Intellectual Property Rights and International Law
Mattias Rättzén is an international intellectual property attorney, working as an Associate at Taylor Wessing in London. He attended Harvard Law School (LL.M.) as a Fulbright Scholar and has a PGDip in Intellectual Property Law and Practice from the University of Oxford and a juristexamen (LL.M.) from Lund University. He is qualified as an attorney in New York, England and Wales, and Sweden, and has been an Associate Delegate for Sweden at WIPO in Geneva on the Standing Committee on Copyright and Related Rights. He has published several articles and regularly advises clients on intellectual property and related international issues.
This interview was conducted in the Fall of 2022. It has been edited for brevity and clarity.
Harvard Undergraduate Law Review: You currently work at a London firm with legal qualifications in both New York and Sweden and your line of work is very international, especially given increased globalization in the digital age. You also recently published an article, Closing the Patent Loophole Across Borders 20 UIC Rev. Intell. Prop. L. 358-411 (2021): https://repository.law.uic.edu/ripl/vol20/iss4/2/. We wanted to know, in your experience, how have countries traditionally mediated IP disputes in the cross-border context?
Mattias Rättzén: Good question. Things have been changing in the IP industry. We are moving to a more cross-border environment — as the markets are becoming more globalized and intertwined, so will IP issues. So what we’re seeing essentially is that the use of products and services is taking place across borders at a much greater frequency and extent than ever before. And part of this is because of marketplaces, but also because of technology. Technology has facilitated the dissemination of products or services. And some of these products and services can be IP protected.
And that affects the scope of IP infringement. You will be seeing IP infringement on a much larger scale. And we’re seeing these infringements not just on a larger scale, but also across borders. These kinds of disputes have been resolved traditionally in an international context because it is not new that things are crossing borders — that has happened for a very long time. It’s not new that companies are selling products and services in multiple countries. What we’re seeing now is, again, to a much greater extent than previously. So there are previous precedents for how you have answered these questions legally in various countries. And there are two aspects to this.
The first aspect is private international law. And that is which court has jurisdiction over an infringement case, and which law is applicable over infringement. And questions on international law always arise when you have something crossing borders. The second aspect is substantive IP law. And that answers the question of where an infringement, as a matter of intellectual property, is occurring. So these are the two questions. And traditionally speaking, how have these been answered? The answer to the first question on international law is quite simple. The tradition has been that litigants sue on a country-by-country basis. For example, a U.S. patent holder suing for infringement of a U.S. patent in the U.S. If infringement is going on in multiple countries, it’s a global activity. Again, that is becoming more prevalent. You will be suing in every country where you want to sue for infringement. So you’ll be suing in the U.S. for infringement of a U.S. patent; you’re suing in the UK for infringement on the UK patent; you’re suing in Germany for infringement on a German patent and so on. You will be suing in multiple countries wherever infringement is current. And that has been the traditional approach — suing on a country-by-country basis. And this has its pros, but also many cons, which have been recognized. We’re starting to see trends moving away from this kind of litigation, but it is still, I would say, a precedent that is being kept up in the practice today. You’re still seeing country-by-country litigation on patents, copyright, and trademarks.
The other aspect of this question you mentioned — how is globalization and technology impacting the intellectual property sphere? The second aspect is the substantive IP law. As I said initially, you would sue on a country-by-country basis, where infringement is occurring. My question is where– where is the infringement occurring — is a question of substantive IP law. And the question, of course, is answered differently for different IP rights. And different courts are answering this differently in different jurisdictions. Some would call this an unclear area of law. And the article which you have quoted touches upon this issue as a pattern of law. So where an infringement is occurring, in which countries when it’s transpiring across borders, is a question debated by courts and academics. And so far, we have not seen any legislative intervention on a global scale. So we are continuing to see different courts in different countries answering this question of where the infringement is occurring differently. And it is important because it relates to where you will sue. And it relates to which law is applicable. It’s also important where you need a license — you need a license where you have a possibility of infringing someone else’s patents. But, it’s a question that is largely still unresolved, with court opinions differing on different jurisdictions.
HULR: So you briefly touched on this notion of different courts having different jurisdictions. And you’ve previously written that courts have historically — and rightfully — been hostile towards enforcing patents outside of their country of protection. Could you provide us some context as to why that is necessarily the case?
MR: There are two sides to the story. Again, private international law is one aspect, and there is the substantive IP law aspect. Courts have traditionally been reserved and strict in both of these questions. But the first question is, would courts in, let’s say, the U.S., enforce the intellectual property rights of another country? Courts have traditionally been restricted for historical and formalistic reasons. It boils down to the principle of territoriality, which we call IP law. It has been a basic fact that intellectual property rights as a matter of law (this goes for any intellectual property rights, copyrights, trademarks, and patents) are national rights. And as a matter of law, some courts have inferred from that principle of public international law that courts in the home country of intellectual property have exclusive jurisdiction over their own intellectual property right. And the latest court case we saw on this in the U.S. was Voda versus Cordis Corp. from a federal circuit in 2007. So, it’s fairly recent. They said, as a matter of sovereignty, that U.S. courts will not decide on foreign intellectual property rights, because as a matter of sovereignty, that’s to be decided by the foreign courts.
The Federal Circuit has continued to be restricted and has been criticized by many scholars, including myself. A lot of people argue that this principle of exclusive jurisdiction does not stem from the fact that intellectual property rights are territorial. And instead, we’ve seen a trend where courts are saying that there is no principle-based objection to enforcing foreign intellectual property rights, as long as we can, under the normal rules of private international law, conclude that we have jurisdiction. A simple example of this: you’re suing a national company for infringements of foreign intellectual property rights. Under most principles of private international law, you have jurisdiction if a defendant is domiciled in before him. And if you have jurisdiction over a defendant, you would be able to sue over anything, including infringement of foreign intellectual property rights. So that is the development and trend which we’ve been seeing in other countries, not the U.S. so far. But in the UK, for example. I think that trend will continue, because it’s becoming important, as a matter of practice, that we’re able to efficiently litigate what are essentially global disputes, which you have because of globalization due to technological advancements. Intellectual property rights will continue to arrive at a larger scale than ever before that trend will continue. We will continue to see more infringement in more countries.
If I could sue in just one country and have one court with jurisdiction over everything, it would mean you only sue once and not dozens of times. It saves money, it tends to lead to less disparate results. If you have multiple courts deciding over the same type of case, different courts can come to different conclusions. So there are some advantages to this from a procedural perspective, which some litigants are realizing. From a patent sector, this is the biggest problem that we have for patents because we see much more litigation in patterns that we see in copyright and trademarks. And it’s usually occurring at many conferences at the same time. Partly because of this problem of national court disputes, we have, in Europe, enacted unitary patent agreements, which establish one unitary patent. This is not a national right — it’s a unitary right covering all of the countries in Europe that have signed this agreement. And a consequence of this agreement is that you will only have to sue once in one court. This is a unique legal innovation, which we have not seen anywhere else in the world. In the European Union, we have established these regional or unitary rights for intellectual property rights, which allows you to streamline court cases.
So that’s a very long answer to that question. But as I mentioned, to be clear, this is only one part of the answer, which is for private international law. The other aspect of this issue is the substantive IP law issue. This is quite similar because it stems from the same principle of territoriality — the fact that intellectual property rights are national rights. So what I just mentioned about private international law is how this fundamental principle of public international law has implicated questions of jurisdiction in private international law. It also implicates questions of substantive IP law on where the infringement is occurring. And there have been court cases, where courts have adopted a strict approach. For example, let’s assume that we have a patent case and a patent claim which comprises multiple steps. And you have to complete all of these steps to reach the technical effect of invention.
And as I mentioned before, as technology advances, we’re seeing more digitized inventions, products, and services. We see more kinds of inventions where some of these steps can be fragmented across jurisdictions. And that can occur very naturally. Costs are located in one country, servers are located in another country, and so on. So we’re seeing more often fragmented exercises of technology across borders, because technology, by its very nature, can be fragmented. This has implications for the law. Some countries have said — and this is the strict, formalistic approach of the principle of territoriality — that if you have infringement occurring across borders, then nothing is taking place in the same country. Because the patent claim, again, consists of multiple steps, let’s say four steps. If you have each step occurring in one country, then, as a matter of fact, nothing is occurring everywhere. And some countries have said, historically speaking, that because of that, there will be no infringement. Because as a matter of territoriality, you’re not infringing a patent since you’re not exercising all of the steps of that patent in that one country. And this is what I would describe as a loophole in the patent system. It’s a strict formalistic approach where you’re assuming, in law, that everything for patent infringement has to occur in the same country. I don’t think that’s realistic because that’s not how the world looks.
But as a matter of law, we’re still forced to answer the question of where infringement occurs. We have to answer that question as a matter of public international law. And again, different courts answer this differently. The strict approach is saying it occurs nowhere, which is quite illogical, in my opinion. The more modern approach is that we have to think about how to localize this activity. It has to occur somewhere — it can’t occur in thin air or a vacuum. So in the U.S., there have been multiple cases where if an invention is being controlled within the U.S. — even if servers are located abroad — you would say the invention is being exercised in the country. In Germany, you answer that question differently; there have been court cases looking at the commercial effect of infringement. Where do you suffer damages? Where do you see the commercial detriment of the infringement? Courts in the UK have battled with this problem and answered it differently as well. So they’ve asked — where is the substance of the infringement, the most essential part of the infringement, occurring? And that’s a matter of claim interpretation. We’re trying to figure out what’s most essential for this invention. So as you can see, in this area of substantive intellectual property, we have different answers in different courts. In my article, I proposed my own theory for solving this as well. But that’s a much longer story.
HULR: Right. So in that article, you propose that “it was undue to let territoriality either have a strict or expansive application in both IP law and private international law and a balanced approach is instead justified and appropriate, but that it should take into account the divergent interests involved in particular circumstances in each case.” So we wanted to know from you in practice, what would a system like this potentially look like?
MR: That’s a good question. We have two options, essentially, to streamline the country-by-country litigation, which is still the norm, unfortunately. It’s costly, it’s time-consuming, and it leads to conflicting results in different countries. There are two ways to solve that. The first is what I mentioned previously: unitary intellectual property rights, or even, in a utopia, a global intellectual property right. As a matter of principle, you would be able to sue anywhere, depending on how the rules are set up. As a matter of theory, you would be able to sue in any country in the scope of that right, and you would only need to sue once. For political, economic, social, technological, and legal reasons, a global intellectual property right, which has sometimes been called for by practitioners and companies, has never been achieved. It’s a very complex problem to solve — to get one intellectual property right — because intellectual property policies differ in different countries. So even if it’s a legal problem, and we have a solution to it, coming up with a unitary right is far more simple to say than do.
The other option for streamlining the otherwise disparate and fragmented national litigation is by what we call extra-territorial jurisdiction by national courts. And this is what I touched upon previously, where you’re suing on not just national intellectual property rights, but also foreign intellectual property rights. And there’s the question of whether you can do that legally. And there is a debate on this. And as I mentioned previously, the U.S. Federal Circuit said no in 2007. But that might not be the final word in the U.S. Other countries have said that legally speaking, it is possible. And the most prominent example is a Supreme Court case from the U.K, where the UK Supreme Court said that there was no objection, as a matter of principle in public international law, for a UK court to deal with foreign copyright infringement. And you could extend that legal theory to other intellectual property rights.
Why would you do that? Assuming you can, you would save money and time, and you would only have one court answering the same question for multiple countries. Of course, you will also need to enforce that decision. So assuming you’re able to enforce your judgment it’s a feasible option to explore as a litigant. This is rarely being pursued — this is very rare litigation that does not happen often. The main reason for this is that there’s not much precedent for it. It’s largely uncharted legal territory and is, therefore, a bit riskier as a litigant. Whereas in the traditional system, you sue on a national basis — it’s more certain and more predictable. Predictability is very important in litigation when you invest time and money, after all. So, that is the answer to a prominent international law question of “What would a framework for resolving that fragmented territorial jurisdiction look like?”
If I should also answer the substantive question, which is what I wrote about in the article to which you refer: there, I asked the question “Where does infringement occur? When it’s cross-border, where does it occur?” Again, the problem with the historically strict approach is that it will not occur anywhere, which is called a loophole. You will not be infringing anywhere. So, if you relocate some of your infringing activities across borders, having one part taking place in one country, another part in another country, and so on, you would not be infringing.
However, this is obviously unsatisfactory. We can have a system where you can easily and artificially evade infringement, and courts have expressed concern about that possibility. So, a framework to deal with that: I quoted three types previously from three types of court cases — ones from the U.S., which I mentioned, where you have previously looked at “where is the invention being controlled?” You have the German approach of “where can you see the commercial benefit or advantage taken out of the invention as it’s carried out across borders?” Then, you have a UK approach, which tries to understand where the substance of the invention is being carried out. I think all of these theories have their share of problems with clarity. They’re not particularly clear. It can be very difficult to understand, for example, where the substance or a central part of an invention is being carried out. In some cases, everything about an invention is essential. Otherwise, it doesn’t work. It can be very artificial and theoretical to try to dissect a particular part of an invention and try to find out where that is being carried out. An example of this is combination inventions, where everything is essential. So, the approach in the UK has its share of problems, and it might be applicable in some cases, but not universally applicable. The German approach, where you look at commercial effects, also has its share of problems in the sense that patent infringement — any infringement of an intellectual property right — is a strict liability tort. If you satisfy the claims of a patent, you infringe. There is no requirement in any national law that you have to injure the patent holder commercially to be able to sue for infringement. If you’ve been infringed, that is the end of the question and you should be able to sue for infringement without having to prove commercial injury, which is the side of damages, something you sometimes don’t request. So, the German approach does not fit very squarely into the patent system as a whole.
We’re not concerned about the commercial effect. If we look at the U.S. approach to control, sometimes you ask, “why is control a relevant factor?” If it might be a relevant factor to assume jurisdiction as a matter of forum in private international law, then control is something you would look at because it has a territorial connection to the forum. You can enforce against the litigant in that regard, but, from an infringement perspective, control is also an artificial concept. So, what I proposed in my article was that we try to look at this from above and think, “what are we really concerned about?”
Patent infringement is a technical analysis — it’s a technical test. Whether you infringe on a patent or not is an analysis of a claim and whether you’re taking advantage of a technical contribution of invention, as it is compacted into the claims. I proposed that we should have the same approach for answering where infringement occurs. So, just as we assume a technical approach from when an infringement occurs, if it occurs at all, we should assume the same approach for where an infringement occurs across borders. We still answer the same question: just because it’s occurring across borders, shouldn’t mean that we add new legal criteria that don’t belong in patent law. So, I proposed a technical test for looking at where the tangible result of invention — as it manifested in the real world — is occurring. If an invention is carried out, you have satisfied the claims and will see some tangible result somewhere.
HULR: We wanted to speak further about the UK’s role in this sphere. How have U.K. courts and European courts grappled with extraterritoriality issues within post-Brexit IP disputes on patents, trademarks, and copyrights? What changes have you witnessed throughout your work post-Brexit?
MR: I think that, because the UK has departed from the European Union, the benefit of having unitary or regional intellectual property rights in the European Union is no longer present in the UK. So, that’s one disadvantage of Brexit, which litigants will have to face for the long term. We’re no longer part of the European Union system and no longer have unitary rights, so the UK will act as just another foreign country. How have courts grappled with this issue? We have had no cases, as far as I’m aware of post-Brexit, concerning this. From a legal perspective, the answer to these questions would not be influenced, such as “where is infringement occurring?” European courts have answered that question by themselves for a very long time.
National courts in Europe such as Germany’s have taken their own approach as part of the European Union. The UK has taken its own approach pre-Brexit and it will continue to take its own approach post-Brexit. I don’t suspect seeing any changes relative to Brexit. What I have seen recently — probably the largest development we have in the UK for international patent litigation in the last few years — is the Unwired Planet Supreme Court case from the UK in 2020, which is pre-Brexit or post-Brexit depending on how you look at it. That court case dealt with questions of jurisdiction in patent law. It dealt with a particular type of patent litigation, which is FRAND litigation in the telecommunications sector. In the telecommunications industry, there have been a lot of patent lawsuits in the last few decades and they’re still increasing. These deal with what the royalty levels should be for telecommunications licenses. So, things like 3G, 4G, and 5G technology, which you have on your smartphone, are subject to patents. The patent holders have requested royalties for these and when there are disagreements on royalty levels, we see patent litigation for infringement. That litigation has occurred on a national basis, which I mentioned previously, which has been costly, time-consuming, and led to disparate results.
What the Supreme Court answered in the Unwired Planet case in 2020 was whether a UK court could have an infringement case of a UK patent and, as a remedy of infringement of a UK patent, request damages calculated on a global FRAND portfolio. What do I mean by a global FRAND portfolio? To simplify, typically in these licensing negotiations between parties, you would calculate the royalty for these patents on a global basis. You may have a global license, so you would not have a national license for each country. The UK Supreme Court answered that even if we are only dealing with infringement of national patents, we have global jurisdiction to answer the question of remedy — for damages calculated based on a global FRAND royalty rate. That was a significant court case and one of the most influential court cases worldwide on FRAND patent litigation. It’s not related to Brexit, but a development from the courts. We see a trend where courts are trying to determine if they’re able to collate issues that are otherwise litigated on a national basis.
HULR: How do differing levels of legal protections of inventions in different jurisdictions potentially deter the innovation and development of technology that is prone to international use?
MR: As an intellectual property holder, you would want to have protection in as many countries as possible where you have a market. And it’s still a national-by-national system: you would have to secure an intellectual property right in each country. The only exception is copyright, where we have no registrations, so you would automatically receive copyright everywhere in the world. But, for trademarks, for patents, for designs, you’ll have to procure them in each country where you want them and different countries have different laws on this.
There is some harmonization on a global level coming from treaties, like the TRIPS agreement from WTO. We have a Berne Convention on copyright and we have a Paris Convention on trademarks and patents. However, these only set a minimum level of protection for intellectual property. Most of the details — like when something is infringing and all the exceptions and limitations of these systems — are subject to national law and national interpretations by courts. So, we are seeing and we will continue to see — unless we see a significant development in global harmonization — different levels of protection, as you mentioned. This has some implications for rights holders. It could be that you’re not able to secure a patent at all in one country, but you can secure it in another. If the law is harmonized, and the law is the same in each country, the prospect of disparate conclusions happening lessens. If the law differs on matters of case law or other factors, such as whether you have a patent at all or whether someone is infringing, you will have a gap between not infringing in one country and infringing in another country. Is that detrimental to intellectual property systems? Yes, because the market becomes free to roam in that country where you lose your intellectual property rights. So, it is a problem we will continue to see unless we have some global substantive harmonization more than just what we currently have with minimum standards.
On deterring innovation: disparate treatment of patents, which usually comes with a significant investment of time and money to come up with an invention. If you don’t end up getting that protection in the end, either by not getting a patent or losing your patent in a lawsuit, someone can infringe freely without you being able to ask for an injunction to stop it. The benefit of a patent becomes nullified, right? The point of a patent is that it’s a monopoly — an exclusive right. Only you can do it or someone with your permission can do it. So, the more we see that happening, the less good it is for the patent system as a whole. Would that deter innovation? It’s a debated question. Some say yes, it will, because it contradicts what the patent system is about: protecting investments and enforcing investments in innovation, but others are unsure. It’s hard to calculate and track how it impacts innovation and the development of technology. So it’s a question that is quite hard to answer without doing rigorous studies.
HULR: Given the rise of artificial intelligence and machine learning, what challenges does the IP law community expect to face? Is there a strong legal argument for categorizing AI as an “inventor” when it comes to IP law?
MR: For now, I think this is a problem we are seeing mostly with patents and copyright. The use of AI technology can facilitate the creation of innovations and copyright-protected works. Currently, as it stands, we have no good answer to that question. There have been trial cases where people have tried to ask an inventor to be an AI. In both the European Patent Office and the Federal Circuit in the U.S., they said an AI cannot be an inventor. I think this stems from the fact that, for the whole intellectual property system on copyright and patents, you need to have an author for a copyright and an inventor for a patent — that has to be a human. I think as it stands now, this comes with rights and some responsibilities. A computer can’t have a right to something by itself. So, for example, for a patent, the inventor has the right to apply for a patent and it will take some time before a computer can do that by itself. So, can AI be an inventor or a copyright author? This is unresolved, and the answer so far is no. I think the industry would agree.
Do we need to change the law? Perhaps, but how would we do it? Perhaps it’s something that deserves discussion at WIPO for a new treaty, but it’s hard to square within the current legal system as it stands. Currently, as it stands, you have to work around it and you will have to name the inventor or the copyright holder a human being. To consider the AI that has been used to facilitate the creation of intellectual property work as a tool would leave the question: “but who will the rights holder become?” Will it become the person who created the AI? Is that satisfactory? I think different people would answer that question differently. But as it stands, currently, we have no satisfactory solution to it and we might need legislative intervention if we want to move the needle and put AI development at an equal level with the law.