Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 16555/90

by R. GmbHgMBh

against the Federal Republic of Germany

The European Commission of Human Rights sitting in private

on 8 November 1990, the following members being present:

MM. C.A. NØRGAARD, President

J.A. FROWEIN

S. TRECHSEL

F. ERMACORA

G. SPERDUTI

E. BUSUTTIL

G. JÖRUNDSSON

A.S. GÖZÜBÜYÜK

A. WEITZEL

J.-C. SOYER

H.G. SCHERMERS

H. DANELIUS

Mrs. G. H. THUNE

Sir Basil HALL

MM. F. MARTINEZ RUIZ

C.L. ROZAKIS

Mrs. J. LIDDY

MM. L. LOUCAIDES

J.-C. GEUS

A.V. ALMEIDA RIBEIRO

M.P. PELLONPÄÄ

Mr. H.C. KRÜGER, Secretary to the Commission

Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 2 February 1990

by R. GmbH against the Federal Republic of Germany and registered

on 2 May 1990 under file No. 16555/90;

Having regard to the report provided for in Rule 47 of the

Rules of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The applicant is a pharmaceutical company producing medical

drugs with its seat in U. Its manager is Mr. Z. It is

represented by Mr. Rüdiger Zuck, a lawyer in Stuttgart.

The applicant company is specialised in producing so-called

"generica", i.e. substances which are no longer protected by patents

and are used to produce medicaments equivalent to those previously

introduced on the market by the inventing firms at a considerably

higher price. The applicant advertises its products as being

"bio-acquivalent" to the reference products. The competitors concerned

therefore brought civil actions against the applicant company.

On 11 March 1986 the applicant company was ordered by the

Cologne Regional Court (Landgericht) at the request of the Bayer AG to

abstain from advertising in publications adressed to the medical

profession its product "Nifedipin-ratiofarm 20" as being

"bio-acquivalent" with the plaintiff's product "Adalat". The latter

had been until 20 March 1985 the only product on the market containing

Nifedipin.

The judgment was confirmed by the Cologne Court of Appeal

(Oberlandesgericht) on 5 December 1986. Both courts considered that

the comparison in the applicant's advertisement with the reference

product and the alleged "bio-acquivalence" constituted unfair

competition in violation of Section 1 of the Unfair Competition Act

(UWG). Even though the plaintiff's product "Adalat" was not expressly

mentioned in the advertisement it was the leading product based on

Nifedipin and therefore it was obvious to the addressees that it was

meant to be the reference product.

In the courts' opinion there was no objective justification for

the comparison with a leading product (vergleichende Werbung). In its

publicity the plaintiff company had not in any way denigrated the

applicant's product necessitating a counter-publicity on its part.

Nor was it necessary to stress the "bio-acquivalence" in order to

underline, in the public interest, the economic advantage of the

applicant company's product. The applicant company did have other

more general possibilities to publicise the advantages of its products

than by referring to the product of a competitor and thereby profiting

from this product's market position. Like the plaintiff it could

publicise in a graphic manner the relevant data necessary to inform

the medical profession about the therapeutical value of its

medicament. There was no therapeutical necessity for medical doctors

to be informed about the two products' interchangeability. If

provided with the relevant data medical doctors could themselves find

out this information. The applicant already had an advantage

vis-à-vis the plaintiff as it did not have to invest any time and

money into research necessary to develop a new medicament. This

burden had been on the plaintiff and it was therefore unjustified that

the defendant profited from the plaintiff product's market position

once the patent protection expired. The right to freedom of

expression could not be invoked as the interdiction of the

advertisement was justified in the interest of the protection of the

prevailing rights of the plaintiff company.

An appeal on points of law (Revision) was rejected by the

Federal Court (Bundesgerichtshof) on 30 March 1989. In respect of the

applicant company's argument that the public had an interest in being

informed of the "bio-acquivalence" of its product and the considerable

price difference compared with the plaintiff's product the Federal

Court stated that mere economic interests did, contrary for example to

the interest in being informed about technical progress, personal

risks or deceitful trade practices, justify a direct comparison with a

competitor's product only where there was no other possibility of

informing the interested public about the economic advantage of the

advertised product. There were however, so the Federal Court noted

referring to the lower court's findings, sufficient other

possibilities for the applicant company without a comparison to the

detriment of a competitor. Insofar as there existed a public interest

in keeping public health care costs low, there was for example the

possibility of providing information to the medical profession via the

Federal Health Office (Bundesgesundheitsamt), to insurance companies

and other public institutions. Also the legislator could be requested

to intervene.

On 29 January 1986 the applicant company was likewise ordered

by the Hamburg Regional Court to abstain from advertising its products

by informing health insurance companies of the prices of its own

products in comparison with those of the plaintiff, a competitor. The

Court stated that it would be admissible to indicate all medicaments

of a given range and their prices in form of a general survey. However,

it constituted unfair competition to compare the applicant company's

products only with those of a single competitor.

This judgment was confirmed by the Hanseatic Court of

Appeal on 11 December 1986 and the Federal Court on 30 March 1989. The

latter court stated that the applicant company had other possibilities

to point out the price advantages of its products than to compare them

with those of a competitor who first introduced them on the market.

It could, for instance, have indicated prices or percentage relations

to prices of competing products without naming those products. This

would have been a practicable and acceptable way to serve the general

public by informing the health insurance institutions of the price

advantages offered by the applicant company.

The applicant company then lodged a constitutional complaint

against all aforementioned decisions. It was rejected by a group of

three judges of the Federal Constitutional Court (Bundesverfassungs-

gericht) on 14 August 1989 as offering no prospects of success. The

applicant company was ordered to pay a fee of 600 DM.

COMPLAINTS

The applicant company complains that the above judgments

interfere in an unjustified and disproportionate manner with its right

to inform the public, health care institutions and practitioners of

the possibility it offers with its cheap but bio-acquivalent products

to lower the enormous costs in the sector of health care. It

considers that insurance companies, pharmacies and medical doctors

need to receive extensive and complete information. Therefore it was

necessary for its advertisement to mention the reference product. In

order to compare products with the one offered by the applicant

company a doctor had to know which one was bio-acquivalent and which

product the least expensive. The applicant company therefore

considers that the judgments complained of violate Article 10 of the

Convention because they are disproportionate to the aim pursued.

THE LAW

The applicant company, who was forbidden by the competent

national courts to publish certain advertisements comparing its own

products and their prices with those of specific competitors,

complains of an interference with its right to impart information as

guaranteed under Article 10 (Art. 10) of the Convention.

Article 10 para. 1 (Art. 10-1) provides:

"Everyone has the right to freedom of expression. This

right shall include freedom to hold opinions and to receive

and impart information and ideas without interference by

public authority and regardless of frontiers. ..."

However, interferences with this right are compatible with

the Convention when they fulfil the requirements of paragraph 2 of

Article 10 (Art. 10-2) which provides:

"The exercise of these freedoms, since it carries with it

duties and responsibiities, may be subject to such

formalities, conditions, restrictions or penalties as are

prescribed by law and are necessary in a democratic society,

in the interests of national security, territorial integrity

or public safety, for the prevention of disorder or crime,

for the protection of health or morals, for the protection

of the reputation or rights of others, for preventing the

disclosure of information received in confidence, or for

maintaining the authority and impartiality of the judiciary."

The Commission first considers that Article 10 (Art. 10) is

applicable in the present case as the applicant company's

advertisements in question not only intended to promote its economic

interest but, being designed for health practitioners, it also

conveyed information of both a commercial and scientific nature (cf.

Eur. Court H.R., markt intern Verlag GmbH and Klaus Beermann judgment

of 20 November 1989, Series A no. 165, p. 17 paras. 25 - 26).

As to the requirements set out in paragraph 2 (Art. 10-2), the

applicant company does not dispute that the interference complained of

is based on domestic law and serves the purpose of protecting the

rights of others. The Commission notes in this context that the aim

of the Unfair Competition Act is the protection of the rights of

business firms against unfair practices by competitors and also the

protection of the rights of consumers. This is in fact a legitimate

aim under Article 10 para. 2 (Art. 10-2), for the protection of the

rights of others in a democratic society (No. 7805/77, Dec. 5.5.79,

D.R. 16 p. 68 [73]).

The applicant company only disputes the necessity and

proportionality of the measures in question and invokes the general

interest in informing the public about the economic advantages of its

products at a time where the cost explosion in the public health care

sector required drastic measures to reduce expenditures.

According to the case-law of the European Court of Human

Rights the Contracting States have a certain margin of appreciation in

assessing the existence and extent of the necessity of an

interference. Such a margin is, according to the Court, essential in

commercial matters and in particular in the area of unfair

competition. The Commission has similarly stated in its decision

cited above (No. 7805/77) that the level of protection in regard to

commercial "speech" is lower than that accorded to the expression

of "political" ideas, in the broadest sense, with which the values

underlying the concept of freedom of expression are chiefly concerned.

The supervision by the Convention organs in this respect is therefore

limited to the question whether the measures taken on the national

level are justifiable in principle and proportionate (markt intern

judgment, loc. cit. at p. 20 para. 33). In order to establish whether

the interference complained of was proportionate it is necessary to

weigh the requirements of the protection of the rights of other

companies against the publication of the information in question. The

Commission must look at the impugned court decisions in the light of

the case as a whole (markt intern judgment, loc. cit., para. 34).

In the present case the national courts did weigh the competing

interests at stake. They underlined that the public had, for example,

an interest in being informed about technical progress, personal risks

or deceitful trade practices. A direct comparison with a competitor's

product is, under German law, permitted only where there is no other

possibility of informing the interested public about the economic

advantage of the advertised product. However, according to the

judgments complained of, the applicant company had other possibilities

of praising the economic advantages of its products than to compare

them directly with those of a particular competitor. The applicant

company has not shown that this reasoning is unrealistic in practice

or for any other reason untenable and arbitrary. In these

circumstances it cannot be found that the decisions of the civil

courts in the present case, confirmed from the constitutional point of

view by the Federal Constitutional Court, went beyond the margin of

appreciation left to the national authorities.

The Commission therefore concludes that there is no appearance

of a violation of Article 10 (Art. 10) and the application is manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

For these reasons, the Commission, by a majority,

DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Commission President of the Commission

(H. C. KRÜGER) (C. A. NØRGAARD)

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R. GmbH v. GERMANY

R. GmbH v. GERMANY

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