ARVIN D.

HAMOR

CONFLCIT OF LAWS IN INTELLECTUAL PROPERTY

I. General principles of Conflict of laws in Intellectual Property

Substantive law. In intellectual property pertains to the laws which creates, defines and
regulates rights and duties regarding intellectual property.

1. National Treatmet: It is the grant of reciprocal rights to signatories of the state who are
signatories to international conventions. National Treatment principleis embodied under section
3of R.A. 8293 (Intellectual Property Code) which provides that;

Any person who is a national or who is domiciled or has a real and effective industrial
establishment in a country which is a party to any convention, treaty or agreement relating to
intellectual property rights or the repression of unfair competition, to which the Philippines is also
a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled to
benefits to the extent necessary to give effect to any provision of such convention, treaty or
reciprocal law, in addition to the rights to which any owner of an intellectual property right is
otherwise entitled by this Act.

The national treatment principle bars the extraterritorial application of foreign copyright laws for it
mandates the application of local laws for the equal treatment of the rights of foreigners. Otherwise
there could be no national treatment if foreign laws are applied. This concept, however does not
resolve conflict of law issues in intellectual property. It does not answer the question what law to
apply or what approach to utilize to harmonize the conflict of laws.

2. Lex protectionis : The law applicable to existence, validity, registration, scope and duration
of an intellectual property right and all other matters concerning the right as such is the law of
the State for which protection is sought.

3. Most Significant Relationship: This approach applies to the law of the state that has the
most significant relationship to the parties to the case. The law of the state which has the most
connection shall be applied in the resolution of the conflict. The criteria that inform the closest
and most substantial connection test:

a. The place where the injury occurred

b. The place where the conduct causing the injury occurred.
c. The domicile, residence, nationality, place of incorporation and place of business of the
parties.
d. the place where the relationship, if, any between the parties is centered.
 The most significant relationship approach answers to the need of modern litigation
where there is difficulty locating the place of the injury. This approach is appropriate for those
cases involving transnational acts or those cases where an act may be happening or being
committed in several states at the same time. This is especially true for internet or cyber
offenses where am offense can be committed at the same time in several states.

4. Lex Loci Voluntatis. Also known as choice of law clause or proper law clause is a term of a
contract in which the parties specify that any dispute arising under the contract shall be
determined in accordance with the law of a particular jurisdiction. As people and transactions
frequently cross sub-national, national and international borders both physically and
electronically, it is necessary to consider which law will be applied in the event of dispute.

5. Lex Loci Laboris: The law of the place where the worker habitually carries out his work.

6. Lex Loci Delicti. The laws of the state where the actor engaged in his conduct and where
the injury was incurred maybe invoked.

Procedural Law. The methods of enforcing those rights and obligations created by substantive
law by providing a procedural system for obtaining redress for the invasion of rights and
violations of duties. Like how suits base on Intellectual Property rights are filed, tried and
decided by the courts

1. Lex fori: (Law of the forum) that is, the positive law of the state, country or jurisdiction of
whose judicial system of the court where the suit is brought or remedy is sought. Procedural
rights are governed by the law of the place of the forum (lex fori).
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II. Application of the Principles

Initial Ownership of Intellectual Property:

There are two views:

1. Most Significant relationship. This rule is applied in the case of Itar-Tass Russian News
Agency vs. Russian Kurier, Inc. The US Court of Appeals states that Copyright is a form of
property, and the usual rule is that the interest of parties in property is determined by the law of
the state with the most significant relationship to the properties and the parties. Thus the issue
of ownership is govern by Russian law, while the issue of infringement, is govern by US law
applying the principle of Lex Loci Delicti.

2. Lex Protectionis. Initial ownership including in particular authorship of a copyrighted work and
entitlement to intellectual property rights arising out of registration is governed by the law of the
State for which protection is sought. This rule is embodied in the article 5 paragraph 2 of Berne
Convention 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 the protection is
claimed

Better view would be the application principle of Lex Protectionis because the application of
the first principle would result to unintended consequences because of divergence of applicable
laws. Like for example in country A require a high standard of originality but once the work come
into existence it enjoys a high degree of protection. While in country B the originalty needed is
very low and the afforded protection is not far reaching. If IP law of country B governs the issue
of ownership and country B law will govern infringement. The author will be delighted because his
work come into existence and enjoys a high degree of protection. But imagine a reverse situation,
the author will suffer disadvantage from both regime because he has to fulfill high requirements
but his work will enjoy lesser protection.

Co-ownership of Intellectual Property

1. The law applicable to initial co-ownership shall be determined in accordance with intial
ownerhip, either Most Significant Relationship or Lex Protectionis. Relations between the co-
owners shall be governed by the law applicable to the parties relationship such as contract,
succession or marriage.

Employment relationships in Intellectual Property

1. General Rule: Lex Loci Voluntatis. The mutual obligations of employer and employee in relation
to the transfer or license of an intellectual property right arising from the employees efforts, in
particular the right of the employer to claim the intellectual property right and the right of the
employee to remuneration, shall be governed by the law chosen by the parties in accordance with
Article.
2. Lex Loci Laboris. If the law has not been chosen by the parties, the mutual obligations of
employer and employee in relation to the an intellectual property right arising from the employees
efforts, in particular the right of the employer to claim the intellectual property right and the right
of the employee to remuneration, shall be governed by the law of the State in which the employee
habitually carries out her/his work in performance of the contract.

Transferability of Intellectual Property

Lex Protectionis. The transferability of intellectual property rights and the question whether the
transfer or license can be invoked against third parties shall be determined by the law of each
State for which protection is sought.

License Agreements and other contracts relating to Intellectual Property

1. General Rule: Lex Loci Voluntatis. Transfer, license agreements and other contracts relating
to an intellectual property right shall be governed by the law chosen by the parties. If the parties
have agreed to confer jurisdiction on a court of a State to hear and determine disputes that have
arisen or may arise out of the contract, they shall be presumed to have chosen the law of that
State. By their choice the parties can select the law applicable to the whole or a part only of the
contract.

2. Most Significant relationship. In the absence of a contractual choice of law, the contract shall
be governed by the law of the State with which the contract is most closely connected. Taking
into consideration the following factors:

(a) The law of the State in which the transferee or licensee has her/his habitual
residence at the time of conclusion of the contract.
(b) The law of the State in which the creator, transferor or licensor has its habitual
residence at the time of conclusion of the contract.

Note: The formal validity of the contract entered into between the parties shall likewise be
governed by the above rule. Either lex loci voluntatis (the law of the place voluntarily
selected) or the lex loci intentionis (the law of the place intended by the parties to the
contract).

Infringement and remedies in Intellectual Property

Basic Rule:

1. Remedial law shall be govern by Lex Fori (Law of the Forum). The procedure in action for
infringement and any other remedies in which the subject matter of the action is the Intellectual
Property shall be governed by the law of the estate in which the action is brought.

2. Lex Protectionis. The law applicable to the infringement is the law of each State for which
protection is sought. This rule is embodied in the article 5 paragraph 2 of Berne Convention 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 the protection is claimed.

3. Lex Loci Delicti. Requires the application of the law where the tort is committed or where the
injury or damage is sustained. So if an infringing act is committed within the borders of State X,
it is the law of the State X that will govern the tort claim.

In the case of Itar-Tass Russian News Agency vs. Russian Kurier, Inc. the principle of Lex
Loci Delicti is applied in determining whose law should be applied in infringement case. Lex loci
delicti is not however the better principle since in case of distant delicts, the applicable law is
either the country where the one liable for compensation has acted or the country where the
result of the act occurs. In contrast, infringement of intellectual property cannot be divided into
act and effect because the place of the act is at the same time the place of the effect.

Ubiquitous infringement. In infringement carried out through ubiquitous media such as the
Internet, the court may apply the law of the State having the closest connection with the
infringement, if the infringement arguably takes place in every State in which the signals can be
received.

1. Most significant relationship. In determining which State has the closest connection with the
infringement, the court shall take all the relevant factors into account, in particular the following:
 (a) the infringers habitual residence;

(b) the infringers principal place of business;

(c) the place where substantial activities in furthering of the infringement in its
entirety have been carried out;

(d) the place where the harm caused by the infringement is substantial in relation to
the infringement in its entirety.

Secondary infringement. Also known as indirect infringement, arises when a party materially
contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried
out by another party. Like for example if a sound recording is used directly for broadcasting or
for other communication to the public, or is publicly performed with the intention of making and
enhancing profit of his business.
1. Lex Proetctionis. The law applicable to liability based upon acts or conduct that induce,
contribute to or further an infringement is the same as the law applicable to that infringement or
the law of the state in which the protection is sought.
Other Remedies. Lex Protectionis. In an action for injunctions, damages, and other means of
redress for injury caused, the law which shall apply shall also be law of the state in which the
protection is sought.