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Volvo v Veng (ECJ)

AB Volvo v Erik Veng (UK) Ltd [1988] EUECJ C-238/87
ECJ preliminary ruling of 5 October 1988

Article 82: refusal to supply; design rights; spare parts
Article numbers refer to the 1997 consolidated version of the EC Treaty.

This ECJ preliminary ruling was given on a reference from the Chancery Division of the English High Court. Veng, an importer of unlicensed spare parts for Volvo cars, wanted to use Article 82 as a defence in a claim from Volvo that it had infringed its UK registered design rights.

The English court asked several questions, including:

Is it prima facie an abuse of such dominant position for such a manufacturer to refuse to licence others to supply such body panels, even where they are willing to pay a reasonable royalty for all articles sold under the licence (such royalty to represent an award which is just and equitable having regard to the merits of the design and all the surrounding circumstances, and to be determined by arbitration or in such other manner as the national court shall direct)?

The ECJ replied that:

The refusal by the proprietor of a registered design in respect of body panels to grant to third parties, even in return for reasonable royalties, a licence for the supply of parts incorporating the design cannot in itself be regarded as an abuse of a dominant position within the meaning of Article 82.

This is explained as follows in the ECJ judgment:

8. It must also be emphasized that the right of the proprietor of a protected design to prevent third parties from manufacturing and selling or importing, without its consent, products incorporating the design constitutes the very subject-matter of his exclusive right. It follows that an obligation imposed upon the proprietor of a protected design to grant to third parties, even in return for a reasonable royalty, a licence for the supply of products incorporating the design would lead to the proprietor thereof being deprived of the substance of his exclusive right, and that a refusal to grant such a licence cannot in itself constitute an abuse of a dominant position.

The judgment notes that the refusal to supply can be an abuse in some circumstances, even though it is not an abuse by itself:

9. It must however be noted that the exercise of an exclusive right by the proprietor of a registered design in respect of car body panels may be prohibited by Article 82 if it involves, on the part of an undertaking holding a dominant position, certain abusive conduct such as the arbitrary refusal to supply spare parts to independent repairers, the fixing of prices for spare parts at an unfair level or a decision no longer to produce spare parts for a particular model even though many cars of that model are still in circulation, provided that such conduct is liable to affect trade between Member States.

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Last changed by Franck at 8:27 AM on Friday 15 June 2007.

Reference for this page:
Reckon Open "Volvo v Veng" 2007-06-15T08:27:07
Link within Reckon Open: [[Volvo v Veng]]