[Hague-jur-commercial-law] Mark your calendar: IP & TheHagueMarch29-30 at USPTO

[Michael Sondow]

Arvind T. Thattai wrote:

> The enforcement and recognition provisions only
> apply to "judgments", and article 3(1) makes it fairly clear that 
> a judgment is a "decision on the merits". I don't see any common 
> law court holding that an order for provisional measures is a 
> decision on the merits.

What you say here makes sense, but I think it will work out differently.
The court chosen by the plaintiff will argue that the treaty, by
including an article on interim measures like temporary injunctions,
intended for them to fall within the general scope of the treaty,
regardless of the fact that they are not, strictly speaking, judgments.
After all, an order for an injunction can be the final judgment in a
case, and the difference between a temporary restraining order and an
order for a permanent injunction as the outcome of a case or trial is
slight, a matter of mere time and not effect, and in practice often
there is no difference to the defendant.

> However, what it is likely to do is create increased pressure on
> courts to liberalise the existing rules for the grant of interim
> relief, which are usually quite stringent.  The argument that 
> will probably be made is that the Convention demands a higher 
> level of comity and mutual recognition amongst signatories even 
> in relation to orders that it does not expressly cover.  If made 
> for long enough and hard enough, this argument may well have 
> effect.

Probably the very first suits initiated under the new treaty will make
use of the right to interim relief that the treaty grants plaintiffs,
for the purpose of establishing a precedent, since this provision is
extremely important for those, like IP interests, who have pushed for
its adoption by the Hague. No doubt there will be a few test cases in
this regard, whose outcomes will have been pre-arranged by those filing
them. It won't take long for temporary restraining orders to be issued
summarily, without the usual protections like bonds posted, perhaps
without even an order to show cause, or without the evidenciary
requirements of such an order. Forum-shopped contract-chosen courts, and
enforcing courts in countries that fear disturbing their commerce with
the more powerful countries that support the treaty, will soon blur the
distinctions between interim and final relief and temporary and
permanent injunctions.

> The really big problem with the Article is that there is really 
> no convincingly solid reason to treat interim relief differently 
> from other proceedings when considering the effect of a forum 
> selection clause.

I beg to differ. The central problem of the treaty - the lack of
conformity between the laws of signatory countries and the avoidance by
the treaty of defining laws and procedures - is exacerbated mightily by
the inclusion of interim relief, which side-steps normal procedures (for
example by substituting a hearing for a trial) for expediency, and
expediency will be the name of the game in the use of the treaty, that
is quite clear from the short-cuts it is taking, like its inexplicable
disregard for the appeals process and the creation of a higher court
where jurisdictional controversies may be decided. 

The effect of the forum selection clause on interim relief will be to
give a clever plaintiff the opportunity to shut down a defendant's
business on the decision of a court that does not have to occupy itself
with the consequences on its own soil, and whose procedures for the
granting of injunctions may not be strict enough to protect the
defendant's interests, and chosen by the plaintiff for that reason, just
as it will be chosen for its willingness to enforce non-negotiated
contracts.

The inclusion of the article on interim relief is a step towards
broadening the legal and jurisdictional purview of the treaty beyond its
original limited scope, and in IP cases particularly it runs the risk of
substituting injunction for trial, since the outcome of injunction can
so easily be the desired finality for the plaintiff. No ISP can
withstand even two weeks of injunction, and many other businesses
likewise, not to mention the havoc that can fall upon an entity that for
example depends exclusively on its website for communication, if that
website were to be removed from the Internet via an injunction.

The inclusion of interim relief within the purview of the treaty is as
potentially disastrous as the treaty's graving in stone the legitimacy
of non-negotiated contracts, and is sure to have very serious
consequences in the future as international law comes to be based on the
precedents and legal status quo resulting from the Hague Convention.

M. Sondow
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