Online and across borders: a net gain for technology companies?

Online and Across Borders:A Net Gain For Technology Companies?Edwards WildmanGareth Dickson

October 16, 2012

Introduction

♦ Rules on jurisdiction: Foundations for ivory towers?

♦ Application to eCommerce disputes:

♦ Recent European cases

♦ A cause for concern from further afield

♦ Conclusions for technology companies

Rules on Jurisdiction

♦ Jurisdiction and Governing law

♦ Home or away?

♦ Different procedural and evidential rules♦ Rules of disclosure and privilege♦ Recovery of damages and costs

♦ Practicalities♦ Location of evidence♦ Location of witnesses♦ Language barriers and transport costs

Application to eCommerce disputes

♦ Lack of harmonisation regulating online behaviour leads to forum shopping

♦ Where IT services are provided across borders, disputes typically involve claims in contract and in tort

♦ Desire to achieve foreseeability, sound administration of justice and the efficacious conduct of proceedings

♦ CJEU has given some guidance, not all of it helpful

Application to eCommerce disputes

Council Regulation (EC) No 44/2001 on jurisdiction and therecognition and enforcement of judgments in civil and commercialmatters:

♦ Persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State. Art 2(1)

♦ A person domiciled in a Member State may, in another Member State, be sued:

♦ in matters relating to contract, in the courts for the place of performance of the obligation in question. Art 5(1)(a)

♦ in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur. Art 5(3)

Recent European CaseseDate v. X, Cases C-509/09 and Case C-161/10

♦ Can accessibility of online material create jurisdiction?

♦ Rules of special jurisdiction are derogations “based on the existence of a particularly close connecting factor between the dispute and the courts of the place where the harmful event occurred”

♦ “The internet reduces the usefulness of the criterion relating to distribution.” Criteria “must therefore be adapted”:♦ Sue for all damage in D’s domicile or place of establishment♦ Sue for national damage where information published♦ Sue for all damage where Claimant has “centre of interests”

Recent European CasesWintersteiger AG v. Products 4U, Case C-523/10

♦ Litigation in Austria over advertisement by a German company on google.de that allegedly infringed Austrian trade mark

♦ Did Austrian Court have jurisdiction to hear Wintersteiger’s claim?

♦ Contrast with eDate:♦ Mere accessibility insufficient to create jurisdiction♦ Sue in courts of Member States where right is protected♦ Sue in courts of Member States where Defendant is established

♦ “The place of establishment of the server cannot, by reason of its uncertain location, be considered to be the place where the event giving rise to the damage occurred.”

Recent European CasesFootball Dataco v. Sportradar, Case C-173/11

♦ FD alleged Sportradar had:♦ extracted data from FD’s football statistics database; and♦ jointly re-utilised that data with sites aimed at UK Internet users

♦ Transmission theory vs. Emission theory

“In the context of the Internet, the usefulness of employing conceptual constructions formulated in the context of broadcasting is highly questionable… What is required [is] a specific construction tailored to the particular characteristics of communication via the internet”

♦ “Making available to the public” is a “collection of acts” which occur, inter alia, where the server is located

Recent European CasesTitus Alexander Jochen Donner, Case C-5/11

♦ “Distribution to the public” to be given an independent interpretation – but same as “making available to the public”

♦ Distribution “characterised by a series of acts” from, at least, conclusion of a contract of sale to the performance thereof by delivery to a member of the public

♦ Distribution may therefore take place, and be actionable, in a number of Member States

♦ Acts of the supplier vs. acts on his behalf

Assessing Jurisdiction Under Article 5(3)EC Regulation 44/2001

Predicting Jurisdiction Under Article 5(3)EC Regulation 44/2001

Case AG Court Jurisdiction (AG) Jurisdiction (Court)

eDate(Online, personality rights and privacy)

Cruz Villalón29 March 2011

Grand Chamber25 October 2011

All damage:1. Where content provider is

established; or2. Where Claimant has "centre of

interests" and dispute has its "centre of gravity"

National damage:Where content is published

interests“

National damage:Where content is accessible

Wintersteiger(Online, nationaltrade marks)

Cruz Villalón16 February 2012

First Chamber19 April 2012

1. Where right protected; or2. Where means necessary to produce

a potential for infringement were used

1. Where right protected; or2. Where advertiser is established; but3. NOT where the server is located

Titus Donner(Offline, copyright)

Jääskinen29 March 2012

Fourth Chamber21 June 2012

Where there is a targeted sales and delivery channel for buyers to acquire works

Where any of the "series of acts" giving rise to a "distribution [making available] to the public" occur

Sportradar(Online, database)

Cruz Villalón21 June 2012

Third Chamber18 October 2012

Where any of the "collection of acts" needed to produce a "making available to the public" occur, including where the server is located

WATCH THIS SPACE!

interests“

WATCH THIS SPACE!

interests“

WATCH THIS SPACE!

Recent European CasesLucasfilm v. Ainsworth [2009] EWCA Civ 1328

♦ Online sale of allegedly infringing goods into California from UK. Lucasfilm sought remedies in the UK

Recent European CasesLucasfilm v. Ainsworth [2009] EWCA Civ 1328

♦ Court of Appeal:♦ “The sheer omnipresence of the Internet does not easily create

that presence which is a necessary ingredient in the enforceability of foreign judgments”

♦ Mere accessibility falls short of “establishing a fixed place of business from which [a defendant] carries on business”

♦ “Mere selling of goods from country A into country B does not amount to the presence of the seller in country B”

♦ Supreme Court:♦ “The English court has jurisdiction [in claims for infringement of

foreign copyrights], provided that there is a basis for in personam jurisdiction over the defendant”

Recent European CasesSolvay v. Honeywell, Case C-616/10

♦ Belgian company sued one Dutch and two Belgian companies for infringement of a European patent, valid in Netherlands and Belgium, amongst others

♦ Honeywell raised invalidity as a defence and said Dutch courts had no jurisdiction

♦ CJEU said:♦ Since there was a risk of irreconcilable judgments, the

Defendants could be sued together in the Netherlands♦ National Court could grant preliminary injunctive relief against

all three Defendants

A Cause for Concern Further AfieldBahattab v. Juniper Networks Middle East, 2012

♦ Decision of the Dubai Court of Cassation

♦ Concerned a claim of infringement of a US patent by the sale of network routers within UAE

♦ Claimant sought royalty for all routers worldwide

♦ First patent dispute in Dubai’s 12 year patent-law history

♦ No Court made any finding on the issue of jurisdiction!

Conclusions for Technology Companies

♦ Trends in the CJEU’s jurisprudence