Opinion of the Advocate-General

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My Lords,

1. Two German courts have requested preliminary rulings on the questions whether copyright and related rights fall within the ambit of the EEC Treaty and whether a Member State which allows its own nationals to oppose the unauthorized reproduction of their musical performances must grant identical protection to nationals of other Member States, in accordance with the prohibition of discrimination on grounds of nationality laid down in Article 7 of the Treaty.

Case C-92/92

2. The plaintiff in Case C-92/92 is Phil Collins, a singer and composer of British nationality. The defendant - Imtrat Handelsgesellschaft mbH ("Imtrat") - is a producer of phonograms. (1) In 1983 Mr Collins gave a concert in California which was recorded without his consent. Reproductions of the recording were sold in Germany by Imtrat on compact disc under the title "Live and Alive". Mr Collins applied to the Landgericht Muenchen I for an injunction restraining Imtrat from marketing such recordings in Germany and requiring it to deliver copies in its possession to a court bailiff.

3. It appears that if Mr Collins were a German national his application would undoubtedly have succeeded. Paragraph 75 of the Gesetz ueber Urheberrecht und verwandte Schutzrechte (Law on copyright and related rights, hereafter "Urheberrechtsgesetz", BGBl. 1965 I, p. 1273) provides that a performing artist' s performance may not be recorded without his consent and recordings may not be reproduced without his consent. Paragraph 125(1) of the Urheberrechtsgesetz provides that German nationals enjoy the protection of Paragraph 75, amongst other provisions, for all their performances regardless of the place of performance. However, foreign nationals have less extensive rights under the Urheberrechtsgesetz. Under Paragraph 125(2) they enjoy protection in respect of performances which take place in Germany, and under Paragraph 125(5) they enjoy protection in accordance with international treaties. The Landgericht Muenchen I refers to the Rome Convention of 26 October 1961 for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, but deduces from its terms that Germany is required to grant foreign performing artists the same treatment as its own nationals only in respect of performances that take place within the territory of a Contracting State; since the United States has not acceded to the Rome Convention, Paragraph 125(5) of the Urheberrechtsgesetz is of no avail to Mr Collins in the circumstances of the present case. However, Mr Collins argued that he was entitled to the same treatment as a German national by virtue of Article 7 of the EEC Treaty. The Landgericht Muenchen I therefore decided to refer the following questions to the Court:

"1. Is copyright law subject to the prohibition of discrimination laid down in the first paragraph of Article 7 of the EEC Treaty?

2. If so: does that have the (directly applicable) effect that a Member State which accords protection to its nationals for all their artistic performances, irrespective of the place of performance, also has to accord that protection to nationals of other Member States, or is it compatible with the first paragraph of Article 7 to attach further conditions (i.e. Paragraph 125(2) to (6) of the German Urheberrechtsgesetz of 9 September 1965) to the grant of protection to nationals of other Member States?"

Case C-326/92

4. The plaintiff and respondent in Case C-326/92 - EMI Electrola GmbH ("EMI Electrola") - produces and distributes phonograms. It owns the exclusive right to exploit in Germany recordings of certain works performed by Cliff Richard, a singer of British nationality. The defendants and appellants are Patricia Im- und Export Verwaltungsgesellschaft mbH ("Patricia"), a company which distributes phonograms, and Mr L.E. Kraul, its managing director. EMI Electrola applied for an injunction restraining Patricia and Mr Kraul (together with other persons) from infringing its exclusive rights in recordings of certain performances by Cliff Richard. The recordings were first published in the United Kingdom in 1958 and 1959, apparently by a British phonogram producer to which Cliff Richard had assigned his performer' s rights in the recordings. That company subsequently assigned the rights to EMI Electrola.

5. The Landgericht granted EMI Electrola' s application and that decision was confirmed on appeal. Patricia and Mr Kraul appealed on a point of law to the Bundesgerichtshof, which considers that, under German law, EMI Electrola would be entitled to an injunction if Cliff Richard were of German nationality but is not so entitled because he is British. It is not entirely clear from the order for reference how or why the Bundesgerichtshof arrived at the view that German law provides for such a difference of treatment. The reason appears to be that the performances in question took place before 21 October 1966, on which date the Rome Convention came into force in Germany, and that Germany is only required to grant "national treatment" to foreign performers, under the Rome Convention, in respect of performances that take place after that date. (2)

6. It is in any event common ground that a difference in treatment, depending on the nationality of the performer, exists in German law. The Bundesgerichtshof therefore referred the following questions to the Court:

"Is the national copyright law of a Member State subject to the prohibition of discrimination laid down in the first paragraph of Article 7 of the EEC Treaty?

If so, are the provisions operating in a Member State for the protection of artistic performances (Paragraph 125(2) to (6) of the Urheberrechtsgesetz) compatible with the first paragraph of Article 7 of the EEC Treaty if they do not confer on nationals of another Member State the same standard of protection (national treatment) as they do on national performers?"

The issues raised by the two cases

7. Both cases raise essentially the same issues: (a) whether it is compatible with Community law, in particular Article 7 of the EEC Treaty, for a Member State to grant more extensive protection in respect of performances by its own nationals than in respect of performances by nationals of other Member States and (b) if such a difference in treatment is not compatible with Community law, whether the relevant provisions of Community law produce direct effect, in the sense that a performer who has the nationality of another Member State is entitled to claim, in proceedings against a person who markets unauthorized recordings of his performances, the same rights as a national of the Member State in question.

8. I note in passing that, although both the national courts refer to copyright, the cases are in fact concerned not with copyright in the strict sense but with certain related rights known as performers' rights.

The prohibition of discrimination on grounds of nationality

9. The prohibition of discrimination on grounds of nationality is the single most important principle of Community law. It is the leitmotiv of the EEC Treaty. It is laid down in general terms in Article 7 of the Treaty, the first paragraph of which provides:

"Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited."

That general prohibition of discrimination is elaborated upon in other, more specific provisions of the Treaty. Thus Article 36 permits certain restrictions on the free movement of goods, provided that they do not constitute "arbitrary discrimination" or a disguised restriction on trade. Article 48(2) requires the "abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work". Under Article 52, second paragraph, nationals of one Member State may work in a self-employed capacity in another Member State "under the conditions laid down for its own nationals". Under Article 60, third paragraph, a person providing a service may temporarily pursue his activity in the State where the service is provided "under the same conditions as are imposed by that State on its own nationals".

10. It is not difficult to see why the authors of the Treaty attached so much importance to the prohibition of discrimination. The fundamental purpose of the Treaty is to achieve an integrated economy in which the factors of production, as well as the fruits of production, may move freely and without distortion, thus bringing about a more efficient allocation of resources and a more perfect division of labour. The greatest obstacle to the realization of that objective was the host of discriminatory rules and practices whereby the national governments traditionally protected their own producers and workers from foreign competition. Although the abolition of discriminatory rules and practices may not be sufficient in itself to achieve the high level of economic integration envisaged by the Treaty, it is clearly an essential prerequisite.

11. The prohibition of discrimination on grounds of nationality is also of great symbolic importance, inasmuch as it demonstrates that the Community is not just a commercial arrangement between the governments of the Member States but is a common enterprise in which all the citizens of Europe are able to participate as individuals. The nationals of each Member State are entitled to live, work and do business in other Member States on the same terms as the local population. They must not simply be tolerated as aliens, but welcomed by the authorities of the host State as Community nationals who are entitled, "within the scope of application of the Treaty", to all the privileges and advantages enjoyed by the nationals of the host State. No other aspect of Community law touches the individual more directly or does more to foster that sense of common identity and shared destiny without which the "ever closer union among the peoples of Europe", proclaimed by the preamble to the Treaty, would be an empty slogan.

12. Much has been written about the relationship between Article 7 and the other provisions of the Treaty which lay down more specific prohibitions of discrimination on grounds of nationality (e.g. Articles 48(2), 52, second paragraph, and 60, third paragraph). There is also a substantial body of case-law on that relationship. The generally accepted position seems to be that recourse is to be had to Article 7 only when none of the more specific provisions prohibiting discrimination is applicable. (3) Thus one of the main functions of Article 7 is to close any gaps left by the more specific provisions of the Treaty. (4)

13. It is sometimes said that, where rules are compatible with the specific Treaty articles prohibiting discrimination, they are also compatible with Article 7. (5) It would perhaps be more accurate to say that, if a national provision discriminates in a manner that is positively permitted by one of the more specific Treaty articles, it cannot be contrary to Article 7. Thus, since Article 48(4) of the Treaty allows nationals of other Member States to be excluded from employment in the public service in certain circumstances, such a practice cannot be contrary to Article 7 notwithstanding its manifestly discriminatory nature. It would, however, be wrong to say that a rule discriminating against nationals of other Member States cannot be contrary to Article 7 simply because it is not caught by the specific provisions of Articles 48, 52, 59 and 60 of the Treaty. Otherwise Article 7 would cease to perform its gap-closing function.

14. In the circumstances of the present cases I do not think that it is necessary to explore more fully the relationship between the general prohibition of Article 7 and the more specific prohibitions laid down elsewhere. There cannot be any doubt that Article 7, either alone or in conjunction with other provisions of the Treaty, has the effect that nationals of a Member State are entitled to pursue any legitimate form of economic activity in another Member State on the same terms as the latter State' s own nationals.

15. That simple observation is probably sufficient in itself to resolve the fundamental issues raised by the present cases. In so far as intellectual property rights assist the proprietor thereof to pursue the economic freedoms granted by the Treaty, in particular by Articles 30, 52 and 59, a Member State must accord the nationals of other Member States the same level of protection as it accords its own nationals. If, for example, a Member State granted patents only to its own nationals and refused to grant patents to the nationals of other Member States, it could not seriously be argued that such a practice was compatible with the Treaty.

16. Indeed, such discrimination was specifically identified by the Council in 1961 in the General Programme for the Abolition of Restrictions on Freedom to Provide Services (6) and in the General Programme for the Abolition of Restrictions on Freedom of Establishment. (7) Both those programmes call for the abolition of "provisions and practices which, in respect of foreign nationals only, exclude, limit or impose conditions on the power to exercise rights normally attaching to the provision of services [or to an activity as a self-employed person] and in particular the power ... to acquire, use or dispose of intellectual property and all rights deriving therefrom". (8) It may be noted that the General Programmes provide "useful guidance for the implementation of the relevant provisions of the Treaty". (9)

17. There are many ways in which the proprietor of intellectual property rights may seek to exercise those rights in pursuit of the economic freedoms guaranteed by the Treaty. A performer may for example have phonograms embodying his