Foreign Law Issues in EC by liaoxiuli1


									International Law Issues In
   Electronic Commerce

  Maggy Bailly
  Black Lowe & Graham
    International Law Issues In EC

 “Of, relating to, or involving two or more
  nations,” or
 “Extending across or transcending national
 International cooking: foreign dish or “fusion”

 International district: multi-national origin of

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         International Law Issues In EC

   Comparative Law
       Defamation and libel require malice in the US but
        not in most other jurisdictions New York Times Company v.
        Sullivan, 315 U.S. 254 (1964)

   Conflicts of Laws (Private International Law)
       Where the crime/tort was committed
       Where the effects of the crime/tort are suffered
       Choice of law in a contract
   Public International Law
       Treaties
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        International Law Issues In EC
   Group of treaties that defines internationally agreed basic standards of
    Intellectual Property (IP) protection in each country.
    Berne Convention for the Protection of Literary and Artistic Works
    Brussels Convention Relating to the Distribution of Programme-Carrying
    Signals Transmitted by Satellite
    Convention for the Protection of Producers of Phonograms Against
    Unauthorized Duplication of Their Phonograms
    Madrid Agreement for the Repression of False or Deceptive Indications of
    Source on Goods
    Nairobi Treaty on the Protection of the Olympic Symbol
    Paris Convention for the Protection of Industrial Property
    Patent Law Treaty (PLT)
    Rome Convention for the Protection of Performers, Producers of Phonograms
    and Broadcasting Organizations
    Trademark Law Treaty (TLT)
   Washington Treaty on Intellectual Property in Respect of Integrated Circuits
    WIPO Copyright Treaty (WCT)
    WIPO Performances and Phonograms Treaty (WPPT)

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        International Law Issues In EC

Conflicts of Laws and of Jurisdiction
   Non-Contractual Issues
       Torts
       Criminal Law
   Contractual Issues
       Choice of Law, Choice of Jurisdiction, ADR
           B2B contracts
           B2C contracts
               Contracts of Adhesion (“Take It Or Leave It”)

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        International Law Issues In EC

Non-Contractual Issues
 Torts and Criminal Law : e.g. Libel, Privacy, IPR
    Violation, Child Pornography, Gambling, Hate Speech, etc.
   Extra-territorial reach of national laws
       “Effects-based” jurisdiction
       “Something more” = targeting, express aiming
       Enforcement of foreign judgments: “comity” limited
        by public policy
       Local enforcement limited by assets location
        Technological enforcement (gateway software)

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        International Law Issues In EC

   Extraterritorial Reach of National Laws
       A French court ordered Yahoo to block access by
        French nationals to an offer of Nazi paraphernalia
        on it’s auction website (geo-location technologies)
       French criminal law applies when victim is French
       Jurisdiction of French court only if an element of
        crime is committed on French territory
       Visualization of Nazi objects in France is violation
       “Effects-Based” jurisdiction
       Only noted that Yahoo! targeted French market

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    International Law Issues In EC

   Extraterritorial Reach of National Laws
       Enforcement of foreign judgment
       Not if it offends public policy
       US Constitution, Freedom of Speech
       Yahoo!,Inc. v. La Ligue Contre le Racism et L’Antisemitisme, 169
        F. Supp. 2d 1181, 1193 (N.D. Cal, 2001)

   Expressive Commodities (speech and commerce)
       Sale of Information > Material Objects
       “Economically valuable information transmissions”

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        International Law Issues In EC

   Extraterritorial Reach of National Laws
       An Australian Court applied Australian defamation law to
        information posted on a US website for libel of Australian
        (resident) businessman.
       A US court ordered a website located in Italy to make
        material published under US trademark “Playmen”
        inaccessible to users in the US
       A US court enjoined a Canadian Website from transmitting
        in the US a US copyrighted programming
       A US court ordered a casino in Antigua to cease offering
        gambling over the web to New Yorkers

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        International Law Issues In EC

   Various tests: Effects, Active/Passive, Targeting
   Reasonable Efforts defense
       Tried to comply with restrictive laws in targeted States
   Technology allows courts to prescribe the least
    invasive solution
   Who should bear the costs of Technology?
       Foreign Government ISP
       Foreign ISP to install blocking software
       Website Owner

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        International Law Issues In EC

International Law
   Harmonization v. supranational decisions
   Harmonization needs Consensus
       Fraud, Child Pornography, IP Protection, Privacy
   Local values generate intractable conflicts
       Hate speech issues pitch “dignity of the individual”
        (EU) against “free speech” (US)
   Then zoning is the answer

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    International Law Issues In EC

International Organizations
Private and Public, seek harmonized www rules
 Global Business Dialogue on EC (GBDe)

 International Chamber of Commerce ICC

 Organization for Economic Co-operation and
  Development (OECD)
 World Trade Organization (WTO)

 World IP Organization (WIPO)

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        International Law Issues In EC

   WIPO Internet Treaties
       Copyright Treaty (1996)
       Performance and Phonograms Treaty (1996)
   Global cooperation, e.g. between US and EU
       EU E-Commerce Directive liability rules for online
        intermediaries parallels US Digital Millennium Act
       US and EU negotiates safe harbor for US
        companies committing to abide by EU data

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      International Law Issues In EC

Contractual Issues
   Choice of Law Clause
   Choice of Jurisdiction Clause
   Alternative Dispute Resolution Clause

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        International Law Issues In EC

Choice of Law Clause
Restatement 2d of Conflict of Laws, § 187 Law of the State Chosen by
 the Parties
   Issue could be resolved by an explicit clause
   Even if issue could not be so resolved, unless
       no substantial relationship to parties or transaction
        and no other reasonable basis for choice, or
       contrary to fundamental policy of a state with
        greater interest in determination of issue and
        which would apply if no choice of law clause

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        International Law Issues In EC

   Fundamental Policies (no contract around)
       Consumer Laws
       Privacy Laws
       Tax Laws
       Import/Export Laws
       Intellectual Property Laws
       Bankruptcy Laws
   Back to Conflict of Laws (e.g. Effects test)
   International Law (e.g. tax treaties)
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        International Law Issues In EC

 Export Regulations
       International Traffic in Arms Regulations 22 CFR
   EAR (US)
       Export Administration Regulations 15 CFR
       E.g. Encryption software
   The European Data Directive
       Forbids entities to export data to countries w/o
        adequate privacy laws
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        International Law Issues In EC

   Tax Localization: e.g. EU VAT on ESS
       Electronically Supplied Services (ESS)
       EU Directive 2002/38 effective 1 July 2003
           Residence of ESS supplier (if in the EU)
           Residence of the ESS customer (if supplier is non EU)
           Interim EU registration (until 2006) for non EU business
           Consider setting up permanent EU establishment
           Avoid EU customers

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         International Law Issues In EC

   VAT
       Turnover tax
           collected at every stage of production and distribution
           Ultimately paid by final consumer
           Business recover input tax on inbound supplies from
            other businesses
       VAT rate varies from 25% in DK to 15% in LX
       ESS: website supply, web hosting, distance maintenance; electronic
        supply, maintenance, updating of software; electronic supply of images,
        text, database and other info.; electronic supply of film, music, games
        (gambling); certain broadcasting services; and distance teaching

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         International Law Issues In EC

   Delivery / Acceptance
   Import or other Taxes (place of shipment/place of delivery are
    identifiable, i.e. no different from those of off-line sales)

   ESS or in country assistance, if the latter:
       Travel, costs and time
       Holidays, Personnel Taxes (income tax, SS tax)
       Foreign Labor Law

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        International Law Issues In EC

 EU
       Council Regulation No 1346/2000 on Insolvency
        Proceedings, May 31, 2000
       Principal: Debtor’s Center of Interests
       Territorial: Debtor’s establishments (local assets)
       Law of place of proceedings (Art.4) except for IP
       Law of place of IP registration
   Ipso Facto termination clause valid in Belgian
    law, not in French law
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        International Law Issues In EC

Dispute Resolution in Contracts
   Choice of Jurisdiction Clause
       No Forum Shopping
       Binding if Negotiated Clause
       In adhesion contracts, often non-binding
   ADR Clause
       E.g. Arbitration
           Binding in B2B
           Non binding in B2C unless agreed at time of dispute

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        International Law Issues In EC

Choice of Jurisdiction
   Future Hague Convention on International
    Jurisdiction and Foreign Judgments
   Valid unless unfair or unreasonable
       Forum Shopping, hardship for a party
   Not in “Take it or Leave it” contracts
       Unless valid in Consumer’s State of residence

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         International Law Issues In EC

Alternate Dispute Resolution
ADR (not in B2C unless C consents after dispute)
 Countries party to New York Convention on
  Recognition and Enforcement of Foreign Arbitral
   Online Ombuds Office (CITDR)
       Center for Information Technology and Dispute Resolution
   ICC rules (International Chamber of Commerce)

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         International Law Issues In EC

   “The confrontation with different national legal
    rules is the most daunting aspect of
    international licensing law [and Electronic
    Commerce]. Only humility can save you.”

        Johan Erauw, University of Ghent, Belgium and Washington
        College of Law (American University - Washington D.C.), and
        consultant to the International Trade Centre. Material used in
        several international seminars including two joint WIPO/ITC

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