European Commission v Council of the European Union (C-389/15)

Contents

Judgment of the Court (Grand Chamber)25 October 2017^note(Action for annulment — Council decision authorising the opening of negotiations on a revised Lisbon Agreement on Appellations of Origin and Geographical Indications — Article 3(1) TFEU — Exclusive competence of the European Union — Common commercial policy — Article 207(1) TFEU — Commercial aspects of intellectual property)In Case C‑389/15,ACTION for annulment under Article 263 TFEU, brought on 17 July 2015,European Commission, represented by F. Castillo de la Torre, J. Guillem Carrau, B. Hartmann, A. Lewis and M. Kocjan, acting as Agents,European Parliament, represented by J. Etienne, A. Neergaard and R. Passos, acting as Agents,vCouncil of the European Union, represented by M. Balta and F. Florindo Gijón, acting as Agents,Czech Republic, represented by M. Hedvábná, K. Najmanová, M. Smolek and J. Vláčil, acting as Agents,Federal Republic of Germany, represented by T. Henze and J. Techert, acting as Agents,Hellenic Republic, represented by M. Tassopoulou, acting as Agent,Kingdom of Spain, represented by M.A. Sampol Pucurull, acting as Agent,French Republic, represented by G. de Bergues, D. Colas, F. Fize, B. Fodda and D. Segoin, acting as Agents,Italian Republic, represented by G. Palmieri, acting as Agent, and S. Fiorentino, avvocato dello Stato,Hungary, represented by M. Bóra, M.Z. Fehér and G. Koós, acting as Agents,Kingdom of the Netherlands, represented by M. Bulterman, M. Gijzen and B. Koopman, acting as Agents,Republic of Austria, represented by C. Pesendorfer, acting as Agent,Portuguese Republic, represented by M. Figueiredo, L. Inez Fernandes and M.L. Duarte, acting as Agents,Slovak Republic, represented by M. Kianička, acting as Agent,United Kingdom of Great Britain and Northern Ireland, represented by C. Brodie and D. Robertson, acting as Agents,THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, L. Bay Larsen, J.L. da Cruz Vilaça, A. Rosas, J. Malenovský (Rapporteur), Presidents of Chambers, E. Juhász, M. Safjan, D. Šváby, M. Berger, A. Prechal, E. Jarašiūnas, and M. Vilaras, Judges,Advocate General: Y. Bot,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 12 June 2017,after hearing the Opinion of the Advocate General at the sitting on 26 July 2017,gives the following

Judgment

1By its application, the European Commission seeks the annulment of Council Decision 8512/15 of 7 May 2015 authorising the opening of negotiations on a revised Lisbon Agreement on Appellations of Origin and Geographical Indications as regards matters falling within the competence of the European Union (‘the contested decision’).

Legal context

International law

The Paris Convention

2The Convention for the Protection of Industrial Property was signed in Paris on 20 March 1883, last revised in Stockholm on 14 July 1967 and amended on 28 September 1979 (United Nations Treaties Series, vol. 828, No 11851, p. 305; ‘the Paris Convention’).

3The original text of the Paris Convention included a preamble, not reproduced in its subsequent revised versions, according to which the parties thereto resolved to conclude it ‘prompted by the desire to secure, by common accord, full and effective protection for the industry and trade of nationals of their respective States and to contribute to securing the rights of inventors and ensuring the fairness of commercial transactions’.

4Article 1 of the Paris Convention provides in particular that the States to which the convention applies constitute a Union for the protection of industrial property, including patents, models, designs, trademarks, trade names and indications of source or appellations of origin, and the repression of unfair competition.

5Article 2 of the Paris Convention provides in particular that nationals of any State of that Union are, as regards the protection of industrial property, to enjoy in all the other States thereof advantages that the respective laws of those other States grant to nationals and that they are consequently to have the same protection as the latter.

6In that context, Articles 10 to 10ter of the Paris Convention oblige the States of that Union to guarantee nationals of that Union effective protection against unfair competition and to offer them appropriate legal remedies, and provide for the seizure on importation of the goods concerned if a false indication of their source is used.

7Under Article 19 of the Paris Convention, the States party thereto reserve the right to make separately between themselves special agreements for the protection of industrial property.

The Lisbon Agreement

8The Lisbon Agreement for the Protection of Appellations of Origin and their International Registration was signed on 31 October 1958, revised in Stockholm on 14 July 1967 and amended on 28 September 1979 (United Nations Treaty Series, vol. 828, No 13172, p. 205; ‘the Lisbon Agreement’). It constitutes a special agreement within the meaning of Article 19 of the Paris Convention and any State party to that convention may accede to it.

9On the date on which the present action was brought, 28 States were parties to the Lisbon Agreement. They included seven Member States of the European Union, namely, the Republic of Bulgaria, the Czech Republic, the French Republic, the Italian Republic, Hungary, the Portuguese Republic and the Slovak Republic. Three other Member States, namely the Hellenic Republic, the Kingdom of Spain and Romania, had also signed, but not ratified, it. The European Union, on the other hand, was not a party to the Lisbon Agreement, to which only States could accede.

10As provided in Article 1 thereof, the States to which the Lisbon Agreement applies constitute a Special Union within the framework of the Union for the Protection of Industrial Property established by the Paris Convention and undertake to protect on their territories, in accordance with the terms of that agreement, the appellations of origin of products of the other States of the Special Union, recognised and protected as such in the country of origin and registered at the International Bureau of the World Intellectual Property Organisation (WIPO).

11Under Article 2(1) of the Lisbon Agreement, ‘appellation of origin’ means the geographical denomination of a country, region, or locality, which serves to designate a product originating therein the quality or characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors.

12Articles 3 to 7 of the Lisbon Agreement set out the content and conditions of the protection of the appellations of origin which fall within their scope and the procedure for registration of the appellations of origin by the International Bureau of WIPO. Article 4 states that that protection does not exclude the protection already enjoyed by those appellations of origin in each of the States of the Special Union, by virtue, inter alia, of the Paris Convention.

13Article 8 of the Lisbon Agreement states that legal action required for ensuring the aforesaid protection may be taken, in each of the States of the Special Union which that agreement establishes, under the provisions of the national legislation.

14Articles 9 to 18 of the Lisbon Agreement contain the provisions devoted to the institutional organisation and administrative operation of the Special Union, and the general clauses relating to that agreement.

EU law

15The European Union has progressively adopted, from the 1970s onwards, various measures governing, amongst other issues, the definition, description, presentation and labelling of certain types of products having appellations of origin or geographical indications, and the conditions governing the grant, protection and monitoring of the latter. The types of products currently concerned are wines, spirits, aromatised wines and other agricultural products and foodstuffs.

16The EU legislation in this regard consists today of Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89 (OJ 2008 L 39, p. 16); Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs (OJ 2012 L 343, p. 1, and corrigendum at OJ 2013 L 55, p. 27); Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ 2013 L 347, p. 671, and corrigenda at OJ 2014 L 189, p. 261, and OJ 2016 L 130, p. 9); and Regulation (EU) No 251/2014 of the European Parliament and of the Council of 26 February 2014 on the definition, description, presentation, labelling and the protection of geographical indications of aromatised wine products and repealing Council Regulation (EEC) No 1601/91 (OJ 2014 L 84, p. 14, and corrigendum at OJ 2014 L 105, p. 12).

Background to the dispute and the contested decision

The revision of the Lisbon Agreement

17In September 2008, the Assembly of the Special Union established by the Lisbon Agreement formed a working group to prepare a revised version of that agreement intended to improve it and to render it more attractive while preserving its principles and objectives.

18In October 2014, the working group agreed upon a draft revising act (‘the draft revised agreement’), which reproduced the institutional, procedural and substantive provisions of the Lisbon Agreement while partially amending their arrangement and making a number of additions or clarifications. The additions and clarifications concerned, in particular, the field of application of the protection provided for by the agreement, which it was proposed to extend to geographical indications (Articles 2 and 9), the substantive scope of that protection and the procedural means for implementing it (Articles 4 to 8 and 11 to 20), and the possibility given to intergovernmental organisations of acceding to the agreement (Article 28).

19A diplomatic conference was convened in Geneva from 11 to 21 May 2015 for the purpose of considering and adopting the draft revised agreement. In accordance with the draft rules of procedure approved by the conference’s preparatory committee, invitations to attend were extended to the delegations of the 28 States party to the Lisbon Agreement and also to two ‘special’ delegations, including a delegation from the European Union, and a number of ‘observer’ delegations.

20On 20 May 2015, the diplomatic conference adopted the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, which was opened for signature the following day.

The Commission’s recommendation and the contested decision

21In view of the aforesaid diplomatic conference, on 30 March 2015 the Commission adopted a recommendation for a Council decision authorising the opening of negotiations on a Revised Lisbon Agreement for the Protection of Appellations of Origin and Geographical Indications.

22In that recommendation, the Commission, first, invited the Council to base its decision on Article 207 TFEU and Article 218(3) and (4) TFEU, given the exclusive competence conferred on the European Union in the field of the common commercial policy by Article 3(1) TFEU and the aim and content of the Lisbon Agreement.

23Secondly, the Commission proposed that the Council authorise it to conduct the negotiations on behalf of the European Union, that it adopt negotiating directives to be followed for that purpose and that it appoint the special committee to be consulted within that framework.

24On 7 May 2015, the Council adopted the contested decision. In contrast to what the Commission recommended, it is based on Article 114 TFEU and Article 218(3) and (4) TFEU.

25The reasons for that choice are set out in recitals 2 and 3 of the contested decision as follows:(2) The international system of the Lisbon Agreement is currently being reviewed with a view to improving it so that it might attract a wider membership, while preserving its principles and objectives. ...(3) The [draft] revised agreement establishes a system of protection for appellations of origin and geographical indications within the contracting parties through a single registration. This subject matter is harmonised by internal EU legislation as regards agricultural appellations and indications and falls therefore within the shared competence of the Union (as regards agricultural appellations and indications) and of its Member States (as regards non-agricultural appellations and indications, and fees).’

26Article 1 of the contested decision is worded as follows:‘The Commission is hereby authorised to participate, together with the seven Member States parties to the Lisbon Agreement, in the Diplomatic Conference for the adoption of [the draft revised agreement], as regards matters falling within the competence of the Union.’

27Article 2 of that decision states:‘In the interest of the Union, the seven Member States parties to the Lisbon Agreement shall exercise the voting rights, based on a common position, as regards matters falling within the competence of the Union.’

28As provided in Article 3 of the decision:‘The negotiations shall be carried out in accordance with the negotiating directives set out in the Annex.’

29Article 4 of the decision provides:‘Appropriate coordination shall take place during the Diplomatic Conference, as regards matters falling within the competence of the Union. After the conference, the negotiators shall swiftly report to the Council Working Party on Intellectual Property.’

30After the contested decision was adopted, the Commission issued a statement in which it expressed its disagreement both with the legal bases used by the Council and with the appointment of Member States as negotiators on behalf of the European Union.

Forms of order sought and procedure before the Court

31The Commission claims that the Court should:– annul the contested decision;– maintain its effects until the entry into force of a new Council decision within a reasonable period from the delivery of the Court’s judgment; and– order the Council to bear the costs.

32The Council contends that the Court should:– dismiss the action; and– order the Commission to bear the costs.

33By decisions of 27 November 2015, the President of the Court of Justice granted the Czech Republic, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic and the Slovak Republic leave to intervene in the proceedings, in support of the form of order sought by the Council.

34By decision of the same day, the President of the Court granted the European Parliament leave to intervene in the proceedings, in support of the form of order sought by the Commission.

35By decision of 12 January 2016, the President of the Court granted the United Kingdom of Great Britain and Northern Ireland leave to intervene in the proceedings, in support of the form of order sought by the Council, in the event that a hearing would take place.

The action

36The Commission, supported by the Parliament, puts forward two pleas in law to substantiate its claims. The first plea is to the effect that the Council adopted the contested decision in breach of Article 3 TFEU, since the negotiations to which that decision relates concern a draft agreement that falls within the exclusive competence of the European Union. The second plea is to the effect that the Council infringed Article 207(3) TFEU and Article 218(3), (4) and (8) TFEU by appointing Member States as negotiators in a matter of EU competence and by not adopting the contested decision in accordance with the qualified majority voting rule that was applicable.

37The first plea is in two parts. The first, and main, part is to the effect that the contested decision fails to have regard to the exclusive competence that Article 3(1) TFEU confers on the European Union in the field of the common commercial policy. The second part, put forward in the alternative, concerns infringement of Article 3(2) TFEU. It is appropriate to begin by examining the first part of this plea.

Arguments of the parties

38The Commission and the Parliament state, first of all, that the exclusive competence conferred on the European Union by Article 3(1) TFEU in the field of the common commercial policy includes, in accordance with Article 207(1) TFEU, the commercial aspects of intellectual property. On that basis, the European Union has sole competence to negotiate and conclude international agreements concerning intellectual property where it is established, having regard to their aim and content, that they display a specific link with international trade, for example, by facilitating international trade by means of the uniformisation of rules. Consequently, that exclusive competence, far from being restricted to agreements relating to the harmonisation of the protection of intellectual property rights which are negotiated in the context of the World Trade Organisation (WTO), extends, in particular, to other agreements which, when assessed individually, clearly have the principal objective of facilitating, on a reciprocal basis, trade in goods or services with third countries by affording such goods or services a similar degree of protection to that which they already enjoy within the internal market.

39Next, the Commission and the Parliament contend that, in the present case, the draft revised agreement, like the Lisbon Agreement, displays a specific link with international trade. It is true that the draft has no preamble expressly stating its aim. However, it is clear from an analysis of its provisions and its context that it has the aim and effect of providing, for the appellations of origin and geographical indications of each contracting party, a system of international registration which ensures their legal protection, on the territory of all the contracting parties, against the risk that they might be used in such a way as to undermine their integrity or their reputation and thus that the marketing abroad of the corresponding products might be prejudiced. In so doing, the draft revised agreement improves the protection of exports of those products from the European Union to third countries, protection which would otherwise depend on country-by-country registration and thus on variable legal guarantees. Consequently, a draft of that nature falls within the exclusive competence of the European Union in the field of the common commercial policy, even if the system of protection which it proposes to introduce is intended to be implemented by the authorities of the Member States, in accordance with Article 291(1) TFEU. Furthermore, the European Union has already concluded by itself, on the basis of Article 207 TFEU, a number of international agreements relating to the protection of appellations of origin and geographical indications, and the Council, which has not disputed the existence of that practice, has given no reasons to explain its departure from it in the present case.

40Accordingly, the Commission and the Parliament submit, finally, that the Council erred in law in taking the view that the draft revised agreement fell within the approximation of laws in the field of the internal market, for the purposes of Article 114 TFEU, and, therefore, within a competence shared between the European Union and its Member States. In this respect, the Council has wrongly drawn a parallel between the external and internal competences of the European Union. The European Union’s competence to negotiate the draft revised agreement may arise from the common commercial policy even though the common rules of the European Union for the protection of appellations of origin and geographical indications are, for their part, based on the common agricultural policy and on the approximation of the laws of the Member States and even though the relevant competences of the European Union have to date been exercised only in relation to appellations of origin and geographical indications for agricultural products, rather than non-agricultural products.

41The Council and all the intervening Member States contend that the draft revised agreement does not fall within the field of the common commercial policy and that the European Union therefore does not have, on that basis, exclusive competence to negotiate it.

42In that regard, they submit, in essence, that, in order for an international agreement which is intended to be negotiated in a context other than that of the WTO and which relates to intellectual property matters other than those covered by the Agreement on Trade-Related Aspects of Intellectual Property Rights — which constitutes Annex 1C to the Agreement establishing the WTO signed in Marrakesh on 15 April 1994 and approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1) — to be regarded as addressing commercial aspects of intellectual property, within the meaning of Article 207(1) TFEU, it is necessary for the agreement to display a specific link with international trade.

43However, in the present case, the context of the draft revised agreement does not support the conclusion that it displays such a specific link. First of all, it is administered by WIPO, and it is apparent from the convention establishing that organisation that the first objective of the latter is to promote the development of measures designed to facilitate the efficient protection of intellectual property and to harmonise national legislation in that field. Next, the objective of the draft revised agreement itself is not to facilitate trade by extending the reach of EU rules to third countries, but, as is the case with the common rules concerning appellations of origin and geographical indications adopted by the European Union on the basis of Article 114 TFEU, to establish a mechanism for protecting traditional products and providing information to consumers that applies to all contracting parties, including the European Union should it accede to the agreement. Finally, analysis of the content of the draft revised agreement confirms that the latter falls within the area of competence covered by Article 114 TFEU since its purpose is to establish a uniform procedural framework for the protection of appellations of origin and geographical indications, and that it is only secondarily and indirectly that the establishment of that procedural framework is capable of affecting trade in goods that benefit from such appellations and indications.

44In any event, the Council contends that, if the Court were to consider Article 207 TFEU to be the appropriate substantive legal basis for the contested decision, and not Article 114 TFEU, the mistaken reference to the latter provision should be regarded as a formal defect that cannot warrant the annulment of that decision. In either event, the Council correctly referred to Article 218 TFEU as the procedural legal basis for the contested decision and complied with the corresponding procedural requirements by adopting that decision by a qualified majority.

Findings of the Court

45In order to settle the disagreement between the Commission, supported by the Parliament, and the Council, supported by the intervening Member States, it must be determined whether the draft revised agreement falls within the field of the common commercial policy.

46In that field, Article 3(1) TFEU confers exclusive competence on the European Union.

47As set out in Article 207(1) TFEU, the common commercial policy is to be based on uniform principles, in particular with regard to the commercial aspects of intellectual property, and is to be conducted in the context of the principles and objectives of the European Union’s external action.

48It follows from that statement to the effect that the common commercial policy belongs within the context of the European Union’s external action that that policy relates to trade with third States and not to trade within the internal market (judgment of 18 July 2013, Daiichi Sankyo and Sanofi-Aventis Deutschland, C‑414/11, EU:C:2013:520, paragraph 50, and Opinion 2/15 (Free Trade Agreement with Singapore) of 16 May 2017, EU:C:2017:376, paragraph 35).

49It is settled case-law that international commitments concerning intellectual property entered into by the European Union fall within the common commercial policy if they display a specific link with international trade in that they are essentially intended to promote, facilitate or govern such trade and have direct and immediate effects on it (Opinion 2/15 (Free Trade Agreement with Singapore) of 16 May 2017, EU:C:2017:376, paragraph 112 and the case-law cited).

50International agreements which are concerned with safeguarding and organising the protection of intellectual property rights on the territory of the parties are among those that may fall within that policy, provided that they satisfy the two conditions recalled in the preceding paragraph of the present judgment (see, to that effect, judgment of 18 July 2013, Daiichi Sankyo and Sanofi-Aventis Deutschland, C‑414/11, EU:C:2013:520, paragraphs 58 to 61, and Opinion 2/15 (Free Trade Agreement with Singapore) of 16 May 2017, EU:C:2017:376, paragraphs 116, 121, 122, 125 and 127).

51In the present case, since, as is apparent from its title, the contested decision is intended to authorise the opening of negotiations on the draft revised agreement, it is necessary to determine whether that draft agreement is essentially intended to promote, facilitate or govern trade between the European Union and third States and then, if so, whether it has direct and immediate effects on such trade.

52As regards, first, the aim of the draft revised agreement, it is to be noted at the outset that there is no express statement of its aim, whether by means of a preamble or of a provision in the body of the draft.

53In the absence of an express statement of that kind, the aim of the draft revised agreement must be examined in the light of the international agreements forming its context.

54In that regard, as is clear from recital 2 of the contested decision, the draft revised agreement provides for amendment of the Lisbon Agreement. Also, the Lisbon Agreement is itself an agreement founded on Article 19 of the Paris Convention that was concluded, as is apparent from Articles 1 and 4 thereof, to supplement the Paris Convention.

55That being so, the aim of the draft revised agreement must be examined taking account, first of all, of the Paris Convention, which constitutes the origin and the foundation for a body of international agreements of which that draft will simply constitute the most recent element.

56The Paris Convention, as is apparent from Articles 1 and 2 thereof, has the object of establishing a Union for the protection of industrial property and of ensuring protection of the various forms of industrial property that are held by nationals of the States forming that Union, including indications of source and appellations of origin, by guaranteeing them the benefit of reciprocal national treatment.

57In addition, the Paris Convention is essentially intended to promote and facilitate international trade. It is apparent from its preamble that it was adopted in order to protect industry and trade and to contribute to ensuring the fairness of commercial transactions between the States which are party to it. The equivalent and homogeneous protection of industrial property rights which the Paris Convention grants their nationals is therefore ultimately designed to enable the latter to participate in international trade on an equal footing.

58In the light of the context referred to in paragraph 54 of the present judgment, account is to be taken, next, of the Lisbon Agreement, which establishes a Special Union conceived as supplementing the Paris Convention in the specific area of appellations of origin.

59In particular, the Lisbon Agreement is concerned with setting up, in addition to the general protection afforded by the Paris Convention, a specific system enabling appellations of origin protected in one of the States of the Special Union which it establishes to benefit from an international registration guaranteeing them protection, covering all the other States of the Special Union, against any usurpation or imitation.

60Regarding its objective, as the Advocate General has stated in point 79 of his Opinion, the specific protection of appellations of origin that is provided for by the Lisbon Agreement is not an end in itself, but a means to the end of developing trade between the contracting parties in a fair manner. The homogeneous standards of protection which that agreement establishes on the territory of all the States that are parties are intended to encourage the participation, on an equal footing, of the relevant economic operators in trade between those States.

61Finally, as stated in paragraphs 17 and 18 of the present judgment, the draft revised agreement is intended to preserve the objectives and principles of the Lisbon Agreement, while making a number of additions designed to improve it and make it more attractive. To that end, the draft revised agreement proposes, in particular, extending the substantive field of application of the Lisbon Agreement to geographical indications, fleshing out substantive and procedural aspects of the protection which it affords to those indications and appellations of origin and permitting the European Union to accede to it.

62Since the main objective of the draft revised agreement is thus to strengthen the system established by the Lisbon Agreement and, within the Special Union created by that agreement, to extend the specific protection introduced by the latter to geographical indications, supplementing the protection which the Paris Convention affords to the various forms of industrial property, the draft revised agreement must be regarded as falling within the framework of the aim — explained in paragraphs 57 and 60 of the present judgment — that is pursued by the body of international agreements of which it forms part and, in particular, from the point of view of the European Union, as being intended to facilitate and govern trade between the European Union and the third States party to the Lisbon Agreement.

63The Council’s argument that the draft revised agreement will be administered by WIPO from its entry into force, as is already the case with the Lisbon Agreement, cannot call that conclusion into question.

64It is admittedly true that the draft revised agreement entrusts the International Bureau of WIPO with the management of one of the components of the international agreement which it presages, namely the mechanism for international registration of appellations of origin and geographical indications that it establishes. It is also true that, more generally, that international agreement is to be administered by that organisation. However, the detailed rules which an international agreement lays down for its future performance and administration must be viewed in the light of the objectives which led the parties to conclude that agreement, and not vice-versa.

65As regards, secondly, the effects of the draft revised agreement, it is settled case-law that the fact that an act of the European Union, such as an international agreement concluded by it, is liable to have implications for international trade is not enough for that act to be required to be classified as falling within the common commercial policy. In addition to the condition, examined in paragraphs 52 to 64 of the present judgment, that such an act must be essentially intended to promote, facilitate or govern such trade, it must also have direct and immediate effects on such trade (judgments of 18 July 2013, Daiichi Sankyo and Sanofi-Aventis Deutschland, C‑414/11, EU:C:2013:520, paragraph 51, and of 22 October 2013, Commission v Council, C‑137/12, EU:C:2013:675, paragraph 57, and Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 61).

66In that regard, the system of reciprocal protection of appellations of origin and geographical indications which the draft revised agreement envisages is based, in essence, on three series of provisions.

67First of all, each contracting party is obliged to establish a body of rules of substantive law preventing appellations of origin and geographical indications that are already protected on the territory of one of the other contracting parties both from being the subject of uses that are likely to damage the interests of their holders or to be detrimental to the reputation of the products that benefit from that protection (Article 11), and from becoming generic (Article 12).

68Next, each contracting party is obliged to establish, in its legal order, rules of procedural law enabling any interested natural or legal person to secure, from the competent administrative and judicial authorities, observance of the protection which the draft revised agreement affords to those appellations of origin and geographical indications, and to bring legal proceedings, or to have legal proceedings brought, against persons alleged to have infringed them (Article 14).

69Finally, the draft revised agreement enables the holders of those appellations of origin and geographical indications to invoke the protection afforded by the various provisions referred to in the preceding two paragraphs of the present judgment, as a result of a mechanism providing for a single registration that is valid throughout the Special Union established by the Lisbon Agreement (Articles 5 to 8).

70In view of that single registration mechanism, the international agreement which the draft revised agreement presages will have the direct and immediate effect of altering the conditions under which trade between the European Union and the other parties to that international agreement is organised, by dispensing manufacturers participating in that trade from the obligation that they currently face, in order to address the legal and economic risks associated with such trade, of having to lodge an application for registration of the appellations of origin and geographical indications that they use with the competent authorities of each of the contracting parties.

71Furthermore, the provisions described in paragraphs 67 and 68 of the present judgment will have direct and immediate effects on trade between the European Union and the third States concerned, by giving all those manufacturers, and any other interested natural or legal person, the necessary tools to secure, under homogeneous substantive and procedural conditions, effective observance of the protection which the draft revised agreement affords to their industrial property rights if appellations of origin or geographical indications are used abroad in a harmful or unfair manner.

72That assessment of the effects of the draft revised agreement is supported by the analysis which led the Court to hold that, in the light of the key role that the protection of intellectual property rights plays in trade in goods and services in general, and in combatting unlawful trade in particular, a draft international agreement providing for the establishment of a registration mechanism for geographical indications of the contracting parties and of a system of reciprocal protection of those indications against acts of unfair competition, which were analogous to those at issue in the present case, was such as to have direct and immediate effects on international trade (Opinion 2/15 (Free Trade Agreement with Singapore) of 16 May 2017, EU:C:2017:376, paragraph 127).

73That being so, the effects of the draft revised agreement on trade between the European Union and the third States that will accede to it meet the requirements of the case-law that is recalled in paragraph 65 of the present judgment.

74It thus follows from the examination of the draft revised agreement, first, that it is essentially intended to facilitate and govern trade between the European Union and third States and, secondly, that it is such as to have direct and immediate effects on such trade, so that its negotiation falls within the exclusive competence which Article 3(1) TFEU confers on the European Union in the field of the common commercial policy envisaged in Article 207(1) TFEU.

75Therefore, the Council was wrong in taking the view that the contested decision fell within the approximation of laws in the field of the internal market and, accordingly, within a competence shared between the European Union and its Member States, and in basing that decision on Article 114 TFEU and Article 218(3) and (4) TFEU.

76Contrary to the Council’s contentions, that error cannot be regarded as a mere formal defect. In particular, it led the Council to disregard the procedural provisions specifically laid down in Article 207(3) TFEU for the negotiation of international agreements falling within the field of the common commercial policy, above all those relating to conduct of the negotiations by the Commission, as the Advocate General has observed in points 86 and 89 of his Opinion.

77It follows that the action must be upheld and the contested decision annulled, without any need to examine the second part of the first plea or the second plea put forward by the Commission in support of its action.

The request that the effects of the contested decision be maintained

78Under the first paragraph of Article 264 TFEU, if the action is well founded, the Court is to declare the act concerned to be void.

79Pursuant to the first paragraph of Article 266 TFEU, the institution whose act has been declared void then has the task of taking the necessary measures to comply with the Court’s judgment.

80Nonetheless, as provided in the second paragraph of Article 264 TFEU, the Court may, if it considers this necessary, state which of the effects of the act which it has declared void are to be considered definitive.

81That power may be exercised, on grounds of legal certainty, in particular where the annulment of a decision adopted by the Council, in the context of the procedure laid down in Article 218 TFEU for negotiating and concluding international agreements, is such as to call into question the participation of the European Union in the international agreement concerned or its implementation, even though there is no doubt as to the competence of the European Union for that purpose (see, with regard to decisions relating to the signature of international agreements, judgments of 22 October 2013, Commission v Council, C‑137/12, EU:C:2013:675, paragraphs 80 and 81; of 24 June 2014, Parliament v Council, C‑658/11, EU:C:2014:2025, paragraph 90; and of 28 April 2015, Commission v Council, C‑28/12, EU:C:2015:282, paragraphs 61 and 62).

82In the present case, the Commission requests the Court, should the contested decision be annulled, to maintain the effects of that decision in order not to call into question the outcome of the negotiations for the purpose of which it was adopted, until the entry into force, within a reasonable period from the date of delivery of the Court’s judgment, of a Council decision based on Articles 207 and 218 TFEU.

83Since those negotiations resulted, after the contested decision entered into force, in the adoption of the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications and there is no doubt as to the competence of the European Union to participate in the adoption of such an act, the Commission’s request should be granted.

84Therefore, the effects of the contested decision should be maintained until the entry into force, within a reasonable period which cannot exceed six months from the date of delivery of the present judgment, of a Council decision based on Articles 207 and 218 TFEU.

Costs

85Article 138(1) of the Rules of Procedure of the Court of Justice provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In the present case, since the Commission has applied for costs and the Council has been unsuccessful, the latter must be ordered to pay the costs incurred by the Commission.

86In addition, Article 140(1) of the Rules of Procedure provides that the Member States and institutions which have intervened in the proceedings are to bear their own costs. In the present case, the Czech Republic, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Slovak Republic, the United Kingdom and the Parliament must be ordered to bear their own costs.

Operative part

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

1.Annuls Council Decision 8512/15 of 7 May 2015 authorising the opening of negotiations on a revised Lisbon Agreement on Appellations of Origin and Geographical Indications as regards matters falling within the competence of the European Union;

2.Maintains the effects of Decision 8512/15 until the entry into force, within a reasonable period which cannot exceed six months from the date of delivery of the present judgment, of a decision of the Council of the European Union based on Articles 207 and 218 TFEU;

3.Orders the Council of the European Union to pay the costs;

4.Orders the Czech Republic, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, Hungary, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Slovak Republic, the United Kingdom of Great Britain and Northern Ireland and the European Parliament to bear their own costs.

Delivered in open court in Luxembourg on 25 October 2017.