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Jurisdiction Issues in Global Intellectual Property
"An underlying premise in pure intellectual property issues is that the law should encourage and reward innovation," wrote Raymond T. Nimmer in his book, "The Law of Computer Technology: Rights, Licenses, Liabilities." In the modern digital world, traditional trade borders are collapsing and competitors can steal valuable intellectual property and send it around the world at the speed of light.
How can the general counsel of a Texas company obtain justice when the company is the target of theft, infringement, fraud or other unfair business practices? How can he navigate jurisdictional issues when protecting the company's intellectual property from foreign corporations? What are alternatives to financing multiple lawsuits throughout the world?
Determining where to fight the battle to protect these rights is a crucial decision. To date, there is no clear law on how the global community will handle international intellectual property jurisdictional issues. Here are some steps general counsel can take when thinking through these issues.
There are currently four main legislative proposals to establish rules on international jurisdiction, choice of law and enforcement of foreign judgments in intellectual property lawsuits. The American Law Institute (ALI) principles are based on the laws of the United States. But businesses considering global litigation should be aware that other principles exist, including the European Principles on Conflict of Laws in Intellectual Property (CLIP), the Japanese transparency principles and Korean Waseda principles, as well as private international law.
When the potential defendant is not a Texas or U.S. business, the legal department may need to establish specific jurisdiction by proving that the defendant purposely availed itself of the privilege of acting in the forum state, the cause of action arises from such acts, and exercise of jurisdiction is not unreasonable. Specific jurisdiction can stem from the stream of commerce, hacking trails, a website sliding-scale test (in which courts are more likely to find jurisdiction as the website's interactivity and the business' electronic contacts increase), licensing and franchise agreements, posted defamatory comments, commercial activities, agency and civil conspiracy with other defendants, patent and trademark infringement, securities fraud, etc.
Overall, in determining whether a court has specific jurisdiction over a defendant, the court will look to see if the defendant was doing business in the forum state. This case-by-case determination often hinges on the foreign business' use of intellectual property or wrongful actions in Texas or the United States.
In the modern digital world, technology is breaking down many traditional borders. International trade and competition is more common than ever before. Many Texas and other U.S. businesses will find themselves in a highly competitive business environment where they are the target of intellectual property infringement and corporate espionage. It pays to prepare now.
Jason S. Coomer of The Law Offices of Jason S. Coomer in Austin handles international IP litigation, SEC Foreign Corrupt Practices Act bounty actions, and international probate matters.
This article originally appeared in Texas Lawyer.