Navigating Territoriality: Intellectual Property Law in the Digital Age

It is a truism that intellectual property (IP) law is based on the principle of territoriality.[1] The principle of territoriality is crucial in international intellectual property (IP) law, forming the basis for various international IP conventions. In intellectual property law the international law framework continues to be heavily infused with territorial principles.[2] Essentially, this principle asserts that each sovereign state holds the authority to define the existence and scope of IP rights within its borders. Unlike other private rights acknowledged across states, IP rights of foreign nationals aren't automatically recognized. In some cases, it is sufficient for a foreign national's representative to fulfill the registration requirements in the legislation of the second state for the registration of the work.

The rationale behind this principle is rooted in significant state and public interests associated with IP rights. For instance, patents require explicit state grants, and even copyright, originating without a direct state grant, is vital for democratic states in terms of public access to information. States grant and protect IP rights to achieve economic, social, and cultural policy objectives. This involves incentivizing the creation and dissemination of new works while balancing the public's interest in accessing these creations.[3] IP rights also serve to regulate competition within domestic markets. Territoriality, in this context, preserves each state's sovereignty, enabling it to determine its economic, social, and cultural policies without external interference. The international IP conventions not only reflect but also reinforce the territoriality principle, emphasizing the significance of respecting each state's autonomy in shaping its IP policies and regulations. Intellectual property rights are limited territorially; they exist and can be exercised only within the jurisdiction of the country or countries under whose laws they are granted.[4]

Any discussion of territorial scope must consider the ambiguity involved in localization—the determination of the location of acts and circumstances in relation to which the reference to territorial scope is made.[5] In cases of online infringements, the act or circumstance can be dispersed across various locations. The infringement could be perceived in multiple places, such as where the infringer entered commands, where users were during the program download, and even where the servers hosting the program file were situated. The impact of these infringing acts reverberates globally, affecting all countries where the program was made accessible, held copyright protection, and was downloaded by users.

One notable aspect is the potential impact on the rights owner's place, where the repercussions on revenue are felt, evident in accounting records. However, due to the territorial nature of IP rights, the injury to the rights owner is typically acknowledged only in the territory where the IP rights are established.[6]?

This confines the location of the injury to where IP rights exist, suggesting that the rights owner's place should be recognized as a venue of infringement through the effects of an infringement only if and to the extent that the rights are present there. Territorial disparities arise from conflicting considerations of claims and remedies, prompting rights owners to seek remedies with a territorial scope different from their claims. While it may seem logical for both claims and remedies to be shaped by identical considerations – that is, rights owners maximizing their remedies – this holds true only if the territorial scope of available remedies aligns with the territorial scope of claims.

In addressing the validity of registered IP rights like patents, trademarks, or designs, courts often refrain from making judgments on the validity of foreign IP rights. Even if validity questions arise initially, many courts opt not to delve into these issues. They often cite doctrines like the act of state doctrine, emphasizing respect for the sovereignty of other countries, as reasons for abstaining from determining the validity of foreign-registered IP rights.

The prevailing standard in international law is national treatment, as argued persuasively by Professor Bradley.[7] He contends that applying IP law extraterritorially is incongruent with existing international legal norms. In the introduction to one of his books, the distinguished international legal scholar, Thomas Franck, begins with the assertion that concepts of sovereignty require careful reconsideration, especially in light of the profound impact of the communication revolution.[8]The communication revolution, marked by remarkable advancements in information technologies and infrastructure over the last few decades, has significantly facilitated the generation, packaging, and transmission of information globally. The Internet, in particular, has played a pivotal role in minimizing both cost and distance to almost negligible levels.

The advancement of the internet has changed the underlying assumptions of traditional copyright law since technological developments have made copyright material easier to access and reproduce, and more difficult to protect.[9] Furthermore, digital contents transmitted over the Internet evoke unique copyright issues. With the view to adequately prepare students to a legal practice increasingly oriented by the Internet, the present law curriculum needs to embrace subjects as they pertain to the Internet.

Developing and implementing technological solutions, such as digital rights management (DRM) and blockchain, can enhance IP protection on the internet. These tools aim to secure and trace digital content to prevent unauthorized use. Moreover, the information economy has increased innovation not only in product design, but also in theories of anticompetitive exclusion. The economic theory of network effects has been a particularly fertile field for novel arguments that a leading firm's competitive practices are harmful to consumer welfare, not merely to its rivals[10] which sows the cons of the internet.

In summary, IPRs are also one of the areas where for more than a century government have tried to reach a certain harmonization.[11]

The principle of territoriality is foundational in international intellectual property (IP) law, granting each sovereign state the authority to regulate IP rights within its borders. This principle, essential in various international IP conventions, ensures that IP rights of foreign nationals are not automatically recognized, and eligibility criteria create parallel rights adhering to territoriality.

Discussion on territorial scope highlights the challenges of online infringements with acts dispersed across locations. The territorial nature of IP rights confines injury recognition to where these rights exist. Territorial disparities arise in conflicts between claims and remedies, requiring alignment for resolution.

As technology continues to advance, there is a growing need to adapt intellectual property laws to the digital age. Some argue for a reevaluation of the territorial nature of IP, suggesting that a more global and uniform approach is necessary to effectively address the challenges posed by the Internet. However, achieving consensus on such changes requires navigating complex legal, cultural, and economic considerations. Law curricula must adapt to include comprehensive Internet-related subjects. Over a century, global efforts have aimed at harmonizing Intellectual Property Rights (IPRs), overcoming nineteenth-century disparities in diverse IP laws adopted by nations.

?

References

[1]? Territoriality in Intellectual Property Law - Lydia Lundstedt, Stockholm University 2016

[2] Curtis A. Bradley, Territorial Intellectual Property Rights in an Age of Globalism, 37?Virginia Journal of International Law?505-85 (1997)

[3]? Territoriality in Intellectual Property Law - Lydia Lundstedt, Stockholm University 2016

[4] ?WIPO HANDBOOK - https://tind.wipo.int/record/28661?ln=en? - Chapter 1 - Introduction – p. 7

[5] Trimble, Marketa, "The Territorial Discrepancy Between Intellectual Property Rights Infringement Claims and Remedies" (2019). Scholarly Works. 1251. https://scholars.law.unlv.edu/facpub/1251

[6] Toshiyuki Kono. "Jurisdiction and Applicable Law in Matters of Intellectual Property" , General Reports of the XVIIIth Congress of the International Academy of Comparative Law/Rapports Généraux du XVIIIème Congrès de l’Académie Internationale de Droit Comparé, 2012

[7] Adeno Addis, The Thin State in Thick Globalism: Sovereignty in the Information Age, 37 VAND. J. TRANSNAT'l L. 1 (2004).

[8] Thomas M. Franck, Fairness in International Law and Institutions (1995)

[9] Kinfe Micheal Yilma & Halefom Hailu Abraha, The Internet and Ethiopia's IP Law, Internet Governance and Legal Education: An Overview, 9 MIZAN L. REV. 154 (2015)

[10] John E. Lopatka & William H. Page, Antitrust on Internet Time: Microsoft and the Law and Economics of Exclusion, 7 SUP. CT. ECON. REV. 157 (1999).

[11] Dutfield, Graham, and Uma Suthersanen. Dutfield and Suthersanen on Global Intellectual Property Law : Second Edition, Edward Elgar Publishing Limited, 2020. ProQuest Ebook Central, https://ebookcentral.proquest.com/lib/uea/detail.action?docID=6029051.

?