European Commission v Systran SA and Systran Luxembourg SA (C-103/11 P)

Contents

Judgment of the Court (First Chamber)18 April 2013^note(Appeals — Articles 225(1) EC, 235 EC and 288, second paragraph, EC — Action in non-contractual liability against the European Community — Assessment of the non-contractual character of the dispute — Jurisdiction of the Community Courts)In Case C-103/11 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 26 February 2011,European Commission, represented by T. van Rijn, E. Montaguti and J. Samnadda, acting as Agents, assisted by A. Berenboom, avocaat, and M. Isgour, avocat,Systran SA, established in Paris (France),Systran Luxembourg SA, established in Luxembourg (Luxembourg),represented by J.-P. Spitzer and E. De Boissieu, avocats,THE COURT (First Chamber),composed of A. Tizzano (Rapporteur), President of the Chamber, M. Ilešič, E. Levits, J.-J. Kasel and M. Berger, Judges,Advocate General: P. Cruz Villalón,Registrar: C. Strömholm, Administrator,having regard to the written procedure and further to the hearing on 19 April 2012,after hearing the Opinion of the Advocate General at the sitting on 15 November 2012,gives the following

Judgment

1By its appeal, the European Commission seeks the annulment of the judgment of the General Court of the European Union of 16 December 2010 in Case T-19/07 Systran and Systran Luxembourg v Commission [2010] ECR II-6083 (‘the judgment under appeal’), whereby the latter ordered it to pay to Systran SA (‘Systran’) lump-sum damages of EUR 12 001 000 for infringement of copyright and disclosure of know-how following an invitation to tender by the Commission relating to the maintenance and linguistic enhancement of its machine translation system.

Background to the dispute

2The initial version of the Systran (SYStem TRANslation) automatic translation system, ‘Systran Mainframe’, was created in 1968 and marketed by World Translation Center Inc. (‘WTC’) and other affilitated companies (hereinafter together referred to as ‘the WTC group’).

3Initially, following the conclusion of a contract with WTC in 1975, the Commission began to use the said system for its translation services, in the ‘EC-Systran Mainframe’ version. Between 1976 and 1987, it further entered into a large number of contracts with companies in the WTC group in order to improve the Systran system and also to develop new pairs of languages (nine pairs of languages in all).

4By a series of contracts concluded from September 1985, Gachot SA (‘Gachot’) acquired the companies of the WTC group, which owned the Systran technology and the Systran Mainframe version, and following that acquisition became the Systran group.

5On 4 August 1987 the Systran group and the Commission signed an agreement for the joint organisation of the development and improvement of the Systran machine translation system for the present and future official languages of the European Community and also for its implementation (‘the collaboration agreement’). According to Articles 11 and 12 of the collaboration agreement, the law applicable to the contract was Belgian law and any dispute between the parties concerning the interpretation, performance or non-performance of the contract was subject to arbitration.

6Between 1988 and 1989 the Commission entered into four agreements with Gachot, which was subsequently itself called ‘Systran’, in order to obtain a licence to use the Systran software for the following pairs of languages: German-English, German-French, English-Greek, Spanish-English and Spanish-French.

7In December 1991, the Commission terminated the collaboration agreement, on the ground that Systran had not complied with its contractual obligations. On the date on which the collaboration agreement ended, the EC-Systran Mainframe version consisted of 16 language versions.

8The Systran group subsequently created and marketed a new version of the Systran software capable of operating in the Unix and Windows operation systems (‘Systran Unix’), while the Commission developed the EC-Systran Mainframe version, partly with the assistance of an outside contractor, which operated in the Mainframe operating system, which is incompatible with the Unix and Windows operating systems.

9Subsequently, in order to enable the EC-Systran Mainframe version to operate in the Unix and Windows environments, four contracts were concluded between Systran Luxembourg SA (‘Systran Luxembourg’) and the Commission, giving rise to the automatic translation system called ‘EC-Systran Unix’ (‘the migration agreements’).

10At the time of the signature of the first migration agreement, in December 1997, Systran gave its agreement for the Commission, first, to use the trade mark Systran systematically for any machine translation system deriving from the original Systran system for the sole purposes of the dissemination or supply of the Systran machine translation system, and, secondly, to use Systran products in the Unix and/or Windows environment for its internal purposes.

11Article 13 of the first migration contract provided that ‘[a]ny results or patent obtained by [Systran Luxembourg] in performance of this contract shall be immediately reported to the Commission and shall be the property of the European Communities, which may use them as they see fit, except where industrial or intellectual property rights already exist’, and that ‘[t]he Commission’s machine translation system, together with all its components shall, whether modified or not in the course of the contract, remain the property of the Commission, except where industrial or intellectual property rights already exist’.

12According to Articles 15 and 16 of the first migration agreement, the law applicable to the agreement was the law of Luxembourg and any dispute between the Community and Systran Luxembourg relating to the contract came within the jurisdiction of the Luxembourg courts.

13Furthermore, the first recital to the fourth migration agreement fixed the end of the contract at 15 March 2002, specifying, inter alia, that Systran Luxembourg was required on that date to provide up-to-date proof of all intellectual and industrial property rights claimed by the Systran group and connected with the Systran machine translation system. According to the Commission, Systran Luxembourg did not communicate that information to it.

14On 4 October 2003 the Commission launched an invitation to tender for the maintenance and linguistic enhancement of the Commission’s ‘EC-Systran Unix’ machine translation service. Following that invitation to tender, two of the 10 lots making up the contract were awarded to Gosselies SA (‘Gosselies’).

15Systran having told the Commission, by letter of 31 October 2003, that the works it was envisaging were likely to infringe its intellectual property rights, the Commission replied that the Systran group had not provided proof of the intellectual property rights which Systran was claiming on the Systran machine translation software and that it therefore took the view that Systran was not entitled to oppose the works carried out by the company which had won the tender.

The procedure before the General Court and the judgment under appeal

16By application lodged at the Registry of the General Court on 25 January 2007, Systran and Systran Luxembourg brought an action for damages in respect of irregularities allegedly committed following the Commission’s invitation to tender concerning the maintenance and linguistic enhancement of its machine translation system.

17In particular, those companies claimed that the General Court should, first, order the immediate cessation by the Commission of the acts of infringement and disclosure, second, establish the confiscation from the Commission or Gosselies of certain IT data or their destruction, third, order the Commission to pay a minimum sum of EUR 1 170 328 to Systran Luxembourg and of EUR 48 804 000, to be re-evaluated, to Systran, fourth, order that the Court’s decision be published, at the Commission’s expense, in specialist journals, specialist reviews and on specialist internet sites, and, fifthly, order the Commission to pay the costs.

18Before dealing with the substance of the matter, the General Court examined, as a preliminary issue, the pleas of inadmissibility raised by the Commission.

19Regarding the first of those pleas, concerning the inadmissibility of the head of claim that the Commission be ordered to pay compensation for the damage alleged by Systran and Systran Luxembourg by reason of the contractual basis of the claim, the General Court set out, in paragraphs 57 to 64 of the judgment under appeal, the principles relating to court jurisdiction in contractual and non-contractual matters.

20It then went on to examine the claim for compensation by Systran and Systran Luxembourg and held, in paragraphs 68 to 77 of the judgment under appeal, that those companies had put forward sufficient elements to support the conclusion that the Systran group could rely on copyright in the Systran Unix version of the Systran machine translation system, and that the Commission had failed to call the Court’s jurisdiction into question by challenging the copyright on which the Systran group relies with respect to that version of the Systran software.

21With regard to know-how, in paragraphs 78 to 81 of the judgment under appeal, the General Court found, first, that business secrets included technical information relating to know-how, and that the communication of such information, not only to the public but also to a mere third party, could seriously damage the interests of the party providing that information, and, second, that technical information which forms part of an undertaking’s business secrets and which has been communicated to the Commission for specific purposes cannot be disclosed to a third party for other purposes without the authorisation of the undertaking concerned.

22The General Court concluded, in paragraph 82 of the judgment under appeal, that Systran and Systran Luxembourg had asserted, to the requisite legal standard to substantiate the jurisdiction conferred on the Court under Article 235 EC, the Commission’s breach of obligations of a non-contractual origin relating to copyright and know-how concerning the Systran Unix version of the Systran machine translation software.

23The General Court then examined, in paragraphs 84 to 102 of the judgment under appeal, whether there was any evidence on the file that the various contracts concluded between the WTC group and the Systran group (‘the WTC/Systran group’) of the one part and the Commission of the other part had conferred on the Commission contractual autorisation to disclose to a third party, in this case Gosselies, without Systran and Systran Luxembourg’s autorisation, information capable of being protected by the Systran group’s copyright and know-how.

24Having regard to the whole of those considerations, in paragraph 104 of the judgment under appeal, the General Court dismissed the Commission’s first plea of inadmissibility.

25As for the second plea of inadmissibility, claiming lack of clarity in the application, the General Court dismissed it, in paragraphs 107 to 110 of the judgment under appeal, as unfounded.

26In paragraphs 113 to 117 of the judgment under appeal, the General Court also dismissed the third plea of inadmissibility, claiming that the Court had no jurisdiction to adjudicate on infringement in the context of an action for damages, holding that, in this case, the concept of infringement of copyright is relied on in conjunction with the concept of protection of the confidentiality of know-how for the sole purpose of characterising the Commission’s conduct as unlawful in the context of an action alleging non-contractual liability.

27Finally, in paragraphs 118 to 124 of the judgment under appeal, the General Court dismissed the Commission’s allegations of inadmissibility of the heads of claim submitted by Systran and Systran Luxembourg not relating to a claim for compensation.

28In its analysis of the substance of the claim for compensation, the General Court first verified, in paragraphs 137 to 147 of the judgment under appeal, the substantial similarity between the Systran Unix and EC-Systran Unix versions of the Systran machine translation system, holding that Systran and Systran Luxembourg could thus rely on the rights held by the Systran group in the Systran Unix version to object to the disclosure to a third party, without their consent, of the EC-Systran Unix derivative version. In that respect, in paragraphs 148 to 157 of the judgment under appeal, it dismissed, by reason of their generality and lack of technical proof, the Commission’s arguments seeking to deny the rights of Systran and Systran Luxembourg on the ground that the EC-Systran Unix version was in reality only the result of the migration of the previous EC-Systran Mainframe version from one computing environment to another.

29Next, having recalled, in paragraph 158 of the judgment under appeal, the content of the conduct of which the Commission was accused, the General Court proceeded, in paragraphs 200 to 261 of that judgment, to make an overall analysis of the unlawful nature of that conduct.

30In the context of that analysis, it first determined, in paragraphs 201 and 204 to 215 of the judgment under appeal, that Systran and Systran Luxembourg could rely on the right to object to the Commission’s entrusting to a third party work relating to certain aspects of the EC-Systran Unix version, basing its reasoning in particular on the presumption of intellectual property law contained in Article 5 of European Parliament and Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights (OJ 2004 L 157, p. 45), according to which, for the author of a work to be regarded as such, it is sufficient for his/her name to appear on the work. In paragraphs 202 and 216 to 222 of the said judgment, it held that the Commission had not been able to establish that it was authorised, by reason of the rights assigned under the contracts concluded with the Systran group since 1975 and the financing allocated in that context, to carry out the uses and disclosures made following the award of the disputed public contract.

31Second, the General Court analysed, in paragraphs 228 to 260 of the judgment under appeal, the nature of the works entrusted by the Commission to a third party, in order to determine whether the latter were capable of entailing the modification or the transmission of information or elements relating to the Systran Unix version which are found in the EC-Systran Unix version.

32In paragraph 261 of the judgment under appeal, the General Court thus concluded that the Commission had committed an unlawful act by reference to the general principles common to the laws of the Member States applicable in such matters. That unlawful act, which constituted a sufficiently manifest infringement of the Systran group’s copyright and know-how in the Systran Unix version of the Systran software, was of such a kind as to give rise to non-contractual liability on the part of the Community.

33That having been established, the General Court then examined, in paragraphs 262 to 325 of the judgment under appeal, the damage suffered by Systran and Systran Luxembourg and the causal link between the latter and the fault of the Commission.

34It concluded from that examination, in paragraph 326 of the said judgment, that lump sum damages of EUR 12 001 000 should be awarded to Systran to compensate for the damage suffered as a consequence of the Commission’s conduct.

35As to the remainder, in paragraphs 329 to 332 of the judgment under appeal, the General Court refused the measures other than damages sought by Systran and Systran Luxembourg.

Forms of order sought

36By its appeal, the Commission claims that the Court should:— set aside the judgment under appeal;— dismiss the claim for damages; and— order Systran and Systran Luxembourg to pay the costs at first instance and on appeal, and— in the alternative, set aside the judgment under appeal and refer the case back to the General Court.

37Systran and Systran Luxembourg contend that the Court should:— dismiss the appeal; and— order the Commission to pay the costs.The application for reopening of the oral procedure

38The oral procedure was closed on 15 November 2012 after the Advocate General delivered his Opinion.

39By letter of 14 December 2012, Systran and Systran Luxembourg asked the Court to order that the oral procedure be reopened.

40In support of that request, they argued that the Opinion of the Advocate General, delivered on 15 November 2012, set out new arguments that had not been debated between the parties.

41It should be observed in that regard that the Court may at any moment, having heard the Advocate General, order the reopening of the oral procedure under Article 83 of its Rules of Procedure, inter alia if it considers that it lacks sufficient information or that the case must be dealt with on the basis of an argument which has not been debated between the parties or the parties concerned referred to in Article 23 of the Statute of the Court of Justice of the European Union (see Case C-116/11 Bank Handlowy and Adamiak [2012] ECR, paragraph 28 and case-law cited).

42In the present case, the Court, having heard the Advocate General, takes the view that it has all the information necessary to answer the questions referred and that that information has been debated before it.

43Consequently, the application by Systran and Systran Luxembourg to reopen the oral procedure must be rejected.

The appeal

44The Commission raises eight pleas in law in support of its appeal.

45The first plea claims that the General Court erred in law by holding that the dispute in question was of a non-contractual nature. The second claims infringement of defence rights and disregard for the rules of evidence. By its third plea, the Commission argues that the General Court misapplied the rules on copyright as regards proof of ownership of the rights invoked by Systran. In its fourth and fifth pleas, the Commission argues that the General Court clearly erred in its assessment of the unlawful or wrongful nature of its conduct and the seriousness of its alleged fault. By its sixth plea, the Commission argues that the General Court, first, misinterpreted the exception under Article 5 of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (OJ 1991 L 122, p. 42), and, second, gave insufficient reasons in the judgment under appeal concerning the exception laid down in Article 6 of the said directive. The seventh plea claims an error of law in the assessment of the existence of a sufficiently direct causal link between the fault complained of and the damage alleged. The eighth plea, finally, claims error of law in fixing the amount of damages at EUR 12 001 000.

The first plea, claiming error of law in the assessment of the non-contractual nature of the dispute

Arguments of the parties

46The Commission claims, first, that the General court misapplied the judgment in Case C-214/08 P Guigard v Commission, which states, in paragraph 43, that the mere invocation of legal rules which do not flow from the contract in question but which are binding on the parties cannot have the consequence of altering the contractual nature of the dispute and thus removing it from the jurisdiction of the competent court. If it were otherwise, the nature of the dispute and, consequently, the competent court, could be changed at the whim of the rules invoked by the parties, which would go against the rules on the jurisdiction of the various courts ratione materiae.

47In that perspective, the General Court should have examined, by reference to the various relevant matters in the file, whether the compensation claim of Systran and Systran Luxembourg was objectively and globally based on obligations of a contractual or non-contractual nature, thus allowing the contractual or non-contractual nature of the dispute to be characterised. The nature of an allegation is not the decisive factor in determining the jurisdiction of Community Courts in that regard. It follows that a difference concerning a copyright arising from a contract, licence or assignment is of a contractual nature in so far as the solution of that difference necessarily depends on the interpretation of the provisions for assignment or grant of that right agreed upon by the parties in question.

48If, therefore, the invocation by Systran of an action which, in its opinion, was not authorised by contractual clauses were sufficient to transform its difference with the Commission into a dispute falling under non-contractual liability, that would have the result of creating an unjustified extension of the scope of Article 235 EC, to the detriment of Article 238 EC.

49In the second place, the Commission maintains that the General Court made erroneous legal assessments as to the interpretation of the rights conferred by the various contractual documents and letters referred to at first instance, particularly the contract of 22 December 1975 between the latter and WTC, the contracts concluded during the period from 1976 to 1987 with companies of the WTC group, including in particular the technical cooperation contract of 18 January 1985 with Gachot, the collaboration agreement, the licence contracts concluded with Gachot in 1988 and 1989 and the migration contracts.

50Whilst recognising the existence of specific contractual rights, particularly ‘user rights’ of the Commission in the EC-Systran Unix version of the Systran machine translation system, the General Court did not assess in an appropriate manner the content and exact nature of those rights.

51By so doing, the General Court made an erroneous interpretation of, or distorted, the clear sense of the abovementioned contracts, leading it to misassess the nature of the dispute.

52Thirdly and finally, the Commission pleads infringement of the rules of interpretation of contracts, as the General Court could not interpret the migration contracts, particularly Article 13 of the first of these, as not conferring any rights on the Commission. In that context, it argues that the General Court also erred in holding that, since Systran was not a signatory of the migration contracts, the latter could not be pleaded against it as such, by application of the principle of the relative effect of contracts.

53Systran and Systran Luxembourg, for their part, consider that the General Court did not err in law in its interpretation of the judgment in Guigard v Commission, cited above. In deciding that it had jurisdiction, the General Court did not limit itself to examining the dispute in the light of the legal rules invoked by those companies, but devoted the greater part of its argument in the judgment under appeal to the analysis of the contracts submitted by the Commission. In particular, in paragraph 62 of that judgment, the General Court recalled that, when assessing its jurisdiction, it is perfectly entitled to examine the content of a contract, as it does with respect to any document on which a party relies in support of its arguments, in order to ascertain whether the document in question is of such a kind as to call into question the jurisdiction expressly conferred on the Court by Article 235 EC.

54In that perspective, in paragraphs 71 to 100 of the judgment under appeal, the General Court found that the contracts relied on did not contain any assignment of rights clause and contained no stipulations authorising the Commission to have carried out, or to carry out itself, works adversely affecting the copyright of Systran, or to disclose information capable of being protected under copyright.

55It follows that the General Court did not make any error of law in the interpretation of the said contracts, the latter having no relevance at all for the determination of jurisdiction in this case, and that it rightly held, in paragraphs 101 to 104 of the judgment under appeal, that the dispute in question was of a non-contractual nature.

Findings of the Court

56The EC Treaty provides for jurisdiction to be divided between the Community Courts and the national courts as regards judicial proceedings brought against the Community in which its liability for damage is at issue (Case C-377/09 Hanssens-Ensch [2010] ECR I-7751, paragraph 16).

57In particular, under Article 240 EC, save where the Treaty confers jurisdiction on the Court of Justice or the General Court, disputes to which the Community is a party fall within the jurisdiction of the courts or tribunals of the Member States (Joined Cases C-80/99 to C-82/99 Flemmer and Others [2001] ECR I-7211, paragraph 39; Guigard v Commission, cited above, paragraph 39).

58There is no treaty provision conferring upon the Court of Justice or the General Court jurisdiction to hear disputes concerning the contractual liability of the Community, apart from Article 238 EC. The latter presupposes, however, the existence of an arbitration clause contained in a contract awarded by the Community or on its behalf (Flemmer and Others, paragraph 42; Guigard v Commission, paragraphs 40 and 41), and thus consists of a jurisdiction in derogation from the ordinary law, which must accordingly be interpreted restrictively (Case 426/85 Commission v Zoubek [1986] ECR 4057, paragraph 11; Case C-114/94 IDE v Commission [1997] ECR I-803, paragraph 82).

59It follows that, in the light of Article 240 EC, where there is no arbitration clause, proceedings concerning the Community’s contractual liability fall within the jurisdiction of the national courts (Hanssens-Ensch, paragraph 19).

60By contrast, with regard to the Community’s non-contractual liability, such disputes fall within the jurisdiction of the Community Courts. Article 235 EC, read in conjunction with Article 225(1) EC, provides that the Court of Justice and the General Court have jurisdiction to hear and determine actions seeking compensation for damage brought under the second paragraph of Article 288 EC, which covers just such non-contractual liability. That jurisdiction of the Community Courts is exclusive (see, to that effect, inter alia, Case C-282/90 Vreugdenhil v Commission [1992] ECR I-1937, paragraph 14, Case C-275/00 First and Franex [2002] ECR I-10943, paragraph 43 and the case-law cited, and Hanssens-Ensch, cited above, paragraph 17), those Courts having to verify, for the Community to be non-contractually liable, the satisfaction of a cumulative set of conditions, namely the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between the conduct of the institution and the damage complained of (Case C-243/05 P Agraz and Others v Commission [2006] ECR I-10833, paragraph 26 and case-law cited).

61It follows from the foregoing that, in order to decide which Court has jurisdiction to hear and determine a specific action brought against the Community seeking compensation for damage, it is necessary to determine whether the action in question concerns the Community’s contractual liability or its non-contractual liability (Hanssens-Ensch, paragraph 20).

62In that respect, it should be noted that the concept of non-contractual liability, within the meaning of Article 235 EC and the second paragraph of Article 288 EC, which is of an autonomous character, must be interpreted in the light of its purpose, namely that of allowing an allocation of jurisdiction between the Community Courts and the national courts.

63In that context, when hearing an action for compensation, the Community Courts must, before ruling on the substance of the dispute, as a preliminary issue determine their jurisdiction by carrying out an analysis to establish the character of the liability invoked and thus the very nature of the dispute in question.

64In doing that, those Courts cannot base their reasoning simply on the rules alleged by the parties.

65In that regard, as the Commission points out in its first plea, referred to in paragraph 46 of this judgment, the Court of Justice has already held that the mere invocation of legal rules not flowing from a contract relevant in the case, but which are binding on the parties, cannot have the consequence of altering the contractual nature of the dispute and thus removing it from the jurisdiction of the competent court. If it were otherwise, the nature of the dispute and, consequently, the competent court, could be changed at the whim of the rules invoked by the parties, which would go against the rules on the jurisdiction of the various courts ratione materiae (Guigard v Commission, paragraph 43).

66However, the Community Courts are required to verify whether the action for compensation before them has as its subject-matter a claim for damages based objectively and overall on rights and obligations of a contractual nature or of a non-contractual nature. For those purposes, as the Advocate General has pointed out in points 49 and 50 of his Opinion, those Courts must examine, on an analysis of the various matters in the file, such as, for example, the rule of law allegedly infringed, the nature of the damage claimed, the conduct complained of and the legal relations between the parties in question, whether there exists between them a genuine contractual context, linked to the subject-matter of the dispute, the in-depth examination of which proves to be indispensable for the resolution of the said action.

67If a preliminary analysis of those matters shows that it is necessary to interpret the content of one or more contracts concluded between the parties in question in order to establish whether the applicant’s claims are well founded, those courts are required at that point to halt their examination of the dispute and declare that they have no jurisdiction to rule thereon in the absence of an arbitration clause in the said contracts. In such circumstances, examination of the action for compensation directed against the Community would imply the assessment of rights and obligations of a contractual nature which, pursuant to Article 240 EC, cannot be removed from the jurisdiction of the national courts.

68It is in the light of those principles that it is necessary to assess whether the first plea raised by the Commission is well founded.

69In this case, in its analysis of the admissibility of the action brought by Systran and Systran Luxembourg, the General Court first held, correctly, in paragraph 60 of the judgment under appeal, that, in order to determine its jurisdiction under Article 235 EC, it had to examine, by reference to the various relevant matters in the file, whether Systran and Systran Luxembourg’s claim for compensation was objectively and globally based on obligations of a contractual or non-contractual nature on the basis of which the contractual or non-contractual nature of the dispute could be characterised.

70However, in that paragraph 60, the General Court then stated that those matters might be inferred, in particular, from an examination of the parties’ claims, of the fact giving rise to the damage in respect of which compensation is claimed and of the content of the contractual or non-contractual provisions relied on in order to settle the point at issue.

71In that perspective, the General Court thus took the view, in paragraph 62 of the judgment under appeal, that examination of the content of the various contracts entered into between the WTC group/Systran and the Commission between 1975 and 2002 formed part of the examination of its jurisdiction and could not have the consequence – as such – of altering the nature of the dispute by conferring a contractual basis on it. Thus, the General Court held that it was perfectly entitled to examine the content of a contract, as it does with respect to any document on which a party relies in support of its arguments, in order to ascertain whether the document in question is of such a kind as to call into question the jurisdiction expressly conferred on the Court by Article 235 EC, and that that examination formed part of the assessment of the facts relied on in order to establish the Court’s jurisdiction.

72Furthermore, in paragraph 63 of the judgment under appeal, referring by way of comparison to Guigard v Commission, cited above, the General Court added that, in the case in question, in which Systran and Systran Luxembourg relied solely on the breach of obligations of non-contractual origin, mere reliance by their co-contractor on obligations of a contractual origin which did not envisage the conduct in dispute could not have the consequence of altering the non-contractual nature of the dispute and of removing it from the court with jurisdiction to hear and determine it.

73That being the case, having stated, in paragraph 64 of the judgment under appeal, that it was for the party alleging breach of an obligation to establish the content of that obligation and to show that it was applicable to the facts of the case, the General Court first examined, in paragraphs 65 to 82 of the judgment, the content of Systran and Systran Luxembourg’s claim for compensation and in particular the evidence that the rights of which infringement is claimed were held. It further examined, in paragraphs 84 to 102 of the judgment, the unlawfulness of the conduct of which the Commission was accused by means of a detailed analysis of the various contracts concluded between the parties from 1975 to 2002, in order to determine the existence of any contractual authorisation allowing the Commission to adopt the said conduct.

74Following that analysis, taking the view that the Commission did not have that authorisation, in paragraph 104 of the judgment under appeal, the General Court rejected the Commission’s assertions that the action was inadmissible on account of its allegedly contractual basis.

75By so holding, the General Court made errors of law in applying the principles referred to in paragraphs 63 to 67 of this judgment, governing the determination of jurisdiction in the context of actions for compensation against the Community, and in the legal classification of the contractual relations between the WTC/Systran group and the Commission, which have led it to infringe the rules concerning its jurisdiction, as defined in Articles 225(1) EC, 235 EC and 240 EC.

76First, in order to establish the contractual or non-contractual nature of the dispute before it and thus determine its own jurisdiction, the General Court did not limit itself to examining, in the part dealing with the admissibility of the action, whether there existed between the parties, having regard to the various matters in the file, a genuine contractual context, linked to the subject-matter of the dispute, an in-depth examination of which proved indispensable in order to determine the substance of the dispute.

77By contrast, in paragraph 62 of the judgment under appeal, the General Court erroneously held that the specific and concrete analysis of the content of the various contracts concluded between the WTC/Systran group and Commission from 1975 to 2002 fell within the examination of its jurisdiction, inasmuch as the content of a contract could perfectly well be examined, like any document in the file.

78Thus, in paragraphs 84 to 102 of the judgment under appeal, the General Court carried out, in the context of determining its jurisdiction, a detailed examination of the content of the various contractual provisions governing the economic and commercial relations between the WTC/Systran group and the Commission from 1975 to 2002, in order to determine whether the Commission had authorisation to disclose to a third party information protected by copyright and know-how held by Systran in the Systran Unix version of the Systran machine translation system, taking the view that the contractual character of the Community’s liability depended on the existence of that authorisation. Such an analysis, however, as the Commission rightly maintains in its first plea, concerns the lawfulness or otherwise of the Commission conduct complained of, and thus falls within the substance of the dispute and not the preliminary determination of the very nature of that dispute.

79Second, the General Court also erred in law, in paragraphs 84 to 102 of the judgment under appeal, in the legal classification of the contracts concluded from 1975 to 2002 between the WTC/Systran group and the Commission, in that it held, in the light of the various matters in the file, that the existence of those contracts had no effect on the classification of the dispute, for the purposes of Article 235 EC.

80It is true in that respect, as the General Court stated in paragraphs 62 and 63 of the judgment under appeal, that it is not sufficient to allege simply any contractual relationship with the applicant or obligations of contractual origin not envisaging the conduct in dispute in order to be able to change the nature of the dispute by giving it a contractual basis. However, the fact remains that where, having regard to the content of the action for compensation against the Community, the interpretation of one or more contracts concluded between the parties in question appears to be indispensable in order to establish the legality or otherwise of the conduct by the institutions which is complained of, the dispute falls outside the jurisdiction of the Community Courts.

81As the Advocate General has pointed out in paragraph 70 of his Opinion, that is precisely the case here. It is undisputed that the various contractual documents relied on by the Commission before the General Court and referred to in the first ground of the appeal, including in particular the contract of 22 December 1975 between the Commission and WTC, the contracts concluded from 1976 to 1987 with companies of the WTC group, particularly the technical cooperation agreement of 18 January 1985 with Gachot, the collaboration agreement, the licence contracts with Gachot in 1988 and 1989 and the migration contracts, constitute a genuine contractual context, linked to the subject-matter of the dispute, an in-depth examination of which proves indispensable in order to establish the legality or otherwise of the Commission conduct complained of.

82That finding, moreover, follows directly from a reading of certain passages of the judgment under appeal dealing with the substance of the dispute. In paragraphs 158, 202 and 216 to 222 of the judgment under appeal, in order to establish the illegality of the conduct in dispute, the General Court itself examined in detail whether the contractual documents relied on by the Commission, and which it had referred to in paragraphs 181 to 187 of that judgment, conferred on the Commission a specific authorisation allowing it to adopt that conduct.

83Having regard to the whole of those considerations, it must therefore be held that the General Court was wrong in its view that the dispute in question was of a non-contractual nature, for the purposes of Article 235 EC and the second paragraph of Article 288 EC.

84In those circumstances, this Court must uphold the first plea of the appeal and, without it being necessary to examine the other pleas, annul the judgment under appeal, since the General Court has infringed the rules concerning its jurisdiction, as defined in Articles 225(1) EC, 235 EC and 240 EC.

The action before the General Court

85In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice, the latter may, where the decision of the General Court is annulled, give final judgment in the dispute where the state of the proceedings so permits. That is the case here.

86In that regard, as is apparent from paragraphs 78 to 82 of this judgment, the Community Courts do not have jurisdiction to hear the action for compensation brought by Systran and Systran Luxembourg. It follows that the said action must be dismissed.

Costs

87Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is well founded and the Court itself gives final judgment in the case, it is to make a decision as to costs.

88In accordance with Article 138(1) of the Rules of Procedure, which applies to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

89In this case, the Commission having been successful on appeal, and Systran and Systran Luxembourg having been unsuccessful in their action for compensation, the latter must be ordered to pay the costs both of these proceedings and of those before the General Court.

Operative part

On those grounds, the Court (First Chamber) hereby:

1.Annuls the judgment of the General Court of the European Union of 16 December 2010 in Case T-19/07 Systran and Systran Luxembourg v Commission;

2.Dismisses the action of Systran SA and Systran Luxembourg SA in Case T-19/07;

3.Orders Systran SA and Systran Luxembourg SA to pay the costs incurred by the European Commission before the Court of Justice of the European Union and the General Court of the European Union.