1. Intellectual Property & Private International Law Subject Matter / Exclusive Jurisdiction © T. Kono / P. Jurčys

2. ClassDateSubject 115 Oct*Introductory Lecture 222 OctTerritoriality, National Treatment, Personal Jurisdiction 329 OctJurisdiction: Infringements of IPRs 45 Nov Exclusive / Subject-Matter Jurisdiction 512 Nov RMInjunctions, Jurisdiction in Contract-related Matters, Choice of Court Agreements 619 Nov** RMApplicable Law: Territoriality Principle 724 Nov* RMLaw Applicable to Initial Title 826 Nov* RMInfringement of IP Rights 93 Dec (moot)Contracts for the Exploitation of IPRs 1010 DecMultiple Parties in IP Disputes/Consolidation 1117 Dec* BUParallel Proceedings, Custom Measures, 1221 Dec* BUArbitration, Security rights 13 7 Jan BURecognition and Enforcement 1414 JanCross-Border Exploitation of IPRs: Current Issues 15Review & Preparation for the Exam 11/5/12IP & PIL2

3. JURISDICTION: ENTITLEMENT AND OWNERSHIP

4. ENTITLEMENT AND OWNERSHIP: Jurisdiction 1.Who is initial / first owner? 3 authors jointly write a book: who is the first author? Inventor vs third party (competitor/applicant for a patent) Employee inventions: employer or employee? 2.Statutory provisions for automatic transfer of IPRs 1.Contractual transfer (assignment) of IPRs 11/5/12IP & PIL4

5. ENTITLEMENT AND OWNERSHIP: Duijnstee v Goderbauer 11/5/12IP & PIL5 INSOVENCY ADMINISTRATOR INVENTOR (EMPLOYEE and EX-MANAGER) PATENTS IN 22 EUROPEAN STATES TRANSFER OF COMPANY’S PATENTS TO INSOLVENCY ESTATE CAN A DUTCH COURT HEAR A CASE? Jurisdiction…

6. ENTITLEMENT AND OWNERSHIP: Duijnstee v Goderbauer Where to sue under the Brussels I Regulation? Defendant’s domicile (general rule) Exclusive jurisdiction (Art 22(4)): ‘Proceedings concerned with the registration or validity of patents’ Employment contracts: employee can sue In the place where the employer is established Where the employee habitually carries out his work Choice of court agreement? 11/5/12IP & PIL6

7. ENTITLEMENT AND OWNERSHIP: Duijnstee v Goderbauer ‘Proceedings concerned with the registration or validity of patents’ Autonomous interpretation Narrow interpretation (exception of a general rule) Only registration and validity  Entitlement to grant / ownership matters not covered by art 22(4) of the Brussels I Regulation 11/5/12IP & PIL7

8. ENTITLEMENT AND OWNERSHIP: CLIP approach A rule of special jurisdiction was proposed: Article 2:205: Entitlement and ownership As regards entitlement to and ownership of an IP right, the State where the right exists or for which an application is pending shall also have jurisdiction. 11/5/12IP & PIL8

9. JURISDICTION AND OWNERSHIP: Common law countries UK law does not contain any specific ground for disputes concerning entitlement or ownership How would these matters be addressed?  subject-matter jurisdiction limitations extend to cases concerning entitlement and ownership [In the UK: What is actual situation after Lucasfilm?] 11/5/12IP & PIL9

10. SUBJECT-MATTER/ EXCLUSIVE JURISDICTION 11/5/12IP & PIL10

11. Hypothetical 1: Subject-Matter Jurisdiction A court is dealing with a dispute between A and B concerning an infringement of a foreign patent issued in country Y. During the course of infringement proceedings, B makes a counter-claim that the patent is invalid. 1) Would a court have international jurisdiction and would it decide the question of the infringement of foreign IPRs? 2) Would a court have international jurisdiction to decide upon the issues of validity (and registration) of foreign IPRs? If so, what would be the legal effects (inter partes or erga omnes) of such a decision? Would the decision differ with regard to registered and non-registered IPRs? 3) What would be the decision of a court if the question of the validity of a foreign IPR arose as a preliminary question and remained unchallenged by the parties? 11/5/12IP & PIL11

12. 11/5/12IP & PIL12 Production in Thailand; Export to Japan Proceedings in a Thai Court Infringement of a Japanese Patent Defendant’s Domicile & assets in Thailand Infringement / validity of Japanese Patent

13. TERRITORIAL IPRS NATIONAL TREATMENT INTERNATIONAL JURISDICTION 11/5/12IP & PIL13

14. National treatment & territorial IPRs: implications to PIL (jurisdiction) PIL: search for connecting factors Defendant’s domicile Special connecting factors Place of performance Place of tort/damage National treatment IP rights – immaterial: less/no connection to assets Foreign authors ＝ national authors Foreign authors as national plaintiffs Territoriality of IPRs – a factual consequence of national treatment More as a principle, less a rule 11/5/12IP & PIL14

15. EXCLUSIVE JURISDICTION: Validity, registration and other matters ‘Pure’ IP infringement cases Cases where validity is the main issue Validity issues may also arise in: – As a defence in infringement proceedings – A case for declaration of non-infringement – Separate revocation proceedings in another state Existence/validity of IPRs as a preliminary matter Substantive law in practice ‘two sides of the same coin’: ‘Gillette defence’: ‘if the patent is wide enough to cover what I do, then the patent is invalid’ The court has to decide on (1) the scope and (2) validity 11/5/12IP & PIL15

16. EXCLUSIVE JURISDICTION: Validity, registration and other matters Should infringement and validity issues be heard in the same proceedings? Policies or efficiency? (Stakeholders: States, IPR holders, communities…?) 11/5/12IP & PIL16

17. Subject-matter / exclusive jurisdiction: two legal traditions Common-law countries In personam jurisdiction Subject-matter jurisdiction Civil law countries General rule (domicile) Special jurisdiction rules Exclusive jurisdiction 11/5/12IP & PIL17 What legal arguments could justify the existence of subject-matter / exclusive jurisdiction?

18. JURISDICTION: HISTORICAL BACKGROUND 11/5/12IP & PIL18

19. JURISDICTION (common law countries): Moçambique rule Historical Background Local actions: where facts are related to a particular place (eg land-related claims) Transitory actions: no necessary connection to certain place (eg breach of contract) Moçambique case (1893): Action between two British over a land in Mozambique Do English courts have Jurisdiction?: 1.Issues related to title: no jurisdiction because the court would not have power to ensure the execution of the judgment 2.Issues related to trespass to foreign land can be adjudicated and damages may be awarded (BUT local venue must exist) 11/5/12IP & PIL19

20. JURISDICTION: PATENTS Potter v Broken Hill Potter: an Englishman who moved to Victoria In 1901 Potter created many inventions, including a chemical process to separate sulphide ores from valuable metals This invention is used until now in mining industry – ‘Delprat- Potter flotation process’ Patents in New South Wales and Victoria At that time: separate state registrations of patents 11/5/12IP & PIL20

21. JURISDICTION: PATENTS Potter v Broken Hill In 1902 Potter met a manager of Broken Hill, who later patented a very similar process Potter sued Broken Hill in Victoria (defendant’s domicile) : 1.Injunction to restrain from infringing of patent in NSW 2.Infringement of patents in Victoria and NSW 3.Compensation for damages Broken Hill argued that patents are invalid and that the NSW patent is not justiciable in Victoria Court decision: Australian states as foreign nations Adoption of the Moçambique rule: Foreign IPR claims not justiciable & ‘act of state’ doctrine 11/5/12IP & PIL21

22. JURISDICTION: PATENTS After Potter v Broken Hill ‘unfortunate orthodoxy’ ? What about non-registered IPRs (copyrights/ neighbouring rights)? No formalities of registration (Art 5(2) Berne) 11/5/12IP & PIL22

23. THE LAW IN THE US 11/5/12IP & PIL23

24. Jurisdiction & infringement of copyrights: Subafilms Beatles, represented by Subafilms, agreed with Hearst to make animated movie of ‘Yellow submarine’ Many financing agreements were concluded with third parties Rights were granted for showing the cartoon (only) in theatres and on TV From 1980 – Warner produced video cassettes and distributed in the US and abroad Subafilms and Hearst sued Warner and its subsidiaries for monetary relief for damage which occurred in the US and abroad by selling video-cassettes US Court decided only on compensation for damages in the US (claims related to foreign IPRs are not actionable  no subject-matter jurisdiction) 11/5/12 IP & PIL 24

25. CONSOLIDATION IN THE US: Voda v Cordis Corp 476 F 3d 887 (Fed Cir 2007). Voda was a proprietor of a number of EPC patents in the US, Canada and Europe Cordis was a US-based corporation established in Florida (affiliates in France, Germany, Italy, and the Netherlands) Voda filed a patent infringement action in the US claiming also infringements of US and foreign patents District court accepted jurisdiction Reversed decision by the Federal Circuit Court: No supplemental jurisdiction (section 1367) Comity considerations The US courts have no duty under international law to hear foreign IP claims 11/5/12IP & PIL25

26. THE LAW IN THE EU 11/5/12IP & PIL26

27. EXCLUSIVE JURISDICTION: EU Brussels I Regulation Art 2: ‘defendants domicile’ Art 22(4) exclusive jurisdiction proceedings concerning registration or validity of registered IP rights can be brought only before the courts of the country where the right in question is registered Art 22(4): other circumstances (eg domicile, location of property etc) do not matter Only registered IPRs (patents, TMs, designs) The reason behind: sovereignty of states (validity of public acts) 11/5/12IP & PIL27

28. EXCLUSIVE JURISDICTION: EU German law: ‘2-track system’ Infringement cases  ordinary courts (invalidity defence not possible!) (In)validity claims  Federal patent court (Munich) Infringement court can stay proceedings and way for the decision of a dispute on validity 11/5/12IP & PIL28

29. EXCLUSIVE JURISDICTION (EU): Gat v Luk 11/5/12IP & PIL29 GAT and LuK were German companies (car manufacturing) GAT supplied some parts to Ford (in France) Proceedings in Germany (Art 2): GAT sought declaration of non- infringement  argument: French patents are invalid ECJ: patent cases are very complex -Validity questions (main issue or as a defence)  Art 22(4) applies -Legal certainty

30. After GAT v LuK Supporters UK authors: GAT v LuK is in line with the common-law practice GAT v LuK maintains legal certainty Criticism GAT v LuK is contrary to the ECJ Practice Jurisdiction depends on whether the claim on invalidity is raised European Patent Rights (EPC) Abuse of process Expensive litigation – Possible solution?! 11/5/12IP & PIL30

31. RECENT JAPANESE COURT PRACTICE 11/5/12IP & PIL31

32. Exclusive jurisdiction in Japan: ‘Coral Sand’ case(1) Plaintiff: JP producer of ‘coral sand’ Defendant: JP company having a US patent Plaintiff exported and sold through a distributor ‘coral sand’ in the US Defendant issued warning letters to the Japanese producer and the US distributor JP producer filed an action for a negative declaratory judgment Defendant has no right to seek injunction US patent is not valid Warning letters  acts of unfair competition Defendant: JP courts have no jurisdiction (territoriality of IPRs) Plaintiff’s claim should be dismissed 11/5/12IP & PIL32

33. EXCLUSIVE JURISDICTION IN JAPAN: ‘Coral Sand’ case (2) COURT DECISION Defendant’s domicile (Art 4(4) CCP) No special circumstances ‘the principle of territoriality of patents means that the grant, transfer, validity etc. of patent rights of each country is governed by the laws of that particular country. The validity and effects of a patent are to be recognized only within the territory of that country.’ territoriality of patent rights - principle of substantive law  nothing to do with jurisdiction If a Japanese court finds that US patent is invalid, it should not affect the continuation of the proceedings  decision between the parties (inter partes) 11/5/12IP & PIL33

34. RECENT DEVELOPMENTS: LUCASFILM V AINSWORTH AND LEGISLATIVE PROPOSALS 11/5/12IP & PIL34

35. Lucasfilm vs. Ainsworth [2011]UKSC39 11/5/12IP & PIL35

36. 11/5/12IP & PIL36

37. SUBJECT-MATTER JURISDICTION Lucasfilm v Ainsworth: Facts Mr Lucas created characters for Star Wars 50 helmets made by Mr Ainsworth All events took place in England Three plaintiffs (2 Californian and 1 English corporations owned by Lucas) Defendant (Ainsworth) in England Infringement of US copyrights Questions: 1.Justiciability of foreign copyright claims? 2.Jurisdiction according to Art 2 Brussels I? Court of Appeals: 1.Non-justiciable (Mocambique rule) 2.No obligation to assert jurisdiction according to Art2 11/5/12IP & PIL37

38. SUBJECT-MATTER JURISDICTION Lucasfilm v Ainsworth: Decision Mocambique and Potter v Broken Hill rules: do not apply in the EU context (Arts 2 and 22(1) of the Brussels I) Double actionability rule (ie the claim must be actionable in the forum and in the state of act) abolished by 1995 PIL (Miscellaneous Provisions) Act Act of state doctrine: Developed by American courts Should not be applied in copyright infringement cases Justiciability of foreign IPRs: Art 22(4)/GAT v LuK: only registered IPRs  ALI / CLIP Principles No policy issues involved in copyright infringement claims Actions for infringement of foreign copyrights are justiciable if the court has jurisdiction in personam 11/5/12IP & PIL38

39. Lucasfilm vs. Ainsworth (2) Mr Ainsworth: the principle behind the Moçambique rule… still subsists and applies to claims for infringement of all foreign intellectual property rights, including copyright, because such claims are essentially “local” and must be brought in the place where the rights have been created, irrespective as to whether there is any claim to title. The Supreme Court: in the case of a claim for infringement of copyright of the present kind, the claim is one over which the English court has jurisdiction, provided that there is a basis for in personam jurisdiction over the defendant, or, to put it differently, the claim is justiciable. 11/5/12IP & PIL39

40. Lucasfilm vs. Ainsworth (3) The Court: There is no room for the application of the act of state doctrine in relation to copyright in this case, even if (contrary to the view expressed above) actions of officials involved with registration and grant of intellectual property rights were acts of state. The requirement to apply for copyright registration in the United States is limited to the “copyright in any United States work” which in practice means that published Page 37 works first published outside the United States are exempted from compliance with US registration provisions. In the present case the copyrights were treated as United States works and were registered. Registration is a pre-requisite to proceedings in the United States: United States Copyright Act, section 411. But the unchallenged evidence before the judge in this case was that registration was not a prerequisite to subsistence but only to suit, and it was possible to register at the time of suit. Consequently the provision is purely procedural. 11/5/12IP & PIL40

41. LEGISLATIVE PROPOSALS § 211. Subject-Matter Jurisdiction (1) Except as provided in subsection (2), a court is competent to adjudicate claims and defenses arising under foreign laws pertaining to copyrights, neighboring rights, patents, trade secrets, trademarks, related IPRs, and contracts that are related to any of these rights. (2) The adjudication of the validity of registered rights granted under the laws of another State is effective only to resolve the dispute among the parties to the action. CLIP Principles Art 2:401: Registration and invalidity (1) In disputes having as their object a judgment on the grant, registration, validity, abandonment or revocation of a patent, a mark, an industrial design or any other IPR protected on the basis of registration, the courts in the State where the right has been registered or is deemed to have been registered under the terms of an international Convention shall have exclusive jurisdiction. (2) Paragraph 1 does not apply where validity or registration arises in a context other than by principal claim or counterclaim. The decisions resulting from such disputes do not affect the validity or registration of those rights as against third parties. 11/5/12IP & PIL41