CONFLICT OF LAWS VERSUS CONFLICT FOR LAWS: A REGIME OF IPR INFRINGEMENT WITH RESPECT TO PATENT LAW

Abstract

Private International Law or popularly termed as “Conflict of Laws” is that part of legal science that is not an act of the legislature or a code but a breviloquent term used to define cases having a foreign element, which are concerned with individual rights and obligations. One of the crucial issues in the conflict of laws is the “choice of forum,” which leads to complexities as the international economies are now interlinked forming as one single market entity where trading of technology, innovation, artistic work, etc takes place amongst the individuals generating one of the most crucial economical rights known as “Intellectual Property Rights” in an IP. IP protection is territorial in nature and is governed by municipal laws. However, IP easily transcends national boundaries because it is intangible giving rise to IP infringement cases involving foreign elements raises the issue regarding the choice of the appropriate forum.

Deviation From the Principle of Territoriality and Foreign Land Rule

The two theories of conflict of laws which are Territorial as well Local Law Theory somehow restricts the inference of the court of sovereign state while applying foreign law or foreign judgment. The principle of Forum non conveniens, is applicable to a jurisdictional dispute where the claim formed has been lawfully served within the said jurisdiction, but the defendant asserts that the claim should be handled in a different and more suitable jurisdiction. The said principle is applicable in international forums only and has no applicability in Indian domestic forums[i].

Lord Cowan in Clements v. Macaulay[ii] observed that the jurisdiction that is most suitable for pursuing the litigation is preferred because it increases the likelihood that the ends of justice will be achieved. This is what is meant by the phrase “forum non conveniens.” Similarly, the applicability of the said principle was discussed in the case of Sim v. Robinow[iii], in which Lord Kinnear has observed that unless the court is convinced that there is another tribunal with sufficient jurisdiction where the case may be tried more suitably for the interests of the parties and for the goals of justice, the plea of Forum non conveniens cannot be sustained.

Further, with regards to the choice of forum, consideration should be given to the needs of all parties so as to achieve the ends of justice by taking into consideration the entire issue and not only the claim and the relief which the claimant sought to achieve[iv]. It is to be said that jurisdiction is not to be decided only on the basis of the presence of a foreign element but consideration should also be given to all the connecting factors while determining the intention of the parties in conflict. In Lazar v Allianz) case [v], the Court of Justice of European Union observed that England was indicated as being the proper forum due to the location of the wrongdoing and the loss as well as the likelihood that English law would apply.

IPR and the Conflict of Law

IP is an abbreviation of the terms “Intellectual” which means creation of human mind, and “Property” which can be in the form of creation, expression, invention, and innovation. The State grants protection through registration, enumerating the characteristic of sovereignty which while regulating any dispute resulting from the infringement of IP right applies its domestic laws. However, the issue arises when the said infringement involves a foreign element, some instances are conflict of geographical indication with trademarks, passing off action, Piracy or Infringement of copyright in Designs or overlap of design protection with a well-known trademark. With the evolution of science and technology, there has been an increase in number of protections against a product or a process in the form of patent right. This exclusive right can be subject to breach of utmost good faith and legal right in any foreign jurisdiction leading to the issue of conflict of forum. The cross-border IP protection has been a subject of discussion especially in case of patented rights. In the landmark case of British South Africa Co v Cia de Moçambique[vi] it was held that that claims for damages in relation to infringement of property rights in another country cannot be brought in an English Court.

The case of Potter v Broken Hill Pty Co Ltd[vii] provides for an extension to Moçambique rule by applying the act of state doctrine to patent infringement claims which was somewhere a prospective negative declaration of non-adjudication in a foreign jurisdiction. In Hesperides Hotels Ltd v Aegean Turkish Holidays Ltd[viii],  Lord Wilberforce observed that the foreign land rule potentially allowed for access into and involvement in politically delicate matters which will create a conflict with the requisite foreign jurisdiction. Tyburn Productions Ltd v Conan Doyle[ix] it was held that in England, it was not possible to file a lawsuit for US copyright infringement.

However, the Moçambique rule has to a certain extend has been dissolved. This can be observed through a case of Lucasfilm Ltd and others v Ainsworth and another[x] in which it was held that the claims for the infringement of foreign copyrights are not covered by the common law principle that an English court lacks the authority to hear an action for damages for the invasion or infringement of property rights in another country. Even the said rule was also taken into exception in case of patent infringement. In other words, the act of state doctrine was not to be applied in patent licence related disputes[xi].

These observations of the Court showcase the fact that how the Courts who once used to be apprehensive in interfering with the foreign jurisdiction due to political policies have evolved their jurisdiction on the premises that the interference is possible to the extent till it does not passes the validity of the acts of foreign governments. There has been a constant effort to liberalise the procedural law in private international law pertaining to “IP” infringement. One such instance is the observation of American Law Institute, according to whom international intellectual property rights should be adjudged, at least in cases of patent right where there are no claims regarding issue of validity[xii]

Further there is an exception to domicile rule of private international law in cases of intellectual property rights. Article 22(4) of the Brussels I Regulation provides for an exclusive jurisdiction to courts of the member states over IPRs which are deposited or registered irrespective of the domicile of the defendant, however the exclusivity does not extend to the infringement of IPR. Further, one of the shortcomings of Article 22(4) is that it does not applies to non-member states.

Complexities in Patent Right

Patent right is generally territorial, where the patent holder has a monopoly right in a nation state where it is registered. The said monopoly is restricted to that nation state only. So, if a patent holder wants to extend its right in other countries, then there has to be separate registration for each patent in different countries, which will again increase the complexities in the adjudication procedure raising the issue of required forum[xiii].

With the advent of the global FRAND license, every court tries to adjudicate the case involving the dispute related to “standard-essential patents” or SEPs, this will again lead to a multiplicity of judgments which will, in turn, leads to difficulty in the enforcement of foreign judgments. To prevent this, arbitration is the only currently available supranational dispute resolution method, and it is the only definite option to avoid any discrepancies in the judgments. However, if the parties decline to arbitrate, the national courts must handle the ensuing jurisdictional disputes keeping in mind the international comity[xiv].

Conclusion

The intricate difficulties that arise in cases involving intellectual property are the legality, ownership, infringement, and contractual components that transcend various jurisdictions. The solution to prevent multiplicity of proceedings is the Alternate Dispute Resolution mechanism resulting in the enforcement of international arbitral awards. Although there is no such regulation or convention which provides for the conflict of laws in IPR, however, attempts are made, for instance the International Association for the Protection of Intellectual Property adopted a resolution in 2003 that suggested guidelines for jurisdiction and the applicable legislation in intellectual property cases. The breakthrough was in the year 2011 when the Munich-based Max Planck Institute developed the Conflict of Laws in Intellectual Principles [xv]. The said principles provided the guidelines regarding jurisdictional matters, the law to be applied, etc.

 If a case involves various connecting factors involving a foreign element, it is important for the domestic court to determine the appropriate forum which can be determined through various factors like the cause of action i.e., the place where the infringement took place. Further apart from judicial scrutiny, it is important to have domestic legislation upon private international law especially dealing with IP law in accordance with various conventions to which India is a signatory. Furthermore, the said legislation or the provision is a need due to the growth in technological invention especially in this digital era where accessibility to the creators’ invention or innovation is so easy which violates its economical as well as moral rights.

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[i] FMC Corporation and another v NATCO Pharma Limited, 2020 Indlaw DEL 1305.

[ii] 1866 4 M. 583, 594.

[iii] 1892 19 R. 665.

[iv] Conversant Wireless Technologies Sàrl v Huawei Technologies Co Ltd & Ors [2019] EWCA Civ 38. 

[v] [2016] 1 W.L.R. 835.

[vi] [1893] AC 602.

[vii] [1905] VLR 612.

[viii] [1979] AC 508.

[ix] [1991] Ch 75.

[x] [2011] UKSC 39.

[xi] Fairchild Semiconductor Corpn. v Third Dimension (3D) Semiconductor, Inc (2008) 589.

[xii] “The American Law Institute Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes”, ALI Publishers (2008).

[xiii] Brussels I Regulation. art. 24(4) and 27.

[xiv] Nokia Technologies OY v Oneplus Technology (SHENZHEN) CO LTD, [2022] EWCA Civ 947.

[xv]“Principles for Conflict of Laws in Intellectual Property”, The Draft Prepared by the European Max Planck Group on Conflict of Laws in Intellectual Property, https://www.ip.mpg.de/fileadmin/ipmpg/content/clip/the_draft-clip-principles-25-03-20117.pdf.