Domestic Courts and "Foreign" Infringement: What is the Law?- II

In the previous post, Mihir Naniwadekar had examined the background to the Mocambique rule, and he now analyses the decision of the UK Supreme Court where issues pertaining to the applicability of the rule to intellectual property arose.

In Lucasfilm, Counsel for the Appellant before the Supreme Court, Jonathan Sumption QC, framed the issue narrowly: the court notes, “the appellants do not take issue with the application of the Moçambique rule to intellectual property so far as it is limited to patents and other intellectual property rights dependent on the grant or authority of a foreign State, and to cases where what is in issue is the validity of the patent, as opposed to its infringement.”

By framing the issue thus, counsel was able to steer the Court away from concerns over the act of state doctrine, and concerns over comity. Indeed, in the facts, this narrow proposition would also be sufficient for the appellants, for on the facts (as emerging from Mann J’s judgment at first instance), “the substantial dispute has always been about the ownership of the relevant copyrights and their infringement rather than about their subsistence.”

[The detailed facts are interesting in their own right, especially for Star Wars fans, but for the purposes of our present discussion an elaboration of the facts would serve no purpose other than lengthening an already long post. The interested reader should refer to the judgment of Mann J. at first instance, which is reported in (2008) EWHC 1878 (Ch)]

The Respondents argued that the Mocambique rule, as extended in Hesperides, was still good law; and continued to apply to “claims for infringement of all foreign intellectual property rights, including copyright, because such claims are essentially local”. Consequently, it was argued that such claims “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 rejects this argument in an illuminating passage quoted below (from the combined judgment of Lord Walker and Lord Collins):

“We have come to the firm conclusion that, 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… It is clear that much of the underpinning of the Moçambique rule and the decision in Potter v Broken Hill Pty Co Ltd has been eroded… 

The basis for what remains of the rule was said by the House of Lords in the Moçambique case to be that controversies should be decided in the country of the situs of the property because the right of granting it was vested in ‘the ruler of the country’ and in the Hesperides case to be the maintenance of comity and the avoidance of conflict with foreign jurisdictions. It is possible to see how the rationale of the Mocambique rule can be applied to patents, at any rate where questions of validity are involved.

For example the claims might touch on the validity of patents in sensitive areas, such as armaments, and that no doubt is part of the rationale for article 22(4) of the Brussels I Regulation. But it is very difficult to see how it could apply to copyright. It is true that copyright can involve delicate political issues.

Thus in a very different context Brightman J had to deal with the international consequences for copyright protection of the samizdat circulation in the Soviet Union of Solzhenitsyn's August 1914 without having been passed by the Soviet censor: Bodley Head Ltd v Flegon [1972] 1 WLR 680.

But such cases can be dealt with by an application of the principles of public policy in appropriate cases…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 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 procedure…”

The Court thus held that Tyburn was wrongly decided and that in personam jurisdiction could be sufficient to bring an action for infringement of a foreign copyright. The case also highlights the conceptual problems with applying real property based reasoning to intellectual property, and further indicates that the differences between the type of intellectual property in question require nuanced consideration.

Insofar as infringers are concerned, beware: in some cases, the long arm of the law is so long that it can extend to overseas infringement also!