"Foreign Law Issues in EC"
International Law Issues In Electronic Commerce Maggy Bailly Attorney Black Lowe & Graham email@example.com International Law Issues In EC International “Of, relating to, or involving two or more nations,” or “Extending across or transcending national boundaries” International cooking: foreign dish or “fusion” International district: multi-national origin of components Maggy Bailly (c) 2004 2 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 Maggy Bailly (c) 2004 3 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) Maggy Bailly (c) 2004 4 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”) Maggy Bailly (c) 2004 5 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) Maggy Bailly (c) 2004 6 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 Maggy Bailly (c) 2004 7 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” Maggy Bailly (c) 2004 8 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 Maggy Bailly (c) 2004 9 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 Maggy Bailly (c) 2004 10 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 Maggy Bailly (c) 2004 11 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) Maggy Bailly (c) 2004 12 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 protection Maggy Bailly (c) 2004 13 International Law Issues In EC Contractual Issues Choice of Law Clause Choice of Jurisdiction Clause Alternative Dispute Resolution Clause Maggy Bailly (c) 2004 14 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 Maggy Bailly (c) 2004 15 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) Maggy Bailly (c) 2004 16 International Law Issues In EC Export Regulations ITAR (US) 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 Maggy Bailly (c) 2004 17 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 Maggy Bailly (c) 2004 18 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 Maggy Bailly (c) 2004 19 International Law Issues In EC Goods Delivery / Acceptance http://www.iccwbo.org/index_incoterms.asp Import or other Taxes (place of shipment/place of delivery are identifiable, i.e. no different from those of off-line sales) Services ESS or in country assistance, if the latter: Travel, costs and time Holidays, Personnel Taxes (income tax, SS tax) Foreign Labor Law Maggy Bailly (c) 2004 20 International Law Issues In EC Bankruptcy 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 Maggy Bailly (c) 2004 21 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 Maggy Bailly (c) 2004 22 International Law Issues In EC Choice of Jurisdiction Future Hague Convention on International Jurisdiction and Foreign Judgments http://www.hcch.net/e/workprog/jdgm.html 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 Maggy Bailly (c) 2004 23 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 Awards http://www.iccwbo.org/court/english/ny_convention/ny_convention.asp Online Ombuds Office (CITDR) Center for Information Technology and Dispute Resolution http://www.ombuds.org/center/about.html ICC rules (International Chamber of Commerce) http://www.iccwbo.org/home/menu_international_arbitration.asp Maggy Bailly (c) 2004 24 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.” NEGOTIATING AND DRAFTING PATENT LICENSING CONTRACTS UNDER THE TRIPS AGREEMENT: THE BUSINESS DIMENSION Professor Dr. 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 Maggy Bailly (c) 2004 25