[Hague-jur-commercial-law] Jurisdiction, applicable law and DRM (WIPO)

[Manon Ress]

For last WIPO Standing Commitee on Copyright and Related Rights meeting 
(Nov.03) an interesting document mentioning the Hague project:

CURRENT DEVELOPMENTS IN THE FIELD OF DIGITAL RIGHTS MANAGEMENT

Prepared by Mr. Jeffrey P. Cunard, Debevoise and Plimpton, Washington, 
D.C.; Mr. Keith Hill, Senior Consultant, Rightscom Limited, London
and Mr. Chris Barlas, Senior Consultant, Rightscom Limited, London

http://www.wipo.org/documents/en/meetings/2003/sccr/index_10.htm

QUOTE/
5.2.2 Jurisdiction and Applicable Law///

DRMs inevitably will be used to protect and deliver content on a 
cross-border basis. In doing so, questions might arise as to which 
jurisdiction’s law “applies,” both to the protection of the DRM and the 
underlying content. Choice of law and jurisdictional questions in the 
online environment, including those that arise with respect to 
intellectual property agreements, are being addressed in multiple 
international and regional fora.

Three separate, but related jurisdictional questions are raised with 
respect to the usage of DRM technologies.

– First, which country’s anti-circumvention law would apply to the 
protection/–/or to the circumvention or hacking/–/of DRM technologies?

– Second, which law would apply to the use, or misuse, of content 
protected by a DRM?

– Third, which national law would apply to the agreements applicable to 
the delivery of content via DRM?

First, the anti-circumvention and conditional access laws discussed 
above are territorial in reach. If an act of circumvention, including 
the act of trafficking in a device, takes place within national 
boundaries, then the law of that country would apply. The country’s 
jurisdiction could even be exercised over the online distribution into 
the country of a circumvention program from beyond the national borders, 
though it may be difficult to get personal jurisdiction over the foreign 
distributor.

In /United States of America v. Elcom, Ltd./, discussed in Section 
3.2.2, a foreign national and a foreign company were indicted in the 
United States of America for violating the anti-trafficking provisions 
of Section 1201(b) when they created and distributed software that 
decrypted Adobe eBook security software. The court, however, expressly 
rejected the argument that it was being asked to exercise its 
jurisdiction on an extraterritorial basis. It found that the defendant 
had sufficient connections with the United States of America such that 
the acts alleged occurred within that country: the offending 
circumvention software was offered and sold via the Internet to U.S.A. 
residents, the Internet server from which the software was sold was 
located in the United States of America and the online payment service 
for the software also was located in the United States of America.[1] 
<#_ftn1> The corporate defendant was later convicted.

Second, if a person succeeds in using a copyrighted work other than as 
permitted by a DRM system, then such use very probably will constitute 
copyright infringement under the relevant national law. With respect to 
online access to and use of content, case law and international 
principles are evolving, both as to the country in which a person may be 
sued for a multi-jurisdictional infringing act and as to which law 
should govern. Applicable principles may be drawn from national law and 
the TRIPS Agreement; work on these matters also is underway in the 
context of the Draft Hague Convention on International Jurisdiction and 
Foreign Judgments in Civil and Commercial Matters.[2] <#_ftn2> In 
January 2001, WIPO organized a forum on Private International Law and 
Intellectual Property to review, among various issues, questions of 
jurisdiction (over the parties and the claim) and choice of law in 
relationship to works transmitted over digital networks.[3] <#_ftn3>

Third, which law properly applies to an agreement by which a consumer 
obtains the delivery of content via a DRM implicates a host of contract 
and choice of law principles. In general, the law specified in the 
contract would be applicable. Where the parties have not chosen an 
applicable law, other principles might be called into play, such as the 
one set out in the Rome Convention of 1980: the court is to apply the 
law of the country where the party who is to perform the “characteristic 
performance” of the contract has his or her residence or its main 
business establishment.[4] <#_ftn4>

Further guidance as to the applicable legal principles in the European 
Community might be found in the Electronic Commerce Directive, which 
adopts a “country of origin rule.” A service provider is subject to the 
laws of the Member States in which it is established, where 
establishment includes the place from which it pursues its economic 
activity or provides its service.[5] <#_ftn5> In the United States of 
America, each state has a choice of law principle that would inform a 
court as to which law ought to apply, in the absence of an agreement 
between the parties.


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[1] <#_ftnref1> /United /States/ v. Elcom, Ltd./, No. CR 01-20138 RMW 
(N.D. Cal. March 27, 2002) (order denying defendant’s motion to dismiss 
indictment for lack of subject matter jurisdiction).

[2] <#_ftnref2> See/ http://www.hcch.net/e/workprog/jdgm.html/.

[3] <#_ftnref3> Papers were prepared by Professors André Lucas and Jane 
C. Ginsburg. See A. Lucas, /Private International Law Aspects of the 
Protection of Works and of the Subject Matter of Related Rights 
Transmitted Over Digital Networks/, WIPO Forum on Private International 
Law and Intellectual Property (WIPO/PIL/01/1 Prov. December 17, 2000); 
J. Ginsburg, /Private International Law Aspects of the Protection of 
Works and Objects of Related Rights Transmitted Through Digital Networks 
(2000 Update)/, WIPO Forum on Private International Law and Intellectual 
Property (WIPO/PIL/01/2 December 18, 2000), both available at/ 
http://www.wipo.int/pil-forum/en/index.html/.

[4] <#_ftnref4> Article 4.2, EC Convention on the Law Applicable to 
Contractual Obligations (Rome 1980) (“it shall be presumed that the 
contract is most closely connected with the country where the party who 
is to effect the performance which is characteristic of the contract 
has, at the time of conclusion of the contract, his habitual residence, 
or, in the case of a body corporate or unincorporate, its central 
administration”).

[5] <#_ftnref5> Recital 19, Electronic Commerce Directive.





-- 
Manon Anne Ress
Consumer Project on Technology
www.cptech.org
PO Box 19367, Washington, DC 20036
manon.ress@cptech.org, voice: 1.202.387.8030, fax: 1.202.234.5176