(D) Private International Law, Harmonization and Intellectual Property

277 The fundamental difficulty in coping with legal relationships involving foreign elements flows from the fact that the legal systems of more than one country may reasonably be found to have a connection with them. The application of the laws of one system, rather than the other, in most cases will lead to different results. One solution to this problem consists of selecting, based on certain criteria, from among the various potentially applicable legal systems, the laws of one particular legal system, to govern the legal relationship. This, in essence, is the exercise of determining the applicable law under a private international law approach. It is also the solution which encroaches the least on existing national law, because it requires no changes to such law in order to resolve the problem posed by the presence of the foreign element.

278 A radically different solution, which is much more intrusive on existing national law, consists of trying to remove, through a process of harmonization, the source of the problem by eliminating the differences that exist between the laws of countries on a given issue. 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 in line with the treaty provisions.

279 Apart from private international law and substantive harmonization of national laws, there exist also other means of dealing with problems resulting from cross-border legal relationships which may be considered to fall in between those categories in terms of their effect on existing national laws. Examples of the latter category in the intellectual property field include, for instance, the principle of national treatment. In the industrial property area, this principle is enshrined in Article 2 of the Paris Convention, which states as follows:

“Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.”

A similar requirement of national treatment exists in copyright and is contained in Article 5 of the Berne Convention providing that “[a]uthors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.” While the national treatment principle is aimed at resolving certain questions arising from the presence of foreign elements in a legal relationship (namely, persons desirous to protect their intellectual property in a foreign jurisdiction), this is not achieved through harmonizing the laws concerned. Indeed, the national treatment principle does not require nations to amend any substantive aspect of their intellectual property regimes, but merely requires them to allow foreigners to benefit from these regimes to the same extent and in the same manner as their nationals, without any discrimination with respect to the acquisition, maintenance and enforcement of the rights concerned. Neither does the national treatment principle reflect a private international law approach, as it does not purport to designate the law of any particular country that is to govern an intellectual property issue involving a foreigner, but merely states that foreigners should not be treated differently than nationals with respect to intellectual property issues.³⁹⁵

280 These differing approaches – reliance on private international law, substantive harmonization, or the application of general principles such as national treatment– are not mutually exclusive. On the one hand, private international law rules themselves are sometimes harmonized through treaties. On the other hand, even in areas where harmonized international rules exist, divergences often remain in the implementing legislation of States parties to the relevant treaties, which again may require resorting to private international law techniques to cope with them. Furthermore, harmonization treaties often include a combination of the various approaches. Which approach is preferred in relation to a particular question will depend primarily on the nature of the issue, the needs of parties whose interests are most affected by such issue and the degree to which States are willing to modify their municipal laws on the point in question.

281 Historically, for certain branches of the law, the emphasis has been on private international law solutions as a means of dealing with issues arising from cross-border legal relationships, while for other branches, the prevailing trend has been to try to harmonize the relevant norms. The three great international intellectual property treaties, the Paris Convention, the Berne Convention and the TRIPS Agreement, all place the emphasis on harmonization, both in terms of substance and procedure, and contain few provisions that could be characterized as rules of private international law. Nonetheless, they do not exclude a private international law approach altogether. A classic example in the latter regard is Article 5(2) of the Berne Convention, which states that “the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.”³⁹⁶ More recently, negotiations during the WIPO Diplomatic Conference on the Protection of Audiovisual Performances (December 7 to 20, 2002) on the question of the international recognition of the transfer of rights of audiovisual performers centered at least in part on a possible private international law approach in order to bridge differing positions among delegations.³⁹⁷

282 The relatively modest attention which has been brought to private international law as a means of resolving problems arising from the presence of foreign elements by the intellectual property system results from three essential features: (a) the territorial nature of the intellectual property system, (b) the need for introducing minimum intellectual property standards across jurisdictions and (c) the reliance of the intellectual property system, notably in industrial property, on registration as a means of enabling, or at least, facilitating the protection of the rights concerned.

(i) Territorial Nature of The Intellectual Property System

283 Intellectual property law is “territorial,” because its geographical scope of application is defined by and restricted to the boundaries of the nation. Each country determines, for its own territory and independently from any other country, what is to be protected as intellectual property, who should benefit from such protection, for how long and how protection should be enforced. Consequently, the fact that a person may have a valid and enforceable intellectual property right in one country, as such, has no bearing on whether that right will be recognized in another country. The territorial nature of intellectual property law is at least partially explained by its use as an instrument of economic and cultural policy by States. Intellectual property grants exclusive rights, in effect monopolies, which are intended, on the one hand, to stimulate market actors to invest in new creations by offering them a framework for reaping the rewards of their investments and, on the other, to safeguard the integrity of artistic works, as well as the reputation of artists. The determination of the conditions which have to be met for such rights to be granted, and of any exceptions to them, requires a careful balancing of competing interests. Traditionally, States have jealously guarded the power to strike the appropriate balance for their own jurisdictions, and such power has come to be accepted as an essential attribute of sovereignty. Historically, this deeply engrained notion of territoriality has restrained the reliance on private international law approaches in an intellectual property context. As noted by Cornish:

“[I]t is conceivable that nations would agree to treat inventors and authors as having personal rights to patents or copyright which are determined by their country of origin. In principle, then, they would be able to carry their rights thus defined to other countries and demand recognition and enforcement there. Thus, an author from country A which gives copyright for the author’s life and 50 years would be able to demand that period of protection in country B, even though its local law is limited to a copyright of (say)

56 years. The same would be true of the range of material protected and the scope of the rights granted. In the early period of industrialization, the political unacceptability of this approach was soon enough appreciated and instead the territorial character of intellectual property became widely accepted during the nineteenth century.”³⁹⁸

284 Enhanced application of private international law techniques in the intellectual property arena would require increased deference on the part of States to each other’s policy choices in the areas of copyright, trademarks and patents. The historical prevalence of the territoriality principle suggests that there are limits to the degree of flexibility which States are prepared to exhibit in this connection.

(ii) The Need For Minimum Standards of Intellectual Property Protection

285 Resort to private international law techniques to resolve cross-border intellectual property disputes in a world where many countries have deficient intellectual property systems makes little sense, as conflict of law rules may designate the laws of countries with substandard intellectual property rules to govern a particular question. In other words, a functioning multilateral private international law regime for intellectual property presupposes that the intellectual property laws of most nations have reached a certain level of maturity. While many countries may be deemed to have reached that level several generations ago, the recognition of the need for robust intellectual property laws by countries worldwide is a relatively recent phenomenon, which initially manifested itself in the seventies and was accentuated by the conclusion of the TRIPS Agreement.³⁹⁹

(iii) A System of Registered Rights

286 One important component of the intellectual property system, namely industrial property, relies heavily on the concept of registration as a means of protecting rights. Typically, a producer will first secure its position in the local market by obtaining the necessary registrations there, later expand his business to foreign markets and obtain equivalent registrations in those jurisdictions. As a result of intellectual property’s territoriality, each nation determines its own conditions and procedures for the acquisition of the registrations in question, and registrations must be obtained for each jurisdiction in which protection is sought. Producers who have a global market presence, and therefore must file for protection in multiple countries, are faced by a maze of differing registration conditions and formalities.

287 Already in the nineteenth century, it was realized that this situation could severely hamper the development of international trade and that some measure of coordination between the various national intellectual property systems had to be introduced. This policy objective has been, and continues to be, of such paramount importance that the creation of linkages and increased coordination between the various national systems of registered rights has tended to dominate the agenda of international industrial property negotiations. The realization of this objective has traditionally been considered far more urgent and effective as a means of enhancing intellectual property protection at the international level, than the creation of a private international law regime specifically tailored to suit intellectual property needs. This is well illustrated by the fact that two of the principal achievements of the Paris Convention, the provisions on national treatment (Article 2), as well as those on rights of priority (Article 4), facilitate the registration of rights by foreigners in local markets, on the one hand, by ensuring that such foreigners are not discriminated against (national treatment) and, on the other, by offering applicants reasonable time to file applications in multiple countries (right of priority). Two other major milestones in international industrial property, the Madrid System and Patent Cooperation Treaty, essentially are a large-scale exercise in trying to mitigate the negative effects of the existence of different national and regional systems for the registration of trademarks and patents.