INTELLECTUAL PROPERTY RIGHTS VS. FREE MOVEMENT OF GOODS
Description:
Intellectual property rights have an obvious propensity to interfere with principle of free movement. There is a conflict between that principle and the protection of exclusive rights which are limited to the territory of a Member State.
There are 4 fundamental freedoms:
-services (articles from 48-73 of Rome Treaty 1957)
-persons (articles from 48-73 of Rome Treaty 1957)
-goods (articles from 9-37 of Rome Treaty 1957)
-capital (articles from 48-73 of Rome Treaty 1957

Depends on the field : trade marks, copyright, design rights…
If the owner of the right were allowed to invoke in order to oppose the importation and sale of goods which were lawfully on the market in another Member State, that would amount to a measure equivalent in effect to a quantitative restriction on imports within the meaning of Article 28 of the Teatry.

The compatibility of the measure with EC law would depend on whether it could be justified under Article 30 of the Teatry.
Intellectual property rights can also come into conflict with the freedom to provide services

example:
X has the patent in Germany but not in Italy ( for different reasons ).
Y makes products incorporating the patented invention in Italy and markets them there.
Z buys the products and exports them to W in Germany.
W, who may know nothing about X’s patents, is sued by X for patent infringement.If X’s action succeeds and W is prevented from importing the goods into Germany, that will amount to restricting the free movement of goods between Member States.
But if X is unable to obtain and injunction against infringing goods imported from Italy, the value of his patent will be seriously undermined.
Any exclusive right limited to the territory a Member State has the potential to come into conflict with the principle of free movement.
If the owner of the right were allowed to invoke it in order to oppose the importation and sale of goods which were lawfully on the market in another Member State, that would amount to a measure equivalent in effect to a quantitative restriction on imports within the meaning of Article 28 of the Treaty. The compatibility of the measure with EC law would depend on whether it could be justified under Art. 30 of the Treaty.
(the main articles about goods)
*Art. 28 EC Treaty :
'Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States'.
*Art. 29 EC Treaty :
'Quantitative restrictions on export and all measures having equivalent effect, shall be prohibited between Member States'.
*Art. 30 EC Treaty :
“The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health andlife of humans, animals or plants; the protection of national treasures possessing artistic, historical or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”
Free movement of goods(Definition): Fusion of the economies of Member States and an integrated market in which the factors of production, can move freely, without let or hindrance.
But harmonization is a slow process and may not even perceived as desirable by everyone. It follows that obstacles resulting from disparities in national legislation will continue to hamper trade between Member States for a long time to come.
Since 1979 the Court has delivered many judgments confirming the principle that goods manufactured and marketed in a Member State in accordance with the local legislation may be imported into any other Member State unless some mandatory requirement justifies their exclusion.
SOLUTIONS TO THE CONFLICT: HARMONIZATION OF NATIONAL LAW AND CREATION OF UNITARY INTELLECTUAL PROPERTY RIGHTS
In some of the examples is clear that a radical solution can be found in the harmonization of national laws.
The situation would different if the laws defining the scope of protection were the same in all the countries concerned.
The term ``EC law´´ refers to the law created as a result ofthe Treaty establishing the European Community ( The EC Treaty ).
Free movement of goods is, as you are undoubtedly aware, one of the fundamental principles of the European Community ('Community').
In recent years, this positive goal of free movement of goods has been reinforced by the program of Completing the Internal Market by 1992, first outlined in the Commission of the European Communities ('Commission') White Paper of June 1985 and by the Single European Act's introduction of Article 8a, which set a deadline of December 31, 1992, for the removal of barriers to trade.
In order to achieve that, however, one must attempt to remove the barriers to trade permitted in Article 36 of the Treaty Establishing the European Economic Community3 ('EEC Treaty'), supplemented to some extent by the doctrine of the European Court of Justice in Cassis de Dijon which allows other areas of important state concern to limit the movement of goods-such areas include environmental concerns, consumer rights protection and the like.

The first point is that the harmonization of intellectual property- or the creation of intellectual property rights-is not a specific goal of the EEC Treaty.
That has always been recognized in the Community. In the White Paper of June 1985, the Commission stated that, 'Differences in intellectual property laws have a direct and negative impact on inter-Community trade and on the ability of enterprises to treat the CommonMarket as a single environment for their economic activities.' That, therefore, is the justification for a program to try to eliminate the diversities of intellectual property law.

The necessity for this harmonization program has been reinforced by the European
Court of Justice's doctrines. The Court of Justice is an extremely -active player in the integration of the Community's market. Member States' measures must be strictly limited to what is necessary to protect the State interest involved.

The European Union's Internal Market (sometimes known as the Single Market, formerly the Common Market) seeks to guarantee the free movement of goods, capital, services, and people – the EU's four freedoms – within the EU's 27 member states.[1]

The Internal Market is intended to be conducive to increased competition, increased specialisation, larger economies of scale, allows goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources.

It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU wide economy. Half the trade in the EU is covered by legislation harmonised by the EU.

History
In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world the Delors Commission took the initiative and in an attempt to relaunch the common marketpublished a White paper in 1985 which identifying 300 measures to be addressed in order to complete a single market. The White Paper which was well received and led to the adoption of the Single European Act, a treaty which reformed the decision making mechanisms of the EEC and set a deadline of 31 December 1992 for the completion of a single market. In the end, it was launched on 1 January 1993.[3]

The new approach, pioneered by the Delors Commission, combined positive and negative integration, relying upon minimum rather than exhaustive harmonisation. Negative integration consists of prohibitions imposed on member states of discriminatory behaviour and other restrictive practices. Positive integration consists in approximation of laws and standards. Especially important (and controversial) in this respect is the adoption of harmonising legislation under Article 114 of the TFEU.

The Commission also relied upon the European Court of Justice's Cassis de Dijon (Case 120/78) jurisprudence, under which member states were obliged to recognise goods which had been legally produced in another member state, unless the member state could justify the restriction by reference to a mandatory requirement. Harmonisation would only be used to overcome barriers created by trade restrictions which survived the Cassis mandatory requirements test, and to ensure essential standards where there was a risk of a race to the bottom. Thus harmonisation waslargely used to ensure basic health and safety standards were met.

By 1992 about 90% of the issues had been resolved[4] and in the same year the Maastricht Treaty set about to create Economic and Monetary Union as the next stage of integration. Work on freedom for services did take longer, and was the last freedom to be implemented, mainly through the Posting of Workers Directive (adopted in 1996 5] and the Directive on services in the internal market (adopted in 2006).[6]

In 1997 the Amsterdam Treaty abolished physical barriers across the internal market by incorporating the Schengen Area within the competences of the EU. The Schengen Agreement implements the abolition of border controls between most member states, common rules on visas, and police and judicial cooperation.

Justification: Under certain circumstances, member states whose rules have been disapplied may defend them. For rules that discriminate, a defence will be possible under Article 36 which mentions, among other things, public health or public morality. For example, a restriction of import of meat from certain countries will be legal if it has clear medical grounds. A restriction of importation of pornographic material may be justified if such material is normally not available in the said Member State. Non-discriminatory rules may be justified not only by reference to Article 36 but also to a Court-made list of exceptions which were first set out in the Cassis deDijon case (Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein).

The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty.

Article 14(formerly 7A) provides the legal basis for the creation of internal market within the European Community. To create the internal market, it is required to remove internal barriers to allow goods(as well as persons, services and capital) to move freely within the Community. Barriers to free movement of goods can be divided into three categories. They are physical barriers, technical barriers and fiscal barriers. Physical barriers involve the stopping and checking system to monitor goods passing the national borders. Fiscal barriers are tariffs and other indirect taxes imposed on exports, imports, or goods in transit. Technical barriers are quantitative restrictions or measure having a equivalent effect to quantitative restrictions which impede the free movement of goods. The common examples of technical barriers are national law and regulations for marketing goods and standard measures to protection public health and safety. Of all three barriers, technical barriers seems to be the most significant barriers because they cause the real obstacles to free movement of goods and the creation of the internal market. Thus, this research will mainly focus ontechnical barriers and will touch upon the others when necessary.

According to the EC Treaty, the free movement of goods provisions can be broken down into four groups.

(1). Articles 23(formerly 9) and 24(formerly 10): The rights of goods produced in a Member State and from a third country to move freely with the Community

Article 23(1)(formerly 9(1)) provides: The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.

According to Article 23(1 formerly 9(1)), the European Community shall be based upon a customs union. This union shall cover all trade in goods and shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect. There are two important aspects arising from this Article.

Content Intellectual Property

Intellectual property is traditionally identified with copyright. Copyright however must be understood in two distinct meaning. Firstly Copyright would strictly referring exclusively to what are the literary, artistic or scientific work carried out by its own creator. The author of a particular work is the owner of the building itself.

In second place, Copyright broadly alsoinclude another set of rights called in our law rights related to copyright: refer to the rights of another set of people close to the Intellectual Property of the work. These would be the rights of the artists who performed a work of certain producers, editors or broadcasters certain.

DEVELOPMENT OF A COMMUNITY POLICY
Until the early 1990´s, copyright law remained untouched by Community action.
National copyright rules came into consideration exclusively under the jurisprudence of ECJ regarding the EC principles of the free movements of goods and services, and unrestricted competition. It was from the early 1970´s that national courts started to seek clarification concerning the conflict between the protection of national property rights (Articles 30 and 295 of the EC Treaty) and the rules covering the free movement of goods and competition (Articles 28 and 82).

FREE MOVEMENT OF GOODS AND THE EXHAUSTION PRINCIPLES
The free movement of goods immediately found an exception in the circulation of intellectual property rights within the Community. The exercise of these rights could allow companies to partition the Common Market in order to prevent the free movement of goods between Member States. National law reserves the exclusive right to exploit a protected process or product within a Member State’s territory to the owner of an intellectual property right; and thereby confers to this owner, expressly or implicitly, the right tooppose the importation of a good which enjoys an identical or similar right from another Member State.
The principle of exhaustion means that once a copyright holder exercises his or her exclusive right of distribution by putting the copyrighted product on the Community market for the first time, Community law prevents the rights holder from using copyright to prevent parallel trade. In this way, Community law ends up respecting the existence of copyright, while restricting its exercise for the attainment of the objective of free movement of goods.
The Commission’s harmonization measures in the field of copyright law sought, on the one hand, to remove distortions at the level of primary exploitation of exclusive rights.
On the other, the Commission’s reactions intended to remove national disparities that opened a breach in the application of both free movement of goods and of the exhaustion principle, which affected internal trade at a secondary level.

Objetivo de los derechos de propiedad intellectual: Is work all original human creation that externalize in a novel way by any means or tangible support or intangible now known or hereafter devised. The work in this direction must be a specific product that is detectable by the human being through any means that allows us to realize its existence.

Clasificacion de los bienes: The assets may be:

*Tangible property, also known as things, objects which have a physical reality.*Intangible assets, no matter, there are real inventions, musical creations ..

*Services, benefits of various types that can be valued economically, and that satisfy human needs: credit claims.

The fundamental reason for protecting intellectual property is a moral and ethical one: if someone expends time and energy, including of course intellectual energy, in developing a new invention capable of industrial application, it’s right that he alone should be allowed to make money out of the invention, at least for a limited period.

The Single European Act. which came into a force on 1 July of 1987, added an Article 8a to the EEC Treaty. This new article required the establishment of an `internal market´ by the end of 1992, comprising an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with this Treaty.
If the Single European Act was meant to deepen economic integration between the Member States, the Agreement on the European Economic Area (EEA), was meant to extend the effect of that integration to the States belonging to the European Free Trade Association (EFTA). The purpose of the EEA Agreement is to promote a continuous and balanced strengthening of trade and economic relations between the Contracting Parties with equals conditions of competition, and the respect of the same rules, with a view to creating a homogeneous European Economic Area.