From patchwork to network: strategies for international intellectual property in flux.

• Author: Geller, Paul Edward

Laws of intellectual property define what is bought and sold on media and technology markets, notably works, trademarks, and inventions. Laws and treaties have traditionally been made and enforced by nation-states operating in a patchwork of territories. Now, the media and technology marketplace is being globalized in digital networks. The law is only beginning to respond to this change.(1)

To analyze this process in the field of intellectual property, this Article will consider the following questions: First, how is the patchwork of national laws lagging behind new networks in this field? Second, how does the international regime of intellectual property leave these laws in conflicts relative to the emerging global marketplace? Third, what strategies are available to private parties for dealing with legal uncertainties that are emerging in the short term? Lastly, how can these strategies be coordinated in the long term?

1. THE SHIFT FROM PATCHWORK TO NETWORK

   How do the patchwork and network models apply in the field of intellectual property? A patchwork consists of differentiated units, each separated from the other by clear-cut borders in space. A network consists of individuals at terminals, each linked and interactively communicating with others across space, while networks themselves tend to interconnect with each other globally.(2) Until recently, national laws of intellectual property, along with corresponding markets, fit within the patchwork model. Now, media technologies are shifting the marketplace to the network model.

   Laws of intellectual property have formed a patchwork country by country. Treaties in the field set out minimum rights, but in flexible terms so that each right may be implemented with more or less discretion.(3) Otherwise, these treaties, starting with the Berne and Paris Conventions, provide for national treatment, requiring each member-state to protect foreign treaty claimants like domestic claimants. Thus, while differing from country to country, much the same legal rules have governed most competitors in media and technology markets within each set of borders.(4) Industries have tended to group within such borders: for example, publishers have gravitated to centers such as Paris, London, and New York. Hard copies and products have been marketed outward from such centers within national territories.

   Now, however, markets are being globally networked. Computers are releasing creation and production from the constraints of geographical space. For example, they allow writers to ready text for publishing, composers to synthesize music, and designers to shape products, all at their desktops. Telecommunication media, like the fax and the Internet, enable teams of creators from the four corners of the earth to collaborate instantaneously across cyberspace.(5) The World Wide Web opens up new interactive channels between creators and producers, on the one hand, and mass and specialized markets, on the other. More generally, the communication of media productions, marketing symbols, and technologies is being decentralized and enriched between points of input and end-use.(6)

2. HOW THE SHIFT LEAVES LAWS IN VOLATILE CONFLICTS

   Patchwork law lags behind the networked marketplace. It suffices to focus on one basic problem to dramatize this lag: What law or laws of intellectual property should a court choose to govern cross-border infringement? In the patchwork, enforcement country by country, usually stopped illicit manufacturing or pirate presses, as well as commerce in infringing products or hard copies. Upon suit in any one country, the court there simply applied its own law to such products or copies within its jurisdiction. But what if, today, a court applied the law of any one country to network transactions crossing borders into other countries?(7) That law could provide too much or too little protection, and that country could become either a choke point or a pirate haven.

   For example, what law should govern transmitting raw data from a European database via the Internet to the United States or China? The European Union has now directed its member-states to institute sui generis property rights in raw data compiled into databases.(8) Suppose that a court considers unauthorized transmissions of raw data from Europe as completely localized inside Europe, effectively at the point of transmission. Then a European law granting property rights in the data might be chosen, at the source, to apply the transmissions worldwide and, accordingly, to those received in the United States and China. That choice of law might well hinder, indeed choke off, data flow at points within the global network that policies in these countries, among others, would still leave open.(9) Suppose, in turn, that a court localizes the infringing acts in the United States or China, where data is received but not strongly protected. Then, to European eyes, pirates may find havens in these countries, from which they might more or less freely retransmit data.(10)

   Such conflicts of laws are potentially quite volatile. The alternative resolutions just broached in the hypothetical data case parallel differing approaches to choosing laws to govern the broadcasting of works via satellite across multiple borders.(11) If suits for illicit satellite broadcasts were brought in different jurisdictions, the results could vary, for example, if one court applied the law of the transmitting country and another the laws of receiving countries.(12) Furthermore, not only do laws of intellectual property vary from country to country, but so do laws governing the ownership and transfer of such property, compounding the chances that different laws might be dispositive of similar cases of transfers of worldwide rights.(13) Finally, different courts follow different methods of resolving conflicts of laws: for example, European courts tend to apply categorical rules often codified in statutes and treaties, while North American courts may more easily take account of public policies in choosing laws.(14) Special conflicts analyses have been proposed to reduce such uncertainties in network cases, but they do not necessarily compel choosing the same laws in similar cases.(15)

   To respond to this problem, among others, the goal of a supranational code has been contemplated in the field of intellectual property for over a century.(16) Such a code would impose sufficiently uniform law worldwide that courts would not have to choose between conflicting laws on critical issues that typically arise in this field of law. The Berne and Paris Conventions have gradually approached this goal by dictating minimum rights that may be implemented with more or less variation in each member-state.(17) Most recently, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) represents new progress, treating most branches of intellectual property in one text applicable to most countries.(18) However, the TRIPs Agreement is not yet a systematic code, but it rather incorporates and supplements Berne and Paris provisions piecemeal.(19) The TRIPs Agreement thus still leaves patchwork law lagging behind an increasingly networked marketplace.

3. TRANSITIONAL STRATEGIES FOR PRIVATE PARTIES

   Hence the urgent question: What strategic options are available during this shift from patchwork to network? Distinguish the following levels of strategies: first, self-help; second, systems; and third, enforcement. In the transition from patchwork law, analysis at each of these levels takes place against the receding horizon of reliable network law. The following strategies are being outlined precisely to cope with this admittedly frustrating, interim perspective.

   1. Self-Help Strategies

      The first level is that of self-help strategies. Most simply, landlords build fences around their lands to prevent trespass, or herders brand cattle or sheep to keep rustling in check and, perhaps more importantly, to keep their livestock from being mixed up into their neighbors' herds on the way to market. Creators, innovators, and producers can use self-help measures, such as digital fences or brands, to manage what they originate, as well as to keep out or to help catch infringers.(20)

      Media productions, marketing symbols, technologies, and data, once digitized, can be copied perfectly and transmitted repeatedly worldwide. In copyright: circles there is a slogan regarding self-help measures against the resulting threat of digital piracy: the answer to the machine is in the machine.(21) That is, increasingly, new systems are being developed to fence in and to brand packets of digitized information and, more broadly, to manage its exploitation. Since the state of the art is rapidly changing, it would be futile to inquire into all possible strategies at this level.(22) Consider, instead, one oversimplified, hypothetical example.

      Suppose that an epic feature film is produced at the cost of fifty-million dollars. Commonly, more money is charged for access to such films upon initial release and less as the market is saturated. It is then crucial to release the film subject to self-help measures that keep it from being uncontrollably retransmitted throughout the marketplace. The film can be encrypted, and an initial signal sent to end-users' terminals to trigger feedback to verify that these terminals would only decode the film for viewing upon compliance with programmed conditions.(23) At the threshold, end-users could only access the film in decoded form on the condition that their credit-card accounts be debited for viewing the film. At the lowest price, the terminal would destroy all trace of the film after displaying it once; at higher prices, the terminal would allow specified, subsequent uses. An interface would articulate such options among which the end-user could choose.(24)

      The mere fact that claimants resort to such fences does not imply any right to stop...