VPATAPP Alert_U.S. Patent Extraterritoriality within the International Context_An SSRN article

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2839897

Abstract:

Globalization has prompted the evolution of our definition of sovereignty. In the patent context, this has arisen amidst a recent focus on the extraterritorial reach of patent remedies. Some of the theoretical challenges are examined in a recent series of decisions of the U.S. Court of Appeals for the Federal Circuit. These decisions evidence the tensions that arise in when transnational conduct is evaluated within the Westphalian framework developed in the 1600’s. In essence, resolving them requires grappling with the problems that arise “where the reality of human interaction, with its plural sources of norms, seems to be chafing against the strictures traditional conceptions of sovereignty impose.” Paul Schiff Berman, From International Law to Globalization, 43 Colum. J. of Transnat’l 485, 528 (2005).

Strict adherence to perfect Westphalian borders is not the current normative world order. Boundaries have become more porous, sometimes through agreement. Treaties, agreements, and other forms of cooperation subject domestic law to external obligations. Another example is the multinational cooperation undertaken to mitigate the impact of climate change, which is an inherently global phenomenon. Corporations engage in global commerce, wield influence over foreign governments, and engage in activities that influence foreign economies. Foreign intervention is justified to address human rights violations and, in some cases, security. Other rationales have been asserted to extend U.S. law beyond its shores. For example, the Supreme Court has authorized extraterritorial jurisdiction for the federal courts to hear petitions for habeas corpus brought by prisoners in Guantanamo Bay, in part because the U.S. had exercised “complete jurisdiction and control” over the territory and acted as the petitioners’ custodians. All of these examples represent shifts in the law’s treatment of territorial reach.

Recently, a series of appellate cases have considered extraterritoriality of the nation's intellectual property laws. This paper considers these cases in their international context. Although this line of extraterritoriality cases turns on the interpretation of a domestic statute, 35 U.S.C. section 284, the issues raised cannot be fully resolved without understanding the global implications. Essentially, there are several difficulties that arise when damages for infringement of a U.S. patent are authorized for overseas conduct. Among others, such a solution would be contrary to over a century of law that establishes that such conduct is legal. Further, extraterritorial damages are contrary to the structure and purpose of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”), and likely to introduce economic distortions. Further, there are difficulties are identified as “the legitimacy of unilateralism by a handful of nations seeking to impose their legal and regulatory will over the entire globe.”