Romania

Popovici Nitu Stoica & Asociatii (PNSA) has advised, together with Latham and Watkins LLP, a syndicate of Romanian and international banks on the granting of a credit facility of approximately USD 173,000,000 to Black Sea Oil & Gas S.A. for the financing of ongoing projects and investments in the Midia Gas Development project in the Black Sea.

Court cases brought between 2019-2023 before the Court of Justice of the European Union (“CJEU”) having intellectual property as the subject matter ranked second in terms of their total number (after those involving freedom, security and justice). Navigating the vast IP ocean, one recent case stood out in particular (Case C-227/23 – Kwantum Nederland and Kwantum België[1]), insofar as it involved a potential conflict of laws between EU and the international laws. The conflict was eventually settled by CJEU’s binding decision as of 24.10.2024. By upholding the very principles of EU law, CJEU has opened the door wide for international creators of works of applied art[2] who will now enjoy sufficient protection for their works within all the EU member states. 1.Facts The smallest snowflake can cause the greatest avalanche. This is also the situation in the present case, where the avalanche effect was produced by perhaps nothing more thrilling than a... chair. But an admirably crafted one. Vitra Collections AG (“Vitra”), a company incorporated under Swiss law, produces designer furniture, in particular chairs, including the well-known Dining Sidechair Wood (“the DSW chair”), designed in 1948 by the now deceased couple Charles and Ray Eames, who were citizens of the United States of America. In the Netherlands and Belgium, Kwantum Nederland BV and Kwantum België BV, two businesses operating under Dutch law (“Kwantum”) run a chain of stores that offer furniture and other household goods. In 2014, Vitra discovered that Kwantum had been selling and promoting a chair under the name “Paris”, which allegedly violates its copyright for the DSW chair. In this context, Vitra brought an action before the Dutch courts with the aim, among other things, of stopping the sale of the Paris chair. In first instance, the District Court of Hague held that Kwantum did not infringe Vitra’s copyrights and that it did not act unlawfully by selling the Paris chair and, consequently, rejected Vitra’s applications for the protection of its own IP rights on EU territory. The first court's judgment was overturned by the Court of Appeal of Hague, which considered that Kwantum did infringe Vitra’s copyrights on the DSW chair and that the chair itself was eligible for copyright protection on EU territory. Further appeals were subsequently lodged by the parties before the Supreme Court of the Netherlands, which reached an impasse on the interpretation and complementarity of the provisions of Dutch copyright law with those of international law. Thus things stand, the Supreme Court decided to stay the proceedings and to refer to the CJEU for a preliminary ruling, mainly requesting the EU court to offer guidance regarding the protection that may be given in the European Union to works of applied art originating in a third country, when the creator of the work is not a citizen of a Member State. 2.The material reciprocity clause - Berne Convention De jure, given the DSW chair's USA “citizenship”, the key element in understanding the CJEU's ruling in the above-described case is the understanding (and potential applicability) of the reciprocity clause contained within the Berne Convention[3]. The Berne Convention establishes a general principle of “national treatment”, wherein authors originating from the signatory states of the Convention are entitled to the same intellectual property rights in another signatory state as that state’s own citizens or residents would be entitled to. However, Article 2(7) of the Convention creates an exception which applies both to works of applied art, and to industrial designs and models – the first category being of interest to the present case. In the specific cases involving these categories of creations, the Convention requires that the material reciprocity test is to be carried out in order to assess the level of protection that is to be granted to such creations. The material reciprocity test implies that if the laws of the country of origin of a work provide protection solely under industrial design or model laws (rather than copyright law), other signatory states are not obligated to extend copyright protection beyond what is recognized domestically. To put it briefly, copyright protection is of a limited nature as regards works of applied art that are not protected in their author’s country of origin, thus allowing other signatory states to refuse to grant greater copyright protection. 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 Article 5(4) of the Convention, the U.S. 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[4]. Under U.S. law, works of applied art can receive copyright protection if their artistic elements are separable from functional aspects. For example, while the structural function of a chair is not copyrightable, unique sculptural features that don't impact function (like the DSW chair's distinct design and its specific processing of raw materials) may qualify for copyright. By (hypothetically) performing the material reciprocity test, it would be concluded that if a country (like the U.S.) only protects certain applied art as designs (and not under copyright), other signatory states are not obligated to provide copyright protection for those works. The applicability of this clause is critical in the case at hand because it questions whether EU Member States (or the EU legislature itself) can limit protection for the DSW chair based on the type of protection it receives in the U.S. Consequently, it follows that the case at hand raises significant questions as regards the copyright protection enjoyed throughout the EU territory in respect of works which do not originate in the EU. The answer given by the CJEU will thus have profound implications for the harmonization of copyright protections across jurisdictions. 3.CJEU Judgement. Importance In its decision, the CJEU stated that Member States cannot apply a material reciprocity criterion for works of applied art originating from third countries, such as the U.S., based solely on the protections available in those countries, as would be required under the reciprocity clause. Furthermore, the EU Court clarified that only the EU legislature itself can decide if, and to what extent, copyright rights might be limited within the Union. In short, the decision signals that neither the place where a work of applied art was created, nor the nationality of the creators themselves is of any relevance, since, due to the protection provided under EU rules, they are equally protected in any of the EU Member States. The CJEU decision finds itself in complete harmony with Advocate General Szpunar's view[5], which found on 5 September 2024, in its groundbreaking Opinion, that the protection offered by the EU legal framework to works of applied art also extends to those residing in third countries. In terms of importance, the CJEU's decision appears to be fundamental for protection of the IP rights across the European area, because it reinforces the EU's commitment to unified copyright standards, holding firm against external influences and ensuring a cohesive, fair environment for creative rights across all Member States. Consider an example involving a Japanese artist whose mural is protected only as an industrial design in Japan. Under the CJEU's decision, if this mural is displayed in the EU, it will receive full copyright protection, unaffected by Japan’s more limited protection. This ruling establishes that EU Member States must consistently apply EU copyright standards, regardless of the work’s origin or the creator’s nationality, ensuring a harmonized legal framework for intellectual property rights within the EU. Given all of the above, one can only imagine that the worldwide creative community will be more than eager to learn about the significance of the CJEU's decision delivered in the case discussed in the present article. Authored by Patricia Gorici, Associate Irina Vasile, Partner *** For any IP-related inquiries, applications or disputes – regardless of the place of creation or the nationality of the creator – Lexters professionals are skilled with all the necessary expertise to deliver results of the highest quality for both national and international clients. Do not hesitate to contact us should you be in need of any assistance, representation or simply answers to your own questions. [1] The complete decision can be accessed here. [2] Works of applied art = works that apply design and decoration to everyday and essentially practical objects in order to make them aesthetically pleasing. [3] Berne Convention for the Protection of Literary and Artistic Works, adopted in 1886, deals with the protection of works and the rights of their authors. It is administered by the World Intellectual Property Organization and has so far been ratified by 181 states worldwide, including the 178 UN member states. It provides creators with the means to control how their works are used, by whom, and on what terms. It is based on three basic principles and contains a series of provisions determining the minimum protection to be granted, as well as special provisions available to developing countries that want to make use of them. Berne Convention can be accessed here. [4] M. Eechoud, A. Metzger, J. P. Quintais, O.A. Rognsta, Opinion of the European Copyright Society on Certain Selected Aspects of Case C-227/23, Kwantum Nederland and Kwantum Belgie, IIC - International Review of Intellectual Property and Competition Law, 2024.   [5] Opinion of Advocate General Szpunar in Case C‑227/23, delivered on 5 September 2024, can be accessed here.

The regulation of crypto-asset markets at the level of the European Union is no longer a legislative promise, but a legal reality. With the adoption of Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), the Union establishes, for the first time, a unified and directly applicable legal framework specifically designed for digital assets not covered by existing financial regulations.

Popovici Nițu Stoica & Asociații pledged once again its full support to Stradivarius International Tour, initiated and supported every year by the violinist Alexandru Tomescu.