on Jurisdiction and Foreign Judgments in Civil and Commercial Matters (the 1999 draft Hague Convention)‟ by the Hague502 provided similar provisions relevant to Internet IP infringement, our analysis will be based on the Principles.
(1) § 201 Defendant’s Forum -the general rule of jurisdiction
§ 201 of the Principles503 provides that “(1) a defendant may be sued in the courts of the State where that defendant is habitually resident. (2) For the purposes of these Principles, an entity or person other than a natural person shall be considered to be habitually resident in the State (a) where it has its statutory seat, (b) under whose law it was incorporated or formed, (c) where it has its central administration, or (d) where it has its principal place of business.”
The defendant‟s forum is defined as the place of habitual residence. But no definition of „habitual residence‟ has been given by the Principles, and the courts in different countries may have different interpretations of it. According to the English law, habitual residence “refers to a man‟s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.”504 If the place of „habitual residence‟ is adopted as the defendant‟s forum, it cannot overcome the difficulties in Internet IP infringement cases involving many infringers. Because it is hard for the claimant to choose which infringer‟s habitual residence he should sue at since all the infringers may contribute, in small amounts, to infringement.
(2) § 204 Infringement Actions- the rule of special jurisdiction
502
In January 2001, WIPO Forum on Private International Law and Intellectual Property provided „the Draft Convention on Jurisdiction and Foreign Judgments in Intellectual Property Matters‟ (the Draft Convention, WIPO/PIL/01/7), which is adapted from the 1999 draft Hague Convention.
503
This provision is the same as Article 3 of the 1999 draft Hague Convention and Article 3 of the Draft Convention.
504
§ 204 of the Principles505 provides that “(1) a claimant may bring an infringement action in the courts of (a) any State where defendant substantially acted (including preparatory acts), or threatened to act, in furtherance of the alleged infringement, or (b) any State to which the alleged infringement was directed, including those States for which defendant took no reasonable steps to avoid acting in or directing activity to that State. (2) If an action is brought in the courts of a State only on the basis of the direction of the alleged infringement to that State, then those courts shall have jurisdiction only in respect of the injury arising out of unauthorized use occurring in that State, unless the injured person has his habitual residence or principal place of business in that State.”
This provision is more precise than the corresponding Article 5(3) of the Regulation which merely refers to “the place where the harmful event occurred or may occur”. In the Bier case,506 the ECJ
explained that the expression “the place where the harmful event occurred” covered both the place
where the damage occurred and the place of the event giving rise to it.507 The wording of the Principles refers to both places. The provision also mirrors the Shevill decision of the ECJ, which allowed a court having jurisdiction on the basis of the damage occurring in a State to award the compensation only for the damage suffered in that State.508
More importantly, this provision seeks to adapt the traditional criteria to the Internet context. On the one hand, it enlarges the scope of the forum‟s competence in the case of multi-territorial infringements. On the other hand, it limits competence when the defendant has endeavored to
505
This provision is similar with Article 10 of the 1999 draft Hague Convention and Article 6 of the Draft Convention.
506
Case 21/76, Handelskwekerij G. J. Bier B. and Another v Mines de Potasse d’Alsace S.A. [1978] Q.B. 708.
507
ibid., at 730.
508
Blumer, F., „Jurisdiction and Recognition in Transatlantic Patent Litigation‟, (2001) 9 Tex. Intell. Prop. L. J. 329, at 390.
avoid acting in a particular territory.509
Section 204(1)(a), designating the competence of “State where defendant substantially acted (including preparatory acts), or threatened to act, in furtherance of the alleged infringement,” recognizes that an infringement may originate in States other than the one in which the defendant resides or has its principal place of business. For example, the defendant may reside in Country A, but make the alleged infringement through a server located in Country B. When jurisdiction is asserted on this basis, the forum is competent to hear all infringement claims arising out of the communication of the infringement from the forum, whatever the territorial extent of the resulting infringements.510
Section 204(1)(b) confers jurisdiction wherever “the alleged infringement was directed, including those States for which defendant took no reasonable steps to avoid acting in or directing activity to that State.”
Regarding „directing‟, the factors such as whether business is conducted via the website and the degree to which the site is interactive should be considered.511 If a defendant clearly does business with customers of a country through its highly interactive website, the courts of that country can have jurisdiction. If a defendant merely posts information on its passive website which is accessible in the country concerned, there are usually no grounds for exercising jurisdiction. In the middle ground where a website is interactive and the customers can exchange information with the website, the exercise of jurisdiction is determined by examining the level of interactivity and the commercial nature of the website.512 However, in recent years, it is rare to find a passive website
509
The ALI, Intellectual Property Principles Governing Jurisdiction, Choice of Law and Judgments in Transnational Disputes, at Comments for § 204 Infringement Actions.
510
ibid.
511
ibid.
512
and most websites are interactive ones, which reveals limits of the above Zippo test. Moreover, interactivity is not determinative. In some circumstances, a passive website or a website in the middle ground may target the forum country for commercial purposes. In such a situation, after having decided the level of interactivity of the website, the court will determine the intention of the website owner. However, the difficulty still exists. For example, what criteria we should apply to determine the existence and degree of commercial activity. In the field of Internet trademark infringement, as trademark laws in different countries may have different criteria, the courts of these countries may make different decisions for the same infringement.
Other factors would be considered: the content of the communication, including advertising, language, the currency in which prices are quoted, the sizes in which items are described, and the extent to which the topics discussed on the site are of specific interest to an audience in the country concerned.513 However, there are difficulties in applying these factors. For example, if a website accepts credit cards, it means that all currencies handled by major credit cards are possible. Those websites employing the English language that do not require any payment are even more problematic. In the Internet copyright infringement context, a library may operate a website that allows Internet users all over the world to download the infringing material. Will the owner of such a website be subject to jurisdiction everywhere in the world under the directing approach?514
(3) § 221 Multiple Defendants-the jurisdictional rule for multiple defendants
§ 221 of the Principles515 provides that “(1) a claimant bringing an action against a defendant in a court of the State in which that defendant is habitually resident may also proceed in that court513
The ALI, Intellectual Property Principles Governing Jurisdiction, Choice of Law and Judgments in Transnational Disputes, at Comments for § 204 Infringement Actions.
514
Franklin, J. A. and Morris. R. J., „International Jurisdiction and Enforcement of Judgments in the Era of Global Networks: Irrelevance of, Goals for, and Comments on the Current Proposals‟, (2002) 77 Chi.-Kent L. Rev. 1213, at 1257-1258.
515
This provision is similar with Article 14 of the 1999 draft Hague Convention and Article 10 of the Draft Convention.
against other defendants not habitually resident in that State if the claims against the defendant habitually resident in that State and the other defendants are so closely connected that they should be adjudicated together to avoid a risk of inconsistent judgments, and (a) as to each defendant not habitually resident in that State, there is a substantial connection between that State‟s intellectual property rights at issue and to the dispute involving the habitually resident defendant, or (b) as between the States in which the other defendants are habitually resident, and the forum, the forum is the most closely related to the entire dispute. (2) Paragraph (1) shall not apply to a codefendant invoking an exclusive choice of court clause agreed with the claimant and conforming with § 202.”
This provision is based on the corresponding Article 6(1) of the Regulation. It adds a limitation that could solve due process issues under the US Constitution. Section 221(1)(a), which requires
“a substantial connection” between the defendant‟s activity and the intellectual property of the
territory, essentially utilizes an „effects test‟ to establish personal jurisdiction under the Due Process Clause.516
Section 221(1)(b) is intended to resolve disputes arising from the „spider and web‟ situations. It can allow the owner of parallel IP rights to sue all the connected defendants before one court. This is particularly useful in the Internet context where parallel IP rights are often infringed by multiple defendants simultaneously. However, it is hard to determine the forum, which is „the most closely related to the entire dispute‟. The courts in different countries may have different opinions on it. The consequence will be that multiple courts may regard themselves as being the most closely related to the entire dispute and take jurisdiction over essentially the same dispute. For Internet IP
516
The ALI, Intellectual Property Principles Governing Jurisdiction, Choice of Law and Judgments in Transnational Disputes, at Comments for § 221 Multiple Defendants.
infringements where parallel IP rights are more likely to be infringed, the consequence will be worse: many courts may exercise jurisdiction over essentially the same Internet IP infringement on the basis that they are most closely related to the entire dispute.517