of the EEC Treaty applies to agreements or
conventions concluded before ....1st January 1973.' From this it
deduced that 'In intra-Community relations, therefore, the
provisions of the Berne Convention, ratified by Ireland and the
United Kingdom before 1st January 1973, cannot affect the
provisions of the Treaty. ....The argument that Article 2 of the
decision is in conflict with Article 9(1) of the Berne
Convention, must therefore be dismissed, without there even being
any need to inquire into its substance'. With regard to Article
9(2) of the Convention, the Court of First Instance observed that
this provision 'was introduced by the Paris revision of 1971, to
which the United Kingdom has been a party since 2nd January 1990
and which Ireland has not yet ratified.' The Court of First
Instance then pointed out that an agreement or a convention
concluded subsequent to accession without recourse to the
procedure set out in Article 236 of the EEC Treaty cannot affect
a provision of the Treaty (RTE judgment, paragraph 103).

74 The Court of First Instance accordingly dismissed as unfounded
the plea alleging infringement of the Convention (RTE judgment,
paragraph 104).

75 RTE claims that Article 9(2) of the Berne Convention, as
revised in Paris in 1971, only allows for exceptions from
authors' exclusive rights of reproduction to be made by
legislation, in special cases, and provided that such
reproduction does not prejudice the normal exploitation of the
work or cause unreasonable prejudice to the legitimate interests
of the author.

76 According to RTE, the Convention does not contain a definition
of what comes under its protection but excludes only
'miscellaneous news facts having the character of mere facts of
press informations' (Article 2(8)), an exception which must be
interpreted restrictively. It is thus for the national
legislature and courts to determine the scope of the Convention
at national level.

77 RTE submits that the obligation imposed by the Commission's
decision has not been provided for by legislation which
sufficiently clear in its terms to define the circumstances in
which and the conditions on which reproduction is to be
permitted. The decision itself cannot be regarded as
'legislation'. Application of competition law does not fulfil
the conditions of Article 9(2). A copyright holder must be able
to know on the basis of explicit legislation whether or not he
may be subject t an obligation of compulsory licensing. A
provision such as Article 86 of the Treaty, which merely sets out
a general obligation and must be made precise and adapted from
case to case, does not fulfil the conditions laid down by Article
9(2) of the Convention. Community legislation alone is capable
of providing a proper legislative basis.

78 RTE submits that the Convention is part of the rules of law
relating to the application of the Treaty referred to in Article
173 of the EEC Treaty. In support of that proposition, RTE
refers to numerous declarations made by the Commission which show
that the Convention enjoys broad international support (see the
preamble to the Proposal for Council Decision concerning the
accession of the Member States to the Berne Convention for the
Protection of Literary and Artistic Works, as revised by the
Paris Act of 24th July 1971, and the International Convention for
the Protection of Performers, Producers of Phonograms and
Broadcasting Organisations (Rome Convention) of 26th October
1961, OJ 1991 C 24, p. 5). According to RTE, the Commission has
always regarded the Convention as establishing a minimum level of
protection. It refers to the Proposal for a Council Directive on
the legal protection of computer programs (OJ 1989 C91 p/. 4,
particularly PP. 8 and 10) and Council Directive 91/250/EEC of 14
May 1991 on the legal protection of computer programs (OJ 1991 L
122, p. 42). The amended Commission proposal for a Council
Decision concerning the accession of the Member States to the
Berne Convention for the Protection of Literary and Artistic
Works, as revised by the Paris Act of 24th July 1971, and the
International Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting Organisations (Rome
Convention) of 26 October 1961 (OJ 1992 C 57, p. 13) states
(Article 1a):

'In the exercise of its powers concerning copyright and
neighbouring rights, the Community shall be guided by the
principles and act in accordance with the provisions of the Berne
Convention...'

The Proposal for a Council Directive on the legal protection of
databases, adopted on 29th January 1992, provides a legislative
basis for compulsory licensing. RTE observes that, in all fields
other than competition law, the Community respects the
Convention.

79 RTE accordingly takes the view that, although the Community
itself is not a party to the Convention, account must be taken of
the rules of the Convention within the framework of Community law
(judgments in Case 4/73 Nold v Commission [1974] ECR 491 and in
Joined Cases 46/87 and 227/88 Hoecsht v Commission [1989] ECR
2859).

80 According to RTE, the Community cannot on the one hand, oblige
the Member States to accede and comply with the Convention and,
on the other, adopt measures which do not comply with it.

81 In conclusion it contends that harmonisation of national
intellectual property law can be achieved only by legislative
mans, namely by a Council measure adopted in accordance with the
procedure provided in Article 100a or Articles 234 and 236 would
be relevant only if a conflict between the obligations arising
form the Convention and certain provisions of the EEc Treaty had
been established.

82 IPO endorses this opinion and contends that harmonisation of
national intellectual property law can be achieved only by
legislative means, namely by a Council measure adopted in
accordance with the procedure provided for in Article 100a or
Article 235 of the EEC Treaty. An individual decision issued by
the Commission on the basis of competition law is not the
appropriate way to resolve this issue.

83 Next, so far as the United Kingdom and Ireland are concerned,
it is true that they were already parties to the Convention when
they acceded to the Community and that Article 234 of the Treaty
therefore applies to that Convention, in accordance with Article
5 of the Act of Accession. It is, however, settled case law that
the provisions of an agreement concluded prior to entry into
force of the Treaty or prior to a Member State's accession cannot
be relied on in intra-Community relations if, as in the present
case, the rights of non-member countries are not involved (see,
in particular, the judgment in Case 286/86 Ministere Public v
Deserbais [1988] ECR 4907, paragraph 18).

85 Finally, the Paris Act, which amended Article 9(1) and (2) of
the Convention (the provisions relied on by RTE), was ratified by
the United Kingdom only after it accession to the Community and
has still not been ratified by Ireland.

86 The Court of First Instance was therefore correct to hold that
Article 9 of the Convention cannot be relied on to limit the
powers of the Community, as provided for in the EEC Treaty, since
the Treaty can be amended only in accordance with the procedure
laid down in Article 236.

87 It follows that the plea that the Court of First Instance
failed to have proper regard to the Convention must be dismissed
as unfounded.

The powers conferred on the Commission by Article 3 of Regulation
No 17 (second plea in the appeal in Case C 242/91 P)

88 The first limb of ITP's second plea is that the Court of First
Instance misconstrued Article of Regulation No 17 in holding
that the provisions enabled the Commission to impose compulsory
licensing, on conditions approved by it, relating to intellectual
property rights conferred by the laws of the Member States.
Relying on the judgment in Case 144/81 Keukoop v Nancy Kean Gifts
[1982] ECR 2853, ITP submits that only the Parliaments of Ireland
and the United Kingdom may take away or replace the copyrights
which they have conferred.

89 The second limb alleges infringement of the principle of
proportionality in so far as the Court of First Instance held
that the Commission's decision was not contrary to that principle
(ITP judgment, paragraphs 78 to 81). ITP contends that the Court
of First Instance should have taken account of a number of
considerations; the decision removed not only ITP's exclusive
right of reproduction, but also its right of first marketing,
particularly important where, as in this case, the product has
useful life 10 days; there is no reciprocity between ITP and the
competitors (other than the BBC and RTE) to whom it is required
to grant licences; many of those of ITP and they also possess
valuable copyrights which they protect from reproduction.

90 It is appropriate to observe that Article 3 of Regulation No
17 is to be applied according to the nature of the infringement
found and may include an order to do certain acts or things
which, unlawfully, have not been done as well as an order to
bring an end to certain acts, practices or situations which are
contrary to the Treaty (judgment in Joined Cases 6/73 and 7/73
Commercial Solvents, cited above paragraph 45).

91 In the present case, after finding that the refusal to provide
undertakings such as Magill with basic information contained in
television programme listings was an abuse of a dominant
position, the Commission was entitled under Article 3, in order
to ensure that its decision was effective to required the
appellants to provide that information. As the Court of First
Instance rightly found, the imposition of that obligation - with
the possibility of making authorisation of publication dependent
on certain conditions, including payment of royalties - was the
only way of bringing the infringement to an end.

92 The Court of First Instance was also entitled to dismiss, on
the basis of the same findings of fact, the allegation that the
principle of proportionality had been infringed.

93 As the Court of First Instance correctly pointed out, in the
context of the application of Article 3 of Regulation No 17, the
principle of proportionality means that the burdens imposed on
undertakings in order to bring an infringement of competition law
to an end must not exceed what is appropriate and necessary to
attain the objective sought, namely re-establishment of
compliance with the rules infringed (ITP judgment, paragraph 80).

94 In holding, at paragraph 81 of the ITP judgment, that, in the
light of the above findings, the order addressed to the applicant
was an appropriate and necessary measure to bring the
infringement to an end, the Court of First Instance did not
commit an error of law.

The reasoning (third plea in the appeal in Case C-242/91 P)

95 In its third plea ITP claims that the Court of First Instance
failed to comply with Article 190 of the EEC Treaty in finding
that the decision was adequately reasoned (ITP judgment,
paragraphs 64 and 65) when the Commission did no more than state
the exercise of copyright was outside the scope of the specific
subject-matter of this right and went on to conclude that an
exercise of copyright was outside the scope of specific
subject-matter of this right and went on to conclude that an
exercise of copyright consisting simply in refusing to grant a
reproduction licence was an abuse of a dominant position.

96 According to ITP, the crucial question whether a mere refusal
to grant a licence could constitute an abuse was dealt with by
the Commission in a summary fashion. There was no analysis of
the special position occupied by owners of copyright in the
context of the application of Article 86. ITP maintains that
such an approach fails to meet the requirements laid down in the
judgment in Case C-269/90 Hauptzollamt Munchen-mitte v Technische
Universitat Munchen [1991] ECR I-5469. ITP maintains that it
still does not know what the Commission meant by describing ITP's
use of its copyright as falling outside the scope of the specific
subject-matter of the intellectual property right.

97 ITP claims that the inadequacy of the decision's reasoning was
highlighted by the numerous arguments advanced by the Commission
in the course of the proceedings before the Court of First
Instance. If the Commission could so act and remain within the
law, Article 190 would be rendered nugatory. ITP submits that the
Court of First Instance adopted its own legal reasoning which
bore no relation to the decision.

98 The Court must observe here that, according to settled
case-law, Commission decisions intended to infringements of
competition rules, issue directions and impose pecuniary
sanctions must state the reason on which they are based, in
accordance with Article 190 of the EEC Treaty, which requires the
Commission to set out the reasons which prompted it to adopt a
decision, so that the Court can exercise its powers to review and
Member States and nationals concerned to know the basis on which
the Treaty has been applied (see judgment in Case C-137/92 P
Commission v BASF and Others [1994] ECR I-2555, paragraph 66).

99 However, the Commission cannot be required to discuss all
matters of fact and law which may have been dealt with during the
administrative proceedings (judgement in Case 246/86 Belasco and
Others v Commission [1989] ECR 2117, paragraph 55).

100 The Court of First Instance found in particular, at paragraph
64 of the ITP judgment, that 'as regards the concept of abuse,
the Commission clearly stated in the decision its reasons for
finding that the applicant, by using its exclusive right to
reproduce the listings as the instrument of a policy contrary
to the objectives of Article 86, went beyond what was necessary
to ensure the protection of the actual substance of its copyright
and committed an abuse within the meaning of Article 86.' It
accordingly arrived at the view that 'Contrary to the applicants
allegations, the statement of reasons in the contested decision
is ... sufficient to allow interested parties to ascertain the
main legal and factual criteria on which the Commission based its
findings and to enable the Court to carry out its review. It
therefore fulfils the conditions relating to the respect of the
right to a fair hearing as they have consistently been defined in
case-law.'

101 ITP's criticisms fail to show that those assessments of the
Court of First Instance are marred by any error of law.

102 It must be added that, in so far as those criticisms concern
the inadequacy of the legal analysis of the situation made by the
Commission in its decision, they substantially reproduce the
arguments put forward to challenge the description of the
appellants' conduct as an abuse of a dominant position, arguments
which have already been rejected above in the examination of the
first plea in law.

103 The plea of non-compliance with Article 190 of the Treaty
must therefore be dismissed.

104 It follows that the appeals must be dismissed in their
entirety.

Costs

105 According to Article 69(2) of the Rules of Procedure, the
unsuccessful party is to be ordered to pay the costs if they have
been applied for by the successful party. Since the appellants'
have failed in their submissions, they must each be ordered to
pay the costs of their appeal. Pursuant to Article 69(4) of the
Rules of Procedure, IPO, which has intervened in support of the
appellants, must be ordered to bear its own costs as well as
those incurred by the Commission due to the IPO's intervention.

On those grounds,

THE COURT

hereby:

1. Dismisses the appeals;

2. Orders Radio Telefis Eireann (RTE) and Independent Television
Publications Ltd (ITP) to pay the costs of the appeals lodged by
them;

3. Orders Intellectual Property Owners Inc. (IPO) to bear its own
costs and to pay those incurred by the Commission due to its
intervention.

Rodriguez Iglesias Schockweiler Kapteyn Mancini

Kakouris Moitinho de Almeida Murray

Delivered in open court in Luxembourg on 6 April 1955.

R. Grass G.C. Rodriguez Iglesias
Registrar President

(phew)

1