1 Introduction and Overview of Kwantum

1.1 Introduction

The European Copyright Society (ECS) was founded in January 2012 with the aim of creating a platform for critical and independent scholarly thinking on European copyright law and policy. Its members are scholars and academics from various countries of Europe, who seek to articulate and promote their views of the overall public interest on all topics in the field of authors’ rights, neighbouring rights and related matters. The ECS is neither funded nor instructed by any particular stakeholders. Its opinions represent the independent views of a majority of ECS members.

The ECS sees it as part of its mission to give its opinion on cases pending at the Court of Justice of the European Union (CJEU or Court). The ECS has published a comment on the impact and consequences of the CJEU’s decision in C-265/19 (RAAP),Footnote 1 which was the first Court case to explicitly focus on questions of material reciprocity in international copyright law. The present Opinion addresses the recent reference for a preliminary ruling in case C-227/23, Kwantum Nederland and Kwantum België (Kwantum).Footnote 2 It reiterates the ECS’s criticism of the CJEU’s approach in RAAP and offers suggestions as to how the Court could now come to a different decision in Kwantum.

1.2 Facts and Questions Referred in Kwantum

The Berne Convention’s key principle is that of the national treatment of foreign authors, coupled with minimum rights that countries of the Union must guarantee foreign works. However, the Convention recognises that countries of the Union may protect design through copyright, design right or otherwise. As a consequence, the Berne Convention does not oblige countries of the Union to always grant protection to foreign designs under copyright on the basis of national treatment. Rather, it sets out a material reciprocity test in Art. 2(7), which limits protection under copyright for works of applied art that are not protected by copyright in their country of origin.

As the ECS and others predicted after RAAP, it was only a matter of time before the CJEU would be asked to clarify how Member State courts were to interpret this provision on material reciprocity for works of applied art. This is the issue at the heart of the referral by the Dutch Supreme Court in Kwantum.

The parties to this case are Kwantum and Vitra. Kwantum marketed and distributed a chair in the Netherlands (and Belgium) that, according to Vitra, infringed copyright in the design of the so-called “DSW chair”, a well-known design of American origin. It is not disputed that, under Dutch copyright law, the work in question would qualify as a work of applied art. Nor is it disputed that, in accordance with Art. 5(4) Berne, the US is the country of origin of the work. However, in the Dutch courts, the parties disagreed on whether, considering the state of harmonised copyright law, the court should apply the reciprocity test, or whether the CJEU’s decision in RAAP implied otherwise. It is of relevance that, under Art. 93 of the Dutch Constitution, international law takes precedence over domestic law. Instruments that have been ratified, such as the Berne Convention, do not need to be implemented. The Dutch Copyright Act (Auteurswet) contains a provision that sets out its scope of application, essentially by defining when the Netherlands qualifies as the country of origin of works in line with Art. 5(4) Berne.Footnote 3 It does not otherwise refer to the Berne Convention directly.

Article 2(7) Berne contains rules on how to deal with cases where the country of origin and that of protection have different regimes. It provides as follows:

Subject to the provisions of Article 7(4) of this Convention, it shall be a matter for legislation in the countries of the Union to determine the extent of the application of their laws to works of applied art and industrial designs and models, as well as the conditions under which such works, designs and models shall be protected. Works protected in the country of origin solely as designs and models shall be entitled in another country of the Union only to such special protection as is granted in that country to designs and models; however, if no such special protection is granted in that country, such works shall be protected as artistic works.

In its referral to the CJEU, the Dutch Supreme Court asks first whether the case in question falls within the scope of EU law. If not, the CJEU would not be competent to hear it. Assuming the CJEU is competent, the Dutch Supreme Court asks the following questions, which we have reworded and shortened for clarity and to delimit the scope of our analysis:

  • Does reciprocity constitute a limitation on the exercise of copyright, and does EU law, specifically as harmonised by Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society (InfoSoc Directive), require this limitation to be provided for by law and, because of Art. 52(1) CFREU, in a clear and precise manner?

  • Are EU Member States still allowed to apply the Berne Convention’s reciprocity clause in respect of non-EU right holders, or has the EU acquired exclusive competence in this matter?

2 Legal Background: Cumulation of Copyright and Design Protection for Works of Applied Art in EU Law

In EU law, the relationship between copyright and design protection for works of applied art is regulated by the Design Directive (Art. 17 and recital 8) and the Design Regulation (Art. 96(2) and recital 32).Footnote 4 Both instruments describe the principle of cumulation of rights in similar wording. In essence, they state that, where there is no harmonised copyright law, a registered design (national or EU title) is also eligible for protection under copyright law as from the date on which the design was created or fixed in any form. Furthermore, it is clarified that Member States are free to establish the extent of copyright protection and the conditions under which such protection is conferred.

These provisions were enacted in the context of EU legislative instruments on copyright that for the most part did not harmonise the concept of work of authorship. The only explicit exceptions to this are computer programs, photographs, databases, and (one could argue more recently) works of visual art.Footnote 5 For these categories, the relevant legal provisions make protection subject to the requirement that the work be original in the sense of expressing the “author’s own intellectual creation”.

Until 2009, it was generally accepted that, outside the specific subject matter covered by the rules on computer programs, photographs and original databases, Member States were free to determine the concept of work of authorship.Footnote 6 This was also true for works of applied art. After 2009, the CJEU seized on the legislative language used in the earlier directives relating to specific subject matter in order to gradually harmonise the concept of work of authorship, extending it to all types of works. This judicial harmonisation process played out in a number of cases, spanning different types of subject matter: Infopaq, Football Dataco, SAS Institute, Premier League, Levola Hengelo, Funke Medien, Cofemel, and Brompton Bicycle.Footnote 7 The latter two cases – Cofemel and Brompton Bicycle – refer specifically to works of applied art and designs.

In general terms, it emerges from these cases that subject matter may be protected by copyright if it is original in the sense that it is “the author’s own intellectual creation”, meaning that the author must make personal creative choices that are expressed in the subject matter.Footnote 8 Furthermore, ever since Levola Hengelo, the Court has explicitly required that the work be in a precise and objective form of expression. In Cofemel, the CJEU essentially clarified that Member States no longer have the freedom to choose the level of originality for works of applied art, industrial designs and works of design. Rather, they must apply to such works the CJEU standard of “the author’s own intellectual creation”, as developed by the Court in its case-law on originality. The conditions for copyright protection set forth therein are both necessary and sufficient. The upshot is that national laws may not require in addition that a work of design generate a distinctive and significant visual effect from an aesthetic viewpoint in order to merit copyright protection, as that would require a subjective assessment. These conclusions were confirmed by the Court in Brompton Bicycle, where their application was considered in the context of designs potentially dictated by their technical function.Footnote 9

Building on this case-law, the proposals for a new Design DirectiveFootnote 10 and Design RegulationFootnote 11 both maintain the principle of cumulation of design and copyright protection, while taking into account the harmonisation of the relevant concepts by virtue of CJEU case-law. In short, both proposals state that cumulation is possible as from the date on which the design was created or fixed in any form, “provided that the requirements of Union copyright law are met”. For our purposes, whether or not these instruments are adopted does not affect our reasoning and conclusions below. Moreover, it should be clearly stated that, with this Opinion, the ECS does not make any pronouncement on the desirability of cumulation of protection between copyright law and design law, which deserves separate treatment and critique.

3 CJEU Case Law on Material Reciprocity and Its Implications for Kwantum

3.1 Facts and Decision in RAAP

After RAAP (2020), Kwantum is the second case within a relatively short period of time on material reciprocity. The RAAP case concerned the payment of remuneration for certain uses of recordings by performing artists (and phonogram producers) from states that do not themselves recognise those remuneration rights. Following RAAP, Art. 8(2) RLDFootnote 12 must be interpreted as preventing EU Member States from excluding performers who are nationals of non-EEA states from the right to equitable remuneration for the communication to the public of their recordings. Moreover, the Court stated that reservations notified to the World Intellectual Property Organisation (WIPO) by non-member states under Art. 15(3) WPPT did not currently lead to limitations of the remuneration right in Art. 8(2) RLD. Such limitations could be introduced only by the EU legislature and had to comply with the requirements of Art. 52(1) CFREU. Any limitation of the exercise of rights protected under the CFREU had to “be provided for by law, which implies that the legal basis which permits the interference with that right must itself define, clearly and precisely, the scope of the limitation on its exercise”.Footnote 13 The exclusion of non-EEA right holders from the right to remuneration had to be explicit. This was because the right to equitable remuneration fell within the fundamental right to intellectual property of Art. 17(2) CFREU. The Court further held that Art. 8(2) RLD could not be interpreted in such a way that only the producer of the phonogram would be entitled to receive remuneration, as opposed to having to share it with the performer who had contributed to that phonogram.

3.2 ECS Opinion and Criticism on RAAP

In its Comment on RAAP, the ECS criticised the Court for not sufficiently considering that the case might have wider consequences. The Court’s approach implied that Member States could never rely on reciprocity under international treaties in areas harmonised by EU law, unless EU law explicitly permitted or required it. The Court’s arguments were drafted in general terms and could also be applied to various international treaties and other rights of authors, performers and other right holders. The resulting legal uncertainty could have been avoided had the Court opted for an alternative interpretation. It could have taken the position that, in the light of Art. 4(2) WPPT, the remuneration right applied only with respect to performers to whom there was a direct and unreserved obligation under the WPPT to grant protection. The Court did not take that position.

The ECS also took a critical stance on the Court’s arguments based on the CFREU. In RAAP, the Court considered the performers’ harmonised right to remuneration for certain forms of communication to the public, enshrined in Art. 8(2) RLD, from the perspective of fundamental rights. Because the Court views the remuneration right as an in abstracto right protected under Art. 17(2) CFREU, any limitation of it must be defined clearly and precisely. In this situation, the Court considered that the EU legislature had not implemented such a clear and precise limitation. However, the consequences of the Court’s viewing the harmonised rights as in abstracto, rather than as individual rights in concreto, remain unclear. The Court’s conclusion is that, because the remuneration right is a harmonised rule, only the EU legislature can limit that right for nationals of non-EU states. As a result, Member States’ past application of material reciprocity requirements on the basis of Art. 4(2) WPPT becomes problematic. Furthermore, since the Court did not address retroactive effects of its interpretation in RAAP, the relevant date for determining the existence of a right for a non-EU national is also unclear. As noted in our previous Comment on RAAP, this creates further legal uncertainty.

3.3 Why Kwantum Differs from RAAP

3.3.1 The EU Is Not Directly Bound to the Berne Convention (but Indirectly via the WCT and TRIPS)

In RAAP, the CJEU was called upon to interpret the WPPT’s provision on remuneration. The EU is party to the WPPT, but not to the Berne Convention. However, it is party to TRIPS, and to the 1996 WIPO Copyright Treaty (WCT), a special agreement within the meaning of Art. 20 Berne, which reiterates that parties will apply the provisions of Arts. 2 to 6 Berne to the matters addressed in the WCT. Article 9(1) TRIPS mandates compliance with the core provisions of the Berne Convention, with the exception of moral rights. Furthermore, Art. 3 TRIPS reiterates the applicability of national treatment subject to the exceptions already stated in the Berne Convention. Those core provisions of Berne can therefore be considered part of the EU’s legal order.Footnote 14 EU copyright law (and national implementations by Member States) must therefore comply with the EU’s international obligations. Furthermore, measures designed to implement the EU’s international obligations have to be interpreted in the light of the obligations under TRIPS and the Berne Convention.

3.3.2 The EU Has Not Enacted Legislation on the Protectability of Applied Art but the CJEU Has Developed Principles Praeter Legem in Cofemel and Brompton Bicycle

In RAAP, the CJEU insisted that material reciprocity must be explicit in the statutory law. As the Court explained:

[P]ursuant to Article 52(1) of the Charter, any limitation on the exercise of that right related to copyright must be provided for by law, which implies that the legal basis which permits the interference with that right must itself define, clearly and precisely, the scope of the limitation on its exercise. […] Since Article 8(2) [RLD] is a harmonised rule, it is for the EU legislature alone and not the national legislatures to determine whether the grant in the EU of that right related to copyright should be limited in respect of the nationals of third States and, if so, to define that limitation clearly and precisely.Footnote 15

In contrast to the legal situation in RAAP, it has not been the EU legislature that has introduced the rule that works of applied art should be governed according to the same principles as other categories of works protected by copyright. On the contrary, to date, EU design legislation has explicitly left it to Member States themselves to decide on the standards for protection of applied art as copyright works. However, despite those provisions, the CJEU itself, building on its previous case-law that had developed an EU concept of copyright work, ruled in the cases of Cofemel and Brompton Bicycle (see supra at 2) that the harmonised work concept extended to applied art.

It might therefore be less convincing than in the RAAP case that the EU legislator alone is authorised to uphold or ban restrictions such as a material reciprocity requirement. The Court itself could interpret EU copyright law in accordance with the material reciprocity requirement set out in Art. 2(7) Berne. The judicial recognition that all copyright works, including works of applied art, are to be subjected to the same work concept, as recognised in Cofemel and Brompton Bicycle, enables the Court to take this approach by judicial fiat, without any intervention by the legislature being necessary (although the legislature would be well advised to intervene, as discussed below). It is noteworthy that interpreting EU law to mandate a rule of national treatment for works of applied art despite the wording of Art. 2(7) Berne would imply that the Court sets aside the principle of legal certainty, which is an important legal principle in EU law. This would be a problematic outcome, even more so if there are retroactive effects dating back to the entry into force of the InfoSoc Directive.

In our view, then, the Court has two viable options. First, it can interpret the operation of Art. 2(7) Berne in the EU legal order as subjecting copyright protection to material reciprocity. This option would likely be preferable for preventing friction in the internal market and lead to harmonised results. Alternatively, the Court could declare Member States’ application of Art. 2(7) Berne to be compatible with EU law, whether a Member State applies material reciprocity or offers unreserved national treatment to works of applied art on the basis of Art. 19 Berne.Footnote 16 We will discuss these two options further below.

3.3.3 Different Regulation of Material Reciprocity

It is important to be clear on the differences between RAAP and Kwantum in how material reciprocity is regulated in Art. 4(2) WPPT and Art. 2(7) Berne. It is known that the application of this exception is conditional upon a Contractual Party opting out of the remuneration system by notifying the Director General of WIPO accordingly pursuant to Art. 15(3) WPPT. In RAAP, the CJEU considered Art. 15(3) WPPT to be a limitation of the remuneration right in Art. 8(2) RLD – an intellectual property right protected by Art. 17(2) CFREU. The CJEU further found that this limitation did not fulfil the Art. 52 CFREU criteria of clearness and preciseness “because such a reservation does not enable nationals of the third State in question to ascertain in precisely what way their right to a single equitable remuneration would, consequently, be limited in the European Union”.Footnote 17 As a consequence, the EU legislator would have to intervene in order to provide a precise and clear limitation of the remuneration right. It should be noted that the ECS criticised this approach to Art. 4(2) WPPT in its Comment on RAAP.

The reciprocity situation in Kwantum is different from that in RAAP. Unlike Art. 4(2) WPPT, Art. 2(7) Berne, as an exception to the national treatment rule set out in Art. 5 Berne (and Art. 3 TRIPS), is not conditional. On the contrary, material reciprocity pursuant to this provision takes the form of a mandatory rule, in that its wording implies that countries of the Union are required to deny copyright protection to works that are not protected by copyright in their country of origin but that do qualify for design protection there (or have done so in the past).Footnote 18 The relevant part reads: “Works protected in the country of origin solely as designs and models shall be entitled in another country of the Union only to such special protection as is granted in that country to designs and models” (emphasis added).

Insofar as the CJEU considers Art. 2(7) Berne to limit copyright as an intellectual property right under Art. 17(2) CFREU – in parallel with its treatment of Art. 8(2) RLD in RAAP – the requirements in Art. 52(1) CFREU should be considered fulfilled, with no need for intervention by the legislature. In other words, the rule of material reciprocity in Art. 2(7) Berne limits the scope of Arts. 2 to 4 of the InfoSoc Directive in a sufficiently clear and precise way.

Certainly, the Berne Convention does allow countries to set aside material reciprocity and offer protection under copyright. After all, Art. 19 Berne specifies that the provisions “shall not preclude the making of a claim to the benefit of any greater protection which may be granted by legislation in a country of the Union.” However, there is no clear legislation at EU level to this effect, and Member States have to date dealt differently with the issue.

For example, Dutch law does not contain any provision that affords greater protection than that provided in Art. 2(7) Berne. With Art. 2(7) taking precedence over domestic law in the Dutch legal order, Dutch courts must apply the material reciprocity clause, unless EU law dictates otherwise. Also, for those Member States that have mirrored Berne’s reciprocity clause in their copyright legislation (e.g. Denmark) the question arises whether applying it contravenes EU law. Faced with this situation, the CJEU could, as stated above, either recognise material reciprocity as a requirement of EU law or at least declare Member States’ rules on the application of Art. 2(7) Berne to be compatible with EU law. Obviously, the latter solution continues the current situation, where a work of applied art originating from non-EU countries enjoys different types of protection in different EU Member States. Of the two possibilities outlined, this would constitute the more cautious solution. However, it would not bring about harmonisation of EU law in this area.

By contrast, a mandatory rule of material reciprocity would result in harmonisation in this area. This would be in accordance with the CJEU’s general tendency to emphasise the goal of harmonising copyright legislation when interpreting directives. To reduce legal uncertainty, it would be helpful if the CJEU were to give guidance on any retroactive effects arising from this solution. The main drawback of this option is that it bars Member States that have so far applied national treatment from continuing to do so. Furthermore, works of applied art originating from outside the EU/EEA would not enjoy identical protection within the EU, as protection would depend on the legal situation in the country of origin.

No matter which of the two options the CJEU chooses to apply – whether leaving it to Member States or accepting a material reciprocity requirement as a harmonised rule – legislative intervention at EU level will ultimately be necessary to ensure legal certainty.

4 Conclusion and Outlook

The general wording of RAAP, with no account being taken of the further consequences of the case, might give the impression that all copyrights and related rights provided for in EU law apply to all right holders irrespective of their nationality unless the EU legislature contains an express limitation. The Kwantum case brought before the CJEU by the Dutch Supreme Court is a symptom of the uncertainty that RAAP has created in this respect. The ECS advocates a nuanced approach to the international application of EU copyrights and related rights, giving due consideration to regulation by international conventions as part of the EU legal order. In the case of copyright protection of works of applied art, the CJEU could either apply the reciprocity rule set out in Art. 2(7) Berne directly as a first step, or leave it to the Member States to decide on material reciprocity or national treatment in accordance with the principles of the Berne Convention. As a second step, the EU legislature would be well advised to address the questions raised by RAAP and Kwantum at a more fundamental level through legislative intervention.

Signatories


Prof. Valérie Laure Benabou, Professor, Université Paris Saclay/UVSQ, France


Prof. Estelle Derclaye, Professor of Intellectual Property Law, University of Nottingham, United Kingdom


Prof. Thomas Dreier, Professor of Law, Institute for Information and Economic Law, Karlsruhe Institute of Technology (KIT), Karlsruhe, Germany


Prof. Séverine Dusollier, Professor, School of Law, Sciences Po, Paris, France


Prof. Reto M. Hilty, Director Emeritus, Max Planck Institute for Innovation and Competition, Munich, Germany


Prof. Martin Husovec, Associate Professor, LSE Law School, London School of Economics and Political Science (LSE), United Kingdom


Prof. Marie-Christine Janssens, Professor of Intellectual Property Law, Head of CiTiP (Centre for IT & IP Law), University Leuven (KU Leuven), Belgium


Prof. Martin Kretschmer, Professor of Intellectual Property Law, University of Glasgow, and Director of CREATe, United Kingdom


Prof. Axel Metzger, Professor of Civil Law and Intellectual Property, Humboldt-Universität, Berlin, Germany


Prof. Péter Mezei, Associate Professor, University of Szeged, Hungary; Adjunct professor (dosentti), University of Turku, Finland


Prof. Alexander Peukert, Goethe-Universität Frankfurt am Main, Germany


Prof. João Pedro Quintais, Associate Professor, Institute for Information Law (IViR),University of Amsterdam, Netherlands


Prof. Ole-Andreas Rognstad, Professor of Law, Department of Private Law/Centre for European Law, University of Oslo, Norway


Prof. Martin Senftleben, Professor of Intellectual Property Law and Director of the Institute for Information Law (IViR), University of Amsterdam, Netherlands


Prof. Caterina Sganga, Associate Professor of Comparative Private Law, Scuola Superiore Sant’Anna (Pisa), Italy


Prof. Alain Strowel, Professor, Saint-Louis University and UCLouvain, Belgium


Prof. Mireille van Eechoud, Professor of Information Law, Institute for Information Law (IViR),University of Amsterdam, The Netherlands