1. Introduction to Choice of Law in Cross-Border IP Infringement

When intellectual property (IP) is infringed across borders, courts face the complex question: which country’s laws should apply? IP is territorial, meaning rights are generally enforceable only within the country that granted them. But in our globalized economy—online piracy, e-commerce, international licensing—cross-border infringements are common.

Choice of law determines:

Which jurisdiction’s law governs the dispute (substantive law).

Which court has the authority to hear the case (jurisdiction).

Key issues:

Infringing acts may occur in multiple countries.

The IP owner may seek remedies in multiple jurisdictions.

Different countries may have conflicting IP laws.

Legal systems have developed tests to address these issues:

Lex loci protectionis – the law of the country where protection is sought.

Lex loci delicti commissi – the law of the place where the wrongful act occurred.

Most significant relationship test – which country has the closest connection to the dispute.

2. Case Studies

Case 1: Microsoft Corp. v. Lindows.com, Inc. (USA/EU, 2004)

Facts: Lindows.com, a US-based company, offered software that allowed Windows-compatible programs to run. Microsoft sued for trademark infringement in the U.S. and Europe.

Choice of Law Issue: Microsoft claimed European trademarks were infringed, even though Lindows operated primarily in the U.S.

Court Ruling: U.S. courts recognized the territorial nature of trademarks and applied lex loci protectionis for European trademarks. Lindows eventually settled to pay $20 million to Microsoft.

Significance: This established that foreign trademark rights could be enforced in the U.S. only under certain conditions, emphasizing territoriality.

Case 2: Yahoo! Inc. v. LICRA (France/USA, 2000)

Facts: Yahoo! auctioned Nazi memorabilia accessible to French users. LICRA (French anti-racism group) filed suit in France, ordering Yahoo! to prevent French users from accessing content.

Choice of Law Issue: Yahoo! argued U.S. law applied, protecting free speech. France insisted French law applied.

Court Ruling: The French court enforced lex loci protectionis, requiring Yahoo! to comply with French law. U.S. courts had limited enforcement power.

Significance: This case highlights how courts may apply the law of the place where harm occurs, even if the defendant is abroad.

Case 3: BMS v. Merck KGaA (EU/US Patent Conflict, 2003)

Facts: Bristol-Myers Squibb (BMS, U.S.) and Merck KGaA (Germany) had conflicting patents for a cancer drug. BMS filed for patent infringement in Germany and the U.S.

Choice of Law Issue: Which country’s patent law governs cross-border sales and exports?

Court Ruling: German courts applied lex loci protectionis, enforcing German patents for sales in Germany. U.S. courts enforced U.S. patents for U.S. sales.

Significance: Reinforces the territorial principle of patent law, requiring IP owners to litigate in each country of infringement.

Case 4: Louis Vuitton Malletier S.A. v. Akanoc Solutions, Inc. (USA, 2008)

Facts: Akanoc, a U.S.-based web hosting provider, facilitated sale of counterfeit Louis Vuitton products online, targeting multiple countries.

Choice of Law Issue: Should U.S. law or foreign law apply to foreign sales?

Court Ruling: U.S. courts applied U.S. trademark law to acts by a U.S.-based company, even if the harm occurred abroad.

Significance: Establishes that courts often use defendant’s domicile or location of act as a basis for choice of law, especially for online infringement.

Case 5: Nintendo Co. v. Skyworks (Japan/US, 2010)

Facts: Japanese company Skyworks sold Nintendo counterfeit products through online marketplaces accessible globally.

Choice of Law Issue: Which law governs damages and injunctions?

Court Ruling: Japanese courts applied lex loci protectionis for sales in Japan, while the U.S. court applied U.S. law for sales in the U.S.

Significance: Confirms that cross-border online sales can trigger multiple jurisdictions simultaneously.

Case 6: Google LLC v. Oracle America, Inc. (USA, 2021)

Facts: Oracle sued Google for copyright infringement related to the use of Java APIs in Android.

Choice of Law Issue: While both parties operated in multiple countries, the U.S. court had to determine which aspects of copyright law applied.

Court Ruling: The court applied U.S. copyright law, focusing on the country where the allegedly infringing act occurred.

Significance: Even for global software companies, the court applies lex loci delicti (where the infringement occurs) for legal analysis.

Case 7: Gucci America, Inc. v. Weixing Li (USA, 2012)

Facts: A U.S. court case involving counterfeiting and international shipment of Gucci products.

Choice of Law Issue: Defendant operated from China, selling counterfeit goods in the U.S.

Court Ruling: U.S. courts applied U.S. law to the acts affecting U.S. consumers, even though production occurred abroad.

Significance: Highlights that courts prioritize where the harm occurs over where the infringer is based.

3. Key Principles from These Cases

Territoriality Principle: IP rights are generally enforced in the country of registration. Each jurisdiction’s law governs infringement within its territory.

Lex Loci Protectionis: Most courts apply the law of the country where the IP is registered/protected.

Lex Loci Delicti: Courts may also use the law of the place where the infringement occurred, especially for cross-border e-commerce.

Defendant Location: For online infringement, courts may apply the law of the country where the defendant is located (e.g., Louis Vuitton v. Akanoc).

Conflict Resolution: Global litigation often requires multi-jurisdictional strategies, settlements, or treaty frameworks (e.g., TRIPS under WTO).

4. Practical Implications for IP Owners

Register IP in all key markets to enable enforcement.

Monitor cross-border online activities and marketplaces.

Understand that enforcement in one country does not guarantee global remedies.

Use international treaties like TRIPS, Berne Convention, Paris Convention for harmonization.

Consider forum selection and arbitration clauses in licensing agreements to preempt disputes.