Judgment of the Court (Second Chamber) of 12 May 2005.Regione autonoma Friuli

Case C-347/03

Regione autonoma Friuli-Venezia Giulia and

Agenzia regionale per lo sviluppo rurale (ERSA)

v

Ministero delle Politiche Agricole e Forestali

(Reference for a preliminary ruling from the Tribunale amministrativo regionale del Lazio)

(External relations – EC-Hungary Agreement on the reciprocal protection and control of wine names – Protection in the Community of a name relating to certain wines originating in Hungary – Geographical indication ‘Tokaj’ – Exchange of letters – Possibility of using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions (‘quality wines psr’), during a transitional period expiring on 31 March 2007 – Exclusion of that possibility at the end of the transitional period – Validity – Legal basis – Article 133 EC – Principles of international law relating to treaties – Articles 22 to 24 of the TRIPs Agreement – Protection of fundamental rights – Right to property)

Opinion of Advocate General Jacobs delivered on 16 December 2004 

Judgment of the Court (Second Chamber), 12 May 2005 

Summary of the Judgment

1.     International agreements — Agreements entered into by the Community — Conclusion — EC-Hungary Agreement on the reciprocal protection and control of wine names — Legal basis — Article 133 EC

(Art. 133 EC; EC-Hungary Association Agreement; EC-Hungary Agreement on wines)

2.     International agreements — Agreements entered into by the Community — EC‑Hungary Agreement on the reciprocal protection and control of wine names — Rules governing geographical homonyms — Conditions for application — Name ‘Tocai’ for Italian wines and ‘Tokaj’ for Hungarian wines — Name ‘Tocai’ not a protected geographical indication — Exchange of letters prohibiting the use of that name — Infringement of those rules — None

(EC-Hungary Agreement on wines, Art. 4(5))

3.     International agreements — Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) — Homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines — Right, recognised in the agreement, for producers who have used that name traditionally and in good faith to continue to use it — None

(TRIPs Agreement, Arts 22 to 24)

4.     Community law — Principles — Fundamental rights — Right to property — Restrictions — Prohibition on use of the name ‘Tocai’ for Italian wines — None — Prohibition pursuing an aim of general interest

(Protocol No 1 to the European Convention of Human Rights, Art. 1, first para.; EC‑Hungary Agreement on wines)

1.     The European Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, is not the legal basis of Decision 93/724 concerning the conclusion of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names.

The appropriate legal basis for the conclusion by the Community alone of the latter agreement is Article 133 EC, as referred to in the preamble to Decision 93/724, an article which confers on the Community competence in the field of the common commercial policy. That agreement is part of those laid down in Article 63 of Regulation No 822/87 on the common organisation of the market in wine and its principal objective is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in Hungary by guaranteeing those wines the same protection as that provided for in respect of quality wines produced in a specified region of Community origin and, on the other, the marketing in that country of wines originating in the Community.

(see paras 70, 79-80, 83, operative part 1-2)

2.     The rules governing homonyms laid down in Article 4(5) of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (EC-Hungary Agreement on wines) concern geographical indications protected by virtue of that agreement.

Since the terms ‘Tocai friulano’ and ‘Tocai italico’, unlike the Hungarian wine names ‘Tokaj’ and ‘Tokaji’, do not appear in part A of the Annex to the EC-Hungary Agreement on wines and are the name of a vine or vine variety recognised in Italy as being suitable for the production of certain quality wines produced in a specified region, they cannot be classed as geographical indications within the meaning of that agreement.

It follows that the prohibition of use of the name ‘Tocai’ in Italy after the expiry of the transitional period laid down in the EC-Hungary Agreement on wines, resulting from the exchange of letters concerning Article 4 of that agreement, is not contrary to the rules governing homonyms laid down in Article 4(5) of that agreement.

It also follows that the Joint Declaration concerning Article 4(5) of the EC‑Hungary Agreement on wines, in so far as it states in the first paragraph that, in respect of Article 4(5)(a) of that agreement, the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality.

(see paras 87-88, 90, 92, 98, 102, operative part 3-4)

3.     Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), set out in Annex 1 C to the Agreement establishing the World Trade Organisation, are to be interpreted as meaning that, in a case which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions, even though they do not prohibit the continued and similar use of such a name, also do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.

(see paras 110, 115, operative part 5)

4.     The right to property does not preclude the prohibition on use by the operators concerned in an autonomous Italian region of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines produced in a specified region at the end of a 13-year transitional period, resulting from the exchange of letters concerning the use of the word ‘Tocai’, annexed to the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names but not referred to in the latter.

That prohibition, in so far as it does not exclude any reasonable method of marketing the Italian wines concerned, does not constitute a deprivation of possessions as referred to in the first paragraph of Article 1 of Protocol No 1 to the European Convention on Human Rights. In addition, even if it were shown that that restriction were to entail a restriction of the fundamental right to property, that restriction may be justified in so far as, by prohibiting the use of that name which is a homonym of the ‘Tokaj’ geographical indication of Hungarian wines, it pursues an aim of general interest, which is to promote trade between the Contracting Parties by facilitating on a reciprocal basis the marketing of wines which are described or presented using a geographical indication.

(see paras 122, 127, 134, operative part 6)

JUDGMENT OF THE COURT (Second Chamber)

12 May 2005 (*)

(External relations – EC-Hungary Agreement on the reciprocal protection and control of wine names – Protection in the Community of a name relating to certain wines originating in Hungary – Geographical indication ‘Tokaj’ – Exchange of letters – Possibility of using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions (‘quality wines psr’), during a transitional period expiring on 31 March 2007 – Exclusion of that possibility at the end of the transitional period – Validity – Legal basis – Article 133 EC – Principles of international law relating to treaties – Articles 22 to 24 of the TRIPs Agreement – Protection of fundamental rights – Right to property)

In Case C‑347/03,

REFERENCE for a preliminary ruling under Article 234 EC from the Tribunale amministrativo regionale del Lazio (Italy), made by decision of 9 June 2003, received at the Court on 7 August 2003, in the proceedings

Regione autonoma Friuli-Venezia Giulia and Agenzia regionale per lo sviluppo rurale (ERSA)

v

Ministero delle Politiche Agricole e Forestali,

third party:

Regione Veneto,

THE COURT (Second Chamber),

composed of C.W.A. Timmermans (Rapporteur), President of the Chamber, R. Silva de Lapuerta, R. Schintgen, G. Arestis and J. Klučka, Judges,

Advocate General: F.G. Jacobs,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 14 October 2004,

after considering the observations submitted on behalf of:

–      Regione autonoma Friuli-Venezia Giulia and Agenzia regionale per lo sviluppo rurale (ERSA), by E. Bevilacqua and F. Capelli, avvocati,

–      the Italian Government, by I.M. Braguglia, acting as Agent, and M. Fiorilli, avvocato dello Stato,

–      the Hungarian Government, by J. Fazekas and M. Ficsor, acting as Agents,

–      the Council of the European Union, by F. Ruggeri Laderchi and F. Florindo Gijón, acting as Agents,

–      the Commission of the European Communities, by E. Righini et F. Dintilhac, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 16 December 2004,

gives the following

Judgment

1       The reference for a preliminary ruling concerns the validity and interpretation of Council Decision 93/724/EC of 23 November 1993 concerning the conclusion of an Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (OJ 1993 L 337, p. 93, ‘the EC‑Hungary Agreement on wines’) and of Commission Regulation (EC) No 753/2002 of 29 April 2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 as regards the description, designation, presentation and protection of certain wine sector products (OJ 2002 L 118, p. 1).

2       That reference was made in proceedings between the Regione autonoma Friuli‑Venezia Giulia (Autonomous region of Friuli-Venezia Giulia) and the Agenzia regionale per lo sviluppo rurale (Regional Agency for Rural Development, ERSA) (together, ‘the Region and ERSA’) and the Ministero della Politiche Agricole e Forestali (Italian Ministry of Agricultural and Forestry Policy).

3       Those proceedings concern an application for annulment of the Ministerial Decree of 26 September 2002 laying down national conditions for the use, in derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of the names of vine varieties and their synonyms including a geographical indication, listed in Annex II to that regulation, which may appear on the labelling of Italian [quality wines produced in specified regions] and [typical geographical indications] (GURI No 247 of 21 October 2002, p. 3, ‘the Decree of 26 September 2002’), in so far as it precludes the use of the word ‘Tocai’ in the term ‘Tocai friulano’ or its synonym ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions (‘quality wines psr’), at the end of a transitional period expiring on 31 March 2007.

 Legal framework

 International law

 The Vienna Convention on the Law of Treaties

4       Article 48(1) of the Vienna Convention on the Law of Treaties of 23 May 1969 provides:

‘A State may invoke an error in a treaty as invalidating its consent to be bound by the treaty if the error relates to a fact or situation which was assumed by that State to exist at the time when the treaty was concluded and formed an essential basis of its consent to be bound by the treaty.’

5       Under Article 59 of that Convention:

‘1.      A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter and:

(a)      it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or

(b)      the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time.

…’

 The European Convention for the Protection of Human Rights and Fundamental Freedoms

6       Article 1 of Protocol No 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’) signed at Rome on 4 November 1950 provides:

‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.’

 Law arising from the Agreement establishing the World Trade Organisation

7       The Agreement on Trade-Related Aspects of Intellectual Property Rights (‘the TRIPs Agreement’), which is set out in Annex 1 C to the Agreement establishing the World Trade Organisation (‘the WTO Agreement’), was approved on behalf of the European Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994 (OJ 1994 L 336, p. 1).

8       Article 1 of the TRIPs Agreement, headed ‘Nature and Scope of Obligations’, provides in paragraph 2:

‘For the purposes of this Agreement, the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II.’

9       Articles 22 to 24 of that agreement are in Part II thereof, which deals with ‘Standards concerning the Availability, Scope and Use of Intellectual Property Rights’, and specifically in Section 3 of that part, relating to ‘Geographical Indications’.

10     Under Article 22 of that agreement, headed ‘Protection of Geographical Indications’:

‘1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

…’

11     Article 23 of the TRIPs Agreement, headed ‘Additional Protection for Geographical Indications for Wines and Spirits’, stipulates:

‘1.      Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question … .

…

3.      In the case of homonymous geographical indications for wines, protection shall be accorded to each indication … Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

…’

12     Article 24 of that agreement, headed ‘International Negotiations; Exceptions’, provides:

‘1.      Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article 23. …

…

3.      In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement.

4.      Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either (a) for at least 10 years preceding 15 April 1994 or (b) in good faith preceding that date.

…

6.      … Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement.

…’

 The EC-Hungary Association Agreement

13     The Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concluded and approved on behalf of the Community by Decision 93/742/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993 (OJ 1993 L 347, p. 1, ‘the EC-Hungary Association Agreement’), was signed in Brussels on 16 December 1991 and, in accordance with the second paragraph of Article 123, entered into force on 1 February 1994.

14     Pending the entry into force of the EC-Hungary Association Agreement, the Interim Agreement between the European Economic Community and the European Coal and Steel Community, of the one part, and the Republic of Hungary, of the other part, on trade and trade-related matters was concluded and approved on behalf of the Community by Council Decision 92/230/EEC of 25 February 1992 (OJ 1992 L 116, p. 1, ‘the EC-Hungary Interim Agreement’). That agreement was signed in Brussels on 16 December 1991 and entered into force on 25 February 1992.

 The EC-Hungary Agreement on wines

15     The EC-Hungary Agreement on wines, signed at Brussels on 29 November 1993, was concluded and approved on behalf of the Community by Decision 93/724 and entered into force on 1 April 1994.

16     The first citation in the preamble to Decision 93/724 states:

‘Having regard to the Treaty establishing the European Community, and in particular Article [133] thereof’.

17     The first and third recitals in the preamble to that decision are worded as follows:

‘Whereas the Agreement negotiated between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names will help make measures to eliminate unfair competition in trade more effective, ensure a greater degree of consumer protection and promote trade in wine between the Contracting Parties; whereas it is therefore desirable to approve the said Agreement;

…

Whereas, since the provisions of the Agreement are directly linked to measures covered by the common commercial and agricultural policy [in this case the Community rules in the wine sector], the said Agreement must be established at Community level’.

18     Under Article 1 of that decision:

‘The Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names, the Protocol, exchanges of letters and declarations annexed thereto are hereby approved on behalf of the Community.

The text of the acts referred to in the first paragraph are attached to this Decision.’

19     The first citation in the preamble to the EC-Hungary Agreement on wines states:

‘Having regard to the Europe Agreement establishing an association between the European Communities and their Member States and the Republic of Hungary, signed in Brussels on 16 December 1991’.

20     Article 1 of the EC-Hungary Agreement on wines stipulates:

‘The Contracting Parties agree, on the basis of reciprocity, to protect and control names of wines originating in the Community and in Hungary on the conditions provided for in this Agreement.’

21     Article 2(2) of that agreement provides:

‘For the purposes of this Agreement, unless the contrary intention appears:

…

–      “geographical indication” shall mean an indication, including an “Appellation of origin”, which is recognised in the laws and regulations of a Contracting Party for the purpose of the description and presentation of a wine originating in the territory of a Contracting Party, or in a region or locality in that territory, where a given quality, reputation or other characteristic of the wine is essentially attributable to its geographical origin,

…’

22     Under Article 4 of that agreement:

‘1.      The following names are protected:

(a)      as regards wines originating in the Community:

…

–      the geographical indications and traditional expressions referred to in the Annex;

(b)      as regards wines originating in Hungary:

…

–      the geographical indications and traditional expressions referred to in the Annex, as they appear in the Hungarian wine legislation, …

…

3.      In the Community, the protected Hungarian names:

–      are reserved exclusively to the wines originating in Hungary to which they apply, and

–      may not be used otherwise than under the conditions provided for by the laws and regulations of Hungary.

…

5.      In the case of homonymous or identical geographical indications:

(a)      where two indications, protected by virtue of this Agreement, are homonymous or identical, protection shall be accorded to each indication, provided that:

–      the geographical name in question has been used traditionally and consistently to describe and present a wine produced in the geographical area to which it refers,

–      the wine is not falsely represented to consumers as originating in the territory of the other Contracting Party;

…

In such cases, the Contracting Parties shall determine the practical conditions under which the homonymous or identical indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.’

23     Part B (‘Wines originating in the Republic of Hungary’), section I (‘Geographical indications’), point 3.4 (‘Wine-growing region Tokaj-Hegyalja’) of the Annex to the EC-Hungary Agreement on wines, headed ‘List of protected names for wines referred to in Article 4’, includes the name ‘Tokaj’. Part A (‘Wines originating in the European Community’) of that annex does not include either of the terms ‘Tocai friulano’ or ‘Tocai italico’.

24     The exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (OJ 1993 L 337, p. 169, ‘the exchange of letters on Tocai’), which is one of the acts referred to in the first paragraph of Article 1 of Decision 93/724, also entered into force on 1 April 1994.

25     After referring inter alia to Article 4(3) of the EC-Hungary Agreement on wines, the signatories of those letters confirm that:

‘1.      For a transitional period of thirteen years from the entry into force of that Agreement, the application of the latter will not preclude the lawful use of the name “Tocai” to designate and present certain Italian quality wines psr under the following conditions.

Without prejudice to particular Community provisions and, where applicable, any more restrictive national provisions, the wine must be:

–      obtained from the “Tocai friulano” vine variety;

–      produced from grapes totally harvested in the Italian regions Veneto and Friuli;

–      designated and presented solely by the name of the variety “Tocai friulano” or by its synonym “Tocai italico”, the two words making up those names appearing together without any intervening words, in characters of the same type and size on a single line and separate from the name of the geographical unit in which the wine originates. In addition, the size of the characters used for those words may not exceed that of the characters giving the name of that geographical unit;

–      marketed outside the territory of Hungary.

…

4.      Without prejudice to the provisions referred to in point 3, the possibility of using the name “Tocai” in accordance with the conditions set out in point 1 will expire at the end of the transitional period referred to therein.

…’

26     Under the Joint Declaration concerning Article 4(5) of the [EC-Hungary] Agreement [on wines] (OJ 1993 L 337, p. 171, ‘the Joint Declaration on homonymous indications’), which is also one of the acts referred to in the first paragraph of Article 1 of Decision 93/724:

‘In respect of Article 4(5)(a) the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions of this article could be applicable.

…’

 Community legislation on the common organisation of the market in wine (‘the COM in wine’)

 The COM in wine in force at the time of the conclusion of the EC-Hungary Agreement on wines

27     Under Article 63 of Council Regulation (EEC) No 822/87 of 16 March 1987 on the common organisation of the market in wine (OJ 1987 L 84, p. 1):

‘1.      For the purposes of marketing within the Community, imported wines intended for direct human consumption and bearing a geographical ascription may, where reciprocal arrangements can be established, be controlled and protected as provided for in [Article 15 of Regulation No 823/87] in respect of quality wines psr.

2.      Paragraph 1 shall be implemented by agreements with the relevant third countries to be negotiated and concluded in accordance with the procedure laid down in Article [133 EC].

3.      Detailed rules for the application of this article shall be adopted in accordance with the procedure laid down in Article 83.’

28     Under Article 1(3) of Council Regulation (EEC) N 823/87 of 16 March 1987 laying down special provisions relating to quality wines produced in specified regions (OJ 1987 L 84, p. 59), as amended by Council Regulation (EEC) No 2043/89 of 19 June 1989 (OJ 1989 L 202, p. 1, ‘Regulation No 823/87’):

‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each of these quality wines psr, details of the national provisions governing the production and manufacture of these quality wines psr.

The Commission shall have the said list published in the “C” series of the Official Journal of the European Communities.’

29     Article 4(1) of Regulation No 823/87 provides:

‘Each Member State shall draw up a list of vine varieties suitable for producing each of the quality wines psr produced in its territory, … varieties [which] must belong to the recommended or authorised categories referred to in Article 13 of Regulation (EEC) No 822/87.’

30     Under Article 15(4) of Regulation No 823/87:

‘…

Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may … authorise the name of a specified region to be accompanied by details relating to the method of manufacture or the type of product or by the name of a vine variety or a synonym thereof.

…’

31     The term ‘Tocai friulano’ appears in Title I of the Annex to Commission Regulation (EEC) No 3800/81 of 16 December 1981 determining the classification of vine varieties (OJ 1981 L 381, p. 1), in particular in Part V of sub-title I, as a vine variety recommended or authorised in certain Italian provinces.

32     Article 14(1) of Council Regulation (EEC) No 2392/89 of 24 July 1989 laying down general rules for the description and presentation of wines and grape musts (OJ 1989 L 232, p. 13) provides:

‘The name of a vine variety as referred to in Article 11(2)(n) to describe a quality wine psr may be used on the labelling only if:

(a)      that variety is on the list drawn up by the Member States pursuant to Article 4(1) of Regulation (EEC) No 823/87 designating the vine varieties which are suitable for producing each of the quality wines psr produced in their territory;

(b)      the name of the variety appears:

–      as one of the recommended or authorised varieties in the classification of vine varieties for the administrative unit concerned,

–      where appropriate, on a list of synonyms to be adopted; this list may provide that a given synonym may be used only to describe a quality wine psr produced in the areas of production in which such use is traditional and customary;

…

(e)      the name of that variety does not cause confusion with the name of a specified region or geographical unit used to describe another quality wine psr or an imported wine.’

33     Article 26(1) of that regulation provides:

‘The description on the labelling of imported wines intended for direct human consumption, described by reference to a geographical area and appearing on a list to be adopted, shall include the following information:

(a)      the name of a geographical unit situated in the third country concerned, in accordance with the conditions laid down in Article 29;

…

This list may include only imported wines for which, in each case, the conditions of production are recognised as being equivalent to those for a quality wine psr or for a table wine bearing an indication of geographical origin.’

34     Article 11(2) of Commission Regulation (EEC) No 3201/90 of 16 October 1990 laying down detailed rules for the description and presentation of wines and grape musts (OJ 1990 L 309, p. 1) provides:

‘The list of imported wines described by reference to a geographical area referred to in Article 26(1) of Regulation (EEC) No 2392/89 is set out in Annex II hereto.

The names on that list shall be shown in such a way that they are clearly distinguishable from other information on the label of the imported wine concerned, particularly with regard to the geographical names referred to in Article 26(2)(b) of Regulation (EEC) No 2392/89.’

35     Hungarian wines bearing the name ‘Tokaj’ or ‘Tokaji’ are included under Title 11, point 5, of Annex II to Regulation No 3201/90, headed ‘List … of imported wines described by reference to a geographical area’.

36     Under Article 12(1) of that regulation:

‘The list of the synonyms of names of the vine varieties which may be used to describe table wines and quality wines psr in accordance with Articles 5(1)(b) and 14(1)(b) of Regulation (EEC) No 2392/89 is set out in Annex III hereto.’

37     The variety ‘Tocai friulano’ and its synonym ‘Tocai italico’ are included in point 5 of Annex III, headed ‘List … of the synonyms of names of wine varieties that may be used to describe table wines and quality wines psr’.

 The COM in wine in force on the date of the main proceedings

38     Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine (OJ 1999 L 179, p. 1) was rendered applicable from 1 August 2000.

39     Article 19(1) of that regulation provides:

‘Member States shall classify vine varieties for the production of wine. …’

40     Rules relating to the description, designation and presentation of certain wine products and to the protection of certain particulars and terms are set out in Articles 47 to 53 and in Annexes VII and VIII of that regulation.

41     Article 50 of Regulation No 1493/1999 provides:

‘1.      Member States shall take all necessary measures to enable interested parties to prevent, on the terms set out in Articles 23 and 24 of the [TRIPs] Agreement, the use in the Community of a geographical indication attached to the products referred to in Article 1(2)(b) for products not originating in the place indicated by the geographical indication in question … .

2.      For the purposes of this article, “geographical indications” is taken to mean indications which identify a product as originating in the territory of a third country which is a member of the World Trade Organisation or in a region or locality within that territory, in cases where a certain quality, reputation or other given characteristic of the product may be attributed essentially to that geographical place of origin.

…’

42     Under Article 52(1) of that regulation:

‘If a Member State uses the name of a specified region to designate a quality wine psr or, where appropriate, a wine intended for processing into such a quality wine psr, that name may not be used to designate products of the wine sector not produced in that region and/or products not designated by the name in accordance with the provisions of the relevant Community and national rules. …

Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may, in the case of certain conditions of production which they shall determine, authorise the name of a specified region to be accompanied by details relating to the method of manufacture or the type or by the name of a vine variety or a synonym thereof.

…’

43     Annex VII(A), points 1 and 2, of Regulation No 1493/1999 indicates that the labelling of quality wines psr and wines originating in third countries is to include certain compulsory references, including the sales description which is to consist, in the case of quality wines psr, of inter alia the name of the production area and, in the case of imported wines, of the word ‘wine’, which must be supplemented by the name of the country of origin, and, when they are designated with a geographical indication, by the name of the geographical area in question.

44     Annex VII(B), points 1 and 4, provides:

‘1.      The labelling of the products obtained in the Community may be supplemented by the following particulars, under conditions to be determined:

…

(b)      in the case of table wines with geographical indication and quality wines psr:

…

–      the name of one or more vine varieties,

…

4.      Member States of production may make certain particulars in paragraphs 1 and 2 compulsory, prohibit them or restrict their use in respect of wines produced in their territory.’

45     Article 54(4) of Regulation No 1493/1999 provides:

‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each of these quality wines psr, details of the national provisions governing the production and manufacture of those quality wines psr.’

46     Regulation No 1493/1999 was implemented by Regulation No 753/2002.

47     Article 19 of Regulation No 753/2002, headed ‘Indication of vine variety’, provides:

‘1.      The names of the vine varieties used for the production of a table wine with a geographical indication or a quality wine psr or their synonyms may be given on the label of the wine concerned provided that:

…

(c)      the variety name or one of its synonyms does not include a geographical indication used to describe a quality wine psr, a table wine or an imported wine listed in the agreements concluded between the Community and third countries, and, where it is accompanied by another geographical term, is given on the label without that geographical term;

…

2.      By way of derogation from paragraph 1(c):

(a)      the variety name or one of its synonyms that includes a geographical indication may be shown on the label of a wine with that geographical indication;

(b)      the variety names and their synonyms listed in Annex II may be used under the national and Community rules in force on the date of entry into force of this Regulation.

3.      The Member States concerned shall notify the Commission, by 1 October 2002, of the measures referred to in point (b) of paragraph 2. The Commission shall take all appropriate steps to ensure that these measures are publicised.’

48     Annex II to that regulation, headed ‘List of vine varieties and their synonyms that include a geographical indication and that may appear on the labelling of wines in accordance with Article 19(2)’, lists inter alia, in relation to Italy, the term ‘Tocai Friulano, Tocai Italico’. A footnote relating to that term states that ‘the name “Tocai friulano” and its synonym “Tocai italico” may be used during a transitional period until 31 March 2007’.

49     In that respect, that annex did not undergo any amendment as a result of the adoption of Commission Regulation (EC) No 1429/2004 of 9 August 2004 amending Regulation No 753/2002 (OJ 2004 L 263, p. 11).

 The Italian legislation

50     Article 1(1) of the Decree of 26 September 2002 provides:

‘The national conditions for the use, by way of derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of names of vine varieties and their synonyms including a geographical indication which may appear on the labelling of [quality wines psr] and of Italian wines with a typical geographical indication are laid down in Annex I which forms an integral part of this Decree, in which for Italy the names of vine varieties and their synonyms including a geographical indication which are mentioned in Annex II to Regulation (EC) No 753/2002 are listed.’

51     Annex I to the Decree of 26 September 2002 mentions inter alia, under the heading ‘Names of vine varieties or their synonyms’, ‘Tocai friulano or Tocai italico’, to which the following notice headed ‘Extent of the derogation (administrative territory and/or specific [quality wine psr] and/or [wines with typical geographical indication]’) relates:

‘For some [quality wines psr] of the regions Frioul-Venezia Giulia and Venezia for a transitional period ending on 31 March 2007 in accordance with the Agreement between the [European Union] and the Republic of Hungary.’

 The facts in the main proceedings and the questions referred for a preliminary ruling

52     In its decision, the referring court points out that the Region and ERSA criticise the unfairness arising from the fact that, of the 106 wine names to which the derogation from Article 19(1)(c) of Regulation No 753/2002 applies, only in the case of Tocai friulano or Tocai italico and the French name Tokay Pinot gris is that derogation limited in time.

53     That court then refers to the argument put forward by the Region and ERSA, intended to demonstrate the importance attached to the historical origins of the name Tocai friulano.

54     It is, they maintain, a vine variety which is native to the area of Collio goriziano (region of Friuli-Venezia Giulia) and has been grown there since ancient times. It is used for the production of a dry white wine which is not suitable for laying down.

55     The referring court notes that, in the light of those explanations, the Region and ERSA have submitted the following pleas in law:

–      misuse of powers on grounds of an insufficient statement of reasons and inconsistency arising from the fact that the Italian authorities applied to the Commission for a derogation unlimited in time, but subsequently approved the decree of 26 September 2002 with the temporal limitation for which it provides;

–      misuse of powers on grounds of manifest unfairness and breach of the principle of equal dignity of all Community citizens arising from the fact that the discrimination against the Italian wine producers is completely unjustified;

–      unlawfulness deriving from the unlawfulness of the EC-Hungary Agreement on wines, since the act on which the unlawful limitation is based, namely that agreement as approved by Decision 93/724, is itself unlawful in that:

–      the two homonymous products are completely different, the Hungarian wine being a sweet wine;

–      the two communities have used the same name since time immemorial;

–      it is legitimate to remedy the homonymity by adding the name of the region or vine variety in question; which is also possible under the EC-Hungary Agreement and the Madrid Agreement of 1891;

–      given that the Republic of Hungary is due to accede to the European Community, the EC-Hungary Agreement on wines, in order to remain valid, must be consistent with the principles contained in the WTO Agreement, in particular Articles 22 to 24 of the TRIPs Agreement, which govern misleading geographical indications;

–      the EC-Hungary Agreement on wines is contrary to principles of international law in that the limitation in time of use of the name in question arises from an exchange of letters (namely the exchange of letters on Tocai) and not from the text of the agreement, violates the principle of customary international law and is based on a false representation of reality so far as the homonymity in question is concerned;

–      breach of Article 1 of the Protocol to the ECHR and of Article 17 of the Charter of fundamental rights of the European Union proclaimed at Nice on 7 December 2000 (OJ 2000 C 364, p. 1,‘the Charter of fundamental rights’) in that it follows from those provisions that intellectual property is protected, that no one is to be deprived of his or her possessions except in the public interest, that the principles of proportionality and fair compensation must be observed and that restrictions of the right to property must in any event be effected in accordance with law.

56     The referring court further observes that, by the Decree of 26 September 2002, the national authorities merely transposed the provision of Regulation No 753/2002 and Annex II thereto limiting in time the use of the name ‘Tocai friulano’ and that those authorities have simply pointed out that that limitation arises from an agreement between the Community and the Republic of Hungary.

57     It is therefore plain, in that court’s view, that the harm alleged in the main action, namely the fact that the name Tocai friulano or Tocai italico cannot be used after 31 March 2007, arises directly from two sources of Community law, namely Decision 93/724 and Regulation No 753/2002.

58     In those circumstances, the Tribunale amministrativo regionale del Lazio, taking the view that the outcome of the main proceedings hinged on the answers to certain questions of Community law, decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘1.      Can the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concluded on 16 December 1991 … , provide a proper and sufficient legal basis for conferring on the European Community power to conclude the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names of 29 November 1993 … , with particular reference to the provisions of Article 65(1), to Joint Declaration No 13 and to Annex XIII (points 3, 4 and 5) of the Europe Agreement of 1991 on the possible reservation of the sovereignty and jurisdiction of the Member States in the matter of national geographical names used with reference to food and wine and restraint of any transfer of jurisdiction or competence in that matter to the European Community?

2.      In view of, inter alia, what is said in Opinion 1/94 of the Court of Justice of the European Communities concerning the exclusive competence of the European Community, should the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names … , which specifies the protection of geographical names which have intellectual and commercial property significance, be declared invalid and of no effect within the Community legal order because the agreement itself has not been ratified by the individual Member States of the European Community?

3.      In the event that the Community Agreement of 1993 … is to be regarded as lawful and applicable in its entirety, should the prohibition of the use in Italy after 2007 of the name “Tocai”, which arises from the exchange of letters between the parties to the agreement, annexed to the agreement, be regarded as invalid and of no effect because it is inconsistent with the rules governing geographical homonyms established in the agreement itself (see Article 4(5) of and the Protocol to the Agreement)?

4.      Should the second Joint Declaration annexed to the 1993 Agreement … , which implies that the Contracting Parties were unaware, at the time of their negotiations, of the existence of homonyms connected with European and Hungarian wines, be regarded as a clear misrepresentation of reality (given that the Italian and Hungarian names used to refer to “Tocai” wines have existed alongside each other for centuries, were officially recognised in 1948 in an agreement between Italy and Hungary and were recently brought within the scope of Community law) such as to render null and void that part of the 1993 Agreement which prohibits the use in Italy of the name Tocai, on the basis of Article 48 of the Vienna Convention on the Law of Treaties?

5.      In the light of Article 59 of the Vienna Convention on the Law of Treaties, is the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement) … , which was concluded within the context of the World Trade Organisation (WTO) and entered into force on 1 January 1996, thus after the Community Agreement of 1993 … entered into force, to be interpreted as meaning that its provisions governing homonyms in wine names apply in place of those of the Community Agreement of 1993 where there is inconsistency between the two, given that the parties to both agreements are the same?

6.      In the case of two names that are homonyms and refer to wines produced in two different countries both party to the TRIPs Agreement (and both where the homonym relates to two geographical names used in both the countries party to TRIPs and where it relates to a geographical name in one country and the like name relates to a vine traditionally cultivated in another country party to TRIPs), must Articles 22 to 24 in [Part II, Section 3 of Annex 1 C] to the Agreement establishing the World Trade Organisation, which contains the TRIPs Agreement… , which entered into force on 1 January 1996, be interpreted as meaning that both the names may continue to be used provided that they have been used in the past by the respective producers either in good faith or for at least 10 years prior to 15 April 1994 (Article 24(4) [of the TRIPs Agreement] and each name clearly indicates the country or region or area of origin of the wine to which it refers in such a way as not to mislead consumers?

7      Does the right of ownership set out in Article 1 of Protocol No 1 to the European Convention on Human Rights and Fundamental Freedoms … and taken up in Article 17 of the Charter of fundamental rights of the European Union proclaimed in Nice on 7 [December] 2000 also cover intellectual property in the names of the places of origin of wines and the exploitation thereof, and, consequently, does the protection of that right preclude application of the agreement set out in the exchange of letters annexed to the Agreement between the European Community and the Republic of Hungary on reciprocal protection and control of wine names … , but not included in the body of that agreement, under which wine producers of the Friuli region will not be permitted to use the name “Tocai friulano”, particularly in view of the total lack of any compensation to the wine producers of the Friuli region thus dispossessed, the lack of any general public interest justifying their dispossession and the disregard for the principle of proportionality?

8.      In the event that it is held that the Community provisions contained in the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names … and/or the exchange of letters annexed thereto are unlawful to the extent described in the preceding questions, must the provisions of Regulation … No 753/2002, under which use of the name “Tocai friulano” is to be prohibited after 31 March 2007 (Article 19(2)), be regarded as invalid or in any event of no effect?’

59     By application of 11 March 2005, received at the Court Registry on 15 March 2005, the Region and ERSA requested the Court to allow all the parties involved in this case to submit observations on certain new facts set out in that application before the Court gives judgment. Those new facts concern the imminent conclusion by the Community of new agreements with Australia and the United States which, under Article 24(6) of the TRIPs Agreement, would allow producers in those countries to continue using the name ‘Tokay’ on their national markets and on third-country markets.

60     In that regard, it should be recalled that the Court may of its own motion, on a proposal from the Advocate General or at the request of the parties, order that the oral procedure be reopened, in accordance with Article 61 of the Rules of Procedure, 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 (see, inter alia, Case C‑299/99 Philips [2002] ECR I‑5475, paragraph 20).

61     The Court considers that there is no need in this case to order the reopening of the oral procedure, which was closed on 16 December 2004, since it has before it all the material necessary for it to answer the questions raised in the main proceedings.

62     The application of the Region and ERSA must therefore be rejected.

 The questions referred for a preliminary ruling

 The first question

63     By its first question, the referring court seeks in essence to ascertain whether the EC-Hungary Association Agreement provided an appropriate legal basis for the adoption of Decision 93/724 by which the Community concluded the EC-Hungary Agreement on wines.

64     That question is founded on the premiss that the legal basis conferring on the Community power to conclude the EC-Hungary Agreement on wines is the EC‑Hungary Association Agreement. That premiss apparently derives from the reference, in the first citation in the preamble to the EC-Hungary Agreement on wines, to the EC-Hungary Association Agreement.

65     However, as the Council and the Commission correctly pointed out, that premiss cannot be accepted.

66     The purpose of the reference to the EC-Hungary Association Agreement is to place the EC-Hungary Agreement on wines in its political context. It must not be construed as identifying the provisions of Community law on the basis of which the Community concluded the latter agreement.

67     The legal basis conferring on the Community power to conclude the EC-Hungary Agreement on wines is however mentioned in the first citation in the preamble to Decision 93/724 by which that agreement was concluded and approved on behalf of the Community.

68     It is clear from that citation that the legal basis in question is Article 133 EC, which confers on the Community competence in the field of the common commercial policy.

69     The question as to whether the legal basis thus adopted by the Council is appropriate is the subject‑matter of the second question referred for a preliminary ruling and will therefore be examined in the context of that question.

70     In the light of the foregoing, the answer to the first question must be that the EC‑Hungary Association Agreement is not the legal basis of Decision 93/724 by which the EC-Hungary Agreement on wines was concluded.

 The second question

71     By its second question, the referring court seeks in essence to ascertain whether Article 133 EC, which confers on the Community exclusive competence in the field of the common commercial policy, is an appropriate legal basis for the conclusion by the Community alone of the EC-Hungary Agreement on wines, in view of the fact that that agreement contains rules governing the protection of geographical names which have intellectual and commercial property significance.

72     According to the settled case-law of the Court, the choice of the legal basis for a Community measure must rest on objective factors which are amenable to judicial review, including in particular the aim and the content of the measure (see, inter alia, Case C-336/00 Huber [2002] ECR I-7699, paragraph 30).

73     It follows from the first citation in the preamble to Decision 93/724 that the Council specifically chose Article 133 EC as the legal basis for the conclusion of the EC-Hungary Agreement on wines.

74     It is also apparent from the third recital in the preamble to that decision that, since the provisions of the Agreement were directly linked to measures covered by the common commercial and agricultural policy, in this instance the Community legislation on wine, the Council took the view that the Agreement had to be established at Community level.

75     According to the case-law of the Court, a Community act falls within the exclusive competence in the field of the common commercial policy provided for in Article 133 EC only if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade in the products concerned (see Opinion 1/94 [1994] ECR I-5267, paragraph 57, Opinion 2/00 [2001] ECR I-9713, paragraph 40, and Case C-281/01 Commission v Council [2002] ECR I-12049, paragraphs 40 and 41).

76     In particular, in this case, the question arises as to whether the EC-Hungary Agreement on wines falls within the Community’s exclusive competence in the field of the common commercial policy or whether, as the Region and ERSA and the Italian Government maintain, it forms part of the protection of intellectual property rights, a field in which the Community and the Member States are jointly competent.

77     In that regard, it is appropriate to recall the Community legislation which was applicable ratione temporis, namely the COM in wine in force when the EC‑Hungary Agreement on wines was concluded.

78     Article 63 of Regulation No 822/87 provides that, for the purposes of marketing within the Community, imported wines intended for direct human consumption and bearing a geographical ascription may, where reciprocal arrangements can be established, be controlled and protected as provided for in respect of quality wines psr and that that provision is to be implemented by agreements with the relevant third countries to be negotiated and concluded in accordance with the procedure laid down in Article 133 EC.

79     The EC-Hungary Agreement on wines is clearly an agreement referred to in Article 63 of Regulation No 822/87.

80     The principal objective of such agreements is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in the third countries concerned by guaranteeing those wines the same protection as that provided for in respect of quality wines psr of Community origin and, on the other, the marketing in those third countries of wines originating in the Community.

81     Those agreements guarantee, in particular, reciprocal protection for certain geographical indications mentioned on the labelling used to market the wines concerned in the Community and in the third country concerned. They are therefore an instrument directly affecting trade in wines (see, to that effect, Commission v Council, cited above, paragraph 40).

82     In the light of those considerations, it must be concluded that such agreements satisfy the criteria which, according to the case‑law cited in paragraph 75 of the present judgment, must be fulfilled in order for a Community measure to fall within the scope of the exclusive competence in the field of the common commercial policy provided for in Article 133 EC.

83     It follows that the answer to the second question must be that Article 133 EC, as referred to in the preamble to Decision 93/724, is an appropriate legal basis for the conclusion by the Community alone of the EC-Hungary Agreement on wines.

 The third question

84     By its third question, the referring court seeks in essence to ascertain whether, in the event that the EC-Hungary Agreement on wines is to be regarded as lawful and applicable in its entirety, the prohibition of the use of the name ‘Tocai’ in Italy after 31 March 2007 which arises from the exchange of letters on Tocai is invalid and of no effect because it is inconsistent with the rules governing homonyms laid down in Article 4(5) of that agreement.

85     This question must be understood by reference to the argument of the Region and ERSA to the effect that there is a contradiction between the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement on wines and the prohibition arising from the exchange of letters on using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of the transitional period expiring on 31 March 1997.

86     That contradiction arises from the fact that, in the exchange of letters on Tocai, priority was given to the Hungarian name ‘Tokaj’ to the detriment of the Italian homonym ‘Tocai’, whereas the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement, the main agreement, from which an act annexed thereto, such as the exchange of letters on Tocai, may not derogate, are based on a rule guaranteeing the coexistence of both names provided that they are not likely to give rise to confusion.

87     In that regard, it must be pointed out that such a conflict can exist only if each of the names deemed to be homonymous within the meaning of Article 4(5) of the EC-Hungary Agreement constitutes a geographical indication protected by virtue of that agreement.

88     It follows from Article 4(1)(a) of that agreement that, as regards wines originating in the Community, the geographical indications protected by virtue of that agreement are listed in the Annex thereto, in part A, headed ‘Wines originating in the Community’.

89     Unlike the Hungarian name ‘Tokaj’, which appears in part B of that annex, which mentions the geographical indications relating to wines originating in the Republic of Hungary which are protected under Article 4(1)(b) of the EC-Hungary Agreement on wines, the terms ‘Tocai friulano’ and ‘Tocai italico’ do not appear in part A of that annex, which concerns wines originating in the Community.

90     In addition and in any event, the latter names cannot be classed as geographical indications within the meaning of the EC-Hungary Agreement on wines.

91     Under Article 2(2) of that agreement, a ‘geographical indication’ is ‘an indication, including an “Appellation of origin”, which is recognised in the laws and regulations of a Contracting Party for the purpose of the description and presentation of a wine originating in its territory, or in a region or locality in that territory, where a given quality, reputation or other characteristic of the wine is essentially attributable to its geographical origin’.

92     Under the relevant legislation in force in the Community on the date when the EC-Hungary Agreement on wines was concluded, the names ‘Tocai friulano’ and ‘Tocai italico’ were not a geographical indication but the name of a vine or vine variety recognised in Italy as being suitable for the production of certain quality wines psr produced in that Member State.

93     It is common ground that the term ‘Tocai friulano’ appeared in Title I of the Annex to Regulation No 3800/81 as a vine variety recommended, and even authorised, in certain Italian provinces, and in point 5 of Annex III to Regulation No 3201/90 as a synonym of the vine variety ‘Tocai italico’ which could be used to describe certain Italian quality wines psr.

94     By contrast, the Hungarian wines known as ‘Tokaj’ or ‘Tokaji’ appeared in point 5 of Title 11 of Annex II to Regulation No 3201/90 under the heading ‘List … of imported wines described by reference to a geographical area’.

95     The Region and ERSA and the Italian Government maintain that the Community legislation provided and still provides that, in Italy, for the purpose of describing and presenting certain Italian quality wines psr, if certain conditions laid down in specifications are complied with, the geographical indications concerned, such as ‘Collio goriziano’, ‘Collio’, ‘Isonzo del Friuli’ and ‘Isonzo’, may be combined with an indication of the vine variety ‘Tocai friulano’ or its synonym ‘Tocai italico’ from which the wines are made.

96     However, no evidence produced before the Court indicates that the choice thus made by that Member State to allow such a combination has led to the wording resulting from that combination constituting a geographical indication in such a way that the terms ‘Tocai friulano’ and ‘Tocai italico’ which form part of it no longer denote a vine variety but a geographical indication.

97     It is, on the contrary, apparent from the reference to the terms ‘Tocai friulano’ and ‘Tocai italico’ in Annex II to Regulation No 753/2002 that, even in the Community legislation applicable at the time of the main proceedings, those terms still related to a vine variety which could, under Article 19(2)(b) and (3) of that regulation, be used on the label of the Italian quality wines psr concerned. They are therefore not the name of a vine variety or one of its synonyms that includes a geographical indication for the purposes of Article 19(2)(a) of that regulation.

98     In the light of the foregoing, the answer to the third question must be that the prohibition of use of the name ‘Tocai’ in Italy after 31 March 2007 resulting from the exchange of letters on Tocai is not contrary to the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement on wines.

 The fourth question

99     By its fourth question, the referring court seeks in essence to ascertain whether the Joint Declaration on homonyms, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of the EC‑Hungary Agreement on wines the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is a clear misrepresentation of reality, invalidating, under Article 48 of the Vienna Convention on the Law of Treaties, that agreement in so far as it prohibits the use of the name ‘Tocai’ in Italy after 31 March 2007.

100   This question must be understood in the light of the argument of the Region and ERSA that a number of factors showed beyond doubt the erroneous nature of the Joint Declaration on homonyms, since the Commission and the Republic of Hungary could not have been unaware of the existence of homonymity between the names ‘Tocai’ referring to an Italian dry wine and ‘Tokaj’ referring to a Hungarian dessert wine.

101   However, as paragraphs 88 to 97 of the present judgment make clear, the Italian name ‘Tocai friulano’ and its synonym ‘Tocai italico’ are not a protected geographical indication within the meaning of the EC-Hungary Agreement on wines, so that the provisions of Article 4(5)(a) of that agreement concerning homonyms do not apply for the purpose of resolving a possible case of homonymity or identity between that name and the Hungarian name ‘Tokaj’ which, as was held in paragraph 89 of the present judgment, is a geographical indication protected by virtue of the same agreement.

102   Consequently, the answer to the fourth question must be that the Joint Declaration on homonyms, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of the EC-Hungary Agreement on wines the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality.

 The sixth question

103   By its sixth question, which must be answered before the fifth, the referring court asks in essence whether Articles 22 to 24 of the TRIPs Agreement are to be interpreted as meaning that, in the case of homonymity between geographical names or between a geographical indication and a name including the name of a vine variety, each of the names may continue to be used in the future provided that it has been used in the past by the respective producers either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.

104   The Region and ERSA and the Italian Government maintain that Articles 22 to 24 of the TRIPs Agreement require the Community, as a member of the WTO, to protect each of the homonymous geographical indications, including in the case of homonymity between a geographical indication and the name of a vine variety, and that, consequently, those articles preclude removal of the protection from the name ‘Tocai friulano’.

105   That argument cannot be accepted in view of the actual wording of the relevant provisions of those articles of the TRIPs Agreement.

106   In the first place, Article 23(3) of the TRIPs Agreement stipulates inter alia that, in the case of homonymous geographical indications for wines, protection is to be accorded to each indication and that each WTO Member is to determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

107   Under Article 22(1) of the TRIPs Agreement, ‘geographical indications’ means indications which identify a good as originating in the territory of a Member of the WTO, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

108   As has already been held in paragraphs 88 to 97 of the present judgment, unlike the Hungarian name ‘Tokaj’, the Italian names ‘Tocai friulano’ and ‘Tocai italico’ relate to the name of a vine or vine variety but are not a geographical indication within the meaning of the EC-Hungary Agreement on wines. In view of the fact that the meaning of ‘geographical indication’ as defined in the latter agreement is in essence the same as that adopted in Article 22(1) of the TRIPs Agreement, the same finding is dictated in the context of the TRIPs Agreement.

109   Consequently, Article 23(3) of the TRIPs Agreement is not applicable in the main proceedings since that case does not concern homonymity between two geographical indications.

110   In the second place, Article 24(4) of the TRIPs Agreement provides that nothing in Section 3 of that agreement is to require a Member of the WTO to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either for at least 10 years prior to 15 April 1994 or in good faith prior to that date.

111   It follows clearly from that provision that, although the Community is not required to prohibit continued and similar use of a particular geographical indication of another Member of the WTO identifying wines or spirits by a national or domiciliary of a Member State in the territory of a Member State, as referred to in Article 24(4) of the TRIPs Agreement, that provision does not preclude such a prohibition.

112   In other words, Article 24(4) of the TRIPs Agreement must be interpreted as establishing, under the conditions which it lays down, a right and not an obligation to grant protection to any homonym.

113   As regards, in the third place, Article 24(6) of the TRIPs Agreement, that provision permits inter alia the Community, as a Member of the WTO, to apply the provisions of that agreement in respect of a geographical indication of any other Member of the WTO with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of a Member State as of the date of entry into force of the WTO Agreement.

114   That provision therefore also establishes a right and not an obligation for the Community to grant protection to a Community grape or vine variety if that variety is the homonym of a geographical indication relating to a wine originating in a third country.

115   In those circumstances, the answer to the sixth question must be that Articles 22 to 24 of the TRIPs Agreement are to be interpreted as meaning that, in a case such as that in the main proceedings, which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.

116   In the light of that answer, there is no longer any need to answer the fifth question since it was asked on the assumption that the EC-Hungary Agreement on wines, in so far as it has the effect of precluding use of the word ‘Tocai’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, is incompatible with the provisions of Articles 22 to 24 of the TRIPs Agreement since the latter require that, where there is homonymity, each of the names may continue to be used in the future.

117   It follows from the answer given to the sixth question that that assumption does not apply in the main proceedings, which concern homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines.

 The seventh question

118   By its seventh question, the referring court seeks in essence to ascertain whether the right to property set out in Article 1 of Protocol No 1 to the ECHR and incorporated in Article 17 of the Charter of fundamental rights includes intellectual property in designations of origin of wines and its exercise and, if so, whether protection of the latter precludes the operators concerned in the autonomous region of Friuli-Venezia Giulia from being deprived of the possibility of using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, as arises from the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines but not from the body of that agreement, particularly in view of the lack of any form of compensation for the dispossessed wine producers of Friuli, the lack of any general interest justifying that dispossession and the disregard for the principle of proportionality.

119   According to settled case-law, the right to property is one of the general principles of Community law. However, it is not absolute but must be viewed in relation to its social function. Consequently, the exercise of the right to property may be restricted, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute in relation to the aim pursued a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed (see, to that effect, inter alia, Case C-306/93 SMW Winzersekt [1994] ECR I-5555, paragraph 22, and Joined Cases C-37/02 and C-38/02 Di Lenardo and Dilexport [2004] ECR I‑0000, paragraph 82 and the case-law cited).

120   In order to determine the scope of the fundamental right to property, a general principle of Community law, account must be taken inter alia of Article 1 of Protocol No 1 to the ECHR establishing that right.

121   It is therefore necessary to examine whether the prohibition of the use of the word ‘Tocai’ for the description and presentation of certain Italian quality wines psr from 1 April 2007, resulting from the exchange of letters on Tocai, constitutes disproportionate and intolerable interference, impairing the very substance of the fundamental right to property of the economic operators concerned.

122   That prohibition, in so far as it does not exclude any reasonable method of marketing the Italian wines concerned, does not constitute a deprivation of possessions as referred to in the first paragraph of Article 1 of Protocol No 1 to the ECHR.

123   Consequently, the lack of any compensation for the dispossessed wine producers of Friuli, to which attention is drawn by the referring court, does not in itself constitute a circumstance demonstrating incompatibility between the prohibition at issue in the main proceedings and the right to property.

124   In addition, without there being any need to determine whether that measure, as a measure controlling the use of property, constitutes interference with the right to respect for property which may fall within the scope of the second paragraph of Article 1 of Protocol No 1 to the ECHR and therefore entail a restriction of the fundamental right to property, it must be stated that a restriction of that right, if established, may be justified.

125   The case-law of the European Court of Human Rights shows that, in order to be justified, a measure controlling the use of property must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to that aim (see, inter alia, Eur. Court HR, Jokela v Finland judgment of 21 May 2002, Reports of Judgments and Decisions 2002-IV, § 48).

126   As regards, first, the lawfulness of the prohibition at issue in the main proceedings, it is common ground that the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines expressly imposes that prohibition and that, by Decision 93/724, that act was approved on behalf of the Community. It is therefore a measure introduced by a lawful provision adopted, as was observed in paragraphs 77 to 81 of the present judgment, in the context of the COM in wine in force at the time of the conclusion of that agreement.

127   With regard, next, to the aim of general interest pursued by the measure at issue in the main proceedings, it has already been observed, in paragraphs 80 and 81 of the present judgment, that the EC-Hungary Agreement on wines, of which that measure forms part, seeks to implement a policy within the framework of the COM in wine, the main objective of which is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in third countries which are described or presented using a geographical indication, by guaranteeing the same protection for those wines as that provided for in respect of quality wines psr of Community origin, and, on the other, the marketing in those third countries of wines originating in the Community.

128   It is clear from inter alia the third and fifth recitals in the preamble to Regulation No 2392/89 that the objective of the Community rules on the description and presentation of wines is to reconcile the need to provide the final consumer with clear and accurate information on the products concerned with the need to protect producers on their territory against distortions of competition.

129   The objective thus pursued by the measure at issue in the main proceedings is a legitimate aim of general interest (see SMW Winzersekt, cited above, paragraph 25).

130   Finally, it is necessary to examine whether that measure is proportionate to the aim of general interest referred to.

131   In a case concerning a Community measure adopted within the framework of the COM in wine, prohibiting, on the expiry of a transitional period of five years, the use of the term ‘méthode champenoise’ for wines not entitled to the registered designation ‘Champagne’, the Court recalled that, according to settled case‑law, the Community legislature has a broad discretion in matters concerning the common agricultural policy, which corresponds to the political responsibilities given to it by Articles 34 EC and 37 EC, and that the lawfulness of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate, having regard to the objective which the competent institution is seeking to pursue (see SMW Winzersekt, cited above, paragraph 21).

132   It is important to note in this regard that, at the end of the transitional period, the Italian quality wines psr in question will be able to continue to be produced from the vine variety ‘Tocai friulano’ and to be marketed under their respective geographical names, although without the addition of the name of the vine variety from which they are produced.

133   In this case, the proportionality of the measure at issue in the main proceedings cannot be disputed since a transitional period of 13 years was provided for in the exchange of letters on Tocai and, as the Commission observed at the hearing, alternative terms are available to replace the name ‘Tocai friulano’ and its synonym ‘Tocai italico’, namely, inter alia, ‘Trebbianello’ and ‘Sauvignonasse’.

134   In those circumstances, the answer to the seventh question must be that the right to property does not preclude the prohibition on use by the operators concerned in the autonomous region of Friuli-Venezia Giulia of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, resulting from the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines but not referred to in the latter.

 The eighth question

135   By its eighth question, the referring court seeks to ascertain whether, in the event that it is held that the EC-Hungary Agreement on wines and/or the exchange of letters on Tocai are unlawful to the extent described in the preceding questions, the provisions of Article 19(2) of Regulation No 753/2002, which abolish the use of the name ‘Tocai friulano’ after 31 March 2007, are invalid or in any event of no effect.

136   Since this question is asked only in the event that examination of the first seven questions referred for a preliminary ruling shows the EC-Hungary Agreement on wines and/or the exchange of letters on Tocai to be unlawful to the extent described in those questions, and since it follows from the answers given to those questions by the present judgment that that is not the case, there is no need to answer it.

137   It should also be pointed out that, in principle, it is for the referring court alone to define the scope of the questions which it finds necessary to refer to the Court for a preliminary ruling.

138   It follows, as the Commission rightly observed at the hearing, that certain questions, raised inter alia at the hearing by the Region and ERSA and by the Italian Government with regard to the eighth question referred for a preliminary ruling, that is to say, those seeking to ascertain whether the validity of the EC-Hungary Agreement on wines is affected as the result of an alleged breach of the duty to state reasons, or even of the principle of proportionality and of the principle of equal treatment as enshrined in Article 34(2) EC, cannot be examined by the Court since they clearly exceed the scope of the eighth question as worded by the referring court.

 Costs

139   Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

1.      The European Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, is not the legal basis of Council Decision 93/724/EC of 23 November 1993 concerning the conclusion of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names.

2.      Article 133 EC, as referred to in the preamble to Decision 93/724, is an appropriate legal basis for the conclusion by the Community alone of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names.

3.      The prohibition of use of the name ‘Tocai’ in Italy after 31 March 2007 resulting from the exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names is not contrary to the rules governing homonyms laid down in Article 4(5) of that agreement.

4.      The Joint Declaration concerning Article 4(5) of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of that agreement the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality.

5.      Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1 C to the Agreement establishing the World Trade Organisation, approved on behalf of the Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994, are to be interpreted as meaning that, in a case such as that in the main proceedings, which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.

6.      The right to property does not preclude the prohibition on use by the operators concerned in the autonomous region of Friuli‑Venezia Giulia (Italy) of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines produced in specified regions at the end of a transitional period expiring on 31 March 2007, resulting from the exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names annexed to that agreement but not referred to in the latter.

[Signatures]

* Language of the case: Italian.

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