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Rotstein, Fiona --- "Is there an international intellectual property system? Is there an agreement between states as to what the objectives of intellectual property laws should be?" [2011] UMelbLRS 1

Last Updated: 14 March 2011

“Is there an international intellectual property system? Is there an agreement between states as to what the objectives of intellectual property laws should be?”

FIONA ROTSTEIN[#]

Melbourne Law School, University of Melbourne

This article was first published in the European Intellectual Property Review, Volume 33, Issue 1, 2011

Abstract

This article contends that there is an international intellectual property system, and the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) sheds light on what the objectives of intellectual property laws should be. However, there are difficulties that occur when applying principles of private international law to multi-jurisdictional intellectual property disputes (particularly in the Australian context) in light of internet technologies.

Introduction

Although there is no ‘international’ intellectual property right that may be sought by an applicant, such as an international patent or trade mark, it is incorrect to say that there is nothing that is either ‘international’ or ‘systemic’ about the international intellectual property system. The World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”)[1] provides for a number of key objectives as to the operation of the international intellectual property system. The TRIPS Agreement recognises that there are various competing principles that need to be balanced in order for the international intellectual property system to work effectively. Unlike physical objects which must be posted by mail, chartered by flight or sent by sea in order to cross geographical borders, intellectual property moves across country boundaries with relative ease. As an intangible asset, intellectual property is able to be transferred from one nation to another without having to be packaged, wrapped or boxed. This tendency made intellectual property one of the first areas of the law to be subjected to international regulation by the operation of international treaties. With the arrival of digital technology and networked communication systems, intellectual property rights have become even more international as sounds, text and images can zig zag across countries in seconds. However, the advent of the internet has also brought with it a number of challenges relating to the adequacy of private international law in matters of intellectual property. This article argues that although there is an international intellectual property system, due to the territorial nature of intellectual property rights, there are various private international law issues (particularly in the Australian context) that exist relating to jurisdiction and dispute resolution.

The factors that give rise to an ‘international intellectual property system’

One of the main impediments in perceiving an international intellectual property system is the fact that intellectual property rights are territorial in nature. The general principle is that the laws of one nation state apply only within that nation state. As Ginsburg and Lucas note:[2]

‘Each country determines, for its own territory and independently from any other country, what it is to be protected as intellectual property, who should benefit from such protection, for how long and how protection should be enforced.’

While different countries each have their own intellectual property regimes, there is nonetheless a substantial integration of intellectual property systems internationally. The integration is achieved because of the effects of intellectual property treaties entered into by a number of nation states. Signatories to international treaties voluntary agree to be bound in relation to minimum standards of protection. For monist systems, an international agreement has direct effect and automatically becomes part of domestic law without further action by the national parliament or legislature. For dualist systems, an international agreement becomes part of domestic law if it is implemented by the national legislature.

The various international treaties on intellectual property law seek to do some or all of the following four objectives. First, the treaties endeavour to oblige each state that is a member of the treaty (‘member state’) to provide minimum standards of protection (‘minimum standards’) in that state. As Correa and Musungu observe, ‘The net effect of this principle is that each subsequent bilateral or multilateral intellectual property agreement can only create higher standards but not derogate from the existing minimum standards.’[3] Second, the treaties attempt to oblige each member state to grant nationals of other member states treatment equivalent to that which it grants its own nationals (‘national treatment’). The national treatment principle is therefore one of ‘non-discrimination’ between foreigners and domestic nationals. Third, the treaties aim to oblige each member state to recognise certain acts performed in another member state as providing an entitlement to protection in the first-mentioned state (‘international recognition’). According to Drahos, in this situation, the foreign beneficiary ‘gains the benefit of entry, but not extra rights.’[4] Lastly, the treaties aim to oblige each member state to regard certain applications for registration carried out in another member state as providing a right of priority to make a similar application in the first-mentioned state (‘right of priority’). One of the primary benefits of the Paris Convention[5] is the priority system it grants for patents, utility models, trade marks and industrial designs.[6] The priority system provides that on the basis of a regular first application filed in one of the contracting States, an applicant may, within a certain period of time,[7] apply for protection in any of the other contracting States. These later applications will then be regarded as if they had been filed on the same day as the first application. A right of priority is not affected by third party acts in this period.[8]

Owing to the above four objectives there is a substantial integration of intellectual property systems internationally. This integration has a number of important features. First, by setting minimum standards, the international treaties produce a degree of harmonisation of national intellectual property laws. As Ginsburg and Lucas observe:[9]

‘Harmonization is achieved through the negotiation between States of treaties establishing uniform rules and, after the international instruments in question have been ratified or acceded to by the States concerned, the subsequent modification of municipal laws in order to bring them into line with the treaty provisions.’

Secondly, due to the principle of national treatment, foreigners benefit from intellectual property regimes to the same extent and in the same manner as nationals, without any discrimination regarding the obtainment, protection and enforcement of the rights concerned. In the words of Gurry, Abbott and Cottier, national treatment can be conveyed ‘in its most basic form’ as follows:[10]

‘the government of one country said to another, “We agree to treat your business people (and products) in the same way we treat our own business people (and products).”’

Thirdly, owing to the principles of international recognition and the right of priority, domestic intellectual property laws operate to ensure that intellectual property owners in one state are able to receive protection in other states. For example, the domestic law of Australia gives copyright protection to any literary work ‘first published’ in Australia. Under the principle of international recognition mandated by the Berne Convention,[11] a first publication of a work in the United States is treated as a first publication in Australia – and so that work is protected by copyright in Australia, irrespective of the nationality of the author.

The TRIPS Agreement gives insight into what the objectives of IP laws should be

In addition to there being an integration of intellectual property systems internationally, the TRIPS Agreement provides various statements that shed light on the objectives of intellectual property laws. These statements are contained in the Preamble, the ‘Objectives’ provided by Article 7, ‘Principles’ in Article 8, and the ‘Enforcement of Intellectual Property Rights’ in Part III. The Preamble of the TRIPS Agreement recognises ‘developmental and technological objectives’ as examples of the underlying public policy objectives of national systems for the protection of intellectual property. Regarding the developmental objectives, the Preamble recognises ‘the special needs of the least-developed country Members’ in respect of ‘maximum flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and viable technological base.’ The ‘objectives’ of the TRIPS Agreement as set out in Article 7 relate to a range of competing interests that need to be balanced with respect to what the goals of intellectual property laws should be. Using reasonably new language in terms of international instruments and intellectual property rights, Article 7 provides that protecting and enforcing intellectual property rights should:

‘contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.’

Article 8 also provides various objectives of intellectual property laws. In Article 8(1), reference is made to the protection of ‘public health and nutrition’ and to the promotion of the public interest ‘in sectors of vital importance to...socio-economic and technological development’. Article 8(2) makes reference to measures that may be needed to prevent abuse of intellectual property rights or practices which ‘unreasonably restrain trade or adversely affect the international transfer of technology’. Finally, Part III of the TRIPS Agreement requires that Member States make provision for adequate and effective enforcement of intellectual property rights. It also provides a number of express requirements in terms of the availability of administrative or judicial processes and remedies. For example, Article 41(2) states that procedures concerning the enforcement of intellectual property rights should be ‘fair and equitable’ and ‘not unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays’.

Flaws that exist in the international intellectual property system

Although there is a significant integration of intellectual property systems globally and the TRIPS Agreement provides insight into what the objectives of intellectual property laws should be, there are challenges that occur when applying principles of private international law to multi-jurisdictional intellectual property disputes in light of internet technologies. In the online environment, the territorial limits of intellectual property rights break down and there is an increasing global exploitation of rights. Problems arise with respect to different national laws where rights are protected in more than one territory. Therefore, it is often difficult to know which nation’s courts have jurisdiction over intellectual property disputes involving a foreign element and which conditions need to be met for decisions of foreign courts to be recognised and enforced within a country. It is also not easy to determine which nation’s laws are to be applied to govern the substance of legal relationships involving a foreign element.

If there is a proceeding against multiple infringers, the solution in international conventions is that the plaintiff may proceed in each convention country. However, it is unknown whether the plaintiff can proceed in one forum, e.g. Australia, in respect of multiple infringements in different countries. Due to the territorial nature of intellectual property rights, Australian courts do not have jurisdiction to hear cases involving infringement of foreign rights. Further, owing to the Mocambique rule against jurisdiction over matters relating to foreign land,[12] an Australian court does not have jurisdiction to hear a suit involving foreign intellectual property rights where the owner thereof (e.g. an Australian) is entitled to protection because of an international agreement such as the Berne Convention or the Paris Convention. As the only Australian state or territory to repeal the application of the Mocambique rule is New South Wales,[13] the rule is in need of a High Court of Australia judgment to clarify its application to intellectual property rights. It is indeed a peculiar rule, analogised to fit the intellectual property system that presents an archaic view based on medieval conceptions in the present online environment. Even if the Mocambique rule could be overcome (and an Australian court has jurisdiction over foreign rights), it is unclear which law applies. Alternatives include law of the forum (lex fori); law of the place of infringement (lex loci delicti); law of the plaintiff’s/defendant’s nationality/place of domicile/place of incorporation; and ‘proper law’, a concept that has a role in contract law. However, it is problematic that the solution to this dilemma is based on an arbitrary selection of many laws.

Further, it is unclear whether the choice of law rule for foreign torts is applicable to breach of statutory intellectual property rights. According to the rule in Phillips v Eyre,[14] an act done in a foreign country is a tort and actionable as such in Australia, only if it is both (a) actionable as a tort according to Australian law, or in other words is an act which, if done in Australia, would be a tort; and; and (b) actionable according to the law of the foreign country where it was done.[15] While there was a move towards lex loci delicti/full faith credit in Australia,[16] there has since been a return to Phillips v Eyre.[17] However, there remain various difficulties with Phillips v Eyre, such as: is/was it a rule of jurisdiction, choice of law, or both? If it is jurisdictional, it serves to reinstate the Mocambique rule in another form – there can be no actionability in a forum for foreign infringement. The rule has also been reformulated by the High Court of Australia for interstate torts, where lex loci delicti is applied,[18] and the rule also now applies to international torts.[19] Further, even if the law of place of infringement is adopted, problems arise in identifying the place of infringement, especially in relation to the internet. While there has been an analogy with satellite transmissions as the place of uplift,[20] this creates difficulties with respect to the internet as it operates on the basis of having different servers located in different locations. This may not result in one applicable law and the effects of damage at the place of receipt may be quite different.

There are, however, alternative approaches departing from territoriality. The preferred US ‘root copy’ approach links the action back to the forum and applies the law of the place where the action is brought. However, even if the ‘root copy’ approach is followed, each infringement has to be treated separately in its applicable forum. It is not possible to bring one action based on all possible infringements that occur globally. Other possible solutions are the ‘nerve centre’ approach relating to where the defendant is situated; connecting factors based on ‘proper law’; the law of the author’s country of residence or place of business – the place where harm is ultimately felt;[21] lex fori; graduated approaches; lex mercatoria (for cyberspace); and extra-legal approaches (e.g. domain name dispute resolution procedures under the Uniform Domain Name Dispute Resolution Policy (‘UDRP’) as administered by the Internet Corporation for Assigned Names and Numbers (‘ICANN’)). Thus, it appears that much is up in the air regarding choice of law for the resolution of multi-jurisdictional intellectual property disputes.

However, some guidance is given by Ginsburg and Dreyfus in the American Law Institute (‘ALI’) Principles relating to choice of law. For ‘ubiquitous infringements’, a court may choose the law or laws of the State or States with the ‘closest connection to the dispute’ as evidenced by a range of factors, such as where the parties reside; where the parties’ relationship, if any, is centred; the extent of the activities and the investment of the parties; and the principal markets towards which the parties directed their activities.[22] Another solution proposed is the Hague Convention on Choice of Court Agreements which applies in international cases to exclusive choice of court agreements concluded in civil or commercial matters. The Convention was completed in mid-2005 but is not yet in force. Australia is currently considering adherence. However, the Convention is very narrow in scope as it only relates to the effect of choice of court agreements concerning copyright and related rights, such as performance rights.[23]

Conclusion

Although it can be argued that there is an international intellectual property system and the TRIPS Agreement provides various insights into what the objectives of intellectual property laws should be, there are various issues that need to be addressed regarding the jurisdiction and resolution of disputes involving cross-border exploitation of intellectual property. The above discussion highlights the inadequacies of existing Australian private international law principles concerning the Mocambique rule, choice of law rules, and recognition and enforcement of foreign judgments. However, there are also inadequacies that exist at the international level. While international conventions allow rights holders access to other national systems and provide a platform of uniform standards, it is unclear whether they extend to conferring jurisdiction regarding multi-jurisdictional disputes. According to Helfer, such conventions operate as agreements that ‘authorise individuals and businesses to claim legal entitlements against other private parties in national courts under national laws.’[24] Owing to the core principle of territoriality that informs so much of the international intellectual property system, this article has shown that that there are limits when attempting to resolve multi-jurisdictional intellectual property disputes in an increasingly globalised environment.

[#] LLB, BA, LLM (University of Melbourne). The author would like to acknowledge Professor Andrew F. Christie and Professor Sam Ricketson for providing valuable feedback on earlier versions of this article.
[1] Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1C to the Agreement Establishing the World Trade Organization 1994. Australia is a member of the World Trade Organization (the WTO) and the TRIPS Agreement is an obligation for all WTO members.
[2] J. Ginbsurg and A. Lucas, ‘The Role of Private International Law and Alternative Dispute Resolution’ in WIPO, Intellectual Property on the Internet: A Survey of Issues, Geneva, 2003, par 283.
[3] C. Correa and S. Musungu, The WIPO Patent Agenda: The Risks for Developing Countries, South Centre, 2002, 1.
[4] P. Drahos, Towards an International Framework for the Protection of Traditional Group Knowledge and Practice (2004), 27.
[5] The ‘Paris Convention’ is the short name for the Paris Convention for the Protection of Industrial Property of 20 March 1883 and revised on 14 July 1967.
[6] Paris Convention, Article 4A.
[7] The periods of priority are twelve months for patents and utility models, and six months for industrial designs and trade marks: Paris Convention, Article 4C.
[8] Paris Convention, Article 4B.
[9] J. Ginbsurg and A. Lucas, ‘The Role of Private International Law and Alternative Dispute Resolution’ in WIPO, Intellectual Property on the Internet: A Survey of Issues, Geneva, 2003, par 278.
[10] F. Gurry, F. Abbott and T. Cottier, International Intellectual Property in an Integrated World Economy, Aspen Publishers, Wolters Kluwer Law & Business, 2007, 45.
[11] Berne Convention for the Protection of Literary and Artistic Works 1886 (last revised 1971), Article 5(1).
[12] British South Africa Co v Companhia de Mocambique [1893] AC 602. The Mocambique rule was applied by an Australian court in Dagi v BHP (No 2) [1997] 1 VR 428.
[13] See Jurisdiction of Courts (Foreign Land) Act 1989 (New South Wales).
[14] (1870) LR 6 QB 1.
[15] This rule has been applied by the High Court of Australia: see Koop v Bebb [1951] HCA 77; (1951) 84 CLR 629; and Anderson v Eric Anderson Radio & TV [1965] HCA 61; (1965) 114 CLR 20.
[16] Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41.
[17] See McKain v Miller [1991] HCA 56; (1991) 174 CLR 1 and Stephen v Head [1993] HCA 19; (1993) 176 CLR 433.
[18] See Pfeiffer v Rogerson [2000] HCA 36.
[19] See Regie National des Usines Renault SA v Zhang [2002] HCA 10 (14 March 2002).
[20] See Directive 94/46 with regard to satellite communications [1994] OJ L268/15 (“EC Satellites Directive”).
[21] See WIPO, Joint Recommendation on the Use of Signs on the Internet (2001).
[22] ALI Principles (2007), section 321(1).
[23] See Hague Convention on Choice of Court Agreements, Article 2(2).
[24] L. Helfer, ‘Towards a Human Rights Framework for Intellectual Property’ (2007) UC Davis Law Review 972, 979-980.