In a landmark decision C-227/23 (Kwantum Nederland and Kwantum België), the Court of Justice of the European Union (CJEU) has provided crucial clarification on the interpretation of Article 351 TFEU in relation to the material reciprocity criterion from the Berne Convention. This decision has significant implications for the application of copyright law within the EU, particularly concerning works originating from non-EU countries like the United States.
The question
The case centers on a copyright infringement claim involving 1. Vitra (plaintiff): A Swiss company holding intellectual property rights over the Dining Sidechair Wood designed by Charles and Ray Eames (US nationals); and 2. Kwantum (defendant): A retail chain operating in the Netherlands and Belgium that marketed a chair called the 'Paris chair'. Kwantum's defense primarily relied on the material reciprocity clause under Article 2(7) of the Berne Convention, which provides that works of applied art originating from countries where such works are protected solely as designs and models should not receive copyright protection in other signatory countries. The protection of works of applied art constitutes an exception to the principle of national treatment.
Vitra initially lost at first instance then won on appeal, obtaining a judgment declaring copyright infringement in both the Netherlands and Belgium but Kwantum appealed to the Dutch Supreme Court, specifically challenging the interpretation of Article 2(7) of the Berne Convention given by the Court of Appeal.
The central issue raised by Kwantum was whether Member States remain free to apply the material reciprocity clause contained in the Berne Convention to works of applied art originating in third countries. This applies particularly when such works are protected solely under a special regime in their country of origin.
The Dutch Supreme Court's referred to the CJEU a fundamental question: To what extent can EU law mandate copyright limitations through reciprocity for non-EU right holders? This question emerges at a time when the boundaries between design rights and copyright protection are increasingly blurred.
The Court’s decision
The CJEU ruled that the first paragraph of Article 351 TFEU does not allow a Member State to apply the material reciprocity criterion from the second sentence of Article 2(7) of the Berne Convention, by way of derogation from EU law, to works whose country of origin is the United States. This decision emphasises the primacy of EU law over international agreements in cases where there might be a conflict.
Key points of the decision
The ruling underscores that EU law takes precedence over international agreements, such as the Berne Convention, when there is a conflict. Member States cannot derogate from EU law by applying international provisions that are inconsistent with EU regulations.
The material reciprocity criterion allows countries to limit copyright protection for works of applied art based on the level of protection those works receive in their country of origin. However, the CJEU's decision makes it clear that this criterion cannot supersede EU law.
Specifically, if EU law mandates copyright protection for works originating from the US, EU Member States cannot use the material reciprocity test to deny such protection.
The RAAP connection: A new chapter in EU copyright law
The Kwantum case (C-227/23) must be analysed in conjunction with the other landmark C‑265/19 RAAP decision, as both cases significantly shape the EU's approach to international copyright protection. However, they present distinct legal challenges and interpretations.
The RAAP decision dealt with equitable remuneration rights for performers, while Kwantum addresses the material reciprocity rule under Article 2(7) of the Berne Convention. This mandatory rule requires Union countries to deny copyright protection to works only protected as designs in their country of origin.
The Court's approach in Kwantum emphasises that applying material reciprocity at a national level would undermine the harmonisation objective of Directive 2001/29. EU law deems the different treatment of works from third countries across Member States as incompatible.
Both cases demonstrate consistent treatment of intellectual property rights under EU law. Any limitations must be explicitly provided for by EU law provisions.
Implications of the decision
This decision promotes a more harmonised approach to copyright protection across the EU, ensuring that all Member States adhere to the same standards and do not apply divergent rules based on international agreements.
By reinforcing the primacy of EU law, the decision provides greater legal certainty for creators and businesses operating within the EU. They can rely on a consistent application of copyright laws, regardless of the country of origin of the works.
The ruling may influence how the EU negotiates and implements international agreements in the future, ensuring that such agreements do not conflict with established EU law.
The decision has also a significant implication for national laws and jurisprudence. Member States must align their copyright laws with EU law, ensuring that any provisions or decisions that conflict with EU law are amended or repealed. This ruling particularly affects how Member States handle the protection of works of applied art, ensuring that such works receive consistent protection across the EU.
EU copyright law primacy priniciple
The CJEU’s decision on Article 351 TFEU and the material reciprocity criterion from the Berne Convention marks a significant step in the evolution of copyright law within the EU. By affirming the primacy of EU law, the court has furthered the way to a more unified and predictable legal framework, benefiting creators, businesses, and the broader cultural landscape. This ruling not only clarifies the relationship between EU law and international agreements but also reinforces the EU’s commitment to protecting intellectual property rights in a consistent and fair manner.