Daniel Stefanica of bpv GRIGORESCU STEFANICA joins ICC Fraudnet, the leading global network of law firms specializing in tackling business crime

We are proud to announce that our firm’s partner, Daniel Stefanica, has joined ICC FraudNet. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit and is an international network of independent lawyers who are the leading civil asset recovery specialists in each country. Membership of ICC FraudNet is by invitation only, and Daniel and our firm are the first-ever Romanian members of the network.

We are honoured to have been invited to join the exclusive network of ICC FraudNet. It is a confirmation of all the hard work and of the reputation build by our team in Romania and internationally. We look forward to bringing the network’s stellar expertise in fighting big crime to clients and enforcement agencies in Romania“, said Daniel Stefanica. “ICC FraudNet offers our client the necessary platform to pursue the recovery of business crime proceeds in every corner of the world. The knowledge base and the global reach fit very well into our existing practice, especially in connection with cybercrime, tax evasion and financial services fraud“, adds Catalin Grigorescu, managing Partner of bpv GRIGORESCU STEFANICA.

ICC FraudNet’s membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Since its creation, ICC FraudNet members have recovered billions of dollars for victims of some of the world’s largest and most sophisticated global frauds involving insurance, commodities, banking, grand corruption and bankruptcy/insolvency. Chambers Global recognizes ICC FraudNet as the world’s leading asset recovery legal network.

bpv Grigorescu Ștefănică obtains a favourable court decision in the first dispute regarding the annulment of a utility model in Romania

Mondialacqua, whose majority shareholder is the American group Culligan Water, is an important player in the public water fountains` market and is continuously expanding throughout Europe. The decision issued by Bucharest Court of Appeal upheld Mondialacqua’s claim for the annulment of a utility model registered by a competitor.

Our litigation team represented Mondialacqua SRL and finally won the dispute against a competitor who registered, in 2012, a utility model for a public water fountain with technical characteristics similar to a Mondialacqua`s product. Mondialacqua is selling public water fountains since the beginning of 2000 and, in Romania, operates under the trademark “Frizzy”.

As a first step, bpv GRIGORESCU ȘTEFĂNICĂ filed a motion with the Romanian State Office for Inventions and Trademarks (OSIM) requesting the annulment of the utility model registered by Mondialacqua`s competitor. OSIM admitted the motion and annulled the utility model. In the ensuing court dispute, the Bucharest Tribunal upheld the challenge against OSIM`s decision. Finally, the Bucharest Court of Appeal ruled that the utility model be annulled and awarded in full the claim of our client.

The team representing Mondialacqua was coordinated by Daniel Ștefănică, Partner. Raluca Marcu, Managing Associate and Șerban Dumitrescu, Senior Associate were also part of the team.

The dispute was challenging, considering that it is the first dispute, in Romania, aiming to annul a utility model. From this perspective, the lack of any case law raised the difficulty of the case, as the team was required to provide the court with an adequate and accurate interpretation of the legal provisions in the broad context of patent laws. Further, the dispute was demanding both in term of duration (it was initiated in 2015) and required evidence. Two complex expert reports were required to answer the objectives approved by the courts. Finally, we are anxious to read the full text of the court ruling in order to understand how it is likely to shape the future case law in these matters. We expect the court to rule one of the main questions raised in the dispute: in order to enjoy protection, is it required that a utility model shows a minimal inventive activity or element, beyond the mere juxtaposition of pre-existing elements that does not lead to a new effect?” Daniel Ștefănică declared.

 

The electronic signature: long-distance (commercial) relationships

*An article by Cezara Constantinescu, Senior Associate

The state of emergency has brought a series of changes in the life of each of us. Among these, the way we communicate, the way we conclude contracts, the way we carry out our interactions with the public authorities. All these must be made, in principle, from a distance.

In this context, the electronic signature takes on particular relevance. The electronic signature is an instrument which exists and has been used for years, which however becomes particularly relevant in the current context, especially since the presidential decrees[1] not only imply, but also expressly advise towards the use of electronic means of communication. Moreover, GEO 38/2020[2], in force as of 7 April 2020, grants an increased legal value to the advanced electronic signature, allowing the use of such signature by natural/ legal persons in their relations with public authorities and institutions.

In this article, we will present the types of electronic signatures, their specific effects, as well as the issue of the electronic signature originating from a non-EU country.

I. The types of electronic signatures. The national and EU regulation.

Two main pieces of legislation on electronic signature are applicable in Romania, namely:

Law no. 455/2001 on the electronic signature (”Law 455/2001”);

Regulation (EU) No. 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC („eIDAS”).

Being an EU regulation, eIDAS is mandatory and directly applicable in the national legal system. eIDAS has priority over Law 455/2001, where it grants broader rights than the latter. In any case, eIDAS is based on the principle that the legal effect of electronic signatures is defined by national law, except for the requirement according to which a qualified electronic signature should have the equivalent legal effect of a handwritten signature (para. (49) eIDAS preamble).

On a basic level, the electronic signature is defined as data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign. Three types of electronic signatures are regulated:

1. The simple electronic signature – consists of data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign.

For example, the signature used in an e-mail, or the signature given on certain digital signature pads.

2. The extended electronic signature, named advanced electronic signature (“AES”) in eIDAS – is that electronic signature which:

is uniquely linked to the signatory;

allows the identification of the signatory;

is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and

is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.

Examples: DocuSign[3], PandaDoc, etc.

3. The extended electronic signature based on a qualified certificate, named qualified electronic signature (“QES”) in eIDAS – is an advanced electronic signature that is created by a qualified electronic signature creation device, and which is based on a qualified certificate for electronic signatures;

Consequently, the main difference between an AES and a QES is that the latter is created by a qualified electronic signature creation device, and is based on a qualified certificate for electronic signatures. These additional elements of the QES generate the presumption that the identity of the signatory is the real one, the reason for which QES is the “safest” type of electronic signature, and has the highest legal value, as will be shown below.

Qualified trust service providers in Romania are listed in the Registry kept by the specialized public authority, which is currently, the Ministry of Transport, Infrastructure and Communications[4]: https://www.comunicatii.gov.ro/semnatura-electronica/ The Registry is updated by the authority as changes occur with respect to the providers.

At an EU level, the full list of trust service providers – including QES in the member states, as per eIDAS, is published at this address: https://webgate.ec.europa.eu/tl-browser.

There is an important aspect which we underline here, namely that, as per Art. 25 (3) eIDAS, a qualified electronic signature based on a qualified certificate issued in one EU member state is recognised as a qualified electronic signature in all other member states. Consequently, a QES based on a qualified certificate issued in another member state is recognized as QES in Romania and has the same legal effects as a QES issued by a local provider.

II. The legal effects of the three types of electronic signatures

Below we will present the legal effects of the three types of electronic signatures, starting with the one with the highest legal value – the qualified electronic signature (QES), and continuing with the other two types of electronic signatures – the advanced electronic signature (AES) and the simple electronic signature.

1. The qualified electronic signature (QES)

Both eIDAS and Law 455 provide that an electronic document signed with QES is assimilated, in what regards its conditions and effects, with an act under private signature. More specifically, the QES has the legal value of a handwritten signature.

At the same time, when the written form is legally requested as a condition of validity or proof of a legal act, an electronic document fulfils such condition if it is signed with a QES.

In this respect, we mention by way of example:

Legal acts for which the written form is a validity condition:

a court claim / a request for appeal;
 a company’s constitution, as per the Company Law no. 31/1990 (when the notarized form is not required);
 the individual employment contract;
 the personal guarantee;
 the mortgage on movable assets;
 the land lease agreement;
the vote expressed in a company’s shareholders’ assembly, when the voter is not physically present;
 the vote expressed in the creditors’ assembly/ committee of an insolvent company, when the voter is not physically present;
 tax declarations;
 the handwritten testament.

Legal acts for which the written form is a proof condition:

 the legal services agreement (as well as any power of attorney based on such agreement);
the transaction agreement;
the company agreement (for companies without legal personality);
the insurance contract;
 the storage contract.

These legal acts are valid or can be proven, respectively, if they are signed with a QES.

2. The advanced electronic signature (AES) and the simple electronic signature

2.1 The general situation

We have previously shown that both eIDAS and Law 45/2001 give the QES the legal value of a handwritten signature.

Nevertheless, by interpreting the relevant legal provisions, we appreciate that the documents signed with AES or simple electronic signature may also have the effects of an act under private signature, in certain situations and under certain circumstances:

 In the case of legal acts for which the written form is not legally required as a condition of validity or proof (see item II.1 above) if the parties agree to use such signature in their relationship.

We may include here: orders; invoices; certain sales agreements; distribution agreements; service agreements; consumer agreements.

 For any legal act, if the party to whom the signature is opposed recognizes the signature.

In this regard, Art. 6 of Law 455/2001 provides that the act in electronic form, to which an electronic signature has been incorporated, attached or logically associated, recognized by the party to which it is opposed, has the same effect as an authentic deed between its signatories and their representatives.

The disadvantage is that in order to be valid, such recognition must be made in the legal form requested for the validity of the act, or before the court – if it comes to litigation. This is why, in practice, the use of a QES from the beginning is preferred.

For any legal act signed with an AES, even in absence of any recognition by the party to which the signature is opposed, if the interested party manages to prove that the AES meets the four cumulative legal requirements (item I.2. above), namely that it:

is uniquely linked to the signatory;
allows the identification of the signatory;
is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.

In the case of QES, it is presumed that these requirements are met, until any proof to the contrary (Art. 9 of Law 455/2001).

Illustratively, in practice, we may think of situations like: (i) a party in a contract signed with an AES denies having signed the contract, and the other party wants to prove that the signature indeed belongs to the party that denies it; (ii) when the recipient of a unilateral legal act (e.g. a unilateral promise of sale) signed with an AES wants to exercise the rights granted by such act, but its author (signatory) denies the signature; (iii) when the author of a unilateral legal act signed with an AES wants to prove such act generated legal effects.

Of course, such proof may be difficult from a technical point of view, however not impossible.

In all cases, the interested party is entitled to challenge in court a certain signature, be it a QES, an AES or a simple electronic signature. In such a situation, the court may order a technical (IT) expertise, the objectives of which will be more or less complex, depending on what exactly is challenged.

2.2 The particular situation of GEO 38/2020 – the AES has the legal value of a handwritten signature for natural and legal persons in their relation with public authorities and institutions

The recent GEO 38/2020 – in force as of 7 April 2020, grants the AES the legal value of a handwritten signature, in the relation of natural and legal persons with public authorities and institutions, providing that:

 As of 7 April 2020, public authorities and institutions have an obligation of registering documents signed with the electronic signature;

The public authorities and institutions establish the type of electronic signature applicable for the use of a particular online service by the natural or legal persons, with the observance of eIDAS. GEO 38/2020 provides that within 15 days from its entry into force, the public authorities and institutions will issue the administrative regulations necessary for the implementation of this provision[5].

The documents signed with an AES, which are sent by the utilisation of authentication mechanisms of a substantial or high level, are assimilated – as regards the conditions and effects thereof, with acts under private signature.

III. The issue of the electronic signature originating from a non-EU country

We have shown above that a qualified electronic signature based on a qualified certificate issued in one EU member state is recognised as a qualified electronic signature in all other member states (Art. 25 (3) eIDAS).

But what legal effects does an electronic signature originating from a third country have? For example, a document signed with DocuSign (USA). This is one of the questions we can face in practice.

As regards the QES, Art. 40 of Law 455/2001 provides that the qualified certificate issued by a certification services provider headquartered in a third country is recognized as having equivalent legal effects with the qualified certificate issued by a certification services provider headquartered in Romania if:

 The certification services provider headquartered in a third country had been accredited in the conditions provided by Law 455/2001; or

An accredited certification services provider headquartered in Romania warrants for that certificate; or

 The certificate or the issuing certification services provider is recognized by way of a bilateral or multilateral agreement between Romania and other countries or international organizations, based on reciprocity.

This latter hypothesis overlaps with the eIDAS provision according to which trust services provided by trust service providers established in a third country shall be recognised as legally equivalent to qualified trust services provided by qualified trust service providers established in the EU, where the trust services originating from the third country are recognised under an agreement concluded between the EU and the third country in question or an international organisation (Art. 14 eIDAS).

On the other hand, Art. 25 (1) eIDAS provides that an electronic signature will not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.

We appreciate that our conclusions above (item II.2) on the legal effects of the AES and the simple electronic signature are relevant here. Accordingly, an electronic signature originating form a third country, that does not meet the requirements for being considered a QES, may have legal effects as an AES or a simple electronic signature, as follows:

 In the case of legal acts for which the written form is not legally required as a condition of validity or proof (see item II.1 above), if the parties agree to use such signature in their relationship.

 For any legal act, if the party to whom the signature is opposed recognizes the signature.

 For any legal act signed with an AES, even in absence of any recognition by the party to which the signature is opposed, if the interested party manages to prove that the AES meets the four cumulative legal requirements (item I.2. above).

Moreover, considering the provisions of GEO 38/2020, we conclude that an AES issued in a non-EU country can be used by natural/ legal persons in their relation with public authorities and institutions, having the legal value of a handwritten signature in the sense of the GEO.

Finally, we reiterate that a qualified electronic signature based on a qualified certificate issued in one EU member state is recognised as a qualified electronic signature in all other member states (Art. 25(3) eIDAS). Consequently, a QES based on a qualified certificate issued in another member state is recognized as QES in Romania and has the same legal effects as a QES issued by a local provider.

 

[1] Decree no.  195/2020 on the establishment of the state of emergency in Romania, issued by the President of Romania, in force as of 16 March 2020. Decree no. 240/2020 on the extension of the state of emergency in Romania, in force as of 15 April 2020.

[2] Government Emergency Ordinance no. 38/2020 on the use of documents in electronic form, at the level of public authorities and institutions, in force as of 7 April 2020.

[3] Except for DocuSign France, which is a QES provider according to the list of trust service providers in EU: https://webgate.ec.europa.eu/tl-browser/#/tl/FR/9

[4] Following the reorganization of the Ministry of Communications and Information Society (MCIS), on 19 February 2020. An update of the websites of the involved ministries was not done yet, therefore the Registry is still published on the (former) website of MCIS.

[5] At the date this article was written, no such administrative implementation acts had been issued.

bpv BRAUN PARTNERS ranked highly once again by Legal 500

This year’s Legal 500, one of the two most prestigious international legal handbooks ranks bpv again in top spots, recommending the Czech office in seven areas and the Slovak office in four.

bpv is highly recommended in employment law (“bpv Braun Partners s.r.o.’s ‘fantastic’ team has ‘deep knowledge in the sector’. The team led by Arthur Braun provides day-to-day employment advice to domestic and international clients, with a focus on cross-border secondment matters. Of counsel Lucie Kalašová specializes in employment litigation and is also noted for advising on GDPR issues in combination with the firm’s data protection practice.”

With the Slovak team offering “Excellent quality, solution-oriented, longstanding experience, international experience and local know-how”) and real estate law (“bpv Braun Partners s.r.o.’s real estate team advises local and global clients on development projects, real estate investments and financing. ‘Top-notch lawyer’ Jiří Bárta, who is the key name to note for complex transactions such as acquisitions and sales, jointly leads the team with Miroslav Dudek, who advises German clients. The practice also handles cross-border deals with the support of its Bratislava office. ‘Igor Augustinič is always on the spot and supports commercial ideas’.”)

In the category of projects and energy the publication emphasizes: “bpv Braun Partners s.r.o.’s projects and energy team is praised for its ‘comprehensive support and excellent legal advice’. The practice is jointly led by the highly regarded Marc Müller and David Vosol, and advises a variety of sector clients on electricity, gas and international pipeline projects. Senior associate Michal Fogel is recommended.”

Legal500 points out regarding TMT: “bpv Braun Partners s.r.o. has ‘highly specialised lawyers in the field of TMT’ and is led by Pavel Vincík.

The team advises on GDPR matters, data protection and TMT-related litigation. Managing partner Arthur Braun is recommended for his IP specialisation”, whereas the team for commercial law, corporate law and mergers & acquisitions is described as one that “impresses clients with its ‘enthusiasm and professionalism’“ (“Key contacts in the group include senior partners David Vosol, Pavel Vincík and Jiří Bárta, who is recommended for real estate-related M&A deals”), while the Slovak team offers ‘‘Excellent quality, solution-oriented, longstanding experience, international experience and local know-how’”.

The handbook also recommends bpv BRAUN PARTNERS for banking, finance and capital markets (“bpv Braun Partners s.r.o. provides an ‘excellent quality’ banking service and is experienced in handling cross-border financing deals for domestic banking clients. David Vosol leads the team, which also includes Arthur Braun and senior associate Zuzana Štěpánková”. According to client feedback “Katerina Trzaska and Arthur Braun are standouts”. Both provide swift responses and never miss a deadline. They are reliable, competent and multilingual“.’ “The (Slovak) team is super reliable and competent; it has never once missed a deadline and is very fast”. Clients also point out that ‘Igor Augustinič thinks out of the box and supports commercial approaches‘ and ‘Monika Kardošová works hard, is very analytical and does a good job‘.) and dispute resolution (“Smart, personable and practical’ team is led by Pavel Vincík.

The team counts many energy sector players among its key clients and is experienced in representing clients in both the Czech and Slovak courts. Marc Müller is a key contact for German clients.”

Litigation during the state of emergency. A brief guide.

*An article by Cezara Constantinescu and Serban Dumitrescu

Preliminary considerations

By Decree no 195/2020 regarding the establishment of the state of emergency on the territory of Romania (the “Decree”), a state of emergency was established for a period of 30 days, starting from the 16th of March 2020, with effect to the entirety of the territory of Romania.

By the Decree, inter alia, measures with direct impact over a multitude of practice areas of the Justice domain were taken. In what follows, we will briefly analyze the measures with direct impact over the civil cases that were pending when the state of emergency was instated or are bound to be registered with the courts following such date.

Our analysis takes into account the civil cases, particularly the cases under the jurisdiction of the High Court of Cassation and Justice (the “HCCJ”), of the Bucharest Court of Appeals (the “CAB”) and the courts under its territorial jurisdiction. Short considerations regarding cases under the jurisdiction of other courts of appeals will be made only with respect to insolvency proceedings. Notwithstanding, on a national level, the courts of appeals established in a generally similar/ uniform manner the cases deemed as urgent.

The cases not deemed as urgent, pending before the courts when the state of emergency was established

The general rule is that the hearing of the civil cases is suspended by operation of law throughout the entire period of the established state of emergency. The suspension comes into effect without any special procedure being required to be fulfilled to this end. The hearing of those cases shall be resumed, ex officio, after the termination of the state of emergency. The courts are obliged to take all the necessary measures to set new hearing dates and to summon the interested parties within 10 days of the termination of the state of emergency.

The new cases not deemed as urgent, that are to be registered with the courts

As regards the cases to be registered with the courts that fall under the CAB’s jurisdiction, they shall be transmitted to the courts exclusively by postal service, express courier services, telefax or by electronic mail.

The new cases shall be registered and receive a case file number, and they shall be randomly assigned to a judge-panel. Nevertheless, the preliminary administrative procedure for such new cases is suspended throughout the state of emergency period. Similarly, the first hearing date shall not be set in such case files until the state of emergency ends.

The cases deemed as urgent, pending before the courts when the state of emergency was instated, or that are bound to be registered with the courts following such date

By way of exception to the general aforementioned rule, the trial of civil cases continues or commences, during the state of emergency, only with regard to those cases deemed of immediate urgency. The cases of immediate urgency are decided upon by the Management Board of the HCCJ regarding the cases under its jurisdiction and by the Management Boards of the Courts of Appeal regarding the cases under their respective jurisdiction.

Nonetheless, even as regards such cases deemed of immediate urgency, the court shall carry out the hearings through video-conference, when possible. The Bucharest Tribunal has already implemented the video-conference system.

Furthermore, the procedural acts shall be communicated by the court by telefax, electronic mail, or by any other means that ensure the transmission and the acknowledgement of receipt of the aforementioned acts.

A novelty aspect regarding the trial of the urgent cases regulated by the civil procedural law is represented by the court’s prerogative to set hearings from one day to another or even in the same day.

Even regarding cases that are deemed of immediate urgency, if the interested party files a request for the postponement of the hearing based on the circumstance that he/she is confined to home isolation, is quarantined or is being hospitalized as a result of the COVID-19 pandemic, the court may postpone the hearing. In the event that the postponement request is denied, the court, either by request or ex officio, shall postpone the ruling so as to allow the interested parties to submit their written conclusions.

The list of cases deemed of immediate urgency that are heard during the state of emergency

In the Annex to this guideline, you will find a table drawn up by us, containing the list of causes deemed of immediate urgency by HCCJ and CAB, which are heard during the state of emergency.

Nevertheless, a court may decide to hear a case that is not expressly included on that list, if the interested party is able to prove the urgency of such-case.

The list of causes deemed of immediate urgency that are being tried during the state of emergency should be available on the courts of law portal (website). De facto, not all courts have communicated the information regarding the cases that are being tried during the state of emergency.

Insolvency proceedings. The particular situation of the debtor’s application for insolvency

As a general rule, the debtors’ applications for insolvency are not heard during the state of emergency period. This conclusion results from Decision no 53/18.03.2020 of the Management Board of CAB, as well as from the more recent Decision no 8/30.03.2020 of the Management Board of the Bucharest Tribunal.

However, at a national level, we identified three exceptions to this general rule. There are three circumscriptions where the tribunals hear the debtors’ applications for insolvency, namely:

» The tribunals under the circumscription of the Court of Appeal of Pitești, namely: The Specialized Tribunal of Argeș, The Tribunal of Vâlcea

» The tribunals under the circumscription of the Court of Appeal of Târgu Mureș, namely: The Specialized Tribunal of Mureș, The Tribunal of Harghita. However, it is specified that these courts shall hear debtors’ applications for insolvency to the extent that such cases will be deemed of immediate urgency, taking into account the specific circumstances of the case.

» The tribunals under the circumscription of the Court of Appeal of Suceava, namely: The Tribunal of Botoșani, The Tribunal of Suceava.

Reasoning and communication of court rulings

The Superior Council of the Magistracy has decided that throughout the period of the state of emergency “the courts may also communicate the rulings drafted in other cases than those deemed of immediate urgency.” However, it is not specified whether the courts will also draft the rulings in the aforementioned cases, making room for the interpretation that the court will communicate only the rulings that were already drafted when the state of emergency commenced.

In practice, we found that some courts also draft the rulings in the cases that are not deemed of immediate urgency.

The situation is the same as regards the summoning: although, theoretically, summons should be issued only regarding the cases deemed of immediate urgency, in practice the courts also issue a summons in cases that are not heard during the state of emergency. Moreover, the practice is split under this regard, meaning that some judge-panels decide to set hearings ex officio after the 1st of May 2020 and issue a summons for the case files that had hearings set during the duration of the state of emergency, despite the fact that such cases were suspended de jure.

The limitation and the preemption periods. The appeal periods.

The limitation and the preemption periods are suspended, meaning:

» if such periods started running before the establishment of the state of emergency, they are suspended and shall resume running after the termination of the state of emergency:

» if such periods should have begun running after the establishment of the state of emergency, then their course will start as of the termination of the state of emergency period.

Similarly, if the appeal periods regarding the cases not deemed of immediate urgency started running before the establishment of the state of emergency, the elapsed periods are interrupted. As such, new appeal periods of equal duration will start to run as of the termination of the state of emergency period.

If appeals were filed before the establishment of the state of emergency, in the cases not deemed of immediate urgency, such cases shall be forwarded to the competent court after the termination of the state of emergency.

The carrying out of judicial expertise activities

In principle, the carrying out of judicial expertise activities is not suspended. This is due to the fact that, even if a meeting of the parties and the expert would be required/ if the expert would be required to travel, such would be allowed based on an affidavit indicating the professional necessity thereof.

However, in our practice, all the summons for meetings with experts set during the period following the establishment of the state of emergency were cancelled. This is attributed to the fact that experts voluntarily take strict measures in order to prevent the spread of the COVID-19 pandemic, as well as to the fact that the cases in which the expert’s report was requested are, in turn, suspended by order of law during the state of emergency.

The enforcement procedures

As a general rule, the enforcement procedures continue in all cases where the rules regarding sanitary discipline instated through the National Committee’s for Special Situations of Emergency Decisions can be respected.

For example, for an enforcement procedure regarding a sum of money owed by the debtor, there are theoretically, no impediments as long as all forced enforcement acts can be fulfilled and communicated through electronic means (notices of garnishment, communications, distribution of the sums obtained through the enforcement procedure etc.)

ANNEX to the guideline »

Brief analysis of the Judgement of the Court of Justice of the European Union in Case C-567/18, Coty Germany v. Amazon Europe

*An article by Vladimir Griga, Associate

On April 2, 2020, the Court of Justice of the European Union (“the Court” or “CJEU”) ruled in Case C-567/18, concerning the reference for a preliminary ruling made by the German Federal Court of Justice (hereinafter “the referring court”) in the dispute between Coty Germany and Amazon Europe. This judgement may have significant implications for retailers, online marketplaces (which usually act as intermediaries of the latter), as well as trademark holders.

Facts

Coty Germany (hereinafter „Coty”), a German company and licensee of the European trademark “Davidoff”, made test purchases and found out that several perfumes from the “Davidoff How Water” line, which were offered for sale by third-party sellers on the Amazon-Marketplace platform (www.amazon.de), have been put on the EU market without its consent, hence infringing Coty’s trademark with respect to Davidoff. Amazon Europe (hereinafter “Amazon”) was not aware at the time the offers were published that those products violate Coty’s rights. Later on, Coty asked Amazon to disclose the details of those sellers, the latter refusing to do so. Finally, Coty sued Amazon for trademark infringement, requesting Amazon to cease the stock and dispatch of perfumes in Germany, if they are marketed without Coty’s consent.

Out of the Amazon companies that were sued, one runs the online platform, whilst the other one runs the warehouse under the “Fulfilment by Amazon” scheme. This scheme allows a third-party seller that uses the platform to delegate to Amazon the entire warehousing and delivery logistics of goods, albeit the former and not the latter remains the person that concludes the contract with the end customer (Amazon thus acting as an intermediary).

Reference for a preliminary ruling

In the dispute, the referring court requested the CJEU’s opinion with respect to the liability of an intermediary who, on behalf of a third-party, stores goods that infringe trademark rights, as long as the intermediary (the warehouse keeper) is not aware of this infringement.

The judgement of the Court

The CJEU decided to limit its judgement strictly within the scope of the question, concluding that the mere warehousing of goods, on behalf of a third-party, does not represent a trademark infringement, should that person be unaware of this infringement. In giving this solution, the Court has partially parted from the Advocate General’s opinion, the latter analysing in-depth the nuances of the issue at hand, from a double perspective.

The opinion of the Advocate General

The Advocate General considered that a distinction should be made between the intermediaries, depending on the nature of the services provided to the seller that had infringed the trademark.

» On the one hand, the Advocate General offered an answer similar to that given by the Court: if the intermediary carries out only ancillary tasks in the sales process, such as warehousing the seller’s products, then the intermediary cannot be sanctioned for trademark infringements if he/she was not aware of them, the responsibility belonging entirely to the seller. This is due to the fact that the intermediary does not have an active role nor any control in the sales process, as opposed to the seller.

» On the other hand, the Advocate General emphasised that the situation is different in the case of the so-called “integrated stores”, where the intermediary is actively involved in the sales process, offering not only simple warehousing services but a much wider range of services, such as online advertising and promotion, providing customer service, managing refunds of defective products, intermediation of payments between buyer and seller, preparation of products for delivery, including labelling, packaging and gift wrapping, and others alike. If the warehousing services, by themselves, could be regarded as accessories of the sales process, not the same can be said about the other services, which together put the online platform in a similar position to the seller, giving it more of a “co-seller” capacity, rather than it being just an intermediary of the seller.

We would like to point out that the Court did not consider the Advocate General’s analysis because the information regarding the active involvement of Amazon in the sales process emerged only in the procedures before the CJEU, the referring court failing to provide them in the context of the reference for a preliminary ruling. Nonetheless, from a procedural point of view, the Court has decided that it can only rule within the limits set by the referring court and, therefore, has omitted all that information and, consequently, the comparative analysis carried out by the Advocate General.

Conclusions and recommendations

Online marketplaces can breathe a sigh of relief for the time being, the decision, in this case, being favourable to them: the simple warehousing, on behalf of a third-party, of goods that infringe the trademark rights of another person will not lead to the liability of the online marketplaces unless they knew about that infringement. However, it is recommended that online marketplaces take into account the Advocate General’s reasons and consider the liability risk for trademark infringements, as the Court has not in any way ruled on the situation of “integrated stores”, which offer a broader range of services. At the same time, one needs to keep in mind that the intermediary’s liability in the present case concerned only trademark infringements: the Court itself warned that the intermediary’s liability may still exist on grounds of intellectual property enforcement and e-commerce, in cases where the intermediary enables another economic operator to use a trademark unlawfully, thus being liable for it.

EU Commission exempts imports of medical equipment from non-EU countries from customs duties and VAT

The European Commission temporarily exempts imports of medical equipment from non-EU countries from customs duties and VAT. This was decided on April 3, 2020 by applications from the EU member states and the United Kingdom. As a contribution to the fight against the corona virus, the aim is to make it easier for doctors, nurses and patients to receive the urgently needed medical equipment.

The regulation initially applies for 6 months.

The measure affects masks and protective equipment, as well as test kits, ventilators and other medical equipment. It is valid for a period of six months, but can be extended even further. The decision applies retrospectively to all imports from 30 January 2020.

 

What to look out for when contracting agile software development?

*An article by Radu Zmaranda, Associate, CIPP/E

Agile software development has become the core project management model applied by most, if not all, software developers nowadays. Often customers are unable to define their software needs from the commencement of a project, since they may vary depending on the business value, budget, profitability, its own clients’ requirements and other variables.

By oversimplifying the concept, the agile process implies a flexible iterative development of the desired software, each iteration representing a so-called “potentially shippable product” – i.e. a fully functioning standalone software module. This iterative approach to software development has been created to better adapt to the constantly changing requirements of the customers, as well as to deliver high-quality products through ongoing inspection and assessment of the software to be developed, continuous collaboration between cross-functional teams and prompt response to changes.

To put it bluntly: agile means delivering what the customer wants even if he does not know it yet.

This model is not, however, without obstacles for lawyers. One of core the values of agile software development, and probably one of the most feared by legal professionals, is: “customer collaboration over contract negotiation”, hence the paradox. The question that we are often faced within this type of engagements is: how can the parties have the flexibility of the agile model while maintaining the same level of protection as in standard waterfall development agreements?

This following article intends to give a broad overview of the most important aspects related to drafting agile software development agreements. For the sake of example, we will focus on the SCRUM methodologies, but many concepts presented herein are equally applicable to agile as a whole and are not limited to SCRUM

1. Shifting to agile: do we need a clean slate?

The short answer: YES!

Legal costs with contract drafting are never on the wish list of any developer or customer who wants to switch to the agile software development models, especially if they already have a very good standard waterfall software development agreement. Why can’t this agreement just be adapted to the new model when the subject matter is, in fact, identical: software development?

The truth is that the differences between the waterfall model and the agile model are significant, and adapting a contract which was designed specifically for the waterfall model may leave the parties exposed to various risks from a legal perspective.

2. The essentials of drafting agile software development agreements

This section shall focus only on certain specific aspects of the agile software development agreements, such as the key roles in the project, sprints procedure, acceptance, liability etc.

>> Define the key roles within the project

The Scrum Master (or agile coach)
• may be an employee of the customer, of the developer or a third party;
• the role of the Scrum Master essentially consists of support obligations for the product owner and development team (similar to a coach);
• the Scrum Master does not have any authority over the development team and the product owner, but must ensure that each of them cooperates in the most efficient manner and do not encounter any obstacles that may affect or impair the software development process.

The Development Team
• usually consists of employees of the developer (but could also include customer personnel);
• is responsible for the actual development and testing of the software;
• is responsible for estimating the effort required for the development of each item in the product backlog;

The Product Owner
• is the key representative of the Customer;
• is responsible for clearly communicating the goals and objectives of the project (i.e. the customer’s requirements) to the development team;
• is responsible for drafting and ongoing revision of the product backlog;
• is responsible for drafting and ongoing revision of the release plan;

Any agile software development agreement should identify the key roles in each project, as well as the obligations corresponding to each member of the project team. In principle, any such agreement should include the following roles and corresponding obligations:

>> Define the sprint process

During the duration of the agile agreement, the software is developed in iterations, often called “sprints”. The duration of each sprint is at the sole discretion of the parties, but it is usually between 2 and 4 weeks. A sprint usually starts with the planning of the respective iteration (aka the sprint planning meeting) and ends with the acceptance and review of the deliverables (aka sprint review meeting).

Although in practice there are discussions whether the sprint process, in itself, should be legally binding for the parties (claiming that a too rigid approach to the sprint process would be incompatible with the agile model), we deem that to a certain extent it is recommendable to make such process binding on the parties, as this would also better delineate the liability of each party in case the project does not progress as intended.

For example, planning and review meetings should be clearly defined in any agile software development agreement, whereas daily meetings could be left at the sole discretion of the development team in order to allow for better flexibility and time management during each individual sprint.

>> Create the Definition of Done

In SCRUM processes, the definition of done is the benchmark against which each deliverable from a sprint is measured, in order to determine whether it satisfies the customer’s requirements. Utmost importance must be given to the Definition of Done since it will pave the way for any future liability of the developer. The Definition of Done should be carefully drafted and negotiated at the commencement of the project, to ensure that both parties have a common understanding on what “done” actually means with regards to the delivered software. For example, the definition of done could provide that all customer’s functional/non-functional tests have been passed, that the acceptance criteria have been met for each product backlog item etc.

>> Create a liability mechanism for delay

In principle, delay is not a common concept in SCRUM projects. This is because velocity (which represents how many product backlog items can be developed by the development team during a sprint) is usually variable. If certain items could not be completed during a sprint, they are returned to the product backlog and prioritized in future sprints. In this respect, lawyers find themselves in situations in which they avoid determining a specific liability for delay and rely on the other provisions of the agreement, such as the obligations of each person involved in the project to self-organize and self-adapt in order to deliver in a timely and efficient manner.

In our view, however, this does not mean that the consequences of delay cannot be regulated in another manner. For example, in many situations the velocity of the development team can be determined with high precision. In this respect, even though fixed milestone and deadlines are usually discouraged, certain provisions guaranteeing a minimum velocity can overcome such gaps. Nonetheless, lawyers should pay very close attention to how such clauses are drafted, to ensure that even the guaranteed velocity allows the flexibility required by the agile models. Drafting too rigid provisions would lead to bottlenecks throughout the project.

>> Dispute Resolution mechanism

Finally, agile models rely heavily on the collaboration of the parties. There are many points during each engagement that disputes may arise, such as: whether the delivered iteration meets the definition of done, whether the effort estimates of the development team are reasonable and in accordance with good industry practice etc. Of course, in each agreement parties try to solve any dispute amicably, but in case they fail they must defer the dispute to the court.

Under agile models, given the incremental delivery, such an approach would create significant bottlenecks throughout the project. In this respect, a multi-tier dispute resolution mechanism is essential to any agile software development agreement. For example, any dispute which cannot be resolved between the product owner, scrum master and development team, may be referred to the middle management of each parties and ultimately to the top management of either party. Relying on an expert’s opinion is also often recommended in agile software development agreements, since many of the disputes are very technical in nature.

3. Key Takeaways

With the shift from waterfall software development models to agile development models, customers and developers alike must ensure that adequate contractual mechanisms are in place, which accurately reflects the new software development methodology. Considering the significant differences between the two models, the adaptation of classic waterfall software development agreements is not recommendable, as there will always be a risk of significant gaps in the protection granted to the parties.

Roles and procedures are the core elements of any agile software development agreement and collaboration of the parties represents the shell. Disputes should be treated as a natural part of the process and should be solved amicably through adequate mechanisms without bringing the progress to a full stop.

Agile models represent a success story and are here to stay. It remains the job of legal professionals to ensure that the agreements keep up with the rapidly changing trends in the technology sector. In the end, flexibility doesn’t mean anything without adequate safeguards.

bpv Huegel Partner Christian F. Schneider honoured at the prestigious Client Choice Awards 2020

Christian F. Schneider, Partner and Head of Public Economic Law at bpv Huegel, was honoured in London with the Client Choice Award 2020 in the category “Energy & Natural Resources” for Austria.

The Client Choice Awards, which have been presented by the International Law Office together with Lexology since 2005, honour lawyers around the world that stand apart for the excellent client care they provide and the quality of their service. The criteria for this recognition focus on the ability to add real value to the clients’ business above and beyond the other players in the market. Nominations can only be made by in-house counsel.

“The prize I was awarded is a very special recognition for my work since it confirms the particular confidence my clients have in me” Christian F. Schneider is delighted after the award of the prize.

Like in the years before, the award of the prizes took place during a gala dinner in London in the impressive building of the Institution of Civil Engineers at One Great George Street, in close proximity to Westminster Abbey.