[Hague-jur-commercial-law] Marc Hankin article on Hague Convention

[James Love]

Thanks for Vergil for find this.  Marc Hankin is in fact a key player in
the treaty negotiations, and claims that he has drafted key parts of
Article 12, as a lobbyist for patent owners.  This is an article he
wrote for the National Naw Journal, which  I am posting as a fair use. 
Some of you might recall Marc as the "eager beaver" young patent lawyer
at the US copyright office roundtable meeting on the Hague Convention. 
Jamie

---------- Forwarded message ----------
Date: Mon, 06 Aug 2001 15:17:58 -0400
From: James Love <love@cptech.org>
To: "Love, James" <love@cptech.org>
Subject: (no subject)

Copyright 2001 The New York Law Publishing Company
                             The National Law Journal

                                 July 23, 2001

SECTION: IN FOCUS; Intellectual Property; International; Pg. C20

LENGTH: 3220 words

HEADLINE: Proposed Hague Convention would help IP owners

BYLINE: By Marc E. Hankin, SPECIAL TO THE NATIONAL LAW JOURNAL; Marc E.
Hankin, a partner in the Los Angeles office of Chicago's Sonnenschein
Nath & Rosenthal, is a registered patent attorney who primarily
litigates patent and trademark disputes, often involving companies with
headquarters abroad. He is not a member of the U.S. delegation to the
Hague Conference, and he is writing for himself alone and not on behalf
of the United States or any member of the official delegation. As the
chair of the American Bar Association Intellectual Property Law Section
Ad Hoc Committee on the Proposed Hague Convention, however, he has been
involved during the past year in negotiating the language of the IP
provisions and advising the U.S. delegation on that language and the
related IP issues.

HIGHLIGHT: But political wrangling nearly derailed treaty on foreign
civil judgments.

BODY: IN JUNE, THE Hague Conference on Private International Law held
Commission II of its 19th Session, at which the proposed draft Hague
Convention on Jurisdiction and the Recognition and Enforcement of
Foreign Judgments in Civil and Commercial Matters was debated. Unlike
previous conference sessions held in The Hague, the Netherlands, this
commission was less negotiation and more political posturing by various
nations, including the United States. The question that only time can
answer is whether this was a missed opportunity to do some good for
international civil litigation, or simply politics as usual, with the
right result coming later but only after a bit more political wrangling.
[See story, Page A19]

This proposed international treaty, which has many important
implications for intellectual property litigators and their clients, has
been on the fast track for several years, but the text of the last
official draft nearly derailed the treaty for the United States
altogether. In response, the chief U.S. negotiator, Jeffrey D. Kovar,
assistant legal adviser for private international law at the U.S.
Department of State, and Jennifer Lucas, the attorney-adviser from the
Office of Legislative and International Affairs of the U.S. Patent and
Trademark Office, shifted into high gear and, along with other members
of the U.S. delegation, sought and coordinated comments from the public
-- including lobbyists, bar associations, IP owners, IP litigators and
other interested parties -- with an eye toward gauging the level of
public support for the draft treaty.

There are at least two main benefits of the United States becoming a
party to the proposed Hague Convention. First, it would be easier for
U.S. IP owners to obtain jurisdiction over infringers in other
countries, thus leading to more complete resolution of the disputes that
ensue. This is especially true in the Internet/e-commerce arena, where
many times the party accused of tortious behavior resides in a country
other than the United States.

Second, as to the enforcement of U.S. judgments in foreign countries,
successful U.S. litigants will benefit, particularly as monetary damages
are being awarded more frequently in trademark suits and many patent
infringers try to hide behind the cloak of domestic sovereignty.
Although the full faith and credit clause of the U.S. Constitution
ensures that judgments are enforceable from one state to another within
the United States, the same principles of comity are not regularly
applied by courts in countries around the world.

Enforcing judgments abroad

Courts in the United States routinely enforce foreign judgments against
U.S. companies, with minor exceptions, and have been doing so for more
than 100 years. n1 Despite the suggestion by the U.S. Supreme Court in
Hilton that courts should require a showing of reciprocity in the
country where the judgment was rendered, this requirement has not been
included in the laws of very many states. In fact, U.S. courts rarely
require reciprocity.

n1 See Hilton v. Guyot, 159 U.S. 113 (1895).

This new treaty was first proposed by the United States in 1992, but
negotiations did not begin until 1996. The U.S. government requested
that the Hague Conference on Private International Law, of which the
United States is a member state, negotiate and draft a convention on
jurisdiction and the enforcement of judgments in foreign countries. An
attempt had been made back in 1971, but few countries ratified that
draft, and it never came into force. A few years later, the United
States attempted to negotiate a bilateral treaty with the United
Kingdom, but that, too, failed. The recent discussions in the mid-1990s
proceeded for about three years at a moderate pace and then hit the fast
track in 1999, when the Special Commission of the Hague Conference
released its preliminary draft text.

Unfortunately, the text that was released as the preliminary draft in
October 1999 was such that there would have been serious problems with
securing support for the treaty. The draft text followed, in many
particular respects, the Brussels Convention on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters, initially
negotiated in 1968 among several European countries of the Common
Market. In 1988, the Brussels Convention scheme was extended to European
countries that were not members of the Common Market through a companion
instrument called the Lugano Convention. Adopting the Brussels
Convention then was made a requirement to obtain entry to the European
Union.

In December 2000, the European Commission adopted the similarly
structured Brussels Regulation, which has specific applicability to
e-transactions in cyberspace, and enacts jurisdictional rules based on
the "country of origin" for use in e-commerce disputes. This regulation
is scheduled to come into force in the Spring of 2002.

Congress takes an interest

One of the leading experts in the United States on the draft Hague
Convention on Jurisdiction is the chief negotiator for the United
States, Jeffrey D. Kovar. Kovar testified before the Subcommittee on
Courts and Intellectual Property of the Committee on the Judiciary of
the House of Representatives on June 29, 2000; on May 22 of this year,
he testified before the Subcommittee On Commerce, Trade and Consumer
Protection of the Committee On Energy and Commerce of the House of
Representatives regarding the draft treaty and the status of the
negotiations. n2

n2 Kovar's testimony is available at
www.house.gov/judiciary/kova0629.htm, and
http://energycommerce.house.gov/107/hearings/05222001Hearing231/Kovar347.htm.
Each of the documents and speeches cited in this article has been
available on the Internet, but as the documents are loaded on and taken
off, the citations have changed over time. Many documents may be found
at the Hague Conference official Web site, www.hcch.net. The Preliminary
Draft is available at www.hcch.net/e/conventions/.draft36e.html. Any
reader who cannot find them and would like a copy may request one from
the author, who can be reached at MHankin@Sonnenschein.com.

In his testimony, Kovar pointed out that "a successful Convention would
level the international playing field for American litigants and fill a
major gap in the legal infrastructure of the global marketplace."
Proving that no good deed goes unpunished, Kovar noted with some irony
that "even in those countries that will, in principle, enforce foreign
judgments in the absence of a treaty, the reach of U.S. Long-Arm
jurisdiction, what they perceive to be 'excessive' jury awards and
punitive damages, are sometimes considered reasons not to enforce U.S.
judgments. U.S. litigants deserve the same opportunity to have their
judgments enforced abroad as that enjoyed by foreign litigants in the
United States."

Kovar further testified that "the successful negotiation at the Hague
Conference of a Convention on Jurisdiction and the Recognition and
Enforcement of Foreign Civil Judgments would be a huge step toward an
international solution for enforcing foreign court judgments."
Nonetheless, Kovar noted that the draft in its then-current state
reflected "a deep seated feeling among many other [countries']
delegations that they do not wish to enforce U.S. judgments unless [the
U.S. makes its] jurisdiction practices consistent with their view of
what constitutes appropriate international rules."

About the U.S. delegation

The official delegation conducting the negotiations on behalf of the
United States is chaired by Kovar, and consists of government officials
from the departments of State, Justice and Commerce, and from the
Federal Trade Commission, the Copyright Office and the Patent and
Trademark Office, as well as two particularly knowledgeable law
professors -- Arthur T. von Mehren of Harvard University Law School and
Ronald A. Brand of the University of Pittsburgh School of Law -- who
have been involved in this Hague project for many years. The U.S.
delegation also includes members from the private sector, including
consumer groups, trial lawyers, bar associations, lobby groups and
experts on the Internet.

Assisting and advising the official U.S. delegation have been numerous
representatives of bar associations, lobby groups, industry coalitions,
law professors, practicing attorneys and many other citizens who have
become interested in this important and wide-sweeping project.

In an effort to refine the text and build a consensus of countries
outside of Europe, the Special Commission of the Hague Conference began
holding a series of informal meetings, including a special meeting in
Ottawa, Canada, in February 2000 to discuss the particular issues
related to the Internet and IP protection. This was followed by
additional meetings, about every month throughout the winter of 2000 and
spring of 2001. Special attention was paid to the IP aspects of the
draft treaty at the meetings in Washington, D.C., and Geneva, and a
second meeting in Ottawa, which focused primarily on jurisdiction in
contracts cases, finally culminating in a major meeting of the primary
drafters in Edinburgh, Scotland in April 2001.

Most of these meetings, and particularly the meetings in Geneva and
Edinburgh, welcomed the participation of outside industry experts from
nongovernmental organizations (NGOs). It was the inclusion of IP experts
that led to the resolutions reached on the patent and trademark issues.
In Geneva, at a meeting co-sponsored by the World Intellectual Property
Organization, a working group was formed to work on the issues
particular to intellectual property in its various formats.

In Geneva, not much was accomplished from a drafting standpoint, but a
loose alliance formed of IP experts and those governmental delegates
with an interest in -- and understanding of -- some of the more arcane
IP issues. One of the best accomplishments in Geneva was the designation
of Andrea Schulz, one of the official delegates from Germany, as the
chair of the IP Working Group. Her leadership and drive to accomplish
the tasks put to the group were key factors in its ultimate success.

Breakthrough for IP issues

After that meeting in Geneva, the most important event for the
resolution of the IP issues occurred. Justice Hugh Laddie, a British
High Court patent judge, circulated an article titled "IP: The Way
Forward," which contained draft text, rationales therefor and
hypothetical examples.

It was this proposal by Laddie that enabled the various IP bar
associations and industry groups within the United States to break the
logjam and come to a consensus on a scheme for treating patents and
trademarks, with regard to both infringement actions as well as disputes
over validity. The linchpin was that infringement and validity need to
be treated together, and exclusive jurisdiction over all such claims
needs to reside in the court of the country in which, or for which, the
rights are granted or registered, or could be registered -- as in the
case of common-law trademark rights, which need not be registered to be
valid.

At the meetings in Edinburgh, the IP working group devised some specific
language that designated patents and trademarks -- whether registered or
not -- for exclusive jurisdiction in the country where the rights are or
could be registered. Exceptions were made when the determination of any
of these issues was required simply as an "incidental question" to the
main action -- such as a malpractice action over a failure properly to
register or prosecute, or an intestacy contest wherein the asset to be
valued by the probate court is the patent of another nation. There is
agreement, among most delegates at the Hague Conference, and among most
of those practitioners and industry experts worldwide to have considered
the issue, that this exception for incidental questions should be
included.

Originally, the Hague Conference planned to hold a two-part diplomatic
conference to finalize the draft Convention on Jurisdiction and
Judgments, with the first half to be held in June 2001, followed by a
second meeting initially scheduled to be held in early 2002. That was
the plan, before the first part of the conference this past June.

The first part of the diplomatic conference that was held this past June
included official delegates from 41 Hague Conference member states, 10
nonmember countries, seven intergovernmental bodies and observers from
at least 13 NGOs.

Political posturing

Traditionally, the Hague Conference has been a professional group of
nonpolitical government officials, law professors and a few experts in
the area of conflict of laws from the private sector. At this most
recent diplomatic conference, however, there was a lot of political
posturing.

There were two fundamental compromises reached during the Special
Commission, which allowed the conference to move forward.

The first compromise was a trade-off by which the U.S. delegation agreed
to give up general "doing business" jurisdiction in favor of other
nations' accepting "activity-based" jurisdiction. The second was an
agreement by other nations to recognize monetary damages awards that in
the United States are deemed compensatory but that some other countries
view as "excessive" and "punitive."

At The Hague in June, official delegates of several different countries
backed away from each of these fundamental compromises. They also backed
away from many of the smaller deals reached throughout the informal
meetings, including Ottawa II and Edinburgh, where the most progress was
made.

The one subject area in which compromises reached were kept in place,
the language made tighter and the scheme fine-tuned, was intellectual
property, specifically, patents and trademarks. Again, the IP Working
Group put aside differences of national origin or professional
background and managed to work together toward a reasonable resolution
that addressed the concerns of the many different factions from around
the world.

Unfortunately, if the two primary compromises fall apart, there will not
be much convention left within which to fit the IP solutions that have
been reached. If the other deals hold together, then the next challenge
for the IP Working Group will be to resolve the knotty issues
surrounding copyrights and the Internet. All suggestions will be
welcome.

In conclusion, the draft Hague Convention on Jurisdiction and Judgments
holds promise for harmonizing rules throughout the world on the proper
reach of jurisdiction and easing the rules for the enforcement of
judgments from country to country. Before that promise can be fulfilled,
however, there is still much work, consultation and negotiation left to
undertake.