1 | 2021
Volume 12 (2021)
Issue 1 ISSN 2190-3387

Editorial

by Toshiyuki Kono, Axel Metzger, Pedro de Miguel Asensio

International Law Association’s Guidelines on Intellectual
Property and Private International Law (“Kyoto Guidelines”):
General Provisions

by Alexander Peukert and Benedetta Ubertazzi

Applicable Law
by Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl, Mireille van Eechoud,Jane C Ginsburg, Toshiyuki Kono, Gyooho Lee, Rita Matulionyte,
Edouard Treppoz, Dário Moura Vicente
Recognition and Enforcement
by Pedro de Miguel Asensio and Marketa Trimble

Annex:
Guidelines on Intellectual Property and Private International Law (“Kyoto
Guidelines“)
by ILA Committee on Intellectual Proterty and Private International Law

Editors:
Thomas Dreier
Axel Metzger
Gerald Spindler
Lucie Guibault
Miquel Peguera
Séverine Dusollier
Chris Reed
Karin Sein

Journal ofIntellectual Property,
Information Technology,
and Electronic Commerce
Law

Jurisdiction
by Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys, Axel Metzger,
Dário Moura Vicente, Sierd J Schaafsma, Benedetta Ubertazzi

www.jipitec.eu

Table Of Contents
Journal of Intellectual Property,
Information Technology andElectronic Commerce Law
Volume 12 Issue 1 March 2021
www.jipitec.eu
contact@jipitec.eu
A joint publication of:Prof. Dr. Thomas Dreier, M. C. J. (NYU)
KIT - Karlsruher Institut für Technologie,
Zentrum für Angewandte
Rechtswissenschaft (ZAR),
Vincenz-Prießnitz-Str. 3,
76131 Karlsruhe Germany
Prof. Dr. Axel Metzger, LL. M. (Harvard)
Humboldt-Universität zu
Berlin, Unter den Linden 6,
10099 Berlin
Prof. Dr. Gerald Spindler
Dipl.-Ökonom, Georg-AugustUniversität Göttingen,
Platz der Göttinger Sieben 6,37073 Göttingen
Karlsruhe Institute of Technology,
Humboldt-Universität zu Berlinand Georg-August-Universität
Göttingen are corporations underpublic law, and represented bytheir respective presidents.
Editors:
Thomas Dreier
Axel Metzger
Gerald Spindler
Lucie Guibault
Miquel Peguera
Séverine Dusollier
Chris Reed
Karin Sein
Board of Correspondents:
Graeme Dinwoodie
Christophe Geiger
Ejan Mackaay
Rita Matulionyte
Giovanni M. Riccio
Cyrill P. Rigamonti
Olav Torvund
Mikko Välimäki
Rolf H. Weber
Andreas Wiebe
Raquel Xalabarder

Editor-in-charge for this issue:
Axel Metzger
Technical Editor:
Lydia Förster
ISSN 2190-3387
Funded by

Editorial

by Toshiyuki Kono, Axel Metzger, Pedro de Miguel Asensio

1

International Law Association’s
Guidelines on Intellectual
Property and Private International
Law (“Kyoto Guidelines”)
General Provisions
by Alexander Peukert and Benedetta Ubertazzi

4

Jurisdiction
by Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys, Axel Metzger, Dário
Moura Vicente, Sierd J Schaafsma, Benedetta Ubertazzi
13
Applicable Law
by Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl, Mireille van Eechoud,Jane C Ginsburg, Toshiyuki Kono, Gyooho Lee, Rita Matulionyte, Edouard
Treppoz, Dário Moura Vicente
44
Recognition and Enforcement
by Pedro de Miguel Asensio and Marketa Trimble

74

Annex
Guidelines on Intellectual Property and Private International Law (“Kyoto
Guidelines“)
by ILA Committee on Intellectual Property and Private International Law

86

Toshiyuki Kono, Axel Metzger and Pedro de Miguel Asensio

Editorial
by Toshiyuki Kono, Axel Metzger and Pedro de Miguel Asensio© 2021 Toshiyuki Kono, Axel Metzger and Pedro de Miguel Asensio
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Toshiyuki Kono, Axel Metzger and Pedro de Miguel Asensio, Editorial, 12 (2021) JIPITEC 1 para 1.

1

It is with great pleasure that we can present withthis Special Issue of JIPITEC the “Kyoto Guidelines
on Intellectual Property and Private International
Law” of the International Law Association (ILA)
with extended comments. The Kyoto Guidelines are
the outcome of an international cooperation of agroup of 35 scholars from 20 jurisdictions lastingfor ten years under the auspices of ILA. The Kyoto
Guidelines have been approved by the plenary of the
ILA 79th Biennial Conference, held (online) in Kyoto
on December 13, 2020. The Kyoto Guidelines provide
soft-law principles on the private international law
aspects of intellectual property, which may guidethe interpretation and reform of national legislationand international instruments, and may be useful
as source of inspiration for courts, arbitrators andfurther research in the field.

2

The ILA Committee on “Intellectual Property andPrivate International Law” was created in November
2010. Its aim was to examine the legal framework
concerning civil and commercial matters involving
intellectual property rights that are connected
to more than one State and to address the issues
that had emerged after the adoption of several
legislative proposals in this field in different regionsof the world. The work of the Committee was built
upon the earlier projects conducted by the Hague
Conference of Private International Law as well as
several academic initiatives intended to develop
common standards on jurisdiction, choice of law
and recognition and enforcement of judgments in
intellectual property matters.

3

In the initial stages of the activities of the Committee
it was agreed that its overall objective should be todraft a set of model provisions to promote a more
efficient resolution of cross-border intellectual
property disputes and provide a blueprint fornational and international legislative initiatives
in the field. Therefore, the focus of its activities
has been the drafting of a set of guidelines with aview to provide a valuable instrument of progress2

concerning private international law aspects
raised by intellectual property. Furthermore, theCommittee conducted a number of comparative
studies and monitored the developments in different
jurisdictions around the world. The Committee also
worked in collaboration with several internationalorganizations, particularly the World Intellectual
Property Organization and the Hague Conference
on Private International Law.

1

4

Acting in accordance with its mandate, the membersof the Committee gathered on more than ten
occasions. In addition, committee members andofficers organized a number of seminars, workshops
and meetings. The Committee’s activities conductedwithin this decade can be grouped into five mainstages. First, preparing comparative studies ofthe pre-existing projects and starting discussions
in subcommittees about the content of the ILA
Guidelines (2010-2012). Second, drafting of the first
proposals to be included in the Guidelines, mainly
on non-controversial issues related to jurisdiction,
choice of law, and, recognition and enforcement of
judgments (2013-2014). Third, finalizing the draft
guidelines on non-controversial issues as well aslaying down directions for continuing the discussions
on controversial issues (2015-2016). Fourth, finalizing
the text of the guidelines concerning the remaining
points, including some novel issues identified at alater stage, such as those concerning collective rights
management (2017-2018). Fifth, drafting of two
sets of explanatory comments to the Guidelines inorder to make explicit the underlying considerations
behind the different provisions and to facilitate theiruniform interpretation (2019-2020).

5

The final text of the Guidelines consists of 35
provisions, which are divided in four sections:
General Provisions (Guidelines1-2), Jurisdiction (318), Applicable Law (19-31) and Recognition and
Enforcement of Judgments (Guidelines 32-35). As
suggested by the term “Guidelines”, this instrument
contains a set of provisions intended to guide the2020Editorial
application or reform of private international laws
in this field. The Guidelines restate certain wellestablished foundational principles such as the lexloci protectionis rule and aspire to provide concrete
solutions for pressing contemporary problems, inareas such as multi-state infringements and crossborder collective copyright management. In orderto make explicit the influence of the previous
projects in the field and to facilitate the comparison
with them, the short comments are preceded by
the reference to the similar provisions adopted
previously in the ALI Principles1, CLIP Principles2,
Transparency Proposal3 and Joint Korean-Japanese
Principles4. As an additional instrument to facilitate
the uniform interpretation of the Guidelines, theCommittee has prepared a set of extended comments
to all the provisions.
6

The Guidelines are published here together withextended comments written by members of the
ILA Committee which explain the background andapplication of the Guidelines. We as the Chair and
Co-Rapporteurs of the ILA Committee would like tothank all members who contributed to the successful
completion of the project, specifically to those whohave written the extended comments published here
in JIPITEC. We would also like to thank ILA Directorof Studies and Headquarter staff members for theirenduring support as well the editors of JIPITEC for
accepting our work as a special issue of the journal.
Toshiyuki Kono
Axel Metzger
Pedro de Miguel Asensio

1

American Law Institute, Intellectual Property: Principles
Governing Jurisdiction, Choice of Law and Judgments inTransnational Disputes, ALI Publishers, 2008.

2

European Max Planck Group on Conflict of Laws inIntellectual Property, Conflict of Laws in Intellectual Property(Text and Commentary), OUP, 2013.

3

Japanese Transparency Proposal on Jurisdiction, Choice ofLaw, Recognition and Enforcement of Foreign Judgments inIntellectual Property, see the English text in J. Basedow, T.
Kono and A. Metzger (eds.), Intellectual Property in the Global
Arena - Jurisdiction, Applicable Law, and the Recognition of
Judgments in Europe, Japan and the US, Mohr Siebeck, 2010, pp.
394-402.

4

Joint Proposal by Members of the Private International Law
Association of Korea and Japan, see The Quarterly Review ofCorporation Law and Society, 2011, pp. 112-163.

1

2

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Toshiyuki Kono, Axel Metzger and Pedro de Miguel Asensio

INTERNATIONAL LAW ASSOCIATIONINTELLECTUAL PROPERTY AND PRIVATEINTERNATIONAL LAW
Members of the Committee:
Professor Toshiyuki Kono (Japan): Chair
Professor Axel Metzger (Germany):
Co-Rapporteur
Professor Pedro A de Miguel Asensio (Spain):
Co-Rapporteur

Professor Marie-Elodie Ancel (France)
Professor Stefania Bariatti (Italy)
Professor Nicolas Binctin (France)
Professor Joost Blom (Canada)
Professor Claire Wan-Chiung Cheng (China(Taiwan))Professor Carlos Correa (Argentina)
Professor Francois Dessemontet (Switzerland)
Professor Josef Drexl (Germany)
Professor Rochelle C Dreyfuss (USA)Professor Mireille van Eechoud (Netherlands)
Professor Susy Frankel (New Zealand)
Professor Jane C Ginsburg (USA)Dr Jie (Jeanne) Huang (HQ-China)
Dr Paulius Jurcys (HQ-Lithuania)
Professor Ryu Kojima (Japan)
Professor Daniel Kraus (Switzerland)
Professor Svetlana Krupko (Russia)
Professor Ivana Kunda (Croatia)
Professor Gyooho Lee (Korea)
Dr Rita Matulionyte (HQ-Lithuania)
Professor Alexander Peukert (Germany)
Professor Fabricio Bertini Pasquot Polido(Brazil)
Professor Benedetta Ubertazzi (Italy)
Professor Sierd J Schaafsma (Netherlands)
Professor Dan Svantesson (Australia)
Professor Paul Torremans (UK)
Professor Edouard Treppoz (France)
Professor Marketa Trimble (USA)Professor Dário Moura Vicente (Portugal)
Professor Marcos Wachowicz (Brazil)
Professor Dai Yokomizo (Japan)
Professor Peter Yu (USA)

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Kyoto Guidelines: General Provisions

International Law Association’s Guidelines onIntellectual Property and Private International
Law (“Kyoto Guidelines”): General Provisions
by Alexander Peukert and Benedetta Ubertazzi

Abstract:
The chapter “General Provisions”
of the International Law Association’s Guidelines onIntellectual Property and Private International Law(“Kyoto Guidelines”) focuses on their scope of application. It provides the conditions under which the
Guidelines are intended to be applied. The Guidelines cover only cross border disputes and transactions between private parties involving intellectual
property rights. Hence, they only refer to situa-

tions connected to more than one State. The definition of “intellectual property rights” is of particular
relevance to determine the scope. Given the similarities to certain claims based on unfair competition the possibility to apply the Guidelines mutatis mutandis to such claims is also contemplated.

© 2021 Alexander Peukert and Benedetta Ubertazzi
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Alexander Peukert and Benedetta Ubertazzi, Kyoto Guidelines: General Provisions, 12 (2021) JIPITEC
4 para 1.

A. General Provisions

Short comments

1. Scope of the Guidelines

1

These are Guidelines on “Intellectual Property in
Private International Law”. Guideline 1(1) specifies
this general explication of the Guideline’s subject
matter by setting out that the Guidelines apply tocivil and commercial matters involving intellectual
property rights that are connected to more than one
State. The Guidelines have been drafted specificallyfor such matters. Therefore, every application of
the Guidelines requires an assessment whether
the requirements set out in Guideline 1(1) are met.
Guideline 1(2) adds two further constellations
in which the Guidelines may be applied mutatis
mutandis.

2

According to Guideline 1(1), the Guidelines areapplicable under three cumulative conditions. The
cause of action has to be (1) a civil and commercial(and not a public law) matter, (2) it has to “involve”
intellectual property rights as defined in Guideline
2(1), and (3) it has to be connected to more than one
State, i.e. it has to entail an international element. If(1) These Guidelines apply to civil and commercial
matters involving intellectual property rightsthat are connected to more than one State.
(2) These Guidelines may be applied mutatis
mutandis to claims based on unfair competition,
if the matter arises from the same set of facts
as relating allegations involving intellectual
property rights, and on the protection ofundisclosed information.
See as reference provisions§ 102 ALI Principles
Art 1:101 CLIP Principles
Art 001 Transparency Proposal
Art 101 Joint Korean-Japanese Principles

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2021

Alexander Peukert and Benedetta Ubertazzi
Hypothetical 3

one of these three requirements is lacking, questionsof international jurisdiction, applicable law andrecognition and enforcement are either not at stake(no international element) or ought to be decided on
different grounds, namely the (private) internationallaw rules governing the respective non-intellectual
property right matter.
3

E holds several patents and trade secrets concerninga machine. He or she enters into a license contract
with F, which covers the relevant patents andtrade secrets for several States. The Guidelines areapplicable to this contract according to Guideline
1(1) (patent license) and Guideline 1(2) (trade secrets
license). Consequently, the parties may choose thelaw governing this contract (Guideline 21). Absent
a choice, the law applicable to the contract is to be
determined according to Guideline 22(1)(b).

Only in two cases may the Guidelines be relied upon
beyond their direct scope of application. According
to Guideline 1(2), this concerns firstly claims basedon unfair competition, if the matter arises from thesame set of facts as relating allegations involving
intellectual property rights, and secondly, claims
based on the protection of undisclosed information.
On the one hand, these causes of action differ
doctrinally from claims based on intellectual
property rights so that a separate qualification iscalled for. On the other hand, the two claims referred
to in Guideline 1(2) share the purpose of intellectual
property rights in that they aim at protecting aparticular asset to the exclusive benefit of one
party. In light of these similarities in structure andpurpose, Guideline 1(2) provides the option to apply
the Guidelines “mutatis mutandis”.

Guidelines
4

These Guidelines present the results of the ILA
Committee on Intellectual Property and Private
International Law.1 Just like the “Principles” or“Proposals” published by European, American,
and Asian predecessor projects in the field,2 theGuidelines do not constitute a formally binding
instrument such as a Convention that States are
obliged to directly apply or incorporate into theirdomestic law. Instead, the term “Guidelines”
suggests that the document contains an advisory,non-binding set of provisions, which can guidethe application or reform of private internationallaws. The instrument may be considered as a codeof current best practice with certain innovative
provisions where appropriate.3

5

Guidelines can be both general as well as concrete.
These Guidelines accomplish both. On the one
hand, they restate well-established foundational
principles such as the lex loci protectionis rule forall matters concerning the intellectual property
right as such (Guideline 19). On the other hand, theGuidelines provide concrete solutions for pressing
contemporary problems, for example regarding
the law applicable to ubiquitous and multi-state
infringements (Guideline 26) and to cross-bordercollective copyright management (Guideline 27).

1

Cf. ILA Committee Rules & Guidelines nos. 3.2, 6.1, adopted
by the Executive Council on 25 April 2015, http://www.ilahq.org/index.php/committee-rules-and-guidelines.

2

ALI Principles; CLIP Principles; Article 101(1) Joint KoreanJapanese Principles.

3

Similar Hague Principles on Choice of Law in International
Commercial Contracts, Introduction, paragraph I.5.

Extended comments
Hypothetical 1
A and B are both habitually resident in State X. A
alleges that B infringes copyrights held by A in States
X and Y. If A only seeks protection in State X, theGuidelines do not apply for lack of a connection of
the matter to more than State X. If A, instead, sues
B for copyright infringement in both States X and Y,
the matter has an international element so that the
Guidelines are applicable. In no case do the Guidelines
cover, however, criminal procedures and penalties
against B and administrative border measures ofcustoms authorities preventing the release into thefree circulation of copyright infringing goods into
States X or Y.
Hypothetical 2
D imitates a product of C and sells its imitations inseveral States. C sues D, asking for an injunction anddamages. He or she bases his/her claim on design
rights and the allegation that the unauthorized
product imitation is contrary to honest practices inindustrial or commercial matters. The Guidelines
apply directly to the design rights cause of action, andthey may be applied mutatis mutandis to the unfair
competition claim. The Guidelines are inapplicable,
however, if C furthermore and unrelated to theimitation claims that D misleads consumers throughfalse product specifications.

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Kyoto Guidelines: General Provisions
Civil and commercial matters6

7

punish a person for conduct proscribed by criminal
law,8 implements administrative border measures9or other public law sources to enforce intellectual
property laws, the Guidelines are inapplicable.
Nor do they apply to judgments on judicial actions
brought either to enforce or appeal such public laworders.10

The Guidelines only apply to “civil and commercial
matters”.4 The reason for using the word “commercial” as well as “civil” is that in some legal systems,“civil” and “commercial” are regarded as separate
categories. Since Guideline 1(1) covers both categories, it does not matter whether a legal system considers intellectual property as part of the “civil” or
the “commercial” branch or even both branches ofthe law.5“Involving intellectual property rights”
9Whereas intellectual property rights have significant
repercussions on the public interest and also for thatreason are generally considered territorial in nature,they are still “private rights” enforced or challenged
in “civil” or “commercial” disputes before civil
courts or arbitral tribunals.6 Because of this private
nature of the matter, the Guidelines deviate fromstrict territoriality where appropriate. For example,
the defendant’s forum has, in principle, territoriallyunlimited jurisdiction (Guideline 3), validity claims
may under certain conditions and restrictions be
decided by courts outside of the State of registration(Guideline 11), and certain multi-state infringements
may be adjudicated by applying only the law or lawsof the State(s) having an especially close connection
with the global infringement (Guideline 26).

8

All these deviations from territoriality only seemappropriate, however, in cases of international
civil and commercial disputes involving intellectual
property rights. This requirement of Guideline 1(1)is intended to exclude matters of public law suchas revenue, customs or administrative matters7 andcriminal law from the scope of application of the
Guidelines. A public law matter is characterized
by the fact that one of the parties exercises
governmental or sovereign powers that are notenjoyed by ordinary private persons. It is therefore
necessary to examine the legal basis of the action. If
the action is based on laws establishing intellectual
property rights as defined in Guideline 2(1) or otherprivate laws such as contract law, the Guidelines may
be relied upon. If, instead, a public authority seeks to4

Similar § 102(1) ALI Principles (civil dispute, civil action);
Article 1:101(2) CLIP Principles (“civil matters”); Article001(1) s. 1 Transparency Proposal (“civil disputes”); Article
101(2) Joint Korean-Japanese Principles (“civil disputes”).

The second requirement for the applicability of the
Guidelines is that the civil and commercial matterhas to involve intellectual property rights. The term
“intellectual property right” is defined in Guideline
2(1) as meaning copyright and related rights, patent,utility model, plant breeder’s right, industrial
design, layout-design (topography) of integrated
circuits, trademark, geographical indication andsimilar rights. It follows e contrario from Guideline
1(2) that claims based on unfair competition andon the protection of undisclosed information are
not covered by the term “intellectual property
right” and thus the Guidelines. At a maximum, theGuidelines may be applied mutatis mutandis to suchcauses of action.

10 The international case at stake has to “involve”
intellectual property rights.11 According to thegeneral meaning of “to involve”, the matter has toinclude intellectual property rights as a necessary
or integral part or result.12 The Guidelines onjurisdiction, applicable law and recognition andenforcement provide guidance on which disputes
satisfy this requirement. Regarding the substantive
law basis of a claim, the Guidelines distinguishbetween matters concerning an intellectual
property right “as such” (Guidelines 8, 19-20),
intellectual property right infringements (Guidelines
5-6, 25-27), and contractual matters (Guidelines
4, 21-24). An international case accordingly“involves” an intellectual property right if its
adjudication requires a determination of the title
to, ownership of, existence, validity, registration,
duration, transferability, and scope (including
the remuneration for the legal use of copyrighted
8

Cf. Article 61 TRIPS.

9

Cf. Articles 51-60 TRIPS.

10

Draft Convention on the recognition and enforcement offoreign judgments in civil or commercial matters, Revised
Draft Explanatory Report, December 2018, paragraphs 2831.

5

Cf. Explanatory Report on the 2005 Hague Choice of Court
Agreements Convention (Hartley/Dogauchi Report),paragraph 49.

6

TRIPS Preamble; Guideline 31.

117

Article 1(1) Hague Draft Convention on the recognition andenforcement of foreign judgments in civil or commercial
matters.

Likewise § 102(1) ALI Principles; Article 1:101 CLIP
Principles; Article 101(2) Joint Korean-Japanese Principles;
Article 001(1) s. 1 Transparency Proposal.

12

Involve, Oxford English Dictionary.

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Alexander Peukert and Benedetta Ubertazzi
13 Regarding jurisdiction and applicable law, theconnection of an intellectual property right matterto more than one State can follow either from thedivergent residence of the parties or any otherelement relevant to the dispute.15 If not all of theparties are habitually resident in the same State,
an international element is present, even if, forexample, an intellectual property license contract
deals with an intellectual property right granted
for one State only (Guideline 22(1)(a)). Conversely,
the fact that all parties to a dispute are resident in
one State does not exclude the applicability of the
Guidelines because the necessary connection toanother State can be derived from other relevant
elements of the case, for example the grant of alicense for more than one State (Guideline 22(1)(b))
or an alleged infringement by one of the parties inanother State. The criteria listed in Guideline 16,
for example the nationality of one party, are alsosufficient to establish internationality of the casebut insufficient for exercising jurisdiction. The
sole fact that the parties have chosen a foreign
court to govern their otherwise purely domestic
relations should, however, not suffice to establish
internationality.16

works or the subject-matter of related rights) of
an intellectual property right; and/or one party
seeks protection against an intellectual property
right infringement. Contracts involve intellectual
property rights and thus fall under the Guidelines ifthey “deal with” one or several intellectual property
rights (cf. Guideline 22(1)) or where the efforts of an
employee give rise to an intellectual property right(Guideline 23(1)). Whether these thresholds are met
has to be decided in each individual case, considering
all circumstances.
11 From a procedural point of view, the Guidelines
cover proceedings concerning matters of title toand ownership of a right (Guideline 8), the grant,
registration, validity, abandonment, or revocationof a registered intellectual property right (Guideline
11(1)), and actions seeking substantive relief on thebasis of intellectual property license or transfer
contracts (Guideline 4) or for an intellectual property
right infringement (Guideline 5). The Guidelines
furthermore apply to other proceedings, in particulardeclaratory actions, including declarations of noninfringement (Guideline 12), and provisional andprotective measures (Guideline 13) if they entail adetermination of the substantive issues mentioned
before. Counterclaims, finally, are subject to the
Guidelines if the original claim involves intellectual
property rights and thus falls under the Guidelines,
and the counterclaim arises out of the same set offacts on which the original claim is based (Guideline
15).

14 Regarding recognition and enforcement, a case isinternational where recognition or enforcement of aforeign judgment is sought.17 As a result, an originallypurely domestic case can become international andthus subject to the Guidelines if it is to be recognized
or enforced in another State.18“Connected to more than one State”

Application to claims based on unfair competition

12 For the Guidelines to be applicable, the civil orcommercial matter involving intellectual property
rights furthermore has to be “connected to morethan one State”.13 The purpose of this requirement is
to exclude purely domestic situations from the scopeof application of the Guidelines. If an intellectual
property case lacks any international element,
questions of private international law and thus
a need to apply the Guidelines do not arise fromthe outset.14 The ascertainment of internationality
requires a careful case-by-case analysis. As a firststep, one has to distinguish between internationality
for the purposes of jurisdiction and applicablelaw and the determination of internationality forthe purposes of recognition and enforcement.

15 The Guidelines apply to international matters
involving intellectual property rights as definedin Guideline 2(1). According to Guideline 1(2), theGuidelines may furthermore be applied mutatis
mutandis to claims based on unfair competition,

13

Cf. § 102(1) ALI Principles.

14

Cf. Article 1(1) Hague Convention on Choice of Court
Agreements; § 102(1), (6) ALI Principles; Article 1:101(1) CLIP
Principles; Article 101(2) Joint Korean-Japanese Principles;
Article 001(1) s. 1 Transparency Proposal.

1

7

15

Cf. Article 1(2) Hague Convention on Choice of Court Agreements; Hague Principles on Choice of Law in International
Commercial Contracts, Introduction, paragraphs 1.14 et seq.

16

Cf. Article 1(2) Hague Convention on Choice of Court Agreements; Explanatory Report on the 2005 Hague Choice of
Court Agreements Convention (Hartley/Dogauchi Report),paragraphs 41-43; Hague Principles on Choice of Law in International Commercial Contracts, Introduction, paragraph
1.21.

17

Cf. Article 1(3) Hague Convention on Choice of Court Agreements.

18

Explanatory Report on the 2005 Hague Choice of Court
Agreements Convention (Hartley/Dogauchi Report), paragraphs 44-45.

2021

Kyoto Guidelines: General Provisions
19 Guideline 1(2) caters for these similarities anddifferences between intellectual property and unfair
competition law by stating that the Guidelines “maybe applied mutatis mutandis”. Guideline 1(2) thus
provides a basis to subject, where and in so far as
appropriate, unfair competition claims to the same
private international law rules as related intellectual
property claims. Guidelines that lend themselvesto application to intellectual property-related
unfair competition claims include the universal
competence of the defendant’s forum (Guideline 3),
the double-headed infringement jurisdiction under
Guideline 5, Guidelines 25-26 on the law applicable toinfringements,22 and the Guidelines on recognitionand enforcement with the exception of Guideline
35(4) concerning the validity of registered rights.
In contrast, the Guidelines dealing with the title
to, ownership of, existence, validity, registration,
duration, transferability, and scope of an intellectual
property right (Guidelines 8, 11, 19, 20), and withcollective copyright management (Guideline 27) are
too much based on an intellectual property right “assuch” as to be informative for deciding international
unfair competition cases.

if the matter arises from the same set of facts as
relating allegations involving intellectual property
rights.
16 Claims based on unfair competition law can concern
a broad range of diverse situations. Article 10bis of
the Paris Convention requires effective protection
against acts “contrary to honest practices inindustrial or commercial matters” but effectively
leaves it to the contracting parties to define thisthreshold of unfairness. Many situations dealt
with under the heading of “unfair competition”
are completely unrelated to intellectual property.
This is the case, for example, with regard to mostmisleading and aggressive commercial acts vis-à-vis
consumers or the violation of statutory provisions
that also intend to regulate market behavior. Cases
like these are beyond the scope of application of the
Guidelines.
17 Unfair competition laws and functionally equivalent
torts can, however, also provide a basis forprotection where intellectual property law fails
to do so. Plaintiffs often claim that the defendant
infringed certain intellectual property rights,
and that he or she in any event practiced unfair
competition/passing off.19 One scenario concerns
allegations of unfair (“slavish”) product imitation,
which complement allegations of infringements ofe.g. design rights or copyrights. The other scenario
pertains to misleading commercial practices thatcreate a risk of confusion with the trademark, tradename or other protected sign of a competitor. These
are situations where “the matter arises from thesame set of facts as relating allegations involving
intellectual property rights” (Guideline 1(2)).

Application to the protection of undisclosed
information
20 The second category of cases to which the Guidelines
may be applied mutatis mutandis according to
Guideline 1(2) concerns claims based on theprotection of undisclosed information. As with unfair
competition claims, this optional extension of thecore scope of application of the Guidelines reflects
the closely related yet still different legal nature andpurpose of the protection of undisclosed informationcompared to the protection of intellectual property.

18 But even in such constellations of closely related
intellectual property and unfair competition claims,
the doctrinal and teleological differences between
the two areas of law have to be taken into account.
In particular, the Guidelines concerning ownershipand transferability suppose a predefined right that is
owned by someone and that is, at least in principle,
fungible. Unfair competition law, instead, defines
the general boundaries of lawful market behavior,and sanctions these limits with private tort claims
and/or public law remedies.20 Therefore, questionsof ownership and transferability of rights canonly become relevant with regard to intellectual
property rights. In light of these differences, privateinternational laws and instruments distinguishbetween both areas.21
19

For an example see German Supreme Court, 13 October
2004, Case I ZR 163/02, GRUR 2005, 431 – Hotel Maritime.

20

Comment C06 Article 1:101 CLIP Principles (Torremans).

21

Cf. § 301(2) ALI Principles; Article 303 Transparency

1

21 On the one hand, both types of protection reflect a balance between the private interestin certain kinds of information, and the public interest. The mix of private and public interests at stake in trade secrets is much the sameas it is in conventional intellectual property.

Proposal; Article 304(3) Joint Korean-Japanese Principles;
Articles 110, 136 Swiss IPRG; Articles 17, 20 Japanese PIL Act;
Article 44 (torts) and Articles 48-59 Chinese Law on the Laws
Applicable to Foreign-Related Civil Relations, 28 October
2010, transl. Lu; Article 6 and 8 Regulation (EC) No 864/2007of the European Parliament and of the Council of 11 July
2007 on the law applicable to non-contractual obligations(Rome II), [2007] OJ L199/40.
22

8

The law for which intellectual property right protection issought (lex loci protectionis) regularly coincides with the lawof the State on whose territory competitive interests on agiven market collide (lex loci damni).

2021

Alexander Peukert and Benedetta Ubertazzi
2. Definitions

And indeed, the TRIPS Agreements regulates theprotection of undisclosed information as one formof “intellectual property”.23

1. “Intellectual property right” means copyrightand related rights, patent, utility model,
plant breeder’s right, industrial design,
layout-design (topography) of integrated
circuits, trademark and similar rights.

22 On the other hand, the protection of undisclosed
information takes various forms in national laws,
ranging from the application of general civil
remedies to specific provisions and forms of sui
generis protection that are akin to but not quite afungible property right.24 Equally heterogeneous are
the types of information as regards which protection
against unauthorized acquisition, use and disclosure
is claimed. Whereas trade secrets protection is akinto intellectual property protection, the protectionof government and personal secrets differs
fundamentally from intellectual property rights.

2. “Judgment” means any judgment rendered bya court or tribunal of any State, irrespectiveof the name given by that State to theproceedings that gave rise to the judgment or
the name given to the judgment itself, such as
decree, order, decision, or writ of execution.
“Judgment” also includes court-approved
settlements, provisional and protective
measures, and the determination of costs or
expenses by an officer of the court.

23 In light of these similarities and differences,
Guideline 1(2) provides that the Guidelines “maybe applied mutatis mutandis”.25 As with regard
to certain, intellectual property-related unfair
competition claims, users thus have the option
to apply the Guidelines to the protection ofundisclosed information where and in so far as
appropriate, considering all circumstances of thecase. International trade secrecy cases may thus be
adjudicated on the – if necessary modified – basisof Guideline 3 on the universal competence of the
defendant’s forum, the double-headed infringement
jurisdiction under Guideline 5, Guideline 8 on thelaw applicable to determine who the “trade secretholder” is,26 Guidelines 21-24 on the law governing
contracts that deal with trade secrets, Guidelines 2526 on the law applicable to infringements, and the
Guidelines on recognition and enforcement with the
exception of Guideline 35(4) concerning the validityof registered rights.

23

Articles 1(2), 39 TRIPS. Consequently, § 102(1) ALI Principles
stipulates that these “Principles apply to transnational
civil disputes that involve copyrights, neighboring rights,
patents, trade secrets, trademarks, related intellectual
property rights, and agreements related to any of theserights”.

24

See, e.g. Directive (EU) 2016/943 of the European Parliamentand of the Council of 8 June 2016 on the protection ofundisclosed know-how and business information (trade
secrets) against their unlawful acquisition, use anddisclosure, [2016] OJ L157/1.

25

Article 1:101(3) CLIP Principles.

26

Cf. Article 2(2) Directive (EU) 2016/943 of the European
Parliament and of the Council of 8 June 2016 on the protectionof undisclosed know-how and business information(trade secrets) against their unlawful acquisition, use anddisclosure, [2016] OJ L157/1.

1

See as reference provisions§ 102(1) ALI Principles
Arts 1:101(2) s. 2, 4:101 CLIP Principles
Art 001(1) s. 2 Transparency Proposal
Art 102(1)-(3) Joint Korean-Japanese Principles

Short comments
24 By defining the term “intellectual property right”
for the purposes of the Guidelines, Guideline 2(1)helps to delineate their scope of application. Thereis no universally agreed understanding of the term
“intellectual property right”. Article 2(viii) of the
WIPO Convention and Article 1(2) of TRIPS provide
definitions only “for the purposes” of the respective
treaties. The term “intellectual property right” andthe open clause “similar rights” in Guideline 2(1)should be interpreted as taking into consideration
the overall purpose and content of the Guidelines.
25 Taken together, Guidelines 1 and 2 distinguish three
categories of international civil and commercial
matters to which the Guidelines apply directly,
apply mutatis mutandis or do not apply at all. The
first category concerns intellectual property rights
as defined in Guideline 2(1), i.e. the explicitly
mentioned rights and “similar rights”. Whereas the
Guidelines should be applied in cases “involving”
such intellectual property rights without
modification (Guideline 1(1)), the Guidelines “maybe applied mutatis mutandis” to certain claims basedon unfair competition and to claims based on theprotection of undisclosed information (Guideline
1(2)). All other international civil and commercial
matters are beyond the scope of application of the
Guidelines.
26 The term judgment is defined broadly, to coverany decision on the merits by any authority having
jurisdiction in civil matters involving intellectual
property, regardless of the name given to the decision92021

Kyoto Guidelines: General Provisions
or the proceedings. The definition of judgment isparticularly relevant with regard to the applicationof the provisions of the Guidelines on recognitionand enforcement. However, it is also significant withregard to other parts of the Guidelines, such as theprovisions on consolidation and lis pendens.

National and regional intellectual property laws havegone beyond this level by codifying several other“related rights”. EU directives and respective EU
Member States’ laws, for example, also protect first
fixations of films, critical and scientific publications,non-creative photographs, the investment in a
database, and press publications.31 By covering
these rights, the term “related rights” functions asa small general clause for all new exclusive rights inthe cultural sector.

Extended comments
Intellectual property rights
27 Like all predecessor principles/proposals concerning
intellectual property in private international law,27
the Guidelines define their scope of application
by referring to a number of concrete examples ofintellectual property rights that are complemented
by an open clause, which allows to apply the
Guidelines to “similar rights”. This way, Guideline
2(1) aims at combining legal certainty with flexibility
in light of the fact that legislatures constantly create
new types of intellectual property rights.

30 In addition to copyright and related rights, Guideline
2(1) mentions six industrial property rights most ofwhich are covered by the TRIPS Agreement, the Paris
Convention for the Protection of Industrial Property,
and/or the treaties establishing WIPO’s “Global
Protection System”.32 First among those rank patents
for inventions,33 second utility models, which enjoyless international recognition and harmonization,
but are also regulated by the Paris Convention.34
The plant breeder’s right as currently specified
on the international level in the Convention for
the Protection of New Varieties of Plants (UPOV)
is the third industrial/intellectual property right.
The fourth industrial property right listed in
Guideline 2(1) concerns industrial designs, which
are covered by the Guidelines irrespective ofwhether the right requires registration or not.35

Rights expressly mentioned
28 Guideline 2(1) lists eight types of rights, which are
to be considered intellectual property rights for the
purposes of the Guidelines. If a civil and commercial
matter, which is connected to more than one State,involves one or several of these rights, the Guidelines
apply directly.
29 The first example of an intellectual property rightis copyright, i.e. an economic and/or moral right inany type of literary, artistic or scientific work.28 The
second category of rights covered by the Guidelines
concerns rights “related” to copyright. Thisterminology is borrowed from the TRIPS Agreement,
which in the title of part II section 1 also speaks of“copyright and related rights”.29 The international
acquis of “related rights” in the TRIPS Agreement
and several WIPO treaties comprises rights ofperformers, of producers of phonograms (soundrecordings), and of broadcasting organizations.30
27§ 102(1) ALI Principles; Article 1:101(2) s. 2 CLIP Principles;
Article 001(1) s. 2 Transparency; Article 102(1)-(3) Joint
Korean-Japanese Principles.

28

Article 2(viii) WIPO Convention; Article 2 Berne Convention;
Comment 1:101.C02 CLIP (Torremans).

29

Article 1:101(2) s. 2 CLIP Principles and §102(1) ALI Principles
refer synonymously to “neighboring rights”.

30

Articles 1(2), 14 TRIPS; Article 2(viii) WIPO Convention(performances of performing artists, phonograms, andbroadcasts); see further International Convention for theProtection of Performers, Producers of Phonograms andBroadcasting Organizations (1961); Convention for the Protection of Producers of Phonograms Against Unauthorized

1

Duplication of Their Phonograms (1971); Brussels Convention Relating to the Distribution of Programme-Carrying
Signals Transmitted by Satellite (1974); WIPO Performancesand Phonograms Treaty (WPPT) (1996); Beijing Treaty on
Audiovisual Performances (2012).

10

31

Directive 2006/116/EC of the European Parliament and of
the Council of 12 December 2006 on the term of protectionof copyright and certain related rights (codified version),[2006] OJ L372/12; Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal
protection of databases, [1996] OJ L77/20; Directive (EU)2019/790 of the European Parliament and of the Council of
17 April 2019 on copyright and related rights in the Digital Single Market, [2019] OJ L130/92, and amending Directives 96/9/EC, [1996] OJ L77/20, and 2001/29/EC, [2001] OJ
L167/10, Article 2(4), 15.

32

https://www.wipo.int/treaties/en/.

33

Article 2(viii) WIPO Convention; Article 27(1) TRIPS; Article
102(1) Joint Korean-Japanese Principles.

34

Cf. Articles 5A(5), 4E Paris Convention.

35

Article 4 Paris Convention; Articles 25-25 TRIPS; Article 1
Council Regulation (EC) No 6/2002 of 12 December 2001 on
Community designs, [2002] OJ L3/1.

2021

Alexander Peukert and Benedetta Ubertazzi
The same holds true for the protection of the layoutdesign (topography) of integrated circuits, the fifth
example for an industrial/intellectual property
right.36

given if a right holder (single or joint ownership)
is entitled to authorize or prohibit the use of acertain good or resource vis-à-vis any third party.
The exclusive legal position at issue has to have apredefined scope within a specific territory so thatit makes sense to speak of a title to or ownershipof a right in a particular object (cf. Guidelines 8, 20)
and that furthermore the existence and scope of theright can be distinguished from an infringement(cf. Guideline 19, 25). Since this property rights
structure is lacking in matters involving claims
based on unfair competition and on the protectionof undisclosed information, Guideline 1(2) provides
that the Guidelines may in these cases only beapplied mutatis mutandis. Finally, the exclusive rightat issue ought to be private in the sense that theright holder is free to decide whether to authorize or
prohibit a use that encroaches on the exclusive scopeof the right.41 Whether and under which conditions
an intellectual property right is transferable is,however, to be determined according to the law of
the State for which protection is sought (Guideline19). Accordingly, laws prohibiting the commercial
use of any sign consisting of or containing the
Olympic symbol except with the authorization of
the International Olympic Committee establish a“similar right” in the sense of Guideline 2(1).42 Thesame is true for the protection of geographicalindications because the TRIPS Agreement andseveral WIPO treaties oblige members/contracting
parties to provide “interested parties” with thelegal means to prevent the unauthorized use ofprotected geographical indications and appellationsof origin.43 Another inconclusive factor regarding
legal similarity is whether the right in question
requires registration.44

31 Finally, Guideline 2(1) mentions trademarks, forwhich there is a broad international consensus thatthey fall under the rubric of intellectual property
rights,37 and are furthermore subject to the same
private international law rules governing copyright,
patent and other industrial property rights matters.38“Similar rights”
32 The broad concept of “intellectual property right”
is not limited to the eight categories of rights listed
in Guideline 2(1). Lawmakers have the power toestablish other rights that share core characteristics
of copyright, copyright-related and industrial
property rights. As the history of intellectual
property law proves, lawmakers indeed make useof this legislative power. In order to allow theapplication of the Guidelines to cross-border matters
involving such other rights, Guideline 2(1) adds thatrights “similar” to those explicitly mentioned also fall
into the category of “intellectual property rights”.39
Whether the Guidelines are directly applicable on
this basis depends upon a comparison between theright in question and the rights explicitly listed in
Guideline 2(1). The requisite similarity concerns two
aspects.
33 Firstly, the structure of the legal position at stake
has to be similar to that of the intellectual property
rights specified in Guideline 2(1). Their mostimportant feature is exclusivity.40 Exclusivity is
36

Cf. Washington Treaty on Intellectual Property in Respect ofIntegrated Circuits (1989).

37

Article 2(viii) WIPO Convention; Articles 15-21 TRIPS.

38

Cf. § 102(1) ALI Principles; Article 1:101(2) s. 2 CLIP Principles;
Article 001(1) s. 2 Transparency Proposal; Article 102(1)-(3)Joint Korean-Japanese.

39

40

1

34 The second aspect with regard to which the rightat issue has to be similar to the rights explicitly
mentioned in Guideline 2(1) concerns its subject
matter. The examples listed confirm that theexclusive property rights in the national law concerned”).

Functionally equivalent formulations can be found in all
predecessor principles/proposals; cf. Article 1:101(2) s. 2
CLIP Principles and Article 001(1) Transparency Proposal(“similar exclusive rights”); § 102 ALI Principles (“relatedIntellectual Property rights”); Article 102(1) Joint KoreanJapanese Principles (intangible property “including” invention etc.).
Article 1:101(2) s. 2 CLIP Principles and Article 001(1)Transparency Proposal (“similar exclusive rights”);
Statement by the European Commission concerning Article
2 of Directive 2004/48/EC of the European Parliament andof the Council on the enforcement of intellectual property
rights, [2005] OJ L94/37 (“in so far as these are protected as

11

41

Cf. TRIPS, Preamble (private rights).

42

Nairobi Treaty on the Protection of the Olympic Symbol adopted at Nairobi on September 26, 1981.

43

Article 10 Paris Convention; Madrid Agreement for the
Repression of False or Deceptive Indications of Source on
Goods; Articles 22-24 TRIPS; Lisbon Agreement on Appellations of Origin and Geographical Indications. But see Article
1:101(3)(a) CLIP Principles (mutatis mutandis application of
the CLIP Principles to the protection of geographical indications).

44

This is only relevant for the applicability of those Guidelines
which specifically address registered intellectual property
rights, in particular Guideline 11.

2021

Kyoto Guidelines: General Provisions
Guidelines are Guidelines on “intellectual” property,
not on any type of property right in privateinternational law. In particular, the Guidelines do
not apply to ownership in movables and immovables(real property). Consequently, an exclusive right isonly a “similar right” under Guideline 2(1) if thesubject matter results from an intellectual, creativeor otherwise entrepreneurial human activity thatcan be easily duplicated.45 Personal data do not fall
into this category and are thus beyond the scope of
the Guidelines.46

by:Alexander Peukert
Prof. Dr. iur., Professor of Civil and Commercial Law witha Specific Focus on International Intellectual Property
Law, Goethe-Universität Frankfurt am Main, contact:a.peukert@jur.uni-frankfurt.de
Benedetta Ubertazzi
Ph.D., LL.M. (Valladolid), Aggregate Professor ofInternational Law, Università degli Studi di MilanoBicocca, contact: benedetta.ubertazzi@ubertazzi.it

35 Examples of rights that may satisfy the double
similarity standard comprise rights in trade names,47
rights in sports events, in traditional knowledge,
genetic resources and traditional culturalexpressions, and rights derived from supplementary
protection certificates. In cross-border matters
involving these intellectual property rights, theGuidelines are applicable.
Alexander Peukert
Judgment
36 The definition of the term “judgment” is mainly
intended to clarify the decisions that can eventually
be recognized and enforced under the Guidelines,
provided that the particular judgment concerned
meets the requirements laid down in the section onrecognition and enforcement. The broad concept of
judgment encompasses decisions of many different
types, including monetary and non-monetaryjudgments and, hence, the features of the particular
judgment concerned influence the application of
the provisions on recognition and enforcement,
particularly with regard to the grounds for nonrecognition. The determination of costs or expensesof the proceedings by the court is also covered
to the extent that it relates to a decision on the
merits. Provisional and protective measures are also
covered, but recognition and enforcement of suchmeasures remain subject to specific restrictions,
as it is also the case with regard to judgments
which have not become final yet. Interlocutory
decisions of a procedural nature are in principle notcovered by the definition and hence not subject torecognition and enforcement under the Guidelines.
Benedetta Ubertazzi

45

Cf. Article 2(viii) WIPO Convention; Article 102(1) Joint
Korean-Japanese Principles.

46

Cf. Comment 1:101.C03 CLIP Principles.

47

Article 2(viii) WIPO Convention; Articles 1(2), 8 Paris
Convention.

1

12

2021

Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.

International Law Association’s Guidelines onIntellectual Property and Private International
Law (“Kyoto Guidelines”): Jurisdiction
by Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys, Axel Metzger, Dário Moura Vicente, Sierd J Schaafsma,
Benedetta Ubertazzi
Abstract:
The chapter “Jurisdiction” of the International Law Association’s Guidelines on Intellectual Property and Private International Law (“Kyoto
Guidelines”) provides where international intellectual
property claims can be brought to court. It defines
the basic forum at the defendants domicile and alternative fora for contractual, infringement and otherkinds of claims. It also provides grounds that should
be taken as insufficient for the granting of jurisdiction. The chapter states to what extent validity andregistration claims should be subject to exclusive jurisdiction. Finally, it comprises Guidelines for the coordination of claims pending before different courts.

© 2021 Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys, Axel Metzger, Dário Moura Vicente, Sierd J Schaafsma, Benedetta
Ubertazzi
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al., Kyoto Guidlines: Jurisdiction, 12 (2021) JIPITEC
13 para 1

A. Basic Forum

State of residence. The jurisdiction of those courts
shall be without territorial limits. Claims based onregistered and unregistered intellectual property
rights from different protection States may beconcentrated at the defendant’s forum, subject to
Guideline 11 on exclusive jurisdiction for validity
disputes.

3. Defendant’s Forum
Unless otherwise provided for in these Guidelines,
the defendant should be subject to the jurisdictionof the courts of the State in which he or she ishabitually resident. The courts’ jurisdiction shallbe territorially unlimited.
See as reference provisions§ 201 ALI Principles
Arts 2:101, 2:207 and 2:601 CLIP Principles
Arts 101, 102 and 106 Transparency Proposal
Arts 201, 202 Joint Korean-Japanese Principles

Short comments
1

Guideline 3 lays down the internationally accepted
principle that a person may be sued in the courts of
the State in which the person is habitually resident(actor sequitur forum rei). The principle ensures
a balance of interests between the plaintiff who
initiates the lawsuit and the defendant who candefend him or herself before the courts of his or her
1

13

2

However, the applicable law will not necessarily be
the law of the forum State but has to be determinedin accordance with Guidelines 19-31.

3

The Guideline does not define the habitualresidence of a person. Here, the model provisionsof the predecessor projects may provide further
guidance, especially in case of companies or otherlegal persons where different connecting factors(statutory seat, place of administration or principal
place of business) may represent alternative placesof residence. However defined, general jurisdiction
requires that one of the habitual residences is in theforum State. It is not sufficient for a court to havegeneral jurisdiction if the defendant is only doing
business in the forum State.

2021

Kyoto Guidelines: Jurisdiction
Extended comments

does business in a given jurisdiction, even if it is themost important market for the defendant, e.g. if
the defendant produces spare parts for cars which
are exported by the car manufacturer. Instead, theGuideline requires that the company conducts its
main business activities in the forum State.

Hypothetical 1
A sues B for worldwide infringement of copyrightin a blockbuster movie based on the alleged making
available of the movie in a peer-to-peer file-sharing
network. A claims for injunctive relief and fordamages. If A brings suit in the courts of the Stateof B’s habitual residence, the courts may orderinjunctive relief and damages on a worldwide basis.

Unlimited jurisdiction
6

The court’s jurisdiction is unlimited with regard
to the substance and the territorial scope of theclaim. The unlimited territorial scope of the court’s
jurisdiction is stressed explicitly in Guideline 3
because it is still controversial in intellectual property
cases. According to the Guideline, the plaintiff may
bring suit based on the alleged infringement ofregistered and unregistered intellectual property
rights protected in the forum State or in otherStates. The Guideline does not allow courts to
decline jurisdiction merely on the ground that
foreign intellectual property rights are concerned.
Deciding cases based on foreign intellectual
property law may require that the court enters into
an analysis of foreign substantive law and decides
on the merits with regard to foreign intellectual
property law. However, this is no compelling reason
to decline jurisdiction since courts are experienced
applying foreign law. As a consequence, theterritorial scope of the subject matter is primarily
determined by the plaintiff’s drafting of the claim.
This approach is followed by all predecessor projects
and most courts.4 However, there is also US case law
to the contrary.5

7

Courts following the approach suggested in the
Guideline shall allow the plaintiff to bring suitbased on an alleged worldwide infringement,
especially in cases of copyright and well-known
trademarks. For those rights, it is not unlikely thata clear infringement action may potentially leadto claims in all or at least in many Member Statesof the Berne or Paris Convention or the WTO.
These Conventions guarantee the protection of

Hypothetical 2
A sues B for infringement of patents registered for
the States X, Y and Z. A seeks an award of damages.
B’s central administration is in State W. A may sue
B before the court of State W for damages based on
the alleged infringement of the patents registered in
X, Y and Z. If B raises the invalidity of the patents as
a defense, Guideline 11 on exclusive jurisdiction forvalidity disputes has to be considered.
Habitual residence of natural persons
4

Guideline 3 follows the predecessor projects andrefers to the (habitual) residence of the defendantand not to the domicile.1 A mere temporary presence
in a given State will typically not suffice if the person
does not establish significant connections in that
State. Whether this is the case must be determinedby the courts on a case-by-case analysis. The habitualresidence of a natural person acting in the courseof a business activity may be located, for actions
related to that activity, at the persons principal
place of business.2 This approach does not preclude
the private residence as a possible forum but adds
another forum at the principal place of business.
Habitual residence of companies and other entities

5

For companies or other entities, different connecting
factors may be used to determine the habitualresidence. The predecessor projects used lists ofpossible alternative fora, referring to the statutory
seat or registered office, its central administration or
its principal place of business. Article 63 Brussels Ia
Regulation follows the same approach. The different
criteria are listed as alternatives. It is, therefore,
sufficient that one of the mentioned places islocated in the forum State. The principal placeof business must not be confused with the doing
business-rule that is applied in some common law
jurisdictions.3 It is not sufficient that the defendant

1§ 201 (2) ALI Principles; Article 2:601(1) CLIP Principles.

2

Article 2:601(1) CLIP Principles.

3

For the US see Supreme Court of the United States,

1

International Shoe Co. v. Washington, 326 US 310 at 318 (1945);
for Canada see Supreme Court of Canada, Club Resorts Ltd. v.
Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at paragraphs 90,
96, 120 and 123.

14

4

See e.g. for Germany District Court of Düsseldorf, 31 May
2001, Case 4 O 128/00, GRUR Int. 2001, 983 – Schwungrad; for
the Netherlands IEPT 19891124, HR, Focus Veilig v. Lincoln
Electric [1989]; for the UK Lucasfilm Ltd. & Ors v. Ainsworth &Anor UKSC 39 [2011].

5

United States Court of Appeal Voda v. Cordis Corporation, 476
F.3d 887 (Fed. Cir. 2007).

2021

Joost Blom, Rochelle C. Dreyfuss, Paulis Jurcys et al.
copyrights6 and well-known trademarks7 without
any formalities. Therefore, right holders may assume
that an infringement has occurred in a high numberof jurisdictions.
8

In case of registered intellectual property rights,
plaintiffs may choose more carefully the jurisdictions
they seek protection for. As a consequence, patent
cases are typically limited to certain, strategicallychosen battle ground States. Still, bringing suit incross-border infringements cases requires the court
to allow claims for different protecting States.

9

Such a concentration of claims at the defendant’s
forum is subject to Guideline 11 on exclusive
jurisdiction for validity claims and related disputes.
According to Guideline 11, the court’s jurisdiction
at the defendant’s forum is not affected if the
defendant raises the invalidity of a registeredintellectual property right as a mere defense. The
situation changes if invalidity arises in the context
of a principal claim or counterclaim. For the details
see the comments on Guideline 11.

the obligation to pay license fees or remuneration,
or damages out of a breach of contract. However,it should be borne in mind that contractual claims
are often subject to an exclusive choice of court
agreement in accordance with Guideline 9.
11 The court’s jurisdiction under Guideline 4 is
territorially limited to the State in which the court
is situated. The argument of proximity to the facts
and to the evidence of the case applies only toclaims based on intellectual property protected inand licensed or transferred for that State. In multistate cases, the plaintiff may either bring the claim
before the defendant’s forum or initiate parallel
proceedings in multiple States based on Guideline 4.
Extended comments
Hypothetical 1
Writer A from State X is in dispute with her publisher
B from State Y over the accounting statement of
the sales figures of her last novel in the X. A seeks
additional information and supplementary license
fees from B. A may bring suit before the courts of
X since the rights in dispute have been granted forState X.

Axel Metzger

B. Alternative Fora

Hypothetical 2

4. Contracts

If A seeks information and license fees with regard to
B’s use of her novel in States X and in Y, A may stillbring suit before the courts of X but only limited tothe information and the license fees regarding B’s
use of the novel in X. If A wants to concentrate both
the X and the Y part of the case in one suit, she mustsue in the defendant’s forum in State Y.

In disputes concerning intellectual property
license or transfer contracts, a person may besued in the courts of the State for which thelicense is granted or the right is transferred; thecourt’s jurisdiction shall be territorially limited
to the State in which the court is situated.

Courts of the State for which the license is granted or
the right is transferred

See as reference provisions§ 205 ALI Principles
Art 2:201 CLIP Principles
Art 204 Joint Korean-Japanese Principles

12 Guideline 4 follows the predecessor projects andprovides a special jurisdiction for claims relating toa contract. All older projects provide such special
jurisdiction rules. Guideline 4 reflects the common
core of the older projects and suggests a simplified
wording.

Short comments
10 Guideline 4 lays down an alternative ground ofjurisdiction for matters relating to contracts. The
plaintiff may choose to bring claims arising out of
intellectual property license or transfer contracts
before the courts of the State for which the license
is granted or the right is transferred. The courts ofthis State may be closer to the facts of the case andto the evidence. The courts determined by Guideline
4 are competent to decide all disputes arising outof the contract, e.g. on the obligation to grant alicense or transfer an intellectual property right, on
6

Article 5(2) Berne Convention.

7

Article 6bis Paris Convention.

1

Irrelevance of the place of performance of theobligation in question
13 Different from older instruments on jurisdiction,8Guideline 4 avoids using the place of performance ofspecific obligations as a connecting factor.9 Although

15

8

See Article 5 N° 1 Brussels Convention on jurisdiction andthe enforcement of judgments in civil and commercial
matters.

9

See also Supreme Court of the United States, Burger King

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Kyoto Guidelines: Jurisdiction
Territorially limited jurisdiction

it may be assumed that the place of performance of agiven obligation is the place closest to the evidence ofa case concerning that obligation, experience showsthat the determination of the place of performanceraises difficult preliminary questions.10 Suchdifficulties are avoided by Guideline 4. Determining
the place of performance of a given obligation
requires, first, to determine the applicable law to
the contract and, second, to identify the place ofperformance under the applicable substantive law.
Moreover, the place of performance may deviate
for different obligations arising from one and thesame contract, e.g. the obligation to grant a license
and the obligation to pay license fees may havedifferent places of performance. Therefore, more
recent instruments like the Brussels Ia Regulation,11
the Lugano Convention12 and the Hague Draft
Convention of 200113 tend to define, at least for themost important contracts, one connecting factor for
all obligations arising from the contract. Guideline
4 is based on the assumption that courts of theState for which the license is granted or the rightis transferred are most proximate to the facts andthe evidence for all disputes arising from a licenseor transfer contract, irrespective whether the
obligation to license or transfer, the obligation to
pay or a damage claim is in dispute.

15 The court’s jurisdiction under Guideline 4 is limited
to the territory of the State in which the court issituated. This limitation is in accordance with thelimitations of the other grounds of special jurisdictionin Guidelines 5 and 6. Several reasons advocate forsuch limitation. A court which competence is solely
based on Guideline 4, can only rely on its specificproximity to the facts and evidence within theforum State. Moreover, the limitation of competence
strikes a balance between the interests of theplaintiff, who can choose between the defendant’s
forum with unlimited jurisdiction and the contract
forum with limited jurisdiction, and the interestsof the defendant who is exposed to the plaintiff’s
choice and has to plead the case outside his residenceState if the plaintiff chooses the contract forum. As
a consequence, e.g., a licensee who wishes to bringsuit for the entire lump sum remuneration arisingout of worldwide license agreement can only do soin the defendant’s forum. The territorial limitationof special grounds of jurisdiction is settled case lawof the Court of Justice of the European Union for
infringement cases.14
Axel Metzger
5. Infringements

Contracts other than license or transfer
14 Guideline 4 provides an alternative ground ofjurisdiction for intellectual property license andtransfer contracts. This rule is not only applicable
to contracts that are entitled “license contract”
or “transfer contract” but also to contracts thathave as their main object a license or transfer of
an intellectual property right even though labeled
differently, e.g. publishing contracts, agreements
on film or broadcasting rights, “sales” of patents
or trademark portfolios. Those contracts should becharacterized as contracts in the sense of Guideline
4. By contrast, the provision should not apply tocontracts including a license grant as an ancillary
duty of one of the contracting parties. Distribution
or franchise agreements are typical examples of suchcontracts. The Guidelines are not applicable to thosecontracts. Courts should examine jurisdiction in
those cases under the applicable national principles.

In a case of an alleged infringement a person may
be sued:a) In the courts of the States where the alleged
infringer has acted to initiate or further
the alleged infringement; the courts’jurisdiction to award remedies arisingfrom those acts shall be territoriallyunlimited; orb) In the courts of the States where theinfringement may have caused direct
substantial harm unless it could not
be anticipated that the infringement
would cause that harm there; the courts’jurisdiction shall be territorially limited
to the State in which the court is situated.
See as reference provisions§ 204 ALI Principles
Arts 2:202, 2:203 CLIP Principles
Art 105 Transparency Proposal
Art 203 Joint Korean Japanese Priniples

Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985).
10

On the following see CJEU, Case 12/76, ECLI:EU:C:1976:133– Tessili/Dunlop; CJEU, Case C-533/07, ECLI:EU:C:2009:257 –Falco Privatstiftung/Weller-Lindhorst.

11

Article 7(1)(b) Brussels Ia Regulation.

12

Article 5(1)(b) Lugano Convention.

13

Article 6 Hague Draft Convention.

1

14

16

CJEU, C-170/12, ECLI:EU:C:2013:635 – Pinckney/KDG
Mediatech; CJEU, C-441/13, ECLI:EU:C:2015:28 – Hejduk/
Energie Agentur.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
Short comments

B, a creator in Z, sues A in State Z, claiming that A isliable for unauthorized use of B’s intellectual products worldwide. A is amenable to suit in Z for worldwide damages caused by operating its facilities in Z.
It is often desirable to locate internet facilities in specific locations, such as where natural cooling saves
resources or near where particular users are located.
The location of volitional activity to initiate or further infringements provides a basis for territoriallyunlimited power to compensate the right holder for
the infringements caused by these acts and to enjoin
further unauthorized distributions. However, if the
defendant could not have known of the location of
the server, then the place of the server would clearly
not qualify under Guideline 5(a).

16 Guideline 5 provides, as alternative fora for infringement actions, courts in a State where the infringer
acted to initiate or further the alleged infringement
and courts in a State where the infringement caused
substantial and foreseeable injuries. In the former
case, the court’s authority extends to the provisionof remedies covering all the injuries caused by the
defendant’s in-state acts; in the latter situation, thecourt’s power is limited to remedies regarding instate harm.
17 Subsection (a) recognizes that in an interconnected
technological environment, acts in one State canhave serious consequences in other locations. While
the plaintiff could bring suit in every jurisdiction
where injuries occurred, repetitive litigation iscostly to the parties; wastes judicial resources; andcan result in inconsistent, irreconcilable outcomesand either under-compensation (and suboptimal deterrence) or multiple liability (and over-deterrence).
For this reason, the Guideline recognizes plenary
authority to award global relief at the place where
the harm emanates, thereby ensuring that adequate
remedies, including both monetary damages and an
injunction to prevent further infringement, are obtainable efficiently. The terms “initiate” and “further” are to be interpreted to encompass substantial
activities, such as operating a website and controlling the materials that appear on it, or operating aprinting, broadcast, manufacturing, or distribution
facility. In such cases, the forum State will be sufficiently related to the subject matter of the litigation, predictable, and affiliated with the defendantto fulfill the domestic policies that underlie national
limitations on jurisdictional authority. Importantly,
in such cases, the court entertaining the case will
not necessarily apply its own State’s law to determine the full scope of liability. On applicable law,see Guidelines 19-30. For the scope of injunctive relief, see Guideline 14.

Hypothetical 2
A, a habitual resident of State X, operates a website
in X, in the language spoken in X. The website makes
available materials of interest to people residing
all over the world who come from X. Prices are
expressed in the currency of State Z and the website
hosts advertisements for businesses in a major city ofZ, where many natives of X now reside. B, a residentof Z, is the creator of materials offered on A’s website.
B sues A in State Z for copyright infringement.
A is amenable to suit in Z. Although the website uses
the traditional language of X, not Z, the website’s useof Z’s currency and its display of ads of local interest
to the X diaspora residing in Z supports jurisdictionin Z. The website caused direct injury in Z and A
could have anticipated that there would be injuries
in that location. Damages are limited to those that
occurred in Z and injunctive relief is similarly limited
to Z.
In contrast, had A offered the same material andtaken steps, such as declining advertisements from
Z, installing a means for geo-blocking that filters out
users in Z, and refusing purchases made with credit
cards issued in Z, it would not be amenable to suit in
Z on the ground that it could not have anticipatedcausing harm there.

18 Subsection (b) creates a basis for jurisdiction inStates where substantial damage is caused, but only
when it can be anticipated that an injury would arisein the State. At its core, this Guideline recognizes the
traditional authority of a State to adjudicate claims
arising from tortious acts and to remedy in-statedamage, irrespective of where the defendant resides.

Initiating and furthering alleged infringements
19 Subsection (a) recognizes the authority of courts inthe jurisdiction where the defendant has engaged in
tortious activity to remedy all the harms caused bythat activity. This power is exemplified by Brussels I
Regulation (recast), Article 7.2, which provides that
“A person domiciled in a Member State may be suedin another Member State . . . in matters relating totort, delict or quasi-delict, in the courts for the place
where the harmful event occurred or may occur.”
The Court of Justice interpreted the “place where
the harmful event occurred” in the predecessor tothis provision as covering “both the place where

Extended comments
Hypothetical 1
A, a habitual resident of State X, establishes and operates an internet facility and website in State Z whichallow A to distribute protected materials globally.

1

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Kyoto Guidelines: Jurisdiction
the damage occurred and the place of the event
giving rise to it.”15 In that case, a libel action basedon the publication of a newspaper article, the Court
allowed the plaintiff to sue at home, the place ofdistribution, but allowed her to recover only forthe damages suffered in that State.16 Significantly,
however, the decision stated that a court in theplace where the publisher was established would
have had jurisdiction over “the action for damages
for all the harm caused by the unlawful act.”17 The
Court of Justice reached a similar conclusion in a caseinvolving defamation on the internet.18

mechanisms to ensure that global relief can beawarded. Thus, in the United States, multiple
foreign copyright infringement claims have been
consolidated into a single action;22 world-wide
damages have been awarded based on the global
dissemination of a local unauthorized reproductionof a “root copy” of a copyrighted work;23 andextraterritorial damages have been awarded forunauthorized export of the components of patented
equipment.24 Jurisdiction where the infringer acted
to initiate or further the alleged infringement
accords with “traditional notions of fair play andsubstantial justice” 25 as articulated by the US
Supreme Court26.

20 While these EU cases involved reputational
injury and defendants that acted at their habitualresidences, Guideline 5(a) extends the rule tointellectual property infringement, which, likedefamation, involves information that can bereadily disseminated. Furthermore, it incorporates
the notion that even when it not situated at thedefendant’s habitual residence, a court at theplace where substantial activity is undertaken has
plenary authority to award global relief, including
both monetary damages and injunctions. In doing
so, the Guideline recognizes that new technologies
create a risk of harm in remote locations and in
multiple jurisdictions. As that problem has become
more acute, it is increasingly important to ensure
the availability of a forum where a global dispute canbe resolved efficiently. Indeed, in another internetbased defamation case, Advocate General Bobek
suggested that the “mosaic” approach of permitting
jurisdiction wherever harm occurs should bediscarded in favor of centralizing adjudication for
multijurisdictional injuries.19 Although the Court ofJustice rejected the AG’s proposal,20 it recognized
the “ubiquitous nature of content placed online”
and the power of the court where the harm arose
to rectify it.21

22 Global injunctions are not common. However, thesame logic applies: effective enforcement requires
efficient dispute resolution. In fact, for intellectual
property cases, the question whether an injunction
will be granted is of crucial importance to both rightholders and consumers of information goods.27 Although at present, extraterritorial enforcement of injunctive relief has presented significant difficulties,28

22

United States Court of Appeals, Boosey & Hawkes Music
Publishers Ltd. v. Walt Disney Co., 145 F.3d 481 [2nd Cir. 1991].

23

United States Court of Appeals, Los Angeles News Serv. v.
Reuters Television Int’l, Ltd., 149 F.3d 987 [9th Cir. 1998], asamended on denial of reh’g and reh’g en banc [1998]; Update
Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67 [2nd Cir. 198]).

24

United States Court of Appeals, WesternGeco LLC v. ION
Geophysical Corp., 138 S. Ct. 2129 [Fed. Cir. 2018]. But see
United States Court of Appeals, Voda v. Cordis Corporation,
476 F.3d 887 [Fed. Cir. 2007]; Supreme Court of the UnitedStates, Microsoft Corp. v. AT&T Corp., 550 U.S. 437 [2007].

25

Supreme Court of the United States, Milliken v. Meyer, 311
U.S. 457 [1940]; Supreme Court of the United States, WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 [1980].

26

See e.g. United States Court of Appeals, Boosey & Hawkes
Music Publishers Ltd. v. Walt Disney Co., 145 F.3d 481 [2d Cir.
1998] consolidating 18 foreign copyright infringement
claims; United States Court of Appeals, Update Art, Inc. v.
Modiin Publ’g, Ltd., 843 F.2d 67 [2d Cir. 1988].

27

See, e.g. Supreme Court of Canada, Google Inc. v. Equustek
Solutions, Inc., 2017 SCC 34, [2017] SCR 824.

28

See, e.g., Supreme Court of Canada, Google LLC v. Equustek
Sols. Inc., No. 5:17-CV-04207-EJD, 2017 WL 5000834 [N.D. Cal.
Nov. 2, 2017]; Supreme Court of Canada, Pro Swing Inc. v. Elta
Golf Inc., 2006 SCC 52, [2006] 2 SCR 612. See also Guidelines 14
and 32-25.

21 Other jurisdictions have similarly created
15

CJEU, Case C-68/93, ECLI:EU:C:1995:61 – Shevill v. Presse
Alliance SA, paragraph 20.

16Id., paragraph 30.

17Id., paragraph 25 (emphasis added).

18

CJEU, Joined Cases C-509/09 and C-161/10,
ECLI:EU:C:2011:685 - eDate Advertising GmbH v. X, paragraphs
41-42.

19

CJEU, C-194/16, ECLI:EU:C:2017:554 - Bolagsupplysningen v
Svensk Handel, paragraphs 73-98.

20

CJEU, C-194/16, ECLI:EU:C:2017:766 - Bolagsupplysningen v
Svensk Handel.

21

Id., paragraph 48.

1

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
6. Statutory Remuneration for the Use of Worksor Subject-Matter of Related Rights

the Guidelines take the position that enforcement
is necessary to protect the exclusivity that is at theheart of intellectual property rights.

In cases concerning disputes on a statutory
remuneration for the lawful use of copyrighted
works or the subject-matter of related rights, aperson may be sued in the courts of the State
where the right to remuneration accrues; thecourt’s jurisdiction shall be territorially limited
to the State in which the court is situated.

Direct and substantial injuries
23 Subsection (b) recognizes the authority of a State to
adjudicate claims involving harm that occurs in theState, irrespective of where the acts giving rise to theharm occurred or where the defendant habituallyresides. In these cases, the court’s power over relief(monetary damages and injunction) is territoriallylimited.

Short comments
26 Guideline 6 deals with disputes over remuneration
for the legal use of works or other protectedsubject-matter, e.g. performances, phonograms or
broadcasts. Copyright law may provide that the use ofa work or other subject-matter is legal but burdenedwith a statutory obligation to pay a remuneration
to the right holder. Typical examples are levies forprivate copying. Such claims for remuneration areneither contractual nor arising out of infringement.
Therefore, Guidelines 4 (contracts) and 5(infringements) do not provide suitable grounds forjurisdiction. To avoid a situation, in which the rightholder or a collecting society representing the rightholder can only bring suit to the defendant’s forum,
Guideline 6 provides an alternative ground for such
remuneration claims. Such claims may be filed in
the courts of the State where the act takes place thatgives rise to the obligation to pay. Claims of rightholders against collecting societies regarding the
distribution of collected revenues are of a different,
often contractual nature. They are not covered by
Guideline 6.

24 Despite AG Bobek’s objection, it is critical topreserve the authority of the court situated at theplace of the harm. That jurisdiction may be moreconvenient than the defendant’s habitual residenceor the place where the harm was initiated, either
from the point of view of the plaintiff (for example,
when the plaintiff suffers an injury at its home) orfrom an adjudicatory and evidentiary perspective. It
may be the place where the majority of the harm issuffered (for example, when the infringement is onlyin the local language) and thus the location where
injunctive relief is especially necessary. Moreover,a local injunction is generally easier to enforce thanan order issued by a foreign court.
25 In jurisdictions such as the EU, where the criticalissues are predictability and a relationship between
the jurisdiction and the subject matter of thelitigation, application of this rule is straightforward.29
In places like the United States, where the focus
is on the due process interests of the defendant,30
jurisdiction at the place of harm is regarded as
acceptable when the defendant purposefully availed
itself of the benefits of the jurisdiction where theharm occurred or where the defendant could, on thebasis of its interactions with the forum, anticipate
being hailed before its courts.31 Subsection (b)addresses these concerns by limiting jurisdiction
to situations where the infringement caused direct
substantial local damages and the damages could
be anticipated. Thus, the mere availability of a
website for uploading or downloading material is
not sufficient to create a basis for jurisdiction under
this Guideline.

27 The court’s jurisdiction under Guideline 6 is
territorially limited to the State in which the court
is situated. This limitation follows the model ofother special grounds of jurisdiction, especiallycontract jurisdiction in Guideline 4 and infringement
jurisdiction in Guideline 5.
Extended comments
Hypothetical 1
Collecting society A from State X wants to bringsuit against mobile phone manufacturer B fromState Y for remuneration on the basis of the private
copies made by B’s customers in X. According to A,
B should pay the levies in accordance with the X’sIntellectual Property Code and pass the costs on toits customers. A has the choice to bring suit at thedefendant’s forum in State Y or to the X’s courts
based on Guideline 6.

Rochelle C Dreyfuss
29

See, e.g., CJEU, C-441/13, ECLI:EU:C:2015:28 – Pez Hejduk v.
EnergieAgentur.NRW, paragraphs 9-20 and 36.

30

Supreme Court of the United States, J. McIntyre Mach., Ltd. v.
Nicastro, 564 U.S. 873 [2011]; Supreme Court of the UnitedStates, Int’l Shoe Co. v. Washington, 326 U.S. 310 [1945].

31

See, e.g., United States Court of Appeals, Plixer Int’l, Inc. v.
Scrutinizer GmbH, 905 F.3d 1 [1st Cir. 2018].

1

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Kyoto Guidelines: Jurisdiction
Hypothetical 2

collecting society on the one side and the debtor or
the claim on the other side. Thus, they are not of acontractual nature. Also, it is not fully convincing tocharacterize remuneration claims as infringement
or tort or delict claims since the underlying use of
the work or subject-matter is lawful.35 Guideline
6 avoids these difficulties of characterization andputs forward a novel and innovative proposal tocreate a specific alternative ground of jurisdiction
for remuneration claims. Claimants may choose tobring suit at the defendant’s forum under Guideline
3 or at the alternative forum under Guideline 6.

Performing artist A from State X wants to bringsuit against the web radio station B from State Y for
remuneration for the repeated broadcasting of his
performances in X and Y. A may either bring suitin the Y as the defendant’s forum or in the X under
Guideline 6 but only the Y’s courts will be competentto decide both on the remuneration for the use of theperformance in X and Y.
Claims for remuneration for legal use
28 Many jurisdictions provide for claims of
remuneration arising out of the lawful use of works
or other protected subject matter. Typical examples
are levies to be paid for the lawful private copying ofa work32, for educational use33 or for the broadcastingof performances which are fixed on a phonogram.34
In such cases, users of protected subject mattersmust not seek the authorization of the right holder
to act within the limits of copyright law. They do not
infringe copyright or related rights. However, theuse of the work triggers a statutory remuneration
claim to be paid to the right holder. As such, these
remuneration claims establish a middle groundbetween a full exclusive right and a full exemption
from copyright. Many of the statutory levies of thiskind are managed by collecting societies. Therefore,claims covered by Guideline 6 will often be filed bycollecting societies as plaintiffs. However, it should
be noted that jurisdictions, like the US, may treat
non-paying users as infringers with the result that
Guideline 5 instead of Guideline 6 has to be applied.

Connecting factor: Where the act takes place
30 Guideline 6 refers as the connecting factor to theState where the act takes place that gives rise to the
obligation to pay. Remuneration claims covered by
Article 6 are triggered by a use of a protected workor other subject matter, e.g. the making of a private
copy, the trading of copy devices, or the broadcastingof a sound recording. These acts may be localized in
one or several jurisdictions according to the same
principles as for the localization of infringing acts.36
Guideline 6 grants jurisdiction to the courts of theState in which these acts take place. This may be one
or several States.
Limited jurisdiction
31 Jurisdiction based on Guideline 6 is limited toremuneration claims related to the use of works orother protected subject matter within the forum
State. In multi-state scenarios, in which the debtor
acts in several States, the jurisdiction of the courtsof each of those States is limited to the remuneration
owed for the use of the work or subject matter inthe given State. Although territorially limited,
the jurisdiction of courts based on Guideline 6
is still of high significance for right holders andcollecting societies. Collecting societies typicallymanage intellectual property rights for the Statein which they have their seat of administrationand provide their services. In disputes involving
the remuneration for the use of those intellectual
property rights, Guideline 6 enables collecting
societies to bring their claim to the courts of theState of their seat.

Other alternative grounds of jurisdiction not suitable
29 Claims for remuneration for legal use are not coveredby the other alternative grounds for jurisdiction,
especially contract or infringement jurisdiction.
Claims for remuneration covered by Guideline 6 are
statutory claims. They are independent from any
contractual agreement between the right holder or
32

33

34

1

See Article 5(2)(a) and (b) Directive 2001/29/EC of 22 May
2001 on the harmonisation of certain aspects of copyrightand related rights in the information society, [2001] OJ
L167/10, and national implementations like e.g. §§ 53,
54 German Copyright Act, Articles L122-5, L 311-1 FrenchIntellectual Property Code.

Axel Metzger

See Article 5(2)(a) and (b) Directive 2001/29/EC of 22 May
2001 on the harmonisation of certain aspects of copyrightand related rights in the information society, [2001] OJ
L167/10, and national implementations like e.g. §§ 53,
54 German Copyright Act, Articles L122-5, L 311-1 FrenchIntellectual Property Code.
See Article 25 (4) South Korean Copyright Act; Article 33bis(2), 34(2) Japanese Copyright Act.

20

35

But see CJEU, Case C-572/14, ECLI:EU:C:2016:286 – AustroMechana/Amazon in which the Court applied Article 5(3)Brussels I Regulation (tort jurisdiction) to a remuneration
claim.

36

See the comments on Guideline 5.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
7. Consolidation

issued under the European Patent Convention
or the Patent Cooperation Treaty. The court may
also determine other possible situations where
the intellectual property rights are “substantiallyrelated” for the purposes of this Guideline. The
second requirement is especially fact-specific: theclaims against the in-state defendant and out-ofstate defendants must be “closely related” and theiradjudication in the same proceedings should help
avoid the serious risk of inconsistent judgments.
Although Guideline 7 does not explicitly stipulate
this, it will be up to the claimant to demonstrate
the closeness of the relationship between the claims
against multiple defendants and that such serious
risk of inconsistent judgments would actually occur
if the defendants were sued in different States. Third,
it is required that there is a substantial connection
between the intellectual property rights at stakeand the foreign defendant. For instance, the foreign
defendant may be joined if he or she belongs to agroup of companies (one of which is habituallyresident in the forum State pursuant to Guideline 3)
that are engaged in multi-state infringement of theplaintiff’s intellectual property rights in the forum
State and abroad.

A plaintiff bringing an action against a defendantin a court of the State in which the defendantis habitually resident in accordance with
Guideline 3 may proceed in that court against
other defendants not habitually resident in that
State if –a) The dispute involves the same or
substantially related intellectual property
rights granted for one or more States, andb) The claims against the defendant
habitually resident in that State and theother defendants are so closely connectedthat they should be adjudicated together
to avoid a serious risk of inconsistentjudgments, anda) As to each defendant not habituallyresident in that State, there exists a
substantial connection between theintellectual property rights at issue andthe dispute involving that defendant.

34 Guideline 7 does not address the so-called “objective”
consolidation of the plaintiff’s claims. Instead, thepossibility of bringing several objectively related
claims against the same defendant is addressed byother Guidelines, e.g., Guideline 15 dealing withcounterclaims. Furthermore, the timing requirementof when such a motion to join out-of-state defendants
could be brought should be determined according todomestic procedural rules of the forum State.

See as reference provisions§ 206 ALI Principles
Art 2:206 CLIP Principles
Art 110 Transparency Proposal
Arts 207-208 Joint Korean-Japanese Principles

Short comments
32 Guideline 7 sets forth conditions that have to be
met in order to join multiple defendants that havetheir respective habitual residences in several
different States. This Guideline deals with the socalled “subjective” consolidation of claims against
several out-of-state defendants before the court of
the State where one of the defendants has his or her
habitual residence. Such a possibility to consolidate
claims against multiple out-of-state defendants is
granted if three conditions are met. These three
conditions are listed in Guideline 7 and are casespecific. Therefore, the court hearing the plaintiff’s
claim against a defendant who has her habitualresidence in the forum State should carefully weighavailable evidence about the circumstances of thecase in deciding whether to join the plaintiff’s claims
against out-of-State defendants.

Extended comments
Hypothetical 1
The plaintiff A holds all rights and interests inthe nine patents for miniature internal antenna
technology. Those miniature antennas are powerfulenough to be used for mobile communication
devices (cellular phones and portable tablets). A’snine patents were issued in ten different States withmajor mobile device markets in the world and coveressential parts of the internal antenna technology.
A brings an action before a court of State X suingdefendant B for infringement of its patents. B, who is
a company based in State X, had previously ordered
three other companies C, D, and E to manufacture
two specific models of cellular phones for sale inState X. Plaintiff A moves to join B’s suppliers as
joint defendants in this case. A argues that C, D, andE who have their main places of business in States Y
and Z, knowingly and willfully infringed its patents

33 Pursuant to Guideline 7, three cumulativerequirements have to be met in order to join out-ofstate defendants. First, the dispute must be related
to the same or substantially related intellectual
property rights. This means that the activities ofthe defendants must relate to the same work ofauthorship, infringement of the same trademark
registered in multiple States, or the same patent
1

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Kyoto Guidelines: Jurisdiction
protect their rights in cases involving multi-state
infringements.

in States Y and Z and requests the court to issue an
injunction and order damages for irreparable harm
which A continues to sustain while cellular phones
are manufactured and sold in State X.

36 A more recent approach is to allow joinder of instate and foreign defendants, provided that there issome observable connection between those foreign
defendants and the forum State.

In this case, the court of State X is the defendant’s
forum pursuant to Guideline 3 because B has its
headquarters in State X. In deciding whether to join
Defendants C, D, and E, the court should evaluate
whether three conditions set forth in Guideline
7 are met. It is clear that (a) the dispute involves
the same patents which the Plaintiff A claims havebeen infringed in States X, Y, and Z; (b) the court inState X may find the existence of close connection
between the defendants C, D, and E because they
were manufacturing phones based on the purchaseorder made by B. However, pursuant to Guideline 7,
it is up to the forum court in State X to determine
whether there is a risk of inconsistent judgments
if the case against each defendant was adjudicatedbefore their home courts in States Y and Z where
those defendants have their habitual domiciles;and (c) the court in State X may also find that
there is a close connection between the intellectual
property rights at issue and each of the out-of-court
defendants, especially if the court determines thatthey significantly contributed to the incorporationof the Plaintiff’s patented technology into mobile
devices that are distributed in the forum State.

37 This Guideline suggests a rule which would provide
for a more efficient adjudication of multi-state
intellectual property disputes. By adopting sucha possibility to consolidate multiple defendants,
the ILA Committee largely follows the approaches
embedded in the previous legislative proposals.
Section 206(1) of the ALI Principles establishes
almost identical wording as Guideline 7, whereas the
CLIP Principles places more emphasis on the need to
avoid the risk of irreconcilable judgments. Article
101(2) of the Japanese Transparency principles also
require that the out-state defendant should be able
to foresee the possibility that he/she may be sued asa joint-defendant before a court of a foreign State.
38 In drafting this Guideline 7, the ILA Committee
aims to provide for sufficient guidance on how
multi-state intellectual property disputes should beapproached in the future. In a world where mostcommunications take place in digital form and where
new technologies are commercialized at a rapid
speed, it is desirable to facilitate the adjudicationof complex multi-state disputes by allowing
the consolidation of multiple related parties.
Consolidation of claims against multiple relatedparties should be seen as a natural evolution of theprinciple of territoriality of intellectual property
rights, especially taking into consideration the factthat the granting of intellectual property rights has
been largely harmonized and cooperation among
national governmental agencies and national courts
continues to evolve.

35 In recent years, there has been an increasing numberof disputes which involve cross-border exploitationof intellectual property rights. Moreover, frequently
those parallel intellectual property rights are usedby related persons (e.g., parent and subsidiarycompanies or contractually-bound corporations).37 In
such situations, one of the main issues is whether theright holder could sue all defendants (including some
out-of-court defendants) before one single court.
From the plaintiff’s point of view, the most efficientapproach would be to sue the “main” defendant andmove to add foreign defendants as co-defendants.
Traditionally, courts in many States used to take amore restrictive approach and assert jurisdiction
only over intellectual property rights effective inthe forum State provided that the defendant has
its habitual residence in the forum State. Sucha traditional approach is based on the “strict”
understanding of the principle of territoriality
pursuant to which leading to fragmentation of
intellectual property rights ligation. Furthermore,
the development of more sophisticated supply
chain models made it challenging for proprietorsof intellectual property rights to efficiently
37

1

39 From the procedural fairness point of view, Guideline
7 places the initial burden of proof upon the claimant
who has to provide sufficient factual evidence andshow that there is sufficient connection between
the activities of the out-of-court defendants andthe forum State. Placing the initial burden of proof
upon the claimant is based on the assumption thatthe joinder would be beneficial for the claimant
in prosecuting their intellectual property rights.
Once the claimant provides their arguments, thedefendants can respond accordingly. It should be
noted that in cases where the costs of joining multiple
out-of-state parties do not appear to be sufficiently
advantageous, Guideline 7 leaves significant
discretion to the courts to rely on existing domestic
doctrines and principles (e.g., forum nonconveniens)in deciding whether to allow joinder or not.

See e.g., CJEU, C-539/03, ECLI:EU:C:2006:458 – Roche Nederland
BV and Others v Frederick Primus and Milton Goldenberg; UnitedStates Court of Appeals, Voda v Cordis Corp 476 F 3d 887 [FedCir 2007].

Paulius Jurcys
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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
8. Title and Ownership

Court’s competence to adjudicate such disputes
emanates from the State’s sovereign power to grant
intellectual property rights provided that certain
statutory requirements are met. This explains why
Guideline 8 is a special rule to the general principle
established in Guideline 3 and allows a court hearing
a dispute over the entitlement or ownership of an
intellectual property right in the forum State even
if the defendant is domiciled abroad. In some cases,
Guideline 8 could be useful in disputes where neitherof the parties is domiciled in the forum State but
seek to determine who is entitled to an intellectual
property right in the forum State, especially if theforum State is a major economy.

In cases concerned only with title and ownership,
the court of the State where the intellectual
property right exists or for which application ispending shall have jurisdiction.
See as reference provisions
Art 2:205 CLIP Principles

Short comments
40 Guideline 8 establishes a clear-cut rule that disputes
related to the title or ownership of an intellectual
property right can be adjudicated by the courts in theState in which that intellectual property right exists
or where the application to grant an intellectual
property right is pending. Pursuant to Guideline 8,
a court can assert jurisdiction if the case concerns
questions related to title or ownership of intellectual
property rights conferred under the laws of theforum State. Guideline 8 is construed as an alternative
ground of jurisdiction. This means that the court
can decide questions of ownership or entitlement
to intellectual property rights in accordance with
Guideline 8 even if the defendant is not resident in
the forum State pursuant to Guideline 3.

42 Furthermore, Guideline 8 aims to clarify thatquestions related to title and ownership of an
intellectual property right should not fall withinthe “exclusive” jurisdiction of the courts of theState granting intellectual property rights. Thisis especially significant in disputes related to
non-registered intellectual property rights suchas copyrights. One possible illustration of suchan important consideration is provided in the
Hypothetical 1 above: in practice, intellectual
property ownership issues often stem fromcontractual dealings among private individuals (e.g.,
employee inventions, collaborative work in creating
works of joint authorship).

Extended comments

43 Accordingly, Guideline 8 does not specify territorial
limitations of the court’s powers in adjudicating the
dispute over title or ownership. Instead, Guideline 8
clearly stipulates that it is sufficient if the disputeitself concerns issues of title or ownership ofintellectual property rights as long as the intellectual
property right exists or the application for suchrights is pending in the forum State. At the sametime, it should be noted that Guideline 8 should beunderstood as an alternative ground of jurisdiction
which provides a narrow “fast-track” possibility toresolve disputes only related to intellectual property
title and ownership in the forum State. Pursuant to
Guideline 8, jurisdiction is automatically conferred
only insofar as the intellectual property rightexists in the forum State. Guideline 8 is a direct
manifestation of the principle of territoriality ofintellectual property rights.

Hypothetical
For the past 6 months, the plaintiff (domiciled inState A) and the defendant (domiciled in State B) havebeen working on a project to develop a gaming app.
Once the prototype of the app has been completed,the Plaintiff institutes court proceedings before theirhome courts in State A arguing that the Plaintiff
should be the sole owner of intellectual property
rights in the gaming software because they had theinitial idea of the game and did the major part of
the work.
Pursuant to Guideline 8, courts of State A should
assert jurisdiction over the dispute because it
concerns the title to intellectual property inthe forum State A regardless of the fact that the
Defendant is domiciled in State B.

44 Guideline 8 follows the approach adopted in the
recent legislative proposals, namely Article 2:205 of
the CLIP Principles. The logic behind this approachis the need to achieve a delicate balance between
the interests of States and cross-border nature ofbusiness models, to provide more legal certainty andreduce the risk of multi-state litigation and the riskof inconsistent judgments.

Relationship to other Guidelines
41 Guideline 8 entrenches the widely acknowledged
principle that states have a direct interest to
adjudicate matters concerning entitlement
and ownership of intellectual property rights
granted pursuant to the laws of the forum State.38
38

1

See e.g., CJEU, 288/82, ECLI:EU:C:1983:326 – Ferdinand Duijnstee
v Lodewijk Goderbauer; CJEU, C-341/16, ECLI:EU:C:2017:738 –Hanssen Beleggingen BV v Tanja Prast-Knipping.

Paulius Jurcys

23

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Kyoto Guidelines: Jurisdiction

C. Other Foraarising from B’s transgression. Other courts cannot
hear the case because of the exclusive nature of the
choice-of-court agreement. L and M, by contrast,
conclude a license agreement with an exclusive
choice of court clause, stating that the courts ofState X will hear disputes relating to obligations
concerning royalty payments. These leave theparties with all options under the general principles
of jurisdiction to bring cases that do not concern
royalty payments before courts outside jurisdiction
Q. The type of claim will therefore determine which
court has jurisdiction in a dispute between L and M.

9. Choice of Court
The parties to a particular relationship may
designate in an agreement a court to havejurisdiction over any dispute that has arisen or
may arise in connection with that relationship.
The chosen court shall have jurisdiction to decide
all contractual and non-contractual obligations
and all other claims arising from that legal
relationship unless the parties express theirintent to restrict the court’s jurisdiction. Suchjurisdiction shall be exclusive unless the parties
have agreed otherwise.

Hypothetical 2
A, whose seat is in State X, enters into a nonexclusive distribution agreement with B, whose
seat is in State Y. Under the agreement, B shalllicense to A its trademarks registered by B in Y andin X for the territory of X. Following B’s refusal tofulfill its contractual obligation, A brings an actionin X, being the State for which the license shall be
granted. Subsequently, B brings an action against
A in Y to obtain payment of outstanding royalties.
In support of the jurisdiction of the court of Y, B
submits that it was the court designated by a choiceof-court clause which had appeared on all invoices
sent by B to A, without the latter having raised
any objection in that regard. According to B, theparties had concluded an agreement conferring
jurisdiction. A contends that the court of Y has no
jurisdiction, since she contests the very existence ofan agreement conferring jurisdiction and States that,
before the action was brought by B before the courtof Y, she had commenced proceedings in X withrespect to the same business relationship. Guideline
17 shall then be considered, with the result that the
court in X despite being the court first seized shallstay proceedings until the court of Y second seized
decides about its jurisdiction.

See as reference provisions§ 202 ALI Principles
Art 2:301 CLIP Principles
Art 107 Transparency Proposal
Art 205 Joint Korean-Japanese Principles

Short comments
45 Guideline 9 lays down a rule of jurisdiction basedon a choice of court agreement made by theparties before the starting of the proceeding. Thus,
parties can choose the court having jurisdiction to
adjudicate their claim. Unless the parties express
their intent to restrict the court’s jurisdiction, choiceof court agreements may concern disputes arisingout of contractual and non-contractual relations.
Unless the parties have agreed otherwise thejurisdiction of the chosen court shall be exclusive.
The Guideline does not address the issue of capacityand other substantive and formal requirements
to make a valid choice of court agreement. Here,the model provisions of predecessor projects may
provide assistance. In addition, Guideline 9 shallbe read together with Guideline 17.3.a), with theresult that a court first seized must neverthelessstay proceedings until the court second seized whose
jurisdiction has been claimed under an agreement
conferring jurisdiction has declared that it has no
jurisdiction. Also, Guideline 9 shall be read together
with Guideline 11 on validity issues, with the resultthat there cannot be any choice of court where theclaim falls into exclusive jurisdiction rules.

Hypothetical 3
A and B enter into an agreement on the sameterms as in Hypothetical 1. The license agreement
confers jurisdiction to a court of State Y to decide allcontractual and non-contractual obligations and allother claims arising from the parties’ relationship,including eventual validity claims of the trademarks
at stake even though principally raised. Following B’s
refusal to fulfill its contractual obligation, A brings anaction in Y, claiming the (in)validity of the relevant
trademarks registered in Y, X and Z. B, in line with theexpress choice of court, enters an appearance before
the court of Y without challenging its jurisdiction.
Yet, despite the choice of court agreement, Guideline
11 on validity disputes indicates that the court of Y
may adjudicate on the invalidity claim related just to
the trademark registered in Y. In contrast, the courts
at the States of registration – namely Z and X - shall

Extended comments
Hypothetical 1
A and B conclude a license agreement which contains
an exclusive choice-of-court agreement “for all
claims arising from the legal relationship of A andB”. B breaches the terms of the contract. A sues B for
breach of contract and trade mark infringement. In
this case the chosen court should have the power todecide on all contractual and non-contractual claims
1

24

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
have jurisdiction to adjudicate on the validity claims
related to the other trademarks involved – namely
those registered in Z and X.

According to Article 23(1)(a), a choice of court
agreement must be “in writing or evidenced inwriting” to be valid, with Article 23(2) stating that“any communication by electronic means which
provides a durable record of the agreement shallbe equivalent to ‘writing’”. In Jaouad, the Court
ruled on whether a “click-wrapping” (a box with
the indication “click here to open the conditionsof delivery and payment in a new window” whichappeared during an online purchase) fulfilled theformal requirements for an agreement conferring
jurisdiction set out in Article 23. The court heldthat accepting the general terms and conditions ofa contract for sale by “click-wrapping”, where theclick-wrapping contains an agreement conferring
jurisdiction, “constitutes a communication byelectronic means which provides a durable recordof the agreement […] where […] it [is] possible toprint and save the text of those terms and conditions
before the conclusion of the contract.”

Exclusive effect of choice-of-court agreements
46 Under Guideline 9, where a choice of court clauseendows exclusive jurisdiction on a court, that court
shall have jurisdiction over all contractual and noncontractual obligations and all other claims arisingfrom the parties’ relationship. Where a choice ofcourt clause confers exclusive jurisdiction for anarrower scope of claims, the nominated court will
have jurisdiction over only claims that fall within
the scope of the clause; any claim outside the scopeof the clause would be subject to more generalprinciples. In the case of a non-exclusive choiceof court agreement, however, different courts arechosen for different disputes.
Capacity and other substantive and formal validity
requirements

Relationship with validity claims

47 The Guideline does not address capacity and othersubstantive and formal validity requirements ofchoice of court agreements. Thus, in line withthe recommendatory nature of the Guideline,
these requirements are left to the procedural lawof the forum State. Yet, the model provisions ofpredecessor projects may provide further guidance.
The CLIP Principles consider validity and formal
requirements of a choice of court agreement. The
ALI Principles deal with issues of form and capacity.
The Transparency Principles deal only with mattersof form of the choice of court agreement, to coverfor instance choice of court agreements concluded
by means of electronic data exchange, such as
email. Similarly to the Transparency Proposal,
the Joint Korean-Japanese Principles also containa similar rule regulating formal requirements forelectronically concluded choice of court agreements.
Moreover, the Joint Korean-Japanese Principles also
regulate validity matters of express choice of court.
Finally, the 2005 Hague Choice of Court Convention
regulates capacity and other substantive and formal
validity requirements.

49 Guideline 9 shall be interpreted as implying that
there cannot be any effect of a choice of court where
the dispute is one covered by Guideline 11. Thus, forinstance, a plaintiff may sue a defendant before thecourts of the State where the defendant is domiciled,claiming the invalidity of the defendant’s patents
registered in other States than the forum State. Under
Guideline 11, the court seized cannot adjudicate theclaims even though the defendant accepted thejurisdiction of the seized court in a choice of court
clause inserted in a license agreement concluded
between the plaintiff and defendant. In fact, therules of jurisdiction provided for in Guideline 11
are of a mandatory nature, the application of whichis specifically binding on both litigants and courts.
Yet, the plaintiff may claim the breach of the license
agreement (because the defendant didn’t pay theroyalties) and the defendant may base the lack of
payment on the invalidity of the plaintiff’s patents. In
this case, when the parties agreed on the jurisdictionof the seized court for all claims arising from theirlegal relationship, that court can adjudicate theinvalidity claims raised as a defense. This applies
even for patents registered in States other than theforum State.

48 In particular, Guideline 9’s silence regarding strict
formal requirements leaves courts free to take apermissive view of the formalities for a choice ofcourt agreement, facilitating their effectiveness.
This conclusion was recently held with respect to
Article 23 of Regulation No 44/2001 (corresponding
to Article 25 of Regulation 1212/2015), which issimilar, mutatis mutandis, to Guideline 9, by the Courtof Justice of the European Union in the judgment
Jaouad El Majdoub v CarsOnTheWeb.Deutschland.39
39

1

Relationship with lis pendens
50 Under Guideline 9 the general rule on the express
choice of court, applies even in the presence ofparallel proceedings. Thus, the parties are prevented
from submitting the dispute to a court other thanthat stipulated in the agreement. This applies even
if the existence or validity of the same (choice ofcourt) agreement is disputed. In fact, Guideline 17
explicitly indicates that where a court is the court
first seized it shall stay proceedings in the case that

CJEU, Case C-322/14, ECLI:EU:C:2015:334 - Jaouad El Majdoub
v CarsOnTheWeb.Deutschland GmbH.

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Kyoto Guidelines: Jurisdiction
the court second seized has exclusive jurisdiction
under an agreement conferring jurisdiction. The
court first seized shall wait for a declaration fromthe court second seized that the choice of court iseventually void and that therefore the same court
has no jurisdiction. Thus, the court second seized
whose jurisdiction has been claimed under anagreement conferring jurisdiction must adjudicate
the case, unless this same court declares that it
has no jurisdiction. Guideline 17, in fact, requires
a court to declare of its own motion, that it has no
jurisdiction where it is seized of a claim which isprincipally concerned with a matter over which
the courts of another contracting State haveexclusive jurisdiction. Since Guideline 9 statesthat the jurisdiction of the chosen court shall be
exclusive, this Guideline prevails over lis pendens.
The same conclusion was recently codified by
Article 31 Brussels Ia Regulation,40 which overcame
the interpretation of Articles 17 and 21 Brussels I
Regulation41 by the Court of Justice of the European
Union, in the judgment in Erich Gasser.42

that court’s jurisdiction. There is no tacit choice ofjurisdiction of the court seized where the defendant
contests the jurisdiction, thereby expressing his or
her intention not to accept that court’s jurisdiction,or where the dispute is one with respect to which
Guideline 11 provides for rules on exclusive
jurisdiction. Yet, neither the general scheme nor theobjectives of the Guidelines provide grounds for theview that the parties are prevented from submitting
their dispute to a court other than that stipulated
in the agreement in accordance with Guideline 9.
Thus, in a dispute concerning the non-performanceof a contractual obligation, in which the applicant
has brought proceedings before the courts of theState in which the defendant has his or her seat, forexample, the jurisdiction of those courts may stemfrom Guideline 10 where the defendant does not
dispute their jurisdiction, even though the contract
between the two parties contains a clause conferring
jurisdiction on the courts of another State.

Benedetta Ubertazzi

Hypothetical 1

10. Submission and Appearance

A sues B for infringement of patents registered inStates X, Y and Z. B’s central administration is inState W. A sues B before the court in Y for damages
based on the alleged infringement of the X, Y and Z
patents. B may enter an appearance before the courtof Y without challenging its jurisdiction. If she does
not contest jurisdiction, the court will be competentto hear the case.

Extended comments

A court shall have jurisdiction if the defendant
appears and does not contest jurisdiction in thefirst defense.
See as reference provisions§ 203 ALI Principles
Art 108 Transparency Proposal
Art 206 Joint Korean-Japanese Principles
Art 202 CLIP Principles

Hypothetical 2

51 Guideline 10 lays down a rule of jurisdiction based on
the entering of an appearance by the defendant withrespect to all disputes where the jurisdiction of thecourt seized does not derive from other provisionsof the Guidelines. Thus, in cases where the court
has been seized in breach of the provisions of the
Guidelines, the entering of an appearance by the
defendant may be considered to be a tacit acceptanceof the jurisdiction of the court seized and a choice ofA, whose seat is in State X, enters into a nonexclusive distribution agreement with B, whose seatis in State Y. Under the agreement, B shall assign to
A all trademarks registered by B in Y. The contractcontains a clause conferring exclusive jurisdiction toa court situated in X. Following B’s refusal to fulfilthat contractual obligation, A brings an action before
the District Court of Y. B enters an appearance before
the court of Y without challenging its jurisdiction.
Since the jurisdiction of the court of Y to decide thiscase is not challenged by the defendant, the case may
be decided by the same court of Y.

40

Time and form of contesting jurisdiction

Short comments

Regulation (EU) No 1215/2012 of the European Parliamentand of the Council of 12 December 2012 on jurisdiction andthe recognition and enforcement of judgments in civil andcommercial matters (recast), [2012] OJ L351/1.

41

Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments incivil and commercial matters, [2001] OJ L12/1.

42

CJEU, C-116/02, ECLI:EU:C:2003:657 - Erich Gasser GmbH v
MISAT Srl.

1

52 The Guideline establishes at what stage of theprocedural phase the jurisdiction of the court
should be contested, namely, in the defendant’s first
defense. Yet, the Guideline does not clarify according
to which formal requirements. Here, the model
provisions of the predecessor projects may provide
further guidance. The Transparency Principles referto the requirement to challenge jurisdiction “in aJapanese court of first instance” and the need to
26

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
make “oral argument or a statement in preliminary
proceedings on the merits”. In addition, the ALI
Principles indicate that the contesting of jurisdiction
shall occur “no later than the first defense on the
merits”. In this framework, the Guidelines adopt a
broad rule that does not refer only to the case where
the defendant appears to proceed on the merits,
contesting jurisdiction, but also encompasses thecase of special appearances, namely appearances justto contest jurisdiction without proceeding on the
merits. The Guidelines address the timing to preventthe defendant from delaying adjudication. Other
formal requirements are left to the procedural lawof the forum State, in line with the recommendatory
nature of the Guidelines.

to determine the case, when the defendant does
not contest the jurisdiction of that court. The
same conclusion was recently held with respect
to Articles 23(5) and 24 of Regulation No 44/2001(corresponding to Arts. 25 and 26 of Regulation
1212/2015), similar, mutatis mutandis, to Guideline 10,
by the Court of Justice of the European Union in the
judgment Taser International Inc.43. According to the
Court, these norms must be interpreted as meaningthat in a dispute concerning the non-performanceof a contractual obligation, in which the applicant
has brought proceedings before the courts of theMember State in which the defendant has its seat,
the jurisdiction of those courts may stem fromthe fact that the defendant does not dispute theirjurisdiction. This applies even though the contract
between the two parties contains a clause conferring
jurisdiction on the courts of a third State.

Relationship with validity claims
53 The Guidelines are to be interpreted in the sensethat there is no tacit choice of jurisdiction where thedispute is one for which Guideline 11 provides forrules on exclusive jurisdiction. Thus, under Guideline
11, if a plaintiff sues a defendant before the courts of
the State where the defendant is domiciled, claiming
the invalidity of the defendant’s patents registeredin States other than the forum State, the court
seized cannot adjudicate the claims even though
the defendant does not contest its jurisdiction.
The rules of jurisdiction provided for in Guideline
11 are of an exclusive and mandatory nature, theapplication of which is specifically binding on both
litigants and courts. Yet, under the same Guideline, if
the plaintiff claims the infringement of the plaintiff’s
patents registered in various States other than theforum State, and if the defendant does not contest
its jurisdiction, the court can adjudicate the claims,
and can do this even though the defendant may raise
the invalidity of said patents as a defense.

Benedetta Ubertazzi
11. Validity Claims and Related Disputes
1. In proceedings which have as their main
object the grant, registration, validity,
abandonment, or revocation of a registeredintellectual property right the court of theState of registration shall have exclusive
jurisdiction.
2. Any other court having jurisdiction may
decide on these matters when they arise inproceedings other than those referred to inparagraph 1. However, the resulting decision
shall not have any effect on third parties.
See as reference provisions§ 211 ALI Principles
Arts 2:401, 2:402 CLIP Principles
Art 103 Transparency Proposal
Art 209 Joint Korean-Japanese Principles

Relationship with express choice of jurisdiction
54 The general rule regarding the tacit choice ofjurisdiction of the court seized under Guideline
10, applies even in the presence of a choice ofjurisdiction by an agreement on jurisdiction for the
purposes of Guideline 9. In fact, neither the generalscheme nor the objectives of the Guidelines provide
grounds for the view that the parties are prevented
from submitting their dispute to a court other thanthat stipulated in the agreement. In fact, the tacit
choice of jurisdiction by virtue of Guideline 10 isbased on a deliberate choice made by the parties tothe dispute regarding jurisdiction that is subsequent
to the choice incorporated in the agreement between
them. Thus, Guideline 10 precludes, in a dispute
between parties to a contract which contains aclause conferring jurisdiction on the courts of a third
State, the court of the State in which the defendant
has its seat, which has been seized, from declaringof its own motion that it does not have jurisdiction
1

Short comments
55 Guideline 11 lays down a rule of jurisdiction related
to registered intellectual property rights for which
validity issues are raised principally (paragraph 1)
or incidentally (paragraph 2). Validity issues arise
principally when the plaintiff invokes before a court
the grant, registration, validity, abandonment, or
revocation of a registered intellectual property
right. Validity issues incidentally arise when, forinstance, there is an intellectual property right
infringement action, and the defendant seeks to havethe intellectual property right on which the claimant
relies invalidated, and hence the infringement action
brought against him dismissed. In addition, validity
43

27

CJEU, C-175/15, ECLI:EU:C:2016:176 – Taser International Inc. v
SC Gate 4 Business SRL and Cristian Mircea Anastasiu.

2021

Kyoto Guidelines: Jurisdiction
issues arise incidentally when the plaintiff brings
before a court a declaratory action to establishthat there has been no intellectual property right
infringement, because the defendant has no valid
intellectual property right to enforce against him.
Also, validity issues arise incidentally where thelicensee brings a declaratory action requesting
the court to declare that he is not bound to fulfil
certain contractual obligations because the licensed
intellectual property right is invalid.

the world. In an application for an interlocutory
injunction before the court of State Y, the liquidator
in company B, claims that this company is entitledto the patent registered in Y, and requests that A beordered to transfer to the insolvent company all of
the patents which he had obtained in other States.
A requests that the same court dismisses this claim,
because the courts of State Y do not have jurisdiction
because of Guideline 11. Yet, claims on title andownership do not fall into the scope of Guideline
11. Thus, the courts of State Y, being the forum of
the defendant’s domicile, and therefore the naturalforum, have jurisdiction to decide on the entire
claim. The judgment of the courts of State Y may
serve as the basis to change the records of foreign
patent offices to produce decisions that the company
is the owner of the respective patents and that A
shall transfer to the company those patents.

56 According to Guideline 11, claims concerning
validity issues principally raised can be adjudicatedonly by the courts of the State of registration of
the intellectual property right at issue. Then, thejudgment of this court on (in)validity has erga omnes
effects. On the contrary, validity issues incidentallyraised can be brought before a court of a State otherthan the State of registration, for instance, before
the court of the State of the defendant’s domicile.
However, in such a case the judgment on (in)validity
has inter partes effects only.

Favoring consolidation of litigation
57 Guideline 11 establishes an exclusive jurisdiction rule,according to which international jurisdiction, in casesof registration or validity of patents, trademarks,
designs and other registered intellectual property
rights, lies exclusively with the courts of the Member
State of deposit or registration. This exclusive
jurisdiction rule requires proceedings related toregistration or validity of intellectual property
rights to be brought before each and every court at
the respective State of registration. However, theGuideline limits the scope of the exclusive jurisdictionof the courts of the State granting the intellectual
property rights to disputes that imply changes in
the administrative acts of registration (i.e. validityof registered intellectual property right claims). In
contrast, the same Guideline allows other courts,
such as those at the defendant’s domicile or at theplace of the illegal action, to adjudicate other multistate parallel intellectual property right disputes,
which therefore could be consolidated before asingle competent court. In line with all predecessor
projects and in conjunction with Guidelines 7, 17,
and 18, Guideline 11 makes it possible to consolidate
multinational intellectual property rights claims,
limiting the scope of exclusive jurisdiction rules. By
overcoming exclusive jurisdiction in cases related
to validity issues incidentally raised, those issues
can be brought before a court of a State other thanthat of registration, provided that the judgment onvalidity would have inter partes effect. Guideline 11
is therefore more favorable to consolidation thancorresponding exclusive jurisdiction rule of someStates, which include in their scope also registeredsystem validity issues incidentally raised.44 However,

Extended comments
Hypothetical 1
A and B, companies established in State X, arecompeting in the field of tire production. A makes anoffer to a tire manufacturer of State Y with a view at
winning a contract to supply tires to them. B allegesthat the tires infringe two patents registered in Y
of which B is the proprietor. A raises a declaratory
action before the court of X to establish that it is
not in breach of the patents, maintaining that its
products do not infringe the rights under the patentsof State Y owned by B and further, that those patents
are invalid. A submits that because the defendantis based in X, the court of X has international
jurisdiction to adjudicate upon the action relating
to the alleged invalidity of the patents registered in
Y. B contends that jurisdiction lies with the courts ofState Y, since Y is the State in which the patents areregistered. Yet, A is invoking invalidity of the patents
registered in State Y incidentally and not principally.
According to paragraph 2 of Guideline 11, courts ofState X have jurisdiction to adjudicate a declaratory
action, such as that raised by A, in order to establishthat there has been no infringement because
the patents registered in Y of the defendant areinvalid and therefore unenforceable. However, thejudgment of the court of State X will have inter partes
effect only.
Hypothetical 2

44

While employed by company B in State Y, A makes
an invention for which he is granted a patent inthat State, and in many States in Europe and in
1

28

See for instance Article 24.4 of the Brussels system. See also
CJEU, C-4/03, ECLI:EU:C:2006:457 - Gesellschaft für Antriebstechnik mbH & Co. KG v Lamellen und Kupplungsbau Beteiligungs
KG.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
12. Declaratory Actions

for provisional measures see the more favorable
approach towards consolidation of the European
Union Court of Justice judgment in the Solvay case45.

A court may hear an action for a negative or apositive declaration on the same ground as acorresponding action seeking substantive relief.

Relationship with choice of court agreements
58 Guideline 11 shall be coordinated with Guideline 9
which concerns express prorogation of jurisdiction.
Prorogation of jurisdiction of the court seized has
no effect where the dispute concerns intellectual
property rights validity issues principally raised
according to Guideline 11 paragraph 1. Thus, if aplaintiff sues a defendant before the chosen court
claiming the invalidity of the defendant’s patents
registered in other States than the forum State,
the court seized cannot adjudicate the claims. Even
though the defendant accepted the jurisdiction of
the seized court in a choice of court clause inserted
in an agreement concluded between the plaintiff
and defendant. In fact, Guideline 11 is specificallybinding on both litigants and courts. Yet, the plaintiff
may claim the breach of the license agreement(because the defendant did not pay the royalties)
and the defendant may base the lack of paymenton the invalidity of the plaintiff’s patents. In thiscase, according to Guideline 11, if the parties agreed
on the jurisdiction of the seized court for all claims
arising from their legal relationship, that court canadjudicate the invalidity claims raised as a defense,
even for patents registered in States other than theforum State.

See as reference provisions§ 213 ALI Principles
Art 2:602 CLIP Principles
Art 213(4) Joint Korean-Japanese Principles

Short comments
60 Guideline 12 sets forth that a claim for positive or
negative declaration can be brought before the same
court as a corresponding action for substantive
relief. Action for a negative declaration refers tosituations where the plaintiff brings an action
asking the court to declare that certain activitiesof the plaintiff do not infringe the intellectual
property rights of the defendant. Actions for apositive declaration may comprise situations inwhich the plaintiff is seeking the court to declarethat the defendant has infringed the plaintiff’s
intellectual property rights and therefore owes theplaintiff statutory damages or that the defendant is
contractually bound to perform a specific obligation.
61 Pursuant to this Guideline, in deciding whether itshould assert jurisdiction over a declaratory action,
the court should bear in mind two qualifications.
First, actions concerning the grant, registration,
validity, abandonment, or revocation of a registeredintellectual property right can be brought exclusively
to the courts of the State where those rights areregistered (Guideline 11). Second, there may besituations where actions for declaratory judgments
are utilized as a tool in multi-state litigation disputes
with an objective to delay the proceedings where thecounterparty is seeking substantive relief (so-called“torpedo” actions). In such cases, the court should
follow Guideline 17 which requires the court second
seized to stay proceedings until the court first seized
decides the case. Furthermore, Guideline 18 provides
possibilities to coordinate or consolidate related
proceedings pending before courts of different
States.

Relationship with disputes concerning title andownership
59 Guideline 11 does not include claims related totitle and ownership, since these do not fall under
the categories of “grant, registration, validity,
abandonment, or revocation” of a registeredintellectual property right. Thus, Guideline 11 does
not exclude the application of other jurisdiction
rules, such as the defendant’s domicile or evenchoice of court if the parties so agree. In addition,
Guideline 8 could also play a role in this respect, inestablishing an additional alternative forum. Thisconclusion corresponds to those of the judgmentsof the European Union Court of Justice in Ferdinand
M.J.J. Duijnstee v Lodewijk Goderbauer46 and Hanssen
Beleggingen47 cases.

Extended comments

Benedetta Ubertazzi
45

CJEU, C-616/10, ECLI:EU:C:2012:445 - Solvay SA v Honeywell
Fluorine Products Europe BV and Others.

46

CJEU, C-288/82, ECLI:EU:C:1983:326 - Ferdinand M.J.J. Duijnstee
v Lodewijk Goderbauer.

47

CJEU, C-341/16, ECLI:EU:C:2017:738 - Hanssen Beleggingen BVv Tanja Prast-Knipping.

1

Hypothetical 1
A is a cosmetics company based in State X which owns
trade secrets to manufacture an anti-aging facial
cream which is the most popular skin care productin State X. A enters into a license agreement with B,
a company based in State Y, pursuant to which B isgiven access to A’s know-how and provides technicalexpertise in manufacturing of the cosmetics. The
29

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Kyoto Guidelines: Jurisdiction
contract between A and B also established licensing
terms to manufacture and sell the facial cream inState Y. For the last year, B failed to provide quarterly
accounts and make agreed licensing fee payments. A
files an action before the courts of State Y seeking toobtain a declaratory judgment that B is contractually
obliged to provide sales-related information and thatthe license fee payment term has passed.

claims: (a) it applies to both - registered andunregistered - intellectual property rights; and (b)it covers declarations related to aspects other than
the grant, registration, validity, abandonment, or
revocation of registered intellectual property rights.
64 Guideline 12 reflects the general consensus as tothe optimal jurisdictional approach in dealing withthe cross-border declaratory actions in intellectual
property matters. Provisions similar to Guideline
12 are also entrenched in Section 213 of the ALI
Principles, and Article 2:602 of the CLIP Principles.
Furthermore, in civil law legal tradition, it is widely
accepted that courts of the State of the defendant’s
habitual residence have jurisdiction to hear actions
for declaratory judgments.48 Similarly, in common
law jurisdictions, courts would have jurisdiction tohear declaratory actions if the plaintiff shows theexistence of both subject-matter jurisdiction as wellas in personam jurisdiction.49

Bearing in mind that the Guidelines apply to trade
secrets mutatis mutandis, Guidelines 3 (defendant’s
habitual residence), 4 (which deals with contracts),
and Guideline 12 make sure that A can file adeclaratory action before the courts of State Y.
Likewise, if B decides to seek a declaration that it is
not contractually obligated to provide sales accounts
or pay license fees, it can do so pursuant to Guideline
4.
Hypothetical 2
Assume, A owns patents in States X and Y forchemical composition of anti-aging facial cream.
Having received several written requests to submit
sales-related accounts and pay license fees, B aims
to seek a declaration before the court of State Y andrequest the court to declare that B’s activities do not
infringe A’s patents in States X and Y.

Paulius Jurcys

B can bring such a claim seeking a declaration of
non-infringement of A’s patents in States X and Y
pursuant to Guideline 12. However, if B decides tochallenge the validity of A’s patents, it can do so only
pursuant to Guideline 11, which deals with exclusive
jurisdiction over patent validity-related claims.

2. Other courts shall have jurisdiction to orderprovisional and protective measures within
their territory.

13. Provisional and Protective Measures
1. A court having jurisdiction as to the meritsof the case shall have jurisdiction to orderprovisional and protective measures.

62 Guideline 12 aims to provide for more legal clarity
and confirm that the most appropriate forum fordeclaratory actions is the court of the State where
the corresponding action for a substantive relief canbe brought. Hence, the plaintiff seeking a positive ora negative declaratory judgment can always instituteproceedings before the court of the State where thedefendant is habitually resident (Guideline 3), or
pursuant to other Guidelines dealing jurisdiction
over contractual (Guideline 4), infringement(Guideline 5), or ownership (Guideline 8) matters.
63 Hypothetical 2 highlights an important distinction
between declaratory actions and actions whichhave as their main object the grant, registration,
validity, abandonment, or revocation of a registeredintellectual property. Guideline 11 covers only
actions dealing with registered intellectual property
rights which the plaintiff may seek to invalidate.
Guideline 12, however, is dealing with declaratory
actions, which are related to other forms of legal
relief that do not result in invalidating registeredintellectual property rights. Hence, the function andscope of Guideline 12 are different from invalidity
1

30

48

See e.g. CJEU, C-133/11 ECLI:EU:C:2017:738 – Folien Fischer AG
and Fofitec AG v Ritrama SpA, where the CJEU held that Article
5(3) of the Brussels I Regulation, [2012] OJ L351/1, dealing
with tort jurisdiction could also cover claims related todeclaratory judgments. More specifically, in Folien Fischer,
the Swiss patent holder brought an action before theRegional Court in Hamburg based on Article 5(3) seeking thecourt to declare that the plaintiff (holder of a Swiss patent)
was not obliged to desist from its sales practices and thatit had no obligation to grant the patent license to anothercompetitor in the market. The CJEU held that the Regional
Court had to adjudicate the cases pursuant to Article 5(3)establishing tort jurisdiction.

49

See e.g., United States Court of Appeals, Subafilms Ltd v MGMPathe Communications Co 24 F3d 1088 (9th Cir 1994); UnitedStates Court of Appeals, Boosey & Hawkes Music Publishers
Ltd v Walt Disney Co 934 F Supp 119 SDNY [2nd Cir 1996];
United States District Court, N. D. Illinois, Packard Instrument
Company Inc v Beckman Instruments Inc 346 F Supp 408 [1978];and, for a more recent approach, United States Court ofAppeals, Penguin Group (USA) v American Buddha WL 1044581[2nd Cir 2011].

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
the court having jurisdiction as to the merits of thecase, and (2) concerning matters which fall within
the scope ratione materiae of the Guidelines as definedin Guideline 1.52 This definition includes various
types of measures, namely (i) measures aimed atsecuring the enforcement of an expected decisionon the merits of the case (conservatory measures
such as seizure), (ii) measures aimed at maintaining
or regulating temporarily a certain State of affairs,(iii) anticipatory measures equivalent to thosewhich would be available in proceedings on the
merits (e.g. an interim injunction), and (iv) measures
aimed at preserving or obtaining evidence or otherinformation (e.g. disclosure).53

See as reference provisions§ 214 ALI Principles
Art 2:501 CLIP Principles
Art 111 Transparency Proposal
Art 210 Joint Korean-Japanese Principles

Short comments
65 Guideline 13 deals with jurisdiction to orderprovisional and protective measures. Such measures
are measures (1) that are intended to preserve afactual or legal situation in order to safeguard rights
the recognition of which are otherwise sought fromthe court having jurisdiction as to the merits of thecase, and (2) concerning matters which fall within
the scope of the Guidelines as defined in Guideline
1. They include, for example, an order to seize
infringing goods, an order to preserve evidence as
to an alleged infringement and an interim injunction
to cease an infringement.

69 Positive interim performance orders, such as aninterim payment order, pose a specific problem
in this context as such orders may, by their very
nature, pre-empt the decision on the merits of thecase. Thus the rules on jurisdiction on the merits
could be circumvented. Therefore, these measures
should not be qualified as provisional and protective
measures unless repayment to the defendant andcompensation is guaranteed in the event that theplaintiff is unsuccessful regarding the merits of its
claim; this means that an adequate bank guaranteeby the plaintiff must be required as a condition for
the enforcement of the order.54

66 Guideline 13 creates a two-track system regarding
jurisdiction to order these measures. The first trackprovides for accessory jurisdiction: a court having
jurisdiction as to the merits of the case, also has
jurisdiction to order provisional and protective
measures (Guideline 13(1)). The scope of the latter
jurisdiction follows the scope of the former: if acourt’s jurisdiction as to the merits of the case is
extraterritorial, its jurisdiction to order provisional
and protective measures is correspondingly
extraterritorial. The second track provides for local
jurisdiction: courts which have no jurisdiction as tothe merits of the case, do have jurisdiction to order
local provisonal and protective measures, i.e. within
their territory only (Guideline 13(2)).

70 Guideline 13 applies to measures in a defended
action as well as to measures ex parte, i.e. without
prior hearing of the adverse party and enforceable
without prior service of process to that party. The
latter type of measures, however, shall not berecognized or enforced in other States pursuant to
Guideline 32(3).

Extended comments

Two-track system
71 Guideline 13 creates a two-track system regarding
jurisdiction to order provisional and protective
measures, distinguishing between so-called
accessory jurisdiction (first track) and local
jurisdiction (second track).55

Provisional and protective measures
67 Guideline 13 deals with jurisdiction in the context
of “provisional and protective measures”. The
expression “provisional and protective measures”
is also used in Guidelines 2(2), 17(3)(b) and 32(3)which deal with other aspects of such measures.50
No deviation is intended from the expression“provisional including protective measures” thatcan be found in other instruments.51
68 Provisional and protective measures can be defined
as measures (1) that are intended to preserve afactual or legal situation in order to safeguard rights
the recognition of which is otherwise sought from50

Guidelines 2(2) (definition of judgments), 17(3)(b) (lis pendens) and 32(3) (recognition and enforcement).

51

See e.g. Article 2:501 CLIP Principles; Article 35 Brussels Ia
Regulation, [2012] OJ L351/1.

1

31

52

This definition is inspired by case law of the CJEU on theBrussels Regulation, [2001] OJ L12/1. Cf. CJEU, Case C-261/90,
ECLI:EU:C:1992:149 at paragraph 34 – Reichert v. Dresdner
Bank.

53

Cf. CLIP Principles comments 2:501.C11; Article 50(1) TRIPS.

54

Cf. Article 50(3) and (7) TRIPS.

55

The concept of a two-track system can also be found in Article 13 Hague Draft Convention (2001); § 214 ALI Principles;
Article 2:501 CLIP Principles; Article 111 Transparency Proposal.

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Kyoto Guidelines: Jurisdiction
Accessory jurisdiction

with the jurisdiction of “other courts”, i.e. courts
which have no jurisdiction as to the merits of the caseon the basis of a jurisdiction rule in the Jurisdiction
chapter of the Guidelines. These other courts havejurisdiction to order provisional and protective
measures within their territory. This Guideline
creates an autonomous ground of international
jurisdiction; it does not refer or delegate to nationalrules of international jurisdiction, as for example
Article 35 of the Brussels Ia Regulation does.59 60

72 Guideline 13(1) contains the first track, rulingthat a court having jurisdiction as to the merits ofthe case on the basis of a jurisdiction rule in the
Jurisdiction chapter of the Guidelines, shall havejurisdiction to order provisional and protective
measures. This jurisdiction to order provisional
and protective measures is not subject to further
conditions. This means that if a court has jurisdiction
as to the merits of the case and that jurisdiction is
extraterritorial, this court also has jurisdiction toorder correspondingly extraterritorial provisional
and protective measures. As the latter jurisdiction isaccessory, it cannot extend beyond the jurisdiction
as to the merits.

76 In addition, this jurisdiction is independent fromjurisdiction as to the merits. Guideline 13(2) may
for example provide jurisdiction for provisional
and protective measures, even if another court has
exclusive jurisdiction as to the merits of the case.61

Hypothetical 1

Hypothetical 2

A sues B in a court in State X for infringement of its
patent rights in States X and Y. B has its habitualresidence in State X. This means that the court has
jurisdiction as to the merits to hear the infringement
claim in respect of State X and the infringement
claim in respect of State Y on the basis of Guideline
3, which jurisdiction is territorially unlimited. By
consequence, this court has also jurisdiction to ordera provisional or protective measure, for example as
an interim injunction, for States X and Y.

A, who has its habitual residence in State X, seeks
an interim injunction against B, who has his/her
habitual residence in State Y, to stop infringement
by B of A’s trademark right in State Z. On the basisof a choice of court agreement between A and B, thecourts in State X have exclusive jurisdiction as to themerits. This choice of court agreement brings alongthat the courts in State Z have no jurisdiction as tothe merits of the case (Guideline 9), which meansthat they have no jurisdiction to order the interim
injunction on the basis of Guideline 13(1). However,on the basis of Guideline 13(2), they have jurisdiction
to order the interim injunction for the territory ofState Z. Alternatively, A may also seek interim relief
in the courts of State X, as they have jurisdiction toorder an interim injunction for the territory of StateZ on the basis of Guideline 13(1).

73 The accessory nature of this jurisdiction also entails
that if a court has no jurisdiction as to the merits
because another court is exclusively competent,56 itwill not have jurisdiction to order provisional andprotective measures on the basis of Guideline 13(1).57
74 For accessory jurisdiction it is not required thatproceedings on the merits are pending: Guideline
13(1) also applies in the event that no suchproceedings have started. This is clarified by thewords “a court having jurisdiction as to the merits”.
It also applies in the event that proceedings on
the merits have started before another court.58 In
such a case, however, there is an increased risk of
conflicting provisional or protective measures. To
mitigate this problem it seems appropriate in thissituation for other courts having jurisdiction as
to the merits, to order provisional and protective
measures within their respective territories only.

The jurisdiction provided for by the Guideline 13(2)is territorially limited to the territory of the court
seized (“local jurisdiction”). Hence, extraterritorial
measures are not available under this Guideline.62

Local jurisdiction
75 Guideline 13(2) contains the second track, dealing
56

Guideline 9 (choice of forum); Guideline 11 (validity claims
and related disputes).

57

This is without prejudice to Guideline 13(2).

58

Cf. Guideline 17(3)(b).

1

32

59

Cf. CJEU, C-391/95, ECLI:EU:C:1998:543 – Uden Maritime/DecoLine; Jenard Report, [1979] OJ C 59/42.

60

The internal jurisdiction (which court is competent withina State) is of course determined by the national procedural
law of that State.

61

Guideline 9 (choice of forum); Guideline 11 (validity claims
and related disputes).

62

In this respect Guideline 13(2) differs from Article 2:501(2)CLIP Principles, which allows for extraterritorial measures.
Under Guideline 13(2) extraterritorial measures are notpossible.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
Hypothetical 3

limited by two factors cumulatively: (i) the extent
of the international jurisdiction of the court and(ii) the territorial reach of the intellectual property
right enforced. The scope of an injunction cannot be
broader than the smallest of these two factors. This
basic rule applies in any event to prohibitory injunctions, aimed at ceasing an infringement of an intellectual property right (a prohibition against further
infringement or threatened infringement). For otherinjunctions covered by Guideline 14, such as a labelling order (see below in the extended comments),
the scope could be somewhat broader in exceptional
cases. In such cases the scope of the injunction could
be extended beyond the territorial reach of the intellectual property right enforced if this is objectively necessary to protect these rights. However,the scope of the injunction shall, of course, neverbe broader than the extent of the jurisdiction of thecourt. Courts should exercise caution when ordering such extraterritorial injunctions.

A, who has its habitual residence in State X, wishes
to sue B for infringement of its copyright in State
Z. B, who has his/her habitual residence in StateY, has a bank account in State X. For an interim
injunction to stop the infringement in State Z, A
may adjudicate the courts in State Y (on the basisof Guideline 13(1) and Guideline 3) or the courts inState Z (on the basis of Guideline 13(1) and Guideline5). The courts in State X have no jurisdiction to ordersuch interim infringement injunction: nor on thebasis of Guideline 13(1) (because these courts haveno jurisdiction as to the merits of the infringementcase), neither on the basis of Guideline 13(2) (because
it is a measure outside the territory of State X).
However, the courts of State X do have jurisdiction
to order provisional measures within the territoryof this State: they may order the attachment of B’sbank account in State X (Guideline 13(2)).
77 However, it should be mentioned in this respect that
under the Guidelines an interim injunction order,
also if based on Guideline 13(2), shall be recognizedand enforced in other States (Guidelines 2(2) and 3235).63 This is especially relevant for the execution, inother States, of penalties forfeited due to violationof the interim injunction.

Extended comments
80 Guideline 14 applies to all injunctions that are
directly aimed at the protection of intellectual
property rights, including prohibitory injunctions(injunctions to stop certain conduct, i.e. injunctions
to cease an infringement of an intellectual property
right) and mandatory injunctions (such as arectification order, etc.). It applies in proceedingson the merits as well as in summary proceedings
on provisional and protective measures. Guideline
14 does not include procedural injunctions suchas the Mareva injunction or anti-suit injunctions.
Injunctions with respect to unfair competition or theprotection of undisclosed information (which areasof law are covered by the Guidelines, cf. Guideline
1(2)) are also excluded from Guideline 14. Although
the first sentence of Guideline 14 does not exclude
these injunctions specifically, their exclusion fromthe Guideline must be derived from the second
sentence which refers to “intellectual property
rights”.

Sierd J Schaafsma
14. Scope of Injunctions
The scope of an injunction is limited by the extent
of the jurisdiction of the court. In addition, thescope shall not be broader than necessary toprotect the intellectual property rights enforced.
See as reference provisions
Art 2:604 CLIP Principles

Short comments
78 Guideline 14 contains a provision regarding the scopeof injunctions in proceedings on the merits and insummary proceedings on provisional and protective
measures. The Guideline is about injunctions thatare directly aimed at the protection of intellectual
property rights. Hence, it does not cover procedural
injunctions. In addition, it does not cover injunctions
regarding unfair competition or the protection ofundisclosed information.

81 Guideline 14 is inspired by the DHL/Chronopost
judgment of 12 April 2011 of the European Court ofJustice, where the Court ruled that the territorial
scope of a prohibition against further infringement
or threatened infringement of a EU trade mark is tobe determined both by the territorial jurisdictionof the court issuing that prohibition and by the
territorial extent of the EU trade mark proprietor’s
exclusive right which is adversely affected by the
infringement or threatened infringement.64 This rule
is indeed the generally accepted principle, whichsays that the scope of an injunction is limited by
two factors, that is (i) the extent of the international

79 The basic idea of Guideline 14 is the generally accepted principle that the scope of an injunction is63

1

By contrast, under CLIP Principles an interim judgment ofa court having no jurisdiction as to the merits, shall not berecognized and enforced in other States (Article 4:301(1)CLIP Principles).

64

33

CJEU, Case C-235/09, ECLI:EU:C:2011:238 at paragraph 33 –DHL Express France.

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Kyoto Guidelines: Jurisdiction
jurisdiction of the court and (ii) the territorial reachof the intellectual property right enforced. The scopeof an injunction cannot be broader than the smallestof these two factors. This is a logical rule that applies
in principle to all injunctions covered by Guideline
14. In any event, it applies to prohibitory injunctions,
aimed at ceasing an infringement of an intellectual
property right.

In terms of prohibitory injunctions, aimed at ceasing
an infringement of intellectual property rights, thebasic DHL/Chronopost rule applies without exception.
Otherwise, intellectual property rights would havean unacceptable extraterritorial overstretch.
Hypothetical 2
A, who has its habitual residence in State X, isthe proprietor of a patent for State Y. B, who has
his habitual residence in State Y, manufactures
infringing products in State Z and exports themfrom State Z to States X and Y. A wishes to sue B in acourt of State Y for patent infringement, invoking his
patent in State Y. A askes for an injunction to cease
the infringement in States X and Y (a prohibition
order) and alternatively for an order to change thelabelling of products as far as destined for export toStates X and Y. The court in State Y has jurisdiction
to hear the claims on the basis of Guideline 3 (B has
its habitual residence in State Y) as this jurisdiction is
territorially unlimited. A invokes its patent for State
Y. Applying the law of State Y (lex loci protectionis,
Guideline 25) the court may come to the conclusionthat B infringes A’s patent in State Y. Now, thescope of the injunction to cease the infringement islimited to State Y as this scope is limited both by theextent of the jurisdiction of the court (territoriallyunlimited) and by the territorial reach of theintellectual property right enforced (limited to State
Y). The court cannot grant an injunction to cease,in State X, infringement of a patent of State Y. As
to the labelling order: the court may grant an orderto change, in State Z, the labelling of the products
as far as they are destined for export to State Y, if
this injunction is necessary to protect A’s patent inState Y (the intellectual property right enforced).
However, the court is not allowed to grant an orderto change, in State Z, the labelling of the products
as far as they are destined for export to State X, as
this injunction is not necessary to protect A’s patent,
which was granted for State Y (the intellectual
property right enforced) and not for State X.

Hypothetical 1
A sues B, who has his habitual residence in State X, ina court in State X for infringement of its patent rights
in State Y, seeking injunctive relief. The court inState X has jurisdiction to hear the claim, concerning
infringement in State Y, on the basis of Guideline 3 as
this jurisdiction is territorially unlimited. Applying
the law of State Y (lex loci protectionis, Guideline 25)
the court may reach the conclusion that B infringes
A’s patent rights and that the injunction should be
granted. The scope of the injunction is limited toState Y as this scope is limited both by the extent of
the jurisdiction of the court (territorially unlimited)and by the territorial reach of the intellectual
property right enforced (limited to State Y).
82 This basic DHL/Chronopost rule was also enshrinedin the original version of Guideline 14. However,after American concerns that court practice toissue certain extraterritorial remedies would be
restricted too much, the Guideline was looseneda bit in order to allow for some extraterritoriality
in exceptional cases. Let us take the example of acourt in State X dealing with an infringement caseregarding an X patent against a defendant in State
X, who manufactures infringing products in State
Y and imports them into State X. The court ordersinter alia to change the labelling of the products as
far as destined for export to State X. This labelling
obligation will have to be performed in the factoryof the defendant in State Y. Strict application of thebasic rule would not allow for such an extraterritorial
measure in this case.65 Therefore, in order to allow
such an extraterritorial remedy, the wording of
Guideline 14 was amended, stating (i) that thescope of an injunction is limited by the extent of
the jurisdiction of the court, and (ii) that it shall not
be broader than necessary to protect the intellectual
property rights enforced. It goes without saying thatcourts should exercise caution when ordering such
extraterritorial injunctions, bearing in mind theterritorial nature of intellectual property rights.
Extraterritorial injunctions should only be issued
in exceptional cases if they are objectively necessary
to protect the intellectual property rights enforced.
65

1

83 Several jurisdiction rules in the Jurisdiction
chapter of the Guidelines provide for jurisdiction
as to infringements in other States or even for
territorially unlimited jurisdiction, for example
Guideline 3 (forum rei), Guideline 9 (choice of court)
and Guideline 10 (submission and appearance).
Where in proceedings (i) the court has jurisdiction
on the basis of such a jurisdiction rule, and (ii) the
enforcement of intellectual property rights in thoseother States is in issue (a multistate infringement or
an ubiquitous infringement) for which the plaintiff
claims an injunction, the scope of the injunction
may be extraterritorial, covering all States forwhich protection of the intellectual property rights

As an alternative, another solution would be to prohibit
in State X the (import of) products with labels that do notcomply. This measure amounts to the same result and has
no extraterritorial effect.

34

2021

Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
concerned is sought.66 Even a global injunction may
be granted.

franchise contract. Subsequently, A filed a lawsuitin State Y seeking to recover unpaid royalties. B
raised a counterclaim arguing that A’s terminationof the franchise agreement was wrongful andthat A should compensate B for damages that thedefendant sustained because of the terminationof the agreement. Pursuant to Guideline 15, thecourt in State Y should assert jurisdiction over B’s
counterclaim.

Hypothetical 3
A sues B in the courts of the State of B’s habitualresidence for copyright infringement on the internet
and seeks a worldwide injunction. The court has
territorially unlimited jurisdiction to hear this claim(Guideline 3) and may grant a worldwide injunction.

Definition of counterclaim

Sierd J Schaafsma

86 In Guideline 15, the notion of counterclaim generally
refers to a claim which is brought by the defendantagainst the plaintiff and where the defendant seeks
pronouncement of a separate judgment or decree.67
Situations where the defendant merely raises set-off
as a defense which would extinguish the plaintiff’s
claim are not deemed to constitute a “counterclaim”
in the context of Guideline 15.68 Besides, Guideline 15
does not apply to claims that the defendant invokes
against a third party.

15. Counterclaims
A court which has jurisdiction to determine aclaim under these Guidelines shall also havejurisdiction to determine a counterclaim arisingout of the same set of facts on which the original
claim is based.
See as reference provisions§ 212 ALI Principles
Art 2:209 CLIP Principles
Art 110 Transparency Proposal

87 From a temporal point of view, a counterclaim
should be made in the course of proceedings after the
court has been seized pursuant to these Guidelines.
Furthermore, Guideline 15 implies that the court cancontinue the proceedings over the counterclaim even
if the plaintiff decides to withdraw the main claim.
Otherwise, conditions for raising counterclaims aregoverned by national procedural laws.

Short comments
84 In cross-border intellectual property litigation,
it often occurs that parties raise claims andcounterclaims which are based on the same sets offacts or transactions. In disputes involving multiple
parties having their habitual residences in different
States or intellectual property rights protected indifferent States, questions may arise whether a court
has jurisdiction to hear claims related to issues that
may not necessarily be related to the original claim.

Relationship to Other Guidelines
88 Just like other Guidelines, a court’s power to assert
jurisdiction over counterclaims is subject to the
exclusive jurisdiction rule stipulated in Guideline
11. Thus, in cases where the defendant seeks toraise a counterclaim in order to invalidate a foreign
registered intellectual property right, such a claim
would have to be brought before the courts of theState where those contested intellectual property
rights are registered (Guideline 11(1)). The same
applies to counterclaims which fall within the scopeof previously concluded choice of court agreements:
the defendant who is trying to raise such a
counterclaim will have to institute proceedings
before the court of the State as previously agreed
by the parties (Guideline 9).

85 Guideline 15 provides that if a court that asserts
jurisdiction to hear a case pursuant to these
Guidelines, it also has jurisdiction to hear thecounterclaims raised by the defendant. The objectiveof this Guideline is to provide more legal certainty
and facilitate adjudication of multi-state intellectual
property disputes by consolidating the claims andcounterclaims in one court and thus curtail the riskof inconsistent judgments.
Extended comments
HypotheticalA, a company with its headquarters in State X,
entered into an exclusive franchise agreementwith B, a company established in State Y, pursuant
to which B was appointed as the only seller of A’s
trademarked fashion-wear. Two years later, A sent
a letter and notified B about the termination of the66

1

See in this respect also Guideline 26(2) and 35(3).

35

67

CJEU, C-341/93, ECLI:EU:C:1995:239 – Danværn Production v
Schuhfabriken Otterbeck.

68

Under the Federal Rules of Civil Procedure S 13(a), suchclaims which arise out of the same transactions or occurrences (e.g., set-off defenses to the plaintiff’s main claim)
would be treated as “compulsory”, i.e., they would have to
be brought in the proceedings, otherwise the defendant
would lose the right of asserting them later.

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Kyoto Guidelines: Jurisdiction
89 Guideline 15 reflects the prevailing international
consensus with regard to the adjudication ofcounterclaims. Similar provisions are set forth in
Section 212 of the ALI Principles, Article 2:209 of
the CLIP Principles, Article 110 of the Transparency
as well as Article 8(3) of the Brussels I Regulation(recast).

that a court shall not recognize or enforce
a foreign judgment if “the rendering court
exercised jurisdiction in violation of the rules ofjurisdiction under these Guidelines”. These “rulesof jurisdiction” are violated if the original court
exercised jurisdiction on a ground not provided forin Guidelines 3 to 15. Guideline 16 reinforces thisby giving a non-exhaustive list of grounds that areplainly insufficient and so providing, for the sake ofclarity, “negative” instances that supplement the“positive” rules provided in the previous Guidelines.
That the list in Guideline 16 is non-exhaustive isindicated by the wording that “insufficient grounds
for jurisdiction include inter alia” those on the list.

90 A court’s decision to assert jurisdiction over otherobjectively related claims between the parties which
are not counterclaims should be made according
to guidelines dealing with related proceedings(Guideline 18).69
Paulius Jurcys

Extended comments

16. Insufficient Grounds for Jurisdiction

Hypothetical 1

Insufficient grounds for exercising jurisdiction
include inter alia:

A sues B for infringement of an intellectual property
right in the court of State Z. B is not habitually resident
in Z (Guideline 3) and the alleged infringement was
not connected with Z so as to provide an alternative
ground for jurisdiction (Guidelines 4-13). The only
basis for jurisdiction is that B was served withprocess while temporarily present in Z, contrary to
Guideline 16(e). B challenges the court’s jurisdiction
but is unsuccessful. A obtains a default judgment
against B.

a) the presence of (any) assets, physical or
intellectual property, or a claim of the
defendant in a State, except when thedispute is directly related to that asset;b) the nationality of the plaintiff or the
defendant;c) the mere residence of the plaintiff in that
State;The judgment is not enforceable against B in State Y
under Guideline 32 because the Z court has “exercisedjurisdiction in violation of the rules of jurisdiction
under these Guidelines”, as stated in Guideline 34(1)(f), by taking jurisdiction on one of the insufficientgrounds listed in Guideline 16. Had B appeared
without contesting jurisdiction, however, the court
would have had jurisdiction based on B’s appearance(Guideline 10), not solely on the insufficient groundin Guideline 16(e).

d) the mere conduct of commercial or otheractivities by the defendant in that State,
except when the dispute is related to those
activities;e) the mere presence of the defendant or theservice of process upon the defendant inthat State; orf) the completion in that State of theformalities necessary to execute anagreement.

Hypothetical 2
A sues B for infringement of an intellectual property
right in the court of State Z. B is not habituallyresident in Z and the alleged infringement was notconnected with Z according to Guideline 5. The
only basis for jurisdiction is that B suffered indirect
economic loss in Z as a result of the infringement.
Jurisdiction is not taken in accordance with thejurisdictional rule in Guideline 5(b) because thedamage B suffered is not “direct, substantial
damage” suffered in Z. Although the ground on
which the Z court exercised jurisdiction is not among
those listed as insufficient in Guideline 16, the Z
judgment is nevertheless not entitled to recognition
or enforcement because the Z court took jurisdiction
on a ground not included in these Guidelines and it
therefore exercised jurisdiction “in violation of therules of jurisdiction” in the Guidelines (Guideline

See as reference provisions§ 207 ALI Principles
Art 109 Transparency Proposal
Arts 211-212 Joint Korean-Japanese Principles

Short comments
91 A list of insufficient grounds of jurisdiction is
included in these Guidelines by way of complement
to the grounds of jurisdiction that are provided
in Guidelines 3 to 15. Guideline 16 adds bases ofjurisdiction that will not satisfy the Guidelines.
The recognition rule in Guideline 34(1)(f) provides
69

1

See also Article 2:209 CLIP Principles.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
34(1)(f)). The list of insufficient grounds in Guideline
16 is not exhaustive.

in an infringement action, the fact that infringing
goods or copies, or assets that are allegedly used tomake infringing goods or copies, are located in theforum State will be sufficient for the court to exercise
jurisdiction in a proceeding that seeks relief withrespect to those assets. Jurisdiction on this basis will
not, however, extend to claims beyond those that are“directly related” to the assets in question. The factthat there is jurisdiction with respect to a directly“asset-related” claim does not permit a plaintiff toexpand the proceeding to include other claims thatare not directly “asset-related”. Such further claims
must be supported by another ground of jurisdiction.

The scope of the list of insufficient grounds ofjurisdiction
92 The purpose of a list of insufficient grounds ofjurisdiction in an instrument like the Guidelines canbe either of two things. If the list is exhaustive, it
defines when jurisdiction does not exist.70 If the list
is not exhaustive, it illustrates some, but not all, ofthe situations in which jurisdiction does not exist
Guideline 16, being non-exhaustive, illustrates someof the grounds on which jurisdiction is not validly
exercised.

96 The above comments refer to jurisdiction to
adjudicate the merits of the dispute. Note that
Guideline 13(2) states that courts have jurisdiction“to order provisional and protective measures within
their territory” even if they do not have jurisdiction
as to the merits. Provisional and protective measuresrelating to a party’s assets may therefore be ordered
by a court in whose territory the assets are located.

93 The issue whether a jurisdictional ground isinsufficient is distinct from the question which oftwo (or more) alternative forums is better placed
to hear the dispute. The latter question arises only
if both forums have proper grounds under the
Guidelines for exercising jurisdiction. See Guidelines
17 (lis pendens) and 18 (related proceedings).

(b) Nationality of the plaintiff or the defendant

94 The insufficiency of the grounds listed in Guideline
16 only applies to disputes within the scope of these
Guidelines, as defined in Guideline 1. Thus, a State
could apply any of these jurisdictional grounds toan intellectual property matter that is not “civil orcommercial”, or that does not involve “intellectual
property rights which are connected to more thanone State”.

97 The fact that the plaintiff is a national of the forum
State is not by itself an acceptable jurisdictional basis
for the court to adjudicate a defendant’s rights. Nor isthe fact that the defendant is a national of the forum
State. A defendant’s nationality, unlike habitualresidence, does not provide a generally recognizedbasis for exercising civil jurisdiction. The defendant’s
nationality may be relevant to determining habitualresidence, but the defendant’s nationality per se isgenerally regarded as an insufficient ground forexercising judicial jurisdiction.

The insufficient grounds(a) The presence of (any) assets, physical or intellectual
property, or a claim of the defendant in a State, except
when the dispute is directly related to that asset(c) Mere residence of plaintiff

95 The mere fact that the defendant has assets in the
territory of the forum is generally regarded as an
insufficient basis for a national court to adjudicate
on the defendant’s rights. Paragraph (a) of Guideline
16 rules out such jurisdiction irrespective of whether
the assets are tangible or intangible, take the form ofphysical or intellectual property, or consist of a claim.
If, however, the dispute is “directly related” to theasset in question, jurisdiction based on the presenceof that asset in the forum State is sufficient. Thus,
70

1

98 Few, if any, States regard the mere residence of theplaintiff in the forum State as a sufficient basis forthat State’s courts to exercise jurisdiction whenneither the defendant nor the facts of the caseare substantially connected with that State. These
Guidelines adopt habitual residence as the properbasis for jurisdiction as against a defendant, see
Guideline 3.
(d) Mere conduct of commercial or other activities by
the defendant, except when the dispute is related tothose activities

As is the case with § 207 Principles. The list of insufficientgrounds under the ALI Principles is exhaustive because
the list of valid grounds of jurisdiction is not exhaustive.
A recognizing court “need not” recognize another State’s
judgment if jurisdiction was exercised on a ground notincluded in the Principles, but it may recognize it: see§ 403(2)(a) ALI Principles. It “shall not” recognize thejudgment if the rendering court exercised jurisdiction
solely on a basis insufficient under § 207 ALI Principles: see§ 403(1)(g) ALI Principles.

99 A corporation’s doing business in the jurisdiction
can be seen as the correlative of a natural person’spresence in the jurisdiction. As with presence(see heading (e)), some jurisdictions regard doing
business in the jurisdiction as a ground for exercisingjurisdiction in any claim against a corporation,
whereas other jurisdictions usually insist on a
corporation having its domicile or principal place
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Kyoto Guidelines: Jurisdictionof business in the forum State if a court is to takejurisdiction in claims against the corporation thatare unrelated to the business done in the forum
State.

right is transferred. The place in which the licenseor the contract was concluded is irrelevant.
Joost Blom

100 Guideline 16(d) adopts the position that — regardlessof whether the defendant is a corporation or a natural
person — the defendant’s conducting commercial orother activities in the forum State is not a sufficientbasis for the court to exercise jurisdiction in claims
against the defendant unless the dispute is related tothose activities. Even if “doing business” jurisdiction
is otherwise valid according to the national legal
system, it is specifically excluded as a sufficientbasis for disputes falling within these Guidelines. A
judgment based on such jurisdiction would therefore
not be entitled to recognition.

D. Coordination and Cooperation
17. Proceedings Between the Same Parties on theSame Cause of Action
1. Where proceedings between the same parties
on the same cause of action are brought inthe courts of more than one State, suchcourts shall consider the coordination ofproceedings in the following terms:a) Where the court that is not first seized has
authority to suspend its proceedings on
grounds of lis pendens, it shall do so until
such time as the jurisdiction of the court
first seized is established, and thereafter
it shall terminate its proceedings. A
suspension may be lifted if the proceedingsin the court first seized does not proceedwithin a reasonable time or this court
concludes that it is not the appropriate
forum to hear the dispute.

(e) Mere presence of the defendant or the service ofprocess upon the defendant
101 Mere service of process upon the defendant in theforum State, or the mere presence of the defendantin the forum State, has traditionally been accepted
as a sufficient jurisdictional ground in some States,
such as the United States71 and Canada.72 Other
States insist on a more substantial and enduring
connection between the defendant and the forum
State, such as domicile or habitual residence. These
Guidelines adopt habitual residence as the properbasis for jurisdiction as against a defendant; see
Guideline 3. In this they follow the pattern in otherinternational instruments.73b) Where the court that is not first seized
has authority to dismiss on forum nonconveniens grounds or to transfer to amore convenient forum, it shall consider
which court is the most convenient forum,taking into account the private interestsof the litigants, the interests of the public,
and administrative issues. If the court
first seized is more convenient, the court
second seized shall dismiss or transfer
the case unless the court first seized has
dismissed or transferred the case.

(f) Completion of the formalities to execute anagreement
102 In some national legal systems, if the plaintiff’s claim
is based upon, or arises out of, a contract, jurisdiction
can be exercised on the basis that the place where
the contract was concluded was within the territoryof the forum court. The place of conclusion of anagreement is an abstract and often arbitrarily
determined criterion, and for this reason is widely
regarded as unsuitable to be a jurisdictional groundand is hence included in Guideline 16(f). Compare
Guideline 4, under which a dispute that concerns
an intellectual property license or a contract totransfer intellectual property rights can be heard
in the State for which the license is granted or the71

Supreme Court of the United States, Burnham v Superior
Court of California, 495 US 604 [1990].

72

Supreme Court of Canada, Chevron Corp v Yaiguaje, 2015 SCC
42, [2015] 3 SCR 69, paragraph 81.

73

See, for example, Article 5(1)(a) of the Hague Convention on
the Recognition and Enforcement of Foreign Judgments in
Civil or Commercial Matters (2019).

1

2. This Guideline does not apply if:a) the proceeding is within the exclusive
jurisdiction of the court subsequently
seized;b) the proceeding is for provisional orprotective measures; orc) it is shown by the party invoking thejurisdiction of the court subsequently
seized that a judgment of the court first
seized would not be recognized in theState of the court subsequently seized.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
or (iii) The judgment of the court first seized would
not be eligible for recognition in the State of thecourt second seized, notably for one of the reasonsstated in Guideline 34.

See as reference provisions§§ 221-223 ALI Principles
Arts 2:402, 2:701-2:706 CLIP Principles
Art 201 Transparency Proposal
Art 213 Joint Korean-Japanese Principles

Extended comments

Short comments

Hypothetical 1

103 Guideline 17 addresses the issues raised byproceedings between the same parties on the samecause of action. In this respect, it adopts a flexible
approach, which seeks to accommodate the existing
differences among national procedural traditions.
To this end, the following distinction is made in the
Guideline.

A sues B for copyright infringement before thecourts of State X, arguing that the defendant has
unlawfully sold copies of a book in X, over which it
allegedly holds exclusive rights. B, in turn, sues A
before the courts of the State Y, where A is habituallyresident, requesting at a declaration by local courtsthat the book is in the public domain and hence
no copyright infringement has occurred. The twoproceedings involve the same parties and the samecause of action for the purposes of this Guideline andmay result in irreconcilable judgments. Pursuant to
Guideline 17(1)(a), the court of Y should therefore
defer to the court of X.

104 For jurisdictions that adopt the doctrine of lis
pendens, Guideline 17(1)(a) lays down a mitigatedform of the principle of the priority of the court first
seized, which aims at preventing the problems that
may arise at the recognition stage if irreconcilable
judgments are rendered in concurrent proceedings.
Pursuant to this Guideline, the court second seizedin proceedings with the same parties and the samecause of action must suspend the proceedingscommenced before it until the court first seized has
established its own jurisdiction. If and when thisis settled, the court second seized must decline its
jurisdiction and terminate the proceedings pending
before it. No discretion is thus granted to this court,
except if the proceeding in the court first seized does
not proceed within a reasonable time, in which casethe suspension of the proceedings may be lifted by
the court second seized.

Hypothetical 2
A sues B before the courts of State X, claiming thatthe defendant has infringed its copyright on acomputer program by marketing and distributing
copies of it in State X. B files a declaratory relief
action in State Y, asking the local court to rule thatits products do not infringe A’s copyright. Both A and
B’s principal place of business is in Y. The goods atstake are also designed, developed and manufactured
there. The courts of X may dismiss the case, pursuant
to Guideline 17(1)(b), on grounds that Y offers anadequate alternative forum and that the balanceof the public and private interests at stake justify
dismissing the action in favor of adjudication by the
courts of Y.

105 Differently, for jurisdictions in which courts may
dismiss or transfer proceedings on grounds of forum
non conveniens, Guideline 17(1)(b) provides that the
court second seized in proceedings with the same
parties and the same cause of action shall consider
which court is the most convenient forum, taking
into account the relevant interests. If the court first
seized is deemed more convenient, the court second
seized shall dismiss or transfer the case, unless thecourt first seized has dismissed or transferred it. A
higher degree of discretion is thus granted to bothcourts, in line with the procedural traditions of thesaid jurisdictions.

The phenomenon and the interests at stake
107 Parallel proceedings between the same parties andbased upon the same cause of action are increasingly
frequent in international litigation. Their regulation
raises a number of complex issues, given theconflicting interests at stake.
108 In fact, a certain coordination of those proceedings
is desirable in order to prevent the problems that
may arise at the recognition stage if irreconcilable
judgments are rendered by the different courts
seized by the parties, as well as a means of promoting
procedural economy. This can be achieved, as in
Hypothetical 1, by giving supremacy to the court
first seized.

106 Neither of the abovementioned rules shall however
apply if: (i) The court second seized is exclusively
competent to adjudicate the dispute, either because
it was chosen by the parties pursuant to Guideline
9 or because it falls into one of the categories
of proceedings specified in Guideline 11(1); (ii)
The second proceedings aim exclusively at the
adoption of provisional or protective measures;

1

109 However, a strict application of the priority rule
may frustrate the exclusive jurisdiction of anothercourt and foster opportunistic behavior of one of the
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Kyoto Guidelines: Jurisdiction
parties consisting, inter alia, of initiating proceedings
before the courts of a State whose judicial system isknown for its delay in disposing of cases, therebyde facto preventing the other party from enforcing
its rights.

found acceptance in intellectual property cases,78 amuch higher degree of discretion is granted to courts
seized in parallel proceedings. In line with thisapproach, the ALI Principles allows the court first
seized to assert coordination authority over actions
involving the same transaction, occurrence, or seriesof occurrences and to decide whether the actions
will proceed through cooperation, consolidation or a
combination of the two.79 Consolidation of all or partof the dispute may consist of the court first seized
retaining jurisdiction over the consolidated action
or instead suspending the proceedings in favor ofanother court.80

The distinct approaches to the problem
110 Given the divergent interests at stake in this problem,
it is not surprising that different approaches haveemerged in its respect.
111 In the European Union, preference is given, asa matter of principle, to the court before which
proceedings were first initiated. To this end,
the Brussels Ia Regulation provides that where
proceedings involving the same cause of action andbetween the same parties are brought in the courtsof different Member States, any court other thanthe court first seized shall of its own motion stayits proceedings until such time as the jurisdictionof the court first seized is established; where thejurisdiction of the court first seized is established,
the former court shall decline jurisdiction in favorof the latter.74 Nevertheless, if a choice of court
agreement confers exclusive jurisdiction upon oneof the seized courts, any other court shall stay theproceedings until the chosen court declares thatit has no jurisdiction.75 This approach has inspired
several predecessor projects, which also providethat where proceedings involving the same causeof action and between the same parties are broughtin the courts of different States, any court other thanthe one first seized shall stay its proceedings.76

The tests for the applicability of the Guideline
113 In order that Guideline 17 applies, two tests must
be met: (i) The same parties must be in dispute inproceedings brought before the courts of different
States; and (ii) The same cause of action must
underlie those proceedings.
114 The identity of the parties in dispute is not excluded
merely because they hold opposite procedural
positions in the concurrent proceedings, as in
Hypothetical 1 above. Nor does it require that inproceedings with a plurality of parties all of themare present in both proceedings: if some, but notall, the parties are the same, Guideline 17 will apply
to the common parties. A more doubtful situation
may occur if an exclusive licensee commences
proceedings against an alleged infringer of thelicensed right and the right owner is, in turn, thedefendant in concurrent proceedings brought by thealleged infringer against him in a different State,in which the latter claims that no infringement has
occurred. Although the parties are not the samein the two proceedings, a stay or termination of
the second proceedings may be justified, under
Guideline 18, in order to avoid conflicting judgments.

112 A different approach has prevailed in the UnitedStates, where the issue is predominantly dealt with
under the doctrine of forum non conveniens, according
to which a court having jurisdiction has the power todismiss an action pending before it provided there isan adequate alternative forum and the balance of therelevant public and private interests favoursfavors
dismissal.77 By virtue of this doctrine, which has also

74

Article 29(1) and (3) Brussels Ia Regulation, [2012] OJ
L351/1.

75

Article 31(2) Brussels Ia Regulation, [2012] OJ L351/1.

76

See Article 2:701 CLIP Principles; equivalent rules arecontained in Article 201 Transparency Proposal and Article
213 Joint Korean-Japanese Principles.

77

See, in respect of domestic litigation, Supreme Court of
the United States, Gulf Oil v. Gilbert, 330 US 501 [1947]. The
doctrine was extended by the Supreme Court of the UnitedStates to international cases in Piper Aircraft Co. v. Reyno, 454
US 235 [1981].

1

115 The application of the second test is also likely
to raise doubts. In general terms, the same causeof action is at stake when the legal purpose of the
concurrent proceedings is the same and these arebased upon matching facts and legal rules. This does
not, however, imply that identical remedies musthave been requested by the disputing parties inthose proceedings: the cause of action will still be
the same for the purposes of Guideline 17 if, as in the
Hypotheticals above, in the proceedings before thecourt first seized the claimant asks for an injunctionor the compensation of damages allegedly sustained

40

78

See United States Court of Appeals, Creative Tech. Ltd. v.
Aztech Sys. Ltd., 61 F.3d 696 [9th Cir 1995].

79§ 221(2) ALI Principles.

80§ 222(4) ALI Principles.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
due to the breach of its intellectual property rights
and in the proceedings before the court second
seized the claimant seeks purely declaratory relief,such as a declaration of non-infringement, because
their legal purpose is the same, i.e., to establish theenforceability of the intellectual property rights atstake. The concurrent proceedings do not therefore
need to be literally identical, or to be characterized
in the same way according to the legal systems at
stake, in order that the Guideline applies.

factor to be considered by the court second seizedwhen assessing which is the most convenient forum
under Guideline 17(1)(b).
Exceptions and exclusions from the Guideline
119 A number of exceptions and exclusions are provided
for in the Guideline, as a means of ensuring anadequate balancing of interests and preventing theabuse of forum shopping, as well as the circumventionof the exclusive jurisdiction of certain courts.

116 The decisive criterion in order to assess the identityof the cause of action is rather whether the twoproceedings may result in judgments that havemutually exclusive legal effects. This will not be
the case if the disputed intellectual property rights
in the concurrent proceedings concern the same
intellectual creations or distinctive signs, but thesehave a different territorial scope of protection, as
will happen, for example, if independent patents
relating to the same invention were granted for
different States.81

120 Accordingly, if the court first seized does not proceedwithin a reasonable time, the suspension of theproceedings pending before the second court may belifted. Furthermore, the Guideline does not apply if
the proceedings pertain to the exclusive jurisdictionof the court second seized, if those proceedings
envisage provisional or protective measures or if
it is shown that a judgment of the court first seized
would not be recognized in the State of the court
second seized.

117 In order to determine which is the most convenientforum to hear the case under Guideline 17(1)(b),the court second seized is required to conduct aweighing of the private and public interests atstake. The former include the litigating parties’ease of access to the relevant sources of evidence,
the availability of means of compulsion of unwilling
witnesses, and the costs of the attendance of willing
witnesses. The latter comprise the speedy disposalof the case and the proper administration of justice,which the application of a foreign law may render
more difficult. Administrative issues, such as those
involved in a trial by jury, also come into play. The
existence of an alternative forum is a prerequisite ofthe dismissal of the proceedings by the court second
seized, which the Guideline assumes is met in thecases envisaged by it.

Dário Moura Vicente
18. Related Proceedings
Where related proceedings are pending in
the courts of more than one State, any of thecourts may take any step permitted by its own
procedures that will promote the fair and efficient
resolution of the related proceedings considered
as a whole. The scope of this guideline includes
both consolidating proceedings in one court
and coordinating the conduct of proceedings indifferent courts.
See as reference provisions§§ 221-223 ALI Principles
Arts 2:206, 2:702-2:706 CLIP Principles
Art 201 Transparency Proposal
Art 213 Joint Korean-Japanese Principles

The interplay of the two approaches
118 Taking into account the approach followed by
the alternative court is instrumental to ensureinternational decisional harmony and the uniform
application of the Guideline, irrespective of theprevailing doctrine in the forum State. Hence, incases submitted to courts that apply the doctrineof lis pendens, the fact that the court first seized has
deemed itself a forum non conveniens should, as amatter of course, prevent the court second seizedfrom suspending or terminating the proceedings on
the basis of Guideline 17(1)(a). Conversely, the fact
the court first seized holds itself competent under
the doctrine of lis pendens should be an additional81

1

Short comments
121 Guideline 18 concerns related proceedings, i.e., those
that, albeit not necessarily having the same parties
and the same cause of action, are so closely connectedto each order that their fair and efficient resolution
would be enhanced if they were considered as awhole by one (or all) of the seized courts.
122 As in Guideline 17, the purpose of this provision
is to avoid inconsistent judgments, although its
scope is broader, since it does not require that the
tests of the previous Guideline be met and, hence,that the recognition and enforcement of one ofthose judgments precludes the recognition andenforcement of the other.

See on this Article 4bis(1) Paris Convention.

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Kyoto Guidelines: Jurisdiction
123 In such cases, Guideline 18 gives the courts
before which the related proceedings are pending
considerable discretion to adopt the measuresdeemed appropriate in order to promote the fairand efficient resolution of the related proceedings,
including their consolidation or coordination.

consolidation.82 The CLIP Principles take a more
restrictive stance in this respect, since the court
second seized is only allowed to stay proceedings
pending before it, but not to decline jurisdiction infavor of the court first seized;83 the court first seized
may also stay the proceedings if a subsequent action
was filed in the State of registration of the disputed
right, and its object is, inter alia, the grant, registration
or validity of an intellectual property right protectedon the basis of registration.84 The ALI Principles do
not distinguish concurrent from related proceedings
and grant the court first seized, in both cases, a wide
discretion to the assert coordination authority overthose proceedings.85 The Transparency Proposal
also makes no distinction between the two types ofparallel litigation.86

Extended comments
Hypothetical 1
A, a producer of reference medicines, sues B, aproducer of generic medicines, before a court ofState X for the infringement of its patent concerninga given active substance, and subsequently also C
and D – B’s subsidiaries in States Y and Z where they
have their respective seats – for the infringement,
respectively, of B’s Y and Z patents over the same
substance. In all proceedings the defendants holdthat their generic drugs do not infringe A’s patents,
either directly or by equivalence. In order to obviate
the risk of contradictory findings in this respect, thestaying of the proceedings pending before the courts
of Y and Z until the issue is settled by the court of
X may be recommended. The efficient resolution of
the dispute, in particular the avoidance of the costs
involved in multiple related proceedings, may also
justify the consolidation of all proceedings before
the court first seized, to the extent that this court
considers itself competent to adjudicate all related
claims.

The notion of related proceedings
125 The notion of related proceedings is broader thanthat of lis pendens, which concerns concurrent
actions in which judgments may be rendered thatwill be mutually exclusive at the recognition andenforcement stage.
126 Although Guideline 18 does not define the concept ofrelatedness of proceedings, it may be inferred fromthe Guideline’s text that it comprises any situationin which fairness and efficiency would be better
served if connected cases are decided jointly or ina coordinated manner, so as to avoid inconsistentdecisions.

Hypothetical 2

127 This may be the case, as in Hypothetical 1, where,
although territorially independent rights anddifferent parties are in dispute, parallel proceedings
raise the same legal issues, such as whether the samegeneric drug marketed in different States infringes
the intellectual property rights of the producer ofthe corresponding reference drug.

A brings an action against B before the courts of State
X, where B is habitually resident, for the worldwide
infringement, via the Internet, of A’s trademark
registered in State Y. B raises the invalidity of the
trademark as a defense. Under Guideline 11(2), thecourt of X has jurisdiction to decide on this defensewith inter partes effect. Nevertheless, it may decide tostay the infringement proceedings until the courtsof Y, which were subsequently seized by B for theannulment of the trademark with erga omnes effect,
have ruled on that issue, on grounds that thosecourts are better placed to decide on the validity ofa trademark registered in Y and governed by its law.

The discretion of the seized courts
128 Guideline 18 gives the seized courts the discretionto adopt the appropriate measures with respect torelated proceedings. That discretion is however
limited by the overriding objectives of the Guideline,i.e., fairness and efficiency of adjudication intransnational litigation.

Rules adopted by other legal instruments
124 Guideline 18 draws inspiration from several previous
instruments, notably the Brussels Ia Regulation,
pursuant to which whenever related actions are
pending in the courts of different Member States
any court other than the court first seized may
stay its proceedings; that court may also decline
jurisdiction if the court first seized has jurisdiction
over the actions in question and its law permits their

1

42

82

Article 30 Brussels Ia Regulation, [2012] OJ L351/1.

83

Article 2:702 CLIP Principles.

84

Article 2:703 Brussels Ia Regulation, [2012] OJ L351/1.

85§§ 221-223 ALI Principles.

86

Article 201 Transparency Proposal.

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Joost Blom, Rochelle C. Dreyfuss, Paulius Jurcys et al.
129 Insofar as these goals are demonstrably better
served by consolidation or coordination of related
proceedings (which includes considering theparties’ right to have the dispute decided within areasonable period of time), the seized courts should
act accordingly.
130 Consolidation of proceedings implicates that one
or more of the seized courts shall decline theirjurisdiction in favor of another court which is deemed
to be better placed to decide the related disputes.
Coordination of proceedings may be carried out, interalia, through a stay of the proceedings in one or moreof the subsequently seized courts until the court first
seized takes a decision on certain common issues,in order that they may reach consistent findings in
respect of those issues, or through the exchange of
information between those courts.
Dário Moura Vicenteby:Joost Blom
LL.M. (Harvard), Professor Emertius of Law, Peter A. Allard
School of Law, University of British Columbia, contact:
blom@allard.ubc.ca
Rochelle C Dreyfuss
J.D. (Columbia), Pauline Newman Professor of Law, NewYork University School of Law, contact: rochelle.dreyfuss@nyu.eduPaulius Jurcys
Ph.D., LL.M. (Kyushu), LL.M. (Harvard), Lawyer, San
Francisco, contact: pjurcys@gmail.com
Axel Metzger
Prof. Dr. iur., LL.M. (Harvard), Professor of Civil andIntellectual Property Law, Humboldt-Universität zu Berlin,
contact: metzger@rewi.hu-berlin.de
Dário Moura VicenteProf. Dr. iur., Professor of Civil Law and Private
International Law, Universidade de Lisboa, contact:
dmouravicente@fd.ulisboa.pt
Sierd J Schaafsma
Prof. Dr. iur., Professor of Private International Law,
Universiteit Leiden and Senior Justice in the Court ofAppeal The Hague (intellectual property department),
contact: s.j.schaafsma@law.leidenuniv.nl
Benedetta Ubertazzi
Ph.D., LL.M. (Valladolid), Aggregate Professor ofInternational Law, Università degli Studi di MilanoBicocca, contact: benedetta.ubertazzi@ubertazzi.it

1

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Kyoto Guidelines: Applicable Law

International Law Association’s Guidelines onIntellectual Property and Private International
Law (“Kyoto Guidelines”): Applicable Law
by Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl, Mireille van Eechoud, Jane C Ginsburg, Toshiyuki Kono,
Gyooho Lee, Rita Matulionyte, Edouard Treppoz, Dário Moura Vicente

Abstract:
The chapter “Applicable Law” of theInternational Law Association’s Guidelines on Intellectual Property and Private International Law(“Kyoto Guidelines”) provides principles on the choiceof law in international intellectual property matters.
The Guidelines confirm the traditional principle of thelex loci protectionis for the existence, transferability, scope and infringement of intellectual property
rights. The law applicable to the initial ownership ofregistered rights is governed by the lex loci protectionis whereas the law of the closest connection isapplied to determine the ownership of copyright. For
contracts, freedom of choice is acknowledged. With
regard to ubiquitous or multi-state infringement andcollective rights management in the field of copyright,
the Guidelines suggest innovative solutions. Finally,
the chapter contains a Guideline on the law applicable to the arbitrability of disputes.

© 2021 Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl, Mireille van Eechoud, Jane C Ginsburg, Toshiyuki Kono, Gyooho Lee,
Rita Matulionyte, Edouard Treppoz and Dário Moura Vicente
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al., Kyoto Guidelines: Applicable Law, 12 (2021)
JIPITEC 44 para 1

A. General Rules

Short comments

19. Existence, Scope and Transferability (lex lociprotectionis)

1

The law applicable to determine the existence,
validity, registration, duration, transferability,
and scope of an intellectual property right, andall other matters concerning the right as such,is the law of the State for which protection issought.
See as reference provisions§§ 301, 314 ALI Principles
Arts 3:102, 3:301 CLIP Principles
Art 305 Transparency Proposal
Arts 301, 309 Joint Korean-Japanese Principles

1

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The Guideline makes “matters concerning the rightas such” subject to the law of the “State for which
the protection is sought” (lex loci protectionis). Thisapproach is in line with the traditional approachand reflects the idea that intellectual property
rights are the outcome of policy choices of States.
“State for which the protection is sought” should
be distinguished from lex fori and is usually
understood in terms of rights which require its
registration in each jurisdiction such as patent andtrademark as the State of registration. For otherrights, which do not arise from registration, forinstance copyright, the lex loci protectionis refers
to the law of the State which recognizes the right.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
2

and cultural policies represent policy decisions, but
under the regime of TRIPS, commercial or trade
policies could be a part of them as well.

The Guidelines distinguish proprietary aspects ofan intellectual property right from its contractual
arrangements. This paragraph applies the lawof the State for which protection is sought (lexloci protectionis) to the proprietary aspects, which
typically include existence, validity, duration andscope. “Existence” of an intellectual property rightmeans that the right is recognized as an exclusive
right in a State. “Registration” as a requirement of
the existence and the validity of certain types ofintellectual property rights includes its procedural
aspects. The “scope” concerns to what extent theprotection of an intellectual property right reaches,
typically, for instance, whether moral right, mereuse, exhaustion, or renumeration right is a part of
the right, and naturally also covers the limits andexceptions of the protection. “Transferability” ofan intellectual property right could be placed in an
independent provision, since it concerns a dynamic
aspect of right, while others concern static aspects
of proprietary right. However, the Guideline clarifies
its stance to place both aspects in one provision bystating that “all other matters concerning the rightas such”.

4

The language “State for which the protection issought“ is carefully chosen, especially to distinguishit from the “State where the protection sought“ inArticle 5(2) of the Berne Convention, as there is ascholarly debate if “State where the protection
sought” in the Convention would mean the principleof choice of law. Also, the language of the Berne
Convention could be interpreted as referring to thelex fori. By contrast, “State for which the protection
is sought” has also been adopted in Article 8 of theRome II Regulation.

5

How to identify the “State for which the protection
is sought“? If the right holder of a patent seeks
protection of his/her patent in the territory of State
A, the law of State A is lex loci protectionis. However, if
his/her invention is not registered in State A, there
is no legal basis at the level of substantive patent law
to protect the claimant. In the Card Reader Case1, theJapanese Supreme Court chose US patent law as thelaw applicable to an injunction, but then rejected toapply it, as extra-territorial application of US-patentlaw would violate public policy (the territoriality
principle) in Japan. The Supreme Court did not use
the term lex loci protectionis in its judgment. If thisGuideline would have been applied, Japanese law
should have been identified as lex loci protectionis, as
the right holder wanted to protect his patent in the
territory of Japan. But his patent was not registeredin Japan, hence he could not get any legal protection.
Although this result is the same as the judgment of
the Japanese Supreme Court, the way to conclusion
is different.

6

For other rights, which do not arise from registration,
the lex loci protectionis refers to the law of the State
which recognizes the right concerned. In legal
practice the claimant should identify for which
States he wants to protect his rights, when heformulates his claims. Therefore, lex loci protectionis
usually corresponds to the market where the rightholder seeks protection.

Extended comments
Hypothetical 1
A, resident in State X, holds a patent registered inState Y. A believes that B, a company which wasincorporated and has its headquarters in State X,
infringes A’s patent in State Y. A sues B in State X, theplace of defendant‘s domicile, for compensation. B
argues that A’s patent in State Y is invalid. The courtof State X should apply the law of State Y to render ajudgment (as for the jurisdiction of the court in StateX, see Guideline 11(2)).
Hypothetical 2
A, composer living in State X, signs a contract withB, an opera company in State Y, to create a new
production of an opera composed by A. The license
contract contains a choice of court clause (State X asagreed forum State), but no choice of law clause. On
the first night, A realizes that in this new production,
the ending scene of the opera is differently staged
from his original idea, while the musical part was notchanged. A sues B in State X for compensation andinjunction restraining B from performing infringing
acts in State Y. The copyright law of State Y should
be applied to the question if such a staging would
infringe A’s copyright.

3

1

Definitions
7

The Guidelines distinguish proprietary aspects ofan intellectual property right from contractual
arrangements. The latter is covered by Guidelines
21 and 22, while this Guideline deals with proprietary
aspects of an intellectual property right.

Lex loci protectionis

8

The Guideline reflects the approach that the
intellectual property rights are the outcome ofpolicy choices of States. Traditionally, industrial“Existence” of an intellectual property right meansthat the right is recognized as an exclusive right in a

1

Japanese Supreme Court, Hanrei Taimuzu, No. 1107, [2002],
p. 80.

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Kyoto Guidelines: Applicable Law
ownership. This paragraph applies mutatis
mutandis to related rights.

State. The issue of “validity” is a separate issue fromthe existence. A right recognized as an exclusive
right may be challenged by certain stakeholders.
Issues such as who could do so, and under what
conditions fall under the issue of the validity.
“Registration”, as a requirement of the existence andthe validity of certain types of intellectual property
rights, includes not only substantial requirements,
but also procedural aspects as well as appeal
procedures in case of refusal. The “scope” concerns
to what extent the protection of an intellectual
property right reaches. Accordingly, exceptions
and limitations of intellectual property rights arecovered by this Guideline. For instance, if and towhat extent exhaustion is recognized; if and underwhat conditions compulsory license2 of patents isallowed; if there are general exceptions of copyrightprotection such as fair use.39(b) If the underlying policy of the law of the Statefor which protection is sought so requires evenin international situations, the allocation ofrights which cannot be transferred or waived isgoverned by the law of that State.
See as reference provisions§§ 311-313 ALI Principles
Arts 3:201, 3:401-402, 3:503 CLIP Principles
Art 305 Transparency Proposal
Art 308 Joint Korean-Japanese Principles

Short comments
10 For industrial property the Guidelines follow themain territoriality based rule. In case of rights forwhich registration is a constitutive factor, the Statefor which protection is sought is the State where
the right is (to be) registered. The same applies
to industrial property rights that do not requireregistration, such as unregistered design rights.

“Transferability” of an intellectual property rightshould be separated from contractual arrangements.
Since transferability is an attribute of an intellectual
property right as proprietary right, while a contract
sets up the framework and detailed conditions of
the transfer of the intellectual property right.
Transferability implies that the link of the right topersonality aspect is marginal. The Guideline clarifies
its holistic stance toward proprietary aspects of an
intellectual property right by stating that “all othermatters concerning the right as such”.

11 Especially in case of employee made inventions
or designs, domestic laws often contain rules on
who (employee or employer) is entitled to claim
ownership of industrial property resulting fromlabour, that is, who is entitled to file a registration.
Similar rules exist for designs and other industrial
property created under commission. Such rules in
effect address the relative position of parties thatare in a contractual relationship (employer andemployee, commissioning and commissioned party).
The principle of party autonomy is recognized asa basic principle for contractual relations in these
Guidelines, and this is reflected in clause 1(b). It
provides for accessory allocation to the law thatgoverns a prior contractual relationship, for example
an employment contract.

Toshiyuki Kono
20. Initial Ownership and Allocation of Rights(1) (a) Initial ownership in registered intellectual
property rights, unregistered trademarks andunregistered designs is governed by the law of
the State for which protection is sought.
(b) In the framework of a contractual relationship,in particular an employment contract or a
research and development contract, the law
applicable to the right to claim a registeredintellectual property right is determined inaccordance with Guidelines 21 to 23.

12 Clause 2(a) leads to identification of a single
applicable law to initial ownership of copyright,
but its approach also applies to performer’s
rights, phonogram producer’s rights and similar
unregistered related rights. All such rights arise as amatter of law, in many States simultaneously. Thereis therefore no easy way for parties to establish
who the owners are. The connecting factor usedis the law most closely connected to the creation.
To promote predictability as to the applicable law,
the presumption of clause 2(a) is that the place ofhabitual residence of the actual “creator” (performer,
producer) has the closest connection. It is in thatjurisdiction that creation will typically take place.
Many works, performances and other protectedsubject-matter result from a collaborative effort. If
those engaged are habitually resident in different
jurisdictions, the principal rule can be difficult to(2) (a) Initial ownership in copyright is governedby the law of the State with the closest connection
to the creation of the work. This is presumed tobe the State in which the person who createdthe subject-matter was habitually resident at
the time of creation. If the protected subjectmatter is created by more than one person, they
may choose the law of one of the States of theirhabitual residence as the law governing initial
2

Article 31 TRIPS.

3§ 107 Title 17 of the United States Code.

1

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
Single law for copyright and related rights

apply. The Guidelines therefore allow co-creators tochoose the applicable law, for instance because they
prefer legal certainty upfront.

14 In case of industrial property, the grant of aregistered right is intimately connected to a
jurisdiction’s specific procedures and intellectual
property institutions. What is more, who is theinitial owner of the rights can be inferred from therelevant official registers. Copyright and related
rights arise by operation of law, simultaneously in alarge number of States. Applying the lex protectionis
to ownership of copyright and related rights, thus
produces legal uncertainty as to the chain of title.
To date the lex protectionis for matters of initialownership is the more common approach,4 but asingle law approach exists in various States.5 A single
applicable law promotes legal certainty. This has theadded advantage that it lowers transaction costs
for parties seeking to acquire intellectual property
rights or licenses. It also positively influences
the value of intellectual property rights as assets
because legal uncertainty about title may reduce
the economic value of intellectual property rights.
For these reasons the Guidelines establish a single
governing law for initial ownership of copyright andrelated rights. The default connecting factor is theplace with the closest connection to the creationof protected subject-matter.6 The reference is to

13 The single law approach can result in ownership ofrights being denied to parties which under domestic
law would qualify as initial owner (e.g. a person
making a minor creative contribution to a work, oran employee). Especially where rights of authors andperformers are not transferable or cannot be waived
in the first place, this outcome may be unpalatable
for a State. If the policies underlying the domestic
intellectual property rules on transferability or
waiver are deemed crucial to uphold in international
cases, clause 2(b) allows for the territorially limited
application of the lex protectionis to initial ownership.
Extended comments
Hypothetical 1
Company A concentrates the design of its clothinglines in State Z, and files applications for designs in all
States where it markets its products. The design lawof State Z provides that in case designs are createdby employees, the rights are vested with the actual
designer (natural person), unless otherwise agreed.
A’s chief designer B claims that under the laws of Z
she is entitled to all design rights. It follows from
Guideline 20(1)(a) that one must look to all the lawsof the States where design applications are filed todetermine which party has acquired the territorially
distinct rights involved. Note however that the rightto claim title to an intellectual property right should
be distinguished from actual (initial) ownership of
the intellectual property right itself. In Hypothetical
1 above, whether chief designer B or any of theother employees involved in the creation of thedesign in State Z are entitled to claim a right to filefor design rights in Z and elsewhere, depends on
the law applicable to the employment contract(s)under Guideline 29(1)(b). If the law applicable to thecontract is not the law of the State where he/she ishabitually resident, the employee may still invoke
mandatory provisions of that law to secure a claim
to register as owner.
Hypothetical 2
An international videogame publisher established in
Y engages freelance game developers to contributeto a videogame. Most developers work and live inState Y, but a number work from and are resident
in States X and W. The law of State Y in this casemay be most closely connected to the creation,
so that law will govern the question whether thedevelopers from Y, X, and W qualify as (co-)authorsof the videogame. The developers may also agree
to have their respective positions governed by thelaws of X or W.
1

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4

See French Court of Cassation, 10 April 2013,
ECLI:FR:CCAS:2013:C100347 – Fabrice X v. ABC NewsIntercontinental; German Supreme Court, Case I ZR 88/95, 2October 1997, GRUR 1999, 152, 153 et seq. – Spielbankaffaire;and for Korea Seoul High Court, Case No 2007Na0093, 8
July 2008, reported in Ghyohoo Lee, Choice of Law, in S.
Wolk, & K. Szkalej (Eds.), Employees’ Intellectual Property
Rights (AIPPI Law Series). Alphen aan den Rijn Netherlands:
Kluwer Law International. Note however that the Korean
Private international law act (Article 24) only provides that
infringement of rights is governed by the law of the placeof infringement. The High Court has extended the scopeof Article 24 to (initial) ownership. However, in a case on
allocation of rights by operation of law (i.e. the grant of
a license by operation of law to employer for employee
created works) the Korean Supreme Court later opted foraccessory allocation to the law governing the employment
contract: Korean Supreme Court, Case No. 2012 Ds 4763, 15January 2015.

5

See for example for Portugal Article 48 Civil Code (privateinternational law section); for the US United States Court ofAppeals, Itar-Tass (153 F.3d 82 (2nd Cir. 1998) and its progeny,
including United States Court of Appeals, Alameda Films v.
Authors Rights Restorat, 331 F.3d 472 (5th Cir. 2003); UnitedStates Court of Appeals, Laparade v. Ivanova, 387 F.3d 1099
(9th Cir. 2004). Compare also Article 1256 of the Civil Code of
the Russian Federation.

6

For comparison: Both the Joint Korean-Japanese Principles
and the ALI Principles contain special rules aimed at
identifying a single applicable law for copyright and related

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Kyoto Guidelines: Applicable Law
domestic (intellectual property) law, excluding rulesof private international law (see also Guideline 30,
no renvoi).

In keeping with the principle of the closest
connection, what matters is the residence with theoverall stronger relationship.

Place of creation

Escape clause 21(2)b

15 The place of creation refers to the place where theintellectual and organizational effort is made to
produce the intangible subject-matter. Often thiswill coincide with the place where a work is firstpublished or its fixation or physical embodimentis produced. Note however that the place where
physical copies are made (e.g. a print run of books,
production of clothing after a protected design) is notnecessarily the place of creation of the (intangible)
subject-matter.

19 Transferability of intellectual property is governedby Guideline 19, the lex loci protectionis. In somejurisdictions copyright is not transferable as amatter of principle. In other States certain rights
cannot be waived. Examples are the author’s moral
right to resist mutilation of her work (cf. Article 6bis
Berne Convention) and remuneration rights forcertain acts of exploitation. Such rules are usually
intimately connected to the protection of persons
that the domestic law regards as “natural” firstowners. Application of a foreign law as the law of
the habitual residence of the creator, might resultin the designation of a different party as author thandomestic law would. So indirectly the domestic law
on transferability is bypassed. If domestic rules on
initial ownership of untransferable or unwaivable
rights are of an overriding mandatory nature, they
may be still be applied for local rights. Note that
this provision does not cover issues that may becharacterized more readily as contract law thanproperty law. In some States for example, a rightof the author to terminate an exploitation contract,
or a right to seek additional compensation in case of
unexpected commercial success will be characterized
as contractual.

Application to related rights
16 To keep the wording of the Guideline simple,
Article 2(a) uses terminology suited to copyrighted
subject-matter. The last sentence stresses that thesame single-law rule governs so-called related orneighboring rights. The closest connection is to theplace of first performance for performer’s rights,
and to the place of production (and investment) for
rights in phonograms, broadcasts and (first fixationsof) films. Here too, the presumption is that the
habitual residence of the (legal) person(s) engaged
in the production or performance normally best
represents the closest connection.
17 Equivalent factors can be applied for (so far)less universally recognized related rights, e.g. in
traditional cultural expressions, databases, sports
events, or press publications. As is the case with theterm “creation” for copyright works, “production”
should not be read as being equal to the place where
physical copies are made.

20 The fact that rules on transferability or waivability
are mandatory under local law is not in and of itself
enough to trigger clause b), this is what the wording“even in international situations” expresses. Blackletter law may not explicitly address the questionof whether rules on initial ownership of rights thatcannot be transferred or waived claim application
in international cases, hence the reference tounderlying policy.

Temporal aspects
18 In many cases, authors and performers will havestable habitual residences in one jurisdiction.
But when they do relocate to another State, theGuidelines clarify that the relevant habitualresidence is the one at the time of creation (asopposed to for example residence at the time
when a dispute arises over initial ownership). Achange of residence may occur during production.

Mireille van EechoudB. Contracts
21. Freedom of Choice
1. Parties may choose the law governing theircontractual relationship.

rights. These rules are drafted as cascading rules, with thehabitual residence of the creator(s) and the law chosen byco-creators as important connecting factors. ALI Principles
has more rules more broadly for non-registered rights
such as neighboring rights of performers and (in a separaterule) unregistered trademarks. The CLIP Principles also
depart from a multiple-governing law approach. The CLIP
Principles have important modifications to accommodate
work for hire and employment situations.

1

2. Such a choice of law shall not, however,
have the result of depriving the creatoror performer of the protection afforded tohim/her by the provisions that cannot bederogated from by agreement under the law
that, in the absence of choice, would have
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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
been applicable pursuant to Guideline 22.

Hypothetical 2
A is a novelist who resides in State X. He signed apublishing contract with a publisher also establishedin State X for distribution of the novel in several
X-speaking States. The contract states that it isgoverned by the law of State W (a non-X-speaking
State). To the extent that the contract presents a
closer nexus with State X (on the basis of Guideline22), the choice of the law of State W cannot deprive
the author of the benefit of the more protective rules
in force in State X.

See as reference provisions§ 315 (1) ALI Principles
Art 3:501 CLIP Principles
Art 306(2) Transparency Proposal

Short comments
21 Guideline 21 applies to contracts concerning
intellectual property rights the generally accepted
principle that the parties to a contract may
choose the law that governs the substance of theiragreement (lex contractus). Also known as “party
autonomy”, the parties’ freedom to choose the law
governing their contractual relationships embodies
the considerable trust that contemporary privateinternational law places in contracting parties
involved in international situations. As a principle,
they are considered to have the highest capacity andlegitimacy to solve conflict of laws regarding theircontracts. For instance, the Guideline’s absence ofgeographic specification or limitation means thatthe parties may choose any law; that law need not
be the lex loci protectionis.

Choice of law agreement
23 Guideline 21 articulates choice of law in light of theother Guidelines. For instance Guideline 30 excludes
renvoi, which means that the substantive rules of thelaw chosen by the parties apply, rather than that
State’s choice of law rules.
24 Guideline 21 does not take a position on whether
the parties may choose as the applicable “law” anensemble of non-state-based private ordering
norms.7 It is clear, however, that whether thesource of law derives from public norms or privateordering, Guideline 21(2) requires the application of
the mandatory author-protective rules of the State
whose law Guideline 22 designates.

22 Without prejudice to the application of generalmandatory rules or the ordre public exception,(Guidelines 28 and 29), the freedom of choice set
out in paragraph 1 of Guideline 21 nonethelessencounters the particular limitation formulated inparagraph 2. To the extent that the law that would
have applied in the absence of the parties’ choice(the lex contractus identified in Guideline 22) includes
mandatory rules which afford greater protection
to the author or performer than provided by thelaw chosen by the parties, these more protective
provisions shall govern. Paragraph 2 thus requires
comparing two sets of rules: the rules imposed by thelaw the parties chose, and the rules of the objectively
applicable law (pursuant to Guideline 22), in orderto guarantee to the author or performer the benefitof the rules that best protect their interests. This
comparative technique is directly inspired by theRome I Regulation, which employs it in the context
of contracts between professionals and consumers,
and in the context of employment contracts (as forwhen the latter concern intellectual property, see
Guideline 23). In the same fashion, Guideline 21
treats the author and the performer as the “weaker
parties” who should receive special protection.

Scope of the chosen law
25 The law chosen by the parties governs only thecontractual aspects of their relationship. For
example, it is competent to determine whether theparties validly consented to enter into the contract,
as well as the content of the contract, to specify
which contractual obligations were undertaken. As
such, general rules of interpretation are governedby the lex contractus. Furthermore, the law chosen
by the parties shall fix the remedies in the event of
failure to execute the contract.
26 By contrast, the law the parties designate cannot
render an intellectual property right transferable
if, under the law for which the rights are granted(the lex loci protectionis), the right is inalienable.
Nonetheless, the law that governs the contract can
provide that contractual clauses exclude certain
rights (which under the lex loci protectionis could havebeen transferred) from the scope of the transfer.8
27 For other issues, it may be difficult to determine

Extended comments
Hypothetical 1
A grants B the patents he holds for States X, Y and
Z. The contract provides that contract issues will be
subject to the law of State W.
1

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7

See for instance the UNIDROIT Principles of International
Contracts, 2016.

8

Creazioni Artistiche Musicali, S. R. L. v. Carlin Am., Inc., 2016
U.S. Dist. LEXIS 180431 (S.D.N.Y. Dec. 30 2016), aff’d., 747 Fed.
Appx. 3 (2nd Cir. August 23 2018).

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Kyoto Guidelines: Applicable Law
whether they are subject to the law chosen by
the parties (the lex contractus) or instead the lexloci protectionis or even the lex fori. For example,
if a licensee exceeds the scope of the license andengages in unauthorized acts of exploitation of awork, should those exploitations be considered
copyright infringements governed by the lex lociprotectionis, or a breach of contract, governed by thelex contractus?9 In fact, both the lex contractus andthe lex loci protectionis should apply, sequentially: thelex contractus to determine whether the licensee hasbreached the contract by exceeding its scope, andif so, then the lex loci protectionis to determine theextent of the infringement.

in modes of exploitation unknown at the time of
the contract’s conclusion. State laws may also allow
the author or performer to terminate the contract
if the grantee does not exploit the work, or after acertain interval even if the work has been exploited(reversion right).
30 The legal status of these measures may not always
rise to that of overriding mandatory rules (within
the meaning of Guideline 29), and even if they are
as a matter of domestic law, Guideline 29(2) does not
require the judge in the forum State to apply foreign
mandatory rules. In order to protect the interestsof authors and performers at the international
level, Guideline 21(2) reduces the complications ofcharacterization and guarantees the respect due tomandatory rules so long as they emanate from theState whose law would have applied if the parties
had not chosen the law to apply to their contract.

28 When State law ties ownership of an exclusive rightunder copyright to standing to sue for infringement,
as is the case in the US, one may also inquire on what
grounds such a rule should apply. It is submitted thatsuch a rule must be part of the lex loci protectionis(and not of the lex fori).10 Nonetheless, in the caseof a licensee, it becomes necessary to apply the lex
contractus in order to verify whether or not exclusive
rights were granted to him or her.

31 Nonetheless, there may be occasions to compare
these domestic mandatory rules and those of thelaw chosen by the parties in order to determine
which are more author- or performer-protective.
The comparison, moreover, may not be obvious.

Mandatory protective provisions

32 Where the law that would have applied in the absenceof the parties’ choice proves more protective, it will
govern the parties’ relationship to the extent set
out by the State that enacted the mandatory rule.
Specifically, if that State determined to limit theambit of its mandatory rule to the territory of that
State (as is the case with the US Copyright Act’s non
waivable termination right), Guideline 21(2) would
not permit the rule to apply more broadly.

29 Some States protect the interests of creators andperformers through rules which impose particularprovisions or which give creators and performers
rights against the other contracting parties. For
example, rules which require in a mandatory fashionthat ambiguities be interpreted restrictively infavor of authors and performers11, or which impose
proportional or just and equitable remunerationfor each mode of exploitation, or which require an
upward revision of the remuneration if the work
encounters unexpected success (so-called “bestseller clauses)12, or which prohibit the grant of rights
9Compare Article 307(3) Joint Korean-Japanese Principles
with Article 3:606(2) CLIP Principles.

10

See Article 15 Rome II Regulation, [2007] OJ L199/40.

11It should be presumed that a rule of interpretation
specifically and expressly enacted in favor of creators or
performers is mandatory according to the legal system it
belongs to. However this presumption can be reversed: seeGerman Supreme Court, I ZR 35/11, 24 September 2014, GRUR
2015, 264 – Hi Hotel II, holding that rules of interpretation
set out by German law for grants of copyright (§ 31(5)German Copyright Act) are not internationally mandatory
because they are not mandatory on the internal level.

121Marie-Elodie Ancel, Jane C Ginsburg
22. Absence of Choice
1. In the absence of choice of law by the parties
pursuant Guideline 21, a contract other thanan employment contract shall be governed,a) if the contract deals with intellectual
property granted for one State only, by
the law of this State, unless it is clear
from all the circumstances of the case thatthe contract is manifestly more closely
connected with another State. Then thelaw of that other State shall apply;b) if the contract deals with intellectual
property granted for more than one
State, by the law of the State with which

See the “best-seller“ provision in Portugal (Article 49
Portuguese Copyright Act) and Germany (§§ 32, 32a and 32b
German Copyright Act). See also Article 20 Directive (EU)2019/790 of the European Parliament and of the Council of
17 April 2019 on copyright and related rights in the Digital

Single Market, [2019] OJ L130/92, and amending Directives
96/9/EC, [1996] OJ L 77/20, and Article 20 Directive 2001/29/
EC, [2001] L167/10 (more generally, on the mandatory
provisions laid down by the Directive, see Recital 81).

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
the contract is most closely connected; indetermining this State, the court shall take
into consideration among other possible
factors:-

These connecting factors need not all apply in every
case, and they do not preclude taking other factors
into account.
36 In order to ensure the predictability of the law thatwill apply to the contract, paragraph 2 of Guideline
22 fixes habitual residence as of the date of theconclusion of the contract.

the common habitual residence ofthe parties;
the habitual residence of theparty effecting the performance
characteristic of the contract;
the habitual residence of one of theparties when this habitual residence
is located in one of the States coveredby the contract.

Extended comments
Hypothetical 1
A grants B the right to exploit his work (or his
trademark, or his patent or design) in State X. The
parties did not include a choice of law clause. It will
be governed by State X law, but if the parties both
habitually reside in State Y, and if payments under
the contract are to be made in State Y currency to
A’s account in a bank established in State Y, State Y
law will apply as the law of the State with which thetransaction is most closely connected.

2. For the purpose of this provision, the habitualresidence of a party shall be determined at
the time of conclusion of the contract.
See as reference provisions§ 315 (2) ALI Principles
Art 3:502 CLIP Principles
Art 306(2) Transparency Proposals
Art 307 Joint Korean-Japanese Principles

Hypothetical 2

Short comments

A grants B the right to exploit his work (or his
trademark, or his patent or design) in States X, Y
and Z. The parties did not include a choice of law
clause. To determine the governing law, it will benecessary to take into account the parties’ habitualresidence, the residence of the party who furnishes
the characteristic performance (in this case, A, thegrantor), but also the currency, and revenue flows(for example, from exploitations in multiple States
to a bank account in a single State) or the link thecontract, such as a franchising agreement, may havewith another contract whose governing law has been
established.

33 Guideline 22 addresses the case in which thecontracting parties have not chosen the law
applicable to their contract (apart from employment
contracts, which are the subject of Guideline 23).
Guideline 22 envisages two kinds of contracts,
depending on their geographic scope.
34 With respect to the first kind of contract, it
concerns only one State; its limited scope facilitates
the analysis of conflict of laws. Subsection a) ofparagraph 1 designates the law of the State for which
the rights which form the object of the contract are
granted, whatever the nationality or residence of theparties may be. The law applicable to the contract
therefore coincides with the lex loci protectionis,
thus avoiding the prospect of differences between
the two laws. Guideline 22(1)(a), however, allows forthe possibility that the contract might present moresignificant contacts with another State.

Closer and closest connections
37 When the contract’s geographic scope is limited toa single State, Guideline 22(1)(a) presumes that itpresents the closest connection to that State. It is
nonetheless possible to present contrary proof thatis, to demonstrate that the contract is more closely
connected to another State.

35 With respect to the second kind of contract, theintellectual property rights at issue cover multiple
territories. Subsection b) of paragraph 1 subjects thecontract to the law of the State with which it has themost significant relationship; it also sets out several
connecting factors that assist in characterizing that
relationship: the habitual residence of the parties inthe same State; the habitual residence of the party
who must furnish the characteristic performance;
the habitual residence of either one of the parties if it
is located in one of the States covered by the contract.

1

38 When the contract covers multiple States, orindeed, the whole world, the connection to any one
State may be weaker. In that situation Guideline22(1)(b) provides no presumption. It therefore
becomes necessary to determine the State withwhich the contract is most closely connected. To
that end, Guideline 22 enumerates several relevant
connecting factors, starting from habitual residence.
The enumeration is illustrative, not limitative. Other
connecting factors may be taken into account, solong as they are based on elements known to bothparties and are established by the time of the
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Kyoto Guidelines: Applicable Law
40 To enable the identification of a single law, theresidence of the party furnishing the characteristic
performance supplies the relevant connecting factor,
rather than the State(s) in which the characteristic
performance is rendered.

conclusion of the contract. For example, a relevant
point might be the choice of a particular currency, orof the State in which the payments are to be made,or of the relationship of the contract to anothercontract entered into by the same parties (forexample, a license agreement that implements a
broader cooperation agreement among the parties).
Other elements, such as the language of the contract
or the presence of a choice of forum clause, may betaken into account when they reinforce certain of
the abovementioned connecting factors.

41 As it is not always possible to identify thecharacteristic performance (that is, to determine
whether one party’s performance is more
important than the other), Guideline 22(1)(b) does
not designate the habitual residence of the party
furnishing the characteristic performance as thepresumptively applicable law (when it is possible
to identify that performance), but rather as one ofseveral connecting factors to be taken into account.

All of these elements may also be employed to rebut
the presumption of Guideline 22(1)(a).
Performance characteristic of the contract

Marie-Elodie Ancel, Jane C Ginsburg

39 The reference to the contract’s characteristic
performance is borrowed from the Rome I
Regulation.13 It requires identifying the mostimportant performance of the contract, that which
expresses the function or the economic dynamic of
the agreement. When a party simply pays a fixed
sum to another party, the second party is usuallyconsidered the one who renders the characteristic
performance. For example, in a contract assigningseveral patents for a fixed sum, the grantor is theparty who furnishes the characteristic performance,
which is the transfer of the industrial property rights.
Similarly, if a work is commissioned to an author,
he will be the one rendering the characteristic
performance of the contract. But the economy ofintellectual property contracts may be more complex.
For instance, when the remuneration of the holder ofthe right granted depends on the results of the othercontracting party’s activity, that activity represents
a particular economic value and may constitute thecharacteristic performance of the contract. Thus,
when a patent holder grants the right to exploit his
patents in several States and must, by virtue of thecontract, receive a remuneration proportional to thelicensee’s revenues, the grantee’s exploitation may
appear to supply the characteristic performance. For
the same reasons when a publisher has undertaken
the obligation to exploit and promote the intellectual
property right in the interest of the author, he is tobe seen as the characteristic performer.14
13

Article 4(2) Rome I Regulation, [2008] OJ L 177/6. Comparewith Article 3:502(2) CLIP Principles. See also Article
1211(1) of the Civil Code of the Russian Federation.

14

German Supreme Court, I ZR 218/53, 22 November 1955, GRUR
1956, 135 –“Sorell and Son” about a book publishing contract;
German Supreme Court, I ZR 182/98, 29 March 2001, GRUR
2001, 1134 – “Lepo Sumera”, about a music publishing contract.
See also Hungarian Supreme Court, 6 October 1995, Pf.IV.
22284/1994/3 [1998] GRUR Int 1998, 74 (German translation);
Paris Court of Appeal, 2 June 1999, [1/2000] RIDA 302.

1

23. Employment Contracts
1. An employer and its employee whose efforts
give rise to an intellectual property right may
choose the law governing their contractual
relationship in accordance with Guideline 21.
Such a choice of law shall not, however, havethe result of depriving the employee of theprotection afforded to him by the provisions
that cannot be derogated from by agreement
under the law that, in the absence of choice,would be applicable pursuant to paragraphs
2 and 3.
2. In the absence of choice of law by theparties, the contractual relationship between
employer and employee shall be governed by
the law of the State in which or, failing that,from which the employee habitually carries
out his work in performance of the contract.
3. The State where the work is habitually carriedout shall not be deemed to have changed if
the employee is temporarily employed inanother State. Where it is clear from all thecircumstances of the case that the contract
is more closely connected with a State otherthan that indicated in paragraph 2, the lawof that other State shall apply.
See as reference provisions§§ 311 (2), 312 (2), 313 (1)(c) and (2) ALI Principles
Art 3:503 CLIP Principles
Art 25(2), 308(4) Joint Korean-Japanese Principles

Short comments
42 Guideline 23(1) recognizes party autonomy interms of choice of law in an individual employment
contract. In this context, Guideline 23 does notprovide a definition of employment contract. It
leaves to the competent court to determine whether
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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
a contract is characterized as an employment
contract as a preliminary question. In otherwords, characterization as to whether a contract
constitutes an employment contract is up to theforum State. The law chosen by the parties shall nothave the consequence of depriving the employeeof the protection afforded to him or her by the
mandatory employment regulations of the Statein which or from which the employee habitually
carries out his or her work in performance of thecontract (lex loci laboris). Neither shall the law chosen
by the parties have the consequence of depriving
the employee of the protection afforded to him
or her by the mandatory employment regulationsof a different State in exceptional circumstances
when the contract is more closely connected withthe different State from the one in which or fromwhich the employee habitually carries out his workin performance of the contract.

the law of the State of the place of business throughwhich the employee was engaged will be taken into
account.
Extended comments
Hypothetical 1
A, a producer of diagnostic medical instruments and ahabitual resident of State X, brought an action before
a court of State Y against A’s former employee B, a
habitual resident of State Y, for patent infringement,
alleging that B applied for and obtained a patent forthe same diagnostic medical instruments in State Y.
B argued that the invention was made before his/her
employment contract with A whereas A claimed it
was made in the course of his/her employment. The
employment contract designated the law of State X
as its governing law. The law of State X, which was
the law chosen by A and B, will determine whether
A can claim any rights arising of the contract under
Guideline 23(1).

43 Guidelines 23(2) and (3) are the fall-back provisions
in the absence of choice of law made by the parties.
Guideline 23(2) prescribes that, in the absence of achoice of law made by the parties, the individual
employment contract shall be governed by thelaw of the State in which the employee habitually
carries out his work in performance of the contract.
In this regard, the State where the work is habitually
carried out shall not be deemed to have changed if
the employee is temporarily employed in anotherState. Otherwise, the applicable law could bechanged by sending an employee to work in anotherState. In cases in which no habitual place of work
can be identified, the law of the State from which
the employee habitually carries out his or her workin performance of the contract.

However, B worked in State Y, as an employee
and he has a mandatory right to non-exclusive
remuneration for invention under the law of State Y.
Under Guideline 23(1) second sentence, applicationof the law of State X shall not have the result ofdepriving B of the mandatory right to non-exclusive
remuneration afforded to him/her by the law ofState Y.
Hypothetical 2
An employee A, a habitual resident of State X, hasbeen employed in State Y by a pharmaceuticalproduct company B of State Z. A has worked for
B for the last 5 years in State Y. The employment
agreement did not contain how much remuneration
A would be paid for his invention made in the courseof employment with B. In terms of the remuneration
issue, the law of state Y shall apply under Guideline23(2) sentence 1.

44 Guideline 23(2) sentence 2 will apply to thecases where the employee is expected to resume
working in the State of origin after carrying out
his work abroad for a limited period of time.
45 Due to the high threshold (“more closely” connection
standard), Guideline 23(3) will apply to exceptional
cases only. This provision makes it possible to deviate
from the law of the State in which or from which theemployee habitually carries out his/her work.

If A worked for the last 2 months in State X
and returned to State Y, the law governing the
remuneration issue is the law of state Y pursuant to
Guideline 23(2) sentence 2.

46 Guideline 23 does not provide which country’s law
applies to cases where the law of the State in whichor, failing that, from which the employee habitually
carries out their work in performance of the contract
cannot be determined. However, it is based on theassumption that the closest connection test should
be applied to those situations. If it is impossible
to determine a State in which or from which theemployee habitually carries out his or her work,

1

Party autonomy principle
47 Guideline 23 does not define the employment
contract. In this context, it will leave doors open
for a court of the forum State to determine whether
a contract is characterized as an employment
contract as a preliminary question. In other words,
characterization as to whether a contract constitutes
an employment contract is up to the forum State.

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Kyoto Guidelines: Applicable Law
48 Guideline 23(1) is modeled after Article 3:503 (1) of
CLIP Principles. These provisions are very muchinfluenced by Article 8 of the EU Rome I Regulation.

of the Rome I Regulation and Article 3:503 (2) of CLIP
Principles. Apart from party autonomy principle,
Guideline 23(2) sentence 1 provides for functional
allocation, i.e., the law applied to the employment
contract is the law of the State where the employee
habitually works.

49 Guideline 23(1) recognizes party autonomy interms of choice of law in an individual employment
contract, for the interpretation of the contract15 andfor determining its effect,16 while prohibiting sucha choice of law from having the result of depriving
the employee of the protection afforded him/her
by provisions that cannot be derogated from byagreement17 under the law applicable pursuant to
the following fall-back provisions.

51 In this regard, the State where the work is habitually
carried out shall not be deemed to have changed ifthey are temporarily employed in another State.19
Otherwise, the applicable law may be changed bysending an employee to work in another State.
In cases in which no habitual place of work canbe identified, the law of the State from which
the employee habitually carries out his work in
performance of the contract.

Fall-back provisions in the absence of choice of law
50 Guidelines 23(2) and (3) provide the fall-backprovisions in the absence of choice of law made by
the parties.18 Guideline 23(2) sentence 1 prescribes
that, in the absence of a choice of law made by theparties, the individual employment contract shall begoverned by the law of the State in which or, failingthat, from which the employee habitually carries out
their work in performance of the contract. Guideline23(2) sentence 1 is identical to Article 8(2) sentence 1
15

CJEU, C-64/12, ECLI:EU:C:2013:551 – Anton Schlecker v Melitta
Josefa Boedeker; § 45 (holding that Article 6(2) of Rome I
Regulation, [2008] OJ L 177/6, “must be interpreted asmeaning that, even where an employee carries out thework in performance of the contract habitually, for alengthy period and without interruption in the same State,
the national court may, under the concluding part of thatprovision, disregard the law of the State where the work is
habitually carried out, if it appears from the circumstances
as a whole that the contract is more closely connectedwith another State”); CJEU, C-29/10, ECLI:EU:C:2011:151- Heiko Koelzsch v État du Grand Duchy of Luxemburg; § 51
(Article 6 (2)(a) of Rome I Regulation, [2008] OJ L 177/6,
must be construed “as meaning that, in a situation inwhich an employee carries out his activities in more than
one Contracting State, the State in which the employee
habitually carries out his work in performance of thecontract, within the meaning of that provision, is that inwhich or from which, in the light of all the factors whichcharacterize that activity, the employee performs thegreater part of his obligations towards his employer.”).

16

The Korean Supreme Court, Case No. 2012 Da 4763, 15 January
2015, which held that the grant of a free non-exclusive license
to an employer by operation of law would be governed by
the law applicable to the employment relationship. Its
lower court decision was the judgment rendered by Seoul
High Court, Case No. 2011 Na 20210, 8 December 2011.

17

Supreme Court of Oklahoma, Howard v Nitro-Lift Technologies,
L.L.C., 2011 OK 98, 273 P. 3d 20, 331 I.E.R. Cas. (BNA) 902 [2011],
petition for cert. filed, 80 U.S.L.W. 3647 [U.S. May 14, 2012].

18

1

52 Guideline 23(2) sentence 2 will be applied to the cases
where the employee is expected to resume working
in the State of origin after carrying out his works
abroad. In this context, the conclusion of a new
employment contract with the original employer
or an employer belonging to the same group ofcompanies as the original employer should not bar
the employee from being considered as carrying out
his tasks in another State temporarily. The decisive
factor in terms of Guideline 23(2) sentence 2 is theintention of the parties (animus retrahendi).
Exception Clause
53 Due to the high threshold (“more close” connection
standard), Guideline 23(3) will apply to exceptional
cases only.
54 According to Guideline 23(3), where it is clear fromall the circumstances of the case that the contract ismore closely connected with a State other than thelaw of the State in which or, failing that, from which
the employee habitually carries out his or her workin performance of the contract, the law of that otherState shall apply.20
55 For example, this exception clause is applicable to
the right to claim a patent right in case of several coinventors who are habitually employed in different
States. In order to avoid applying several different
laws to the right, the initial owner of the rightshould be identified in accordance with the closest
connection test under Guideline 23(3). The governing
law will ordinarily be the law of the State where thecenter of gravity of the inventive activity is situatedor, as the least preferable option, to the State of
the habitual residence of the employer. In anotherexample, when it comes to assignment or licenseof international property rights, the employment

Cf. Article 8 Rome I Regulation, [2008] OJ L 177/6.

54

19

Article 8(2) 2 of Rome I Regulation, [2008] OJ L 177/6.

20

Article 8(4) of Rome I Regulation, [2008] OJ L 177/6.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
be interpreted more broadly.24

contract is presumed to be most closely connectedto the State in which the assignor or the licensor
resided at the time of the execution of the contract.21

Gyooho Lee
24. Formal Validity

56 Guideline 23(3) is reserved for exceptional cases, sothat courts can apply it only in special circumstances.
Some factors to be taken into account as relevant
circumstances of the case include the nationality andlocation of the parties, the language and currency
used in the contract, and the existence of previous
employment contracts between the parties.22
Guideline 23(3) does not allow the seeking of themost favorable solutions for the employee from theperspective of substantive law.

1. Any contract dealing with intellectual
property rights shall be formally valid
to the extent that it satisfies the formal
requirements:a) of the law of the State which governs thecontract pursuant Guidelines 21-23, orb) of the law of the State in which either ofthe parties has its habitual residence atthe time of the conclusion of the contract,or

57 Guideline 23 does not provide what law is applied
to cases where the law of the State in which or,
failing that, from the employee habitually carries
out their work in performance of the contract
cannot be determined.23 However, it is based on theassumption that the closest connection test should
be applied to those situations. If it is impossible
to determine a State in which or from which theemployee habitually carries out his or her work,
the law of the State of the place of business throughwhich the employee was engaged will be taken into
account.

c) of the law of any other State with which
the contract is connected.
2. This provision shall not deprive creators,
performers and employees of the protection
resulting from Guideline 21 paragraph 2 andGuideline 23, paragraph 1.
See as reference provisions:§ 315 ALI Principles
Art 3:504 CLIP Principles
Art 306(4) Transparency Proposals

Public Policy or Mandatory Rules
58 Guidelines 23(1) enforces the mandatory employment
regulations of the State in which or from which
the employee habitually carries out his/her workin performance of the contract (lex loci laboris), orof another State where has more connected with
the State in which or from which the employee
habitually carries out his/her work in performanceof the contract. Some good illustrative examples
are mandatory provisions applied to employees for
employee inventions and mandatory remunerationfor employee inventions. The phase “provisions
which cannot be derogated from by agreement”
should be differentiated from the term “overriding
mandatory provisions” in Guideline 29 and should
21§ 315(2)(2) ALI Principles.

22

A place of residence in the other State turned out to be
insufficient to repeal the law of the State in which theemployee habitually carries out his work in the English
case of Shekar v Satyam Computer Services (2005 ICR 737).

23

Article 8(3) Rome I Regulation, [2008] OJ L 177/6, providing that, where the law of the State in which or,
failing that, from which the employee habitually carries out their work in performance of the contract cannot be determined, the contract shall be governedby the law of the State where the place of businessthrough which the employee was engaged is situated.

1

Short comments
59 In order to avoid invalidating contracts for defects
of form, Guideline 24(1) provides several alternative
connecting factors. These are, on the one hand, in (a),the law that governs the substance of the contract,
as determined under the prior Guidelines; on theother hand, under (b) and (c), more circumstantial
elements: the State in which each party habituallyresides; or any other State with which the contract
presents a connection.
60 Guideline 24(2) nonetheless constrains thisvery open-ended approach to formal validity.
Certain formal requirements, such as thedetailed specification of the remuneration, or the
specification of modes of exploitation of works ofauthorship have a particularly strong connection to
the substantive law governing the agreement, andare intended to protect the author or performer.
These requirements must be respected if they aremandated by the State whose law Guideline 21(2)and Guideline 23(1) designate.

24

55

Recital 37 of the Rome I Regulation, [2008] OJ L 177/6. See
Guideline 29.

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Kyoto Guidelines: Applicable Law
Extended comments

have specifically chosen a particular place in whichto conclude and sign the contract, that place may
have a relevant connection to the agreement.

Hypothetical 1

Formal requirements intended to protect authors andperformers

By virtue of the law that applies to the contract
entered into between A and B, which is also the lawof State X where A habitually resides, the agreement
should have been notarized, which it was not.
Nonetheless, B habitually resides in State Y whose
law merely requires that the contract be in writing
and signed by both parties, which is the case for
A and B’s agreement. Had there been no writing,it might nonetheless be possible to validate thecontract if one of the other laws set out in Guideline
24(1) would validate a purely oral agreement.

63 Following up on the protection guaranteed by
Guideline 21(2) and Guideline 23(1), Guideline 24(2)guarantees the application of the more protective
formal rules of the State whose law would apply
to the contract in the absence of a choice of law
clause. In such cases, it is unnecessary to assess
whether these requirements constitute overriding
mandatory rules within the meaning of Guideline
29; it suffices that they be more protective of theinterests of authors and performers, whether or notthey are employees, than the rules of formal validity
Guideline 24(1)’s multiple connecting factors would
otherwise designate. Moreover, thanks to Guideline
24(2), the international regime of more protective
laws aligns with the regime of more protective
laws governing the substance of the contract.
The distinction between form and substance thus
disappears, obviating the need to litigate whether
a particular rule goes to a contract’s form or its
substance.

Hypothetical 2
The contract concluded between author andpublisher A and B concerns a single State X, whose
law would apply by virtue of Guideline 22(1)(a).
However, they have chosen the law of State Y togovern their contractual relationship, as Guideline
21 permits. The law of State Y does not require thata grant of rights in future technologies be explicit.
By contrast, under the law of State X, such a grant
must be specifically stated. A may claim the benefitof this protective formal rule.

Marie-Elodie Ancel, Jane C Ginsburg

Alternative connecting factors

C. Infringements

61 Consistently with a widespread approach,25 Guideline
24(1) enumerates different connecting factors
in order to increase the chances that one of thedesignated laws will validate the form of the contract.
One connecting factor on which the Guidelines do not
rely is the State in which the parties were present at
the time of the contract’s conclusion. If this location
has any significant bearing on the transaction, it will
come within the general criterion of “any other State
with which the contract is connected”. Setting out
the place of the parties’ presence as an autonomous
point of attachment, however, risks subjecting thevalidity of the form of the contract to the law of aState with which the transaction has no meaningfulconnection. For example, party A could be in theDubai airport on a stopover from New York to
Singapore when, using Skype, A concludes a contract
dealing with a Brazilian trademark with B, a French
citizen, who is on a skiing holiday in Switzerland
when she participates in the Skype call.

25. Basic Rule on Infringement
1. The law applicable to the infringement of an
intellectual property right is the law of eachState for which protection is sought.
2. The law applicable to the remedies for the
infringement may be chosen by the parties.
See as reference provisions§§ 301-302 ALI Principles
Arts 3:601, 3:602, 3:605, 3:606 CLIP Principles
Arts 301, 303, 304 Transparency Proposal
Arts 304-305 Joint Korean-Japanese Principles

Short comments
64 Guideline 25 lays down an internationally accepted
rule of lex loci protectionis that requires subjecting
intellectual property infringements to the law of theState for which protection is sought. It is the same
rule that applies to proprietary aspects of intellectual
property disputes (Guideline 19). Lex loci protectionis
reflects the territorial nature of intellectual property
rights, and implies that different States’ laws may
define intellectual property right infringements

62 Guideline 24(1)(c) therefore refers to the law of any
other State with which the contract has a connection.
Such a State could be the one for which rights are
granted, or of another contract between the parties
to which the current contract is related. If the parties
25

1

See also Article 11 Rome I Regulation, [2008] OJ L177/6.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
in different ways, which may lead to different
outcomes in a cross-border intellectual property
infringement case. This rule should be distinguishedfrom the lex fori rule which subjects intellectual
property infringement to the law of the State where
the infringement is litigated.

whereby a right holder enjoys multiple national
intellectual property rights that exist in different
States independently. Even in case of unregisteredrights, such as copyright, the territoriality principle
suggests that there is no single universal copyrightin a work; rather, copyright in each State exists
separately and, therefore, cross-border infringementof copyright should be adjudicated in each protecting
State independently. The underlying rationaleof this rule is that each State has sovereignty todetermine the scope of intellectual property rights
and the consequences of their infringement. A
similar applicable law rule for intellectual property
infringements could be found in many national andregional laws (e.g., the EU Rome II Regulation27) andall predecessor projects.

65 Guideline 25 also sets an exception to theterritoriality principle. It allows parties to choose
law applicable to the remedies for the infringement.
This rule is meant to provide more discretion for theparties to the dispute and increase efficiency of theproceedings. This party autonomy rule is limited as
it applies to the remedies for the infringement only,and does not apply to other infringement-related or
proprietary issues.
Extended comments

Scope of lex loci protectionis
67 It could be implied from Guideline 25(1) that lexloci protectionis applies to all infringement-related
issues, such as existence of the infringement, extent
of liability, limitations on liability, remedies andothers. While the Guideline does not list all issues
that are covered by the “infringement”, such lists
are available under some national and regionallaws.28 As indicated earlier, the lex loci protectionis
rule also applies when determining the existence,scope and transferability of the right (see Guideline19). In contrast, initial ownership of the right andubiquitous infringements are determined under
separate sets of rules (see Guidelines 20 and 26
respectively).

Hypothetical 1
Patent holder A situated in State X has patent rights
over an invention in States Y and Z. Company
B established in state Y infringes A‘s rights byproducing an infringing product in State Y andselling it in States Y and Z. A may choose to sue B in
State Y, B‘s domicile, and claim an infringement bothin States Y and Z (see international jurisdiction rule
under Guideline 3). In such a case, State Y’s court will
have to apply Y‘s and Z‘s laws to determine whether
there is an infringement and what remedies areavailable in each State separately.
Hypothetical 2

Party autonomy as an exception to territoriality

Company A situated in State X has copyright on afilm. Company A has a contract with a distribution
company B situated in State Y that assigned company
B film distribution rights for the territory of State
Y. The contract States that all disputes arising outof or related to the contract, including disputes
related to any possible future right infringements,
are governed by the law of State X. B starts making
and distributing copies of A‘s film in State Z. A sues B
in State Y (B‘s domicile) for copyright infringement
occurring in State Z. Although the infringement will
have to be adjudicated under Z‘s law as the law of
the State for which protection is sought, remedies
may be determined under State‘s X law as the law
chosen by the parties.

68 Party autonomy that is implemented in Guideline25(2) is an exception to the territoriality principle
and the lex loci protectionis rule. Namely, parties
are allowed to choose a single law that applies toremedies in a single-state or multi-state intellectual
property infringement. The rationale of this rule isthat parties to the intellectual property infringement
dispute, like in any other tort case without broader
public interest, should be given certain discretion
how to deal with the legal dispute. Hence, they shouldbe able to choose law that will govern at least theremedies in the case. Reducing the number of lawsthat have to be applied to determine remedies indifferent States allows a more efficient adjudicationof multi-state intellectual property disputes.
Traditionally, due to a strict territorial approach tointellectual property rights, choice of law by parties
has not been possible in disputes over intellectual

Territoriality and a “Mosaic Approach”
66 Lex loci protectionis rule provided for in Guideline25(1) mirrors the territoriality principle which
underlies intellectual property rights and that could
be implied from international intellectual property
treaties.26 It leads to a so called “Mosaic Approach”
26

1

literary and artistic works (1886).

See e.g. Article 5(2) Berne Convention for the protection of

57

27

Article 8(1) Rome II Regulation, [2007] OJ L199/40.

28

See e.g. Article 15 Rome II Regulation, [2007] OJ L199/40.

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Kyoto Guidelines: Applicable Law
Choice of parties can be overridden

property rights.29 However, some national laws allow
parties to choose the law in intellectual property law
disputes,30 and all predecessor projects suggested
introducing party autonomy in intellectual property
disputes, although to a slightly different extent.31

71 Despite a limited party autonomy allowed under thisrule, parties‘ choice of law may still lead to resultsthat are not compatible with forum‘s public policyor mandatory rules (e.g. punitive damages available
in some jurisdictions might be seen as incompatible
with public policy in some jurisdictions). In such acase, courts may rely on public policy and mandatory
rules set in the Guidelines (Guidelines 28 and 29) anddeny the application of law chosen by the parties.

Exercise and limits of party autonomy
69 Parties are free to choose the law applicable to theremedies at any point in time. Since the Guideline
does not restrict the time when the choice could be
made, it could be made before or after the dispute
arises (e.g. in a pre-existing contract).

Rita Matulionyte

70 According to Guideline 25(2), party autonomy
in intellectual property disputes is limited to
the kinds of redress for injury. Parties are able
to choose applicable law to remedies only. This
includes injunctions, damages and other sanctions,such as seizure and destruction of infringing goods,
although procedural aspects shall be subject to thelex fori. For all other matters, such as existence of theright, its scope and transferability, initial ownershipas well as all other issues related to the infringement(e.g. third party liability, limitation of liability andothers), parties cannot choose the applicable law.
With relation to these issues, respective applicablelaw rules prescribed under these Guidelines will
have to apply. All predecessor projects also adopt
restrictions with regard to party autonomy inintellectual property disputes.32

29

E.g. EU Rome II Regulation, [2007] OJ L199/40, does notallow such choice either, see Article 8(3) Rome II Regulation.

30

E.g. Article 110(2) Swiss Federal Code on Private International
Law and Article 50 China‘s Law on the Laws Applicable to
Civil Relationships Involving a Foreign Element Foreignrelated Civil Relations. Concerning the application of thisprovision, see Xiang Weiren v Peng Lichong (“Drunken
Lotus”), [2015] Jing Zhi Min Zhong Zi 1814, applying Chinese
law to infringements occurring in Germany and Russia
on the basis that the parties agreed on the application of
the law of the forum. Full text of the case can be foundhere (in Chinese): http://pkulaw.cn/case_es/payz_
a25051f3312b07f3119ba99f8e37a1268f07b2edd50f2343bdfb.
html?match=Exact

31

See § 302 ALI Principles; Article 3:606 CLIP Principles; Article
304 Transparency Proposals; Article 302 Joint KoreanJapanese Principles.

32

See § 302 ALI Principles; Article 3:606 CLIP Principles;
Article 304 Transparency Proposal; Article 302 Joint KoreanJapanese Principles.

1

26. Law Applicable to Ubiquitous or Multi-state
Infringements
1. When the infringement in multiple Statesis pleaded in connection with the use of
ubiquitous or multinational media, the court
may apply to the infringement as a whole
the law or laws of the State(s) having anespecially close connection with the global
infringement. Relevant factors to determine
the applicable law (or laws) in these situations
include:-the place where the harm caused by
the infringement is substantial in
relation to the infringement in its
entirety;-the parties’ habitual residences or
principal places of business;-the place where substantial activities
in furthering the infringement havebeen carried out.

2. In situations where paragraph (1) is applied,
any party may prove that, with respect toparticular States covered by the action, thesolution provided by any of those States’ laws
differs from that obtained under the law(s)chosen to apply to the case as a whole. The
court must take into account such differences
when fashioning the remedy.
3. Paragraphs (1) and (2) above may apply
mutatis mutandis in cases of secondary
or indirect infringements of intellectual
property rights.
See as reference provisions§§ 301-302, 321 ALI Principles
Arts 3:603, 3:604 CLIP Principles
Art 302 Transparency Proposal
Art 306 Joint Korean-Japanese Principles

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
Short comments

adjudicating multi-state infringements by applying
a single applicable law, instead of multiple laws ofseveral States.

72 Guideline 26 sets a new applicable law rule
for infringements occurring via ubiquitous or
multinational media, such as the Internet. It suggeststhat such ubiquitous or multinational infringements
could be adjudicated under a single law with anespecially close connection to the dispute. It departs
from the territoriality principle and abandons therequirement that a multi-state infringement shall be
subject to the law of each protecting State separately.

75 The purpose of the rule is to facilitate the adjudicationof multi-state infringements which otherwise would
be subject to multiple national laws. In particular,
it applies in cases where infringements occur whenusing ubiquitous or multinational media, such as
the Internet. In such an environment, intellectual
property rights can be simultaneously infringed ina number of jurisdictions and enforcing these rights
by applying a traditional territorial approach isimpracticable, if possible at all. Such infringements
are most frequent with relation to copyright which is
automatically protected in all Berne Union Member
States33 and is easily infringed in all of these States.
This rule might be particularly relevant in prima facie
copyright infringement cases (e.g. straightforward
copyright “piracy” cases) but might be little
useful in less straightforward cases (e.g. involving
the interpretation and application of copyrightexceptions). Single-law approach could also be
applied with relation to multi-state trademark
infringements online, e.g. when a trademark is
registered in multiple States, or with relation to
trade marks that are protected under national laws
without registration.

73 The purpose of this rule is to facilitate theenforcement of global intellectual property
infringements and ensure that remedies for theentire global infringement could be granted undera single applicable law. At the same time, theGuideline contains an exception that allows parties
to invoke another law that provides a different
outcome to the dispute. This establishes a balance
between territoriality and universality approaches
in ubiquitous infringement cases. The rule can also
be applied to indirect or secondary infringements.
Extended comments
Hypothetical 1
A, who resides in State X, owns rights into a song.
The song was uploaded without authorizationon B‘s website and became accessible for free in
essentially all States around the world. B resides andB‘s business is registered in State Y. B‘s website is in
English and its users primarily come from Englishspeaking States, such as State X, where A‘s songs
are best known. A sues B in State Y, B‘s domicile,and requests the court to adjudicate the entire
multi-state dispute under the law of State X. X‘s law
arguably has an especially close connection with adispute since significant harm occurred in State X
when users originating in State X downloaded thesong, and at least one party resides in State X.

A single law with an “especially close connection”
76 The law that applies to adjudicate the entire multistate dispute is the law that has “an especially close
connection” with the infringement. An especiallyclose connection rule has been chosen as a flexible
rule that helps to avoid “forum shopping” and “raceto the bottom” problems that other more specificrules would cause (such as lex fori or lex loci delicti).
The Guideline provides a non-exhaustive list offactors that should be taken into account when
determining which law has a sufficiently close
connection, such as a place of substantial harm,
parties’ habitual residence or a place of business, andplace of substantial activities. The court will have totake all relevant circumstances into account in orderto determine which State has an especially close
connection to the dispute. If the dispute appears tohave an equally close connection to several States,
several laws might apply to different parts of a multistate infringement.

State‘s X law allows additional (punitive) damages.
As State‘s Y law does not allow additional damages,
B can claim that State‘s Y law, if applied, would leadto a different result. The court may take this into
account and reduce damages in proportion to anumber of users who accessed the song from State Y.
Ubiquitous infringements and a single-law approach

Limits of a single-law approach

74 Guideline 26(1) subjects ubiquitous intellectual
property infringements to a single applicable law andthereby establishes an exception to the territoriality
principle. The rule proposed in this Guideline is novel
and has not been adopted in any national, regional
or international laws yet. However, all predecessor
projects contained a single-law approach that allows

1

77 Guideline 26(1) is meant to apply in situations where
respective intellectual property laws are similarin all States covered by the claim and therefore
it is very likely that the infringement would be
33

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Signatories of the Berne Convention for the protection ofliterary and artistic works (1886).

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Kyoto Guidelines: Applicable Law
right holders, vis-à-vis a collective rights
management organization, such as

established under each law separately. When this is
not the case, Guideline 26(2) sets an exception to therule. It allows any party to argue that the State otherthan the one with an especially close connection
has different laws on the matter (e.g. has broader
or narrower copyright exceptions, different liability
rules or remedies available). The court is required totake into account such differences in fashioning theremedy (e.g. by excluding a particular State from an
injunction or reducing damages accordingly).

(i) the right and conditions for becoming
a member of this organization;(ii) therightandconditions
for entrusting rights to thisorganization;(iii) the rights and conditions forwithdrawing the management ofrights from this organization;

78 In addition, Guideline 26 “allows” but does not“require” the courts to apply the ubiquitous
infringement rule. This means that the generalrule of lex loci protectionis (Guideline 25(1)) may
also be applied for the adjudication of ubiquitous
infringements. If the court finds that a single-law
approach proposed by the ubiquitous infringement
rule is not suitable for a particular infringement
occurring over ubiquitous media, the court may
resort to a traditional lex loci protectionis ruleand adjudicate the dispute under the law of eachprotecting State separately.

(iv) the requirements regarding the
calculation and distribution of
the organization’s revenue to theright holders and other collective
rights management organizations
representing right holders; and(v) the rights and conditions on accessto alternative dispute resolution to
be offered by the collective rights
management organization; andSecondary infringements may be subject to a singlelaw approachc) in absence of a choice of law by the parties,
the contract under which the right holder
entrusts rights to this organization.

79 Guideline 26 may also be applied in case of secondary
or indirect infringements. However, applying asingle-law approach to such infringements might
be more difficult since liability for secondary
or indirect infringements is not internationallyor regionally harmonized. It is more likely to
be applied in straight-forward (prima facie)
intellectual property infringement cases. Notably,
the ubiquitous infringement rule was extended tosecondary or indirect infringements only in someof the predecessor projects,34 while the remaining
predecessor projects did not address this complicatedmatter at all.

2. The law of the State for which protection issought shall governa) the presumption that a collective rights
management organization is empowered
to seek protection for certain works or
subject-matter of related rights;b) mandatory collective rights management;c) the power of an individual collective
rights management organization to grant
licenses or collect statutory remuneration
without prior consent of the right holder;

Rita Matulionyte
27. Collective Rights Management in the Field of
Copyright and Related Rights

34

1

1. The law of the State where a collective rights
management organization has its actual seatof administration shall governd) the issue of whether and under which
conditions a collective rights management
organization has to license rights to users;
anda) the requirements for the specific corporate
structure of collective rights management
organizations;e) the requirements regarding the
calculation of the royalty rates andstatutory remuneration.

b) the rights, conditions and principles
concerning the relationship of the rightholder, as well as of another collective rights
management organization representing

3. The law of the forum shall govern legal
standing of a collective right management
organization before a court.
4. This guideline applies without prejudice tothe applicable competition law rules.

See Article 3:604 CLIP Principles.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
Short comments

Since right holders can freely decide whether they
prefer to mandate the management of their rights
to the local CMO or a foreign CMO, cross-bordercompetition among CMOs should sufficiently takecare of their economic interests.

80 As all private international law rules, Guideline 27 oncollective rights management only relates to private
law issues. It does not identify the administrative
law that State authorities apply when controlling
collective rights management organizations (in thefollowing: CMOs). Whether national provisions areof a private or administrative law nature should be
decided in the light of the potentially applicablenational law. Rules that have both a private andadministrative law character fall within the scopeof the Guidelines.

85 Regarding the relationship with users, applicationof the lex loci protectionis rule according to Guideline27(2) is mandated by the application of this samelaw according to Guideline 25(1) in the case of
infringement. Hence, the lex loci protectionis applies
both to legal and to illegal use of rights. Applicationof the lex loci protectionis also guarantees a levelplaying field of all, national and foreign, CMOs
with regard to the use of rights in a given State. In
contrast, deviation in favor of the law of the Stateof the CMO’s actual seat of administration would
open the door for forum shopping, since CMOs could
choose to establish their seat in a State with lower
levels of protection for users.

81 Guideline 27 is an innovation in private internationallaw. Neither national law nor international law
specifically provide conflict rules relating tocollective rights management. When legislatures
adopt sector-specific rules on collective rights
management, they typically remain silent on issuesof private international law.

86 Yet some States limit the possibility of foreign CMOs
to claim rights for their right holders before national
courts. Guideline 27(3) characterizes this issue as aprocedural one, stating that the law of the forum
should decide on this matter. This rule prevents
individual States from introducing such limitations
on legal standing with effect before foreign courts.

82 Contrary to the past, private international law isquickly gaining relevance with regard to collective
rights management. Especially in the field of online
use of music, multi-territorial licensing has emerged
as a new tool used by CMOs. Equally, right holders
may decide to mandate their rights to a foreign
CMO. In the European Union, harmonization of thelaw on collective rights management is particularly
motivated by the objective to enhance cross-bordercompetition among national CMOs for right holders.

87 Guideline 27 needs to be delimited from of otherchoice-of-law rules. Guideline 27(4) explicitly
states that Guideline 27 applies without prejudice
to the applicable competition law rules. Still, thelex protectionis rule pursuant to Guideline 27(2) will
typically be the same as the law applicable underthe effects doctrine in the field of competition law.

83 The major question to be answered is whether and towhich extent a deviation from the lex loci protectionis
rule should be advocated. Guideline 27(1) proposessuch deviation in favor of the application of thelaw of the State of the actual seat of administrationof a CMO for all issues regarding the relationshipbetween such CMO and right holders. Conversely,
Guideline 27(2) maintains the lex loci protectionis
rule for issues concerning the relationship between
a CMO and users.

88 Apart from Guideline 27(1)(c), Guideline 27 does
not aim to identify the contract law applicable tothe contractual relationship between a CMO, on the
one hand, and right holders or users, on the otherhand. Accordingly, the parties are in principle free
to choose the law that governs their contractual
relationships. Yet, where a choice of law is absent,
Guideline 27(1)(c) departs from Guideline 22,
stipulating that the law of the State of the CMO’s
actual seat of administration should apply in suchcase. This rule recognizes the legitimate interestof a CMO to apply its national law uniformly toall, national and foreign, rights it manages and all,national and foreign, right holders it represents.

84 Regarding the relationship with right holders,application of the law of the State of the CMO’s actual
seat of administration has considerable advantages.
Right holders will often prefer to mandate theirrights under multiple national laws to a single
CMO. In such instances, Guidelines 27(1) avoids theneed for parallel application of multiple laws. This
enables the CMO to define its relationship with all
right holders uniformly against the backdrop of
its national law. Application of the national law at
the CMO’s actual seat of administration also favors
application of the same national law in a private
and administrative law context. Conversely, there
is no legitimate interest that would advocate theapplication of the lex loci protectionis or the law of theState of the habitual residence of the right holder.
1

89 The freedom to choose the applicable law also
governs the relationship with users pursuant to
Guidelines 21 and 22. Most importantly Guideline22(1)(b) departs from the application of the lex lociprotectionis in case of contracts regarding intellectual
property for more than one State, such as in the caseof multi-territorial licenses. The second indent of thisprovision, referring to the habitual residence of the
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Kyoto Guidelines: Applicable Law
party effectuating the characteristic performance,
will typically lead to the application of the law of
the State of the actual seat of the CMO that grants
the license.

an obligation to manage the rights of right holders.
Pursuant to Guideline 27(1)(b)(ii), B is obliged toaccept the management of A’s rights for all Member
States of the EU.

90 Guideline 27 does not include any rule on theapplicable law to representation agreements between
CMOs. In this regard, the applicable contract law also
arises from Guidelines 21 and 22. Yet Guideline 27(1)also applies to the extent that a CMO has mandated
the management of rights it represents to another
CMO, especially with regard to the territory of
another State. Hence, Guideline 27(1) should not
be read to apply exclusively to cases where rightholders directly claim rights against a CMO but also
where they do so through representation by their
CMO against another CMO.

Hypothetical 3
The law of State X provides for an unwaivable
remuneration right of authors and performers
regarding the rental of a phonogram or a film
where the exclusive right has been licensed to aphonogram or a film producer. The remunerationright can only be claimed by a CMO. In addition,
the law of X recognizes the principal director of acinematographic or audiovisual work at least as a coauthor of such work. A is a film director who was hiredby the film producer B from State Y for producing afilm which is also exploited in State X through therental of DVDs. Under the contract with B, A has
transferred or licensed all worldwide copyrights tothe extent possible to B. Pursuant to Guideline 19, thenon-transferability of the remuneration right under
the law of X as the applicable lex loci protectionis
is recognized from a private international law
perspective. Because of the lack of transferability,
initial ownership of the remuneration right is also
governed by the law of X pursuant to Guideline 20(2)(b). Therefore, A has to be considered the holder ofthe unwaivable remuneration right under the law of
X. In addition, pursuant to the law of X, applicable as
the lex loci protectionis pursuant to Guideline 27(2)(b), A has to use the system of mandatory collective
rights management in X to generate income fromthe remuneration right.

91 Guideline 27(1)(a) identifies the applicable law forrequirements for the specific corporate structureof CMOs. Yet this rule does not define the applicablecorporate law to CMOs. However, in individual cases,
it may restrict the autonomy, otherwise available
to the founders and members of a CMO under theapplicable corporate law, to choose a particular
corporate form or to design the internal rules or
structure of a CMO.
Extended comments
Hypothetical 1
A is a limited society established in State X andmanages the related rights of broadcastingorganizations. A decides to open an office in State
Y for the sole purpose of directly granting licenses
for the cable retransmissions of its programs to the
local cable operators. A is also directly mandated to
manage the rights of the programs of the private
TV broadcasting corporation B from State Z
under the copyright law of X and Y. Regarding therelationship between B and A, Guideline 27(1) leads
to the application of the law of X with regard to therights under the law of Y. As regards the connecting
factor of the “actual seat of administration”, it is only
relevant where the CMO administers the relationshipwith the right holders; the mere fact that A decided
to locate the licensing of rights to an office in State Y
as regards to cable operators in Y does not suffice tothe make the law of Y applicable to the relationshipbetween M and A.

Scope of application and connecting factors
92 Guideline 27 only applies to ‘collective rights
management organizations’ (CMOs) without
providing a definition of such organizations. To
distinguish CMOs from other entities that acquire
rights from original right holders, the distinguishingcriterion is the fiduciary relationship between the
CMO and its right holders. Within these entities,
national jurisdictions may further differentiate. For
instance, EU law distinguishes between “collective
management organizations”, on the one hand, and“independent management organizations”, on theother. The former are owned or controlled by theright holders or organized on a non-for-profit basis.35
Such differentiation is needed on the EU level, sincedifferent rules of EU law will only apply to the formergroup of entities or to both. For the purpose of
applying Guideline 27, the concept of a “collective
rights management organization” should beunderstood broadly to cover all cases where nationallaws provide for special rules applicable to entities
that manage copyrights or related rights on behalf ofHypothetical 2
Composer A is habitually resident in the SouthAmerican State X. Her music is especially popularin the EU. She therefore seeks to mandate the CMO B,
which has its headquarters in the EU Member StateY, with the licensing of her rights for the whole of
the EU. Under the national law of Y, a CMO is under
1

35

62

Article 3(a) CMO Directive (2014/26/EU), [2014] OJ L84/21.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
95 However, this definition is still in need of being
adjusted to the purposes of Guideline 27(1). Since
Guideline 27(1) only applies to the relationship of
CMOs with right holders, the relevant economic
activity in the sense of the abovementioned
definition from the Services Directive should be
limited to the administration of relationships withright holders. Hence, in the case where a CMO only
opens an office in another State for the purpose of
granting licenses to users in that State, while therelationships with right holders are administeredfrom the headquarters, the CMO should not be
considered to have an actual seat of administrationin that State of the licensing branch for the purposeof applying Guideline 27(1) (see Hypothetical 1,
above). Conversely, where a CMO decides to locate
the administration of the relationship with rightholders or a group of right holders to a branch inanother State, the law of that State will apply. Hencethe “actual seat of administration” does not have tobe the principle seat of the CMO’s overall economic
operation.

more than one right holder. Accordingly, Guideline
27 should in principle also apply to “independent
management organizations” in the sense of EU law.
93 As expressed by its title, Guideline 27 only applies
to CMOs that manage copyrights and related
rights. There are also entities that manage otherintellectual property rights, especially patents, onbehalf of several right holders. However, extensionof Guideline 27 to so-called “patent aggregators”
or “patent assertion entities (PAEs)” is not needed,since national laws do not typically provide for
special sector-specific private rights regarding therelationship of such entities with right holders or
potential users. To the extent that national law
controls so-called patent “hold-up”, as the claimingof an injunction against an implementer especiallyof standard essential patents with the objective
to charge excessive royalty rates, the underlying
patent, contract or competition law rules typically
apply to all patent holders and not specifically to
PAEs acting on behalf of other right holders. Yet
courts will not be prevented from applying Guideline
27 mutatis mutandis where national laws provide
or will provide for rules that specifically apply toentities managing other rights than copyrights andrelated rights.

Requirements for the specific corporate structure of
CMOs
96 The corporate structure of CMOs has an impact
on the ability of right holders to become members
or shareholders of the CMO and, hence, to control
the operation of the CMO. To protect the economic
interests of right holders, some national laws
therefore prescribe a particular corporate form39
for the operation of collective rights management
or create obligations for the design of the corporate
structure of CMOs. Some national laws may also
require CMOs to be run as non-for-profit entities.40

94 For the purpose of applying Guideline 27(1),the Guidelines do not define the “actual seatof administration of a CMO”. This provides thenecessary flexibility to ensure that the same nationallaw applies in both private and administrative law
enforcement. In the EU context, the connecting
factor should in principle be understood in thesense of the “State of the establishment” of a CMO.
According to Article 36(1) EU CMO Directive36, EU
Member States are under an obligation to ensurethat their competent authorities control complianceof CMOs established in their territory with thenational law adopted under the Directive.37 Since
the CMO Directive, not containing a definition of“establishment” either, aims to guarantee thefreedom of providing services of CMOs within theinternal market, it seems appropriate in principle todefine “establishment” according to the rules of the
EU Services Directive, namely, as “the actual pursuitof an economic activity … by the provider for anindefinite period and through a stable infrastructurefrom where the business of providing services is
actually carried out”.38
36

EU CMO Directive 2014/26/EU, [2014] OJ L84/21.

37

According to Article 2(4) CMO Directive 2014/26/EU,[2014] OJ L84/21, Article 36 also applies to “independent
management organizations” in the sense of Article 3(b) of
the Directive.

38

1

97 Guideline 27(1)(a) only relates to rules thatspecifically regulate the corporate structure of
CMOs. It does not replace the generally applicablechoice-of-law rule for corporate law matters. The
two conflict rules can in fact lead to different
national laws where the choice-of-law rule of thedeciding court on corporate law matters designates
the law of the State of the incorporation as theParliament and of the Council of 12 December 2006 on
services in the internal market, [2006] L376/36.

Article 4(5) Directive 2006/123/EC of the European

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39

For instance, Turkish law requires CMOs to be incorporated
as “professional unions in accordance with the regulations
and type statutes prepared by the Ministry of Culture andapproved by the Board of Ministers”; Section 42 Law No.
5846 of 5 December 1951 on Intellectual and Artistic Works,
as amended by Law No. 4110 of 7 June 7 1995.

40

For an overview of such systems see Copyright, Competition
and Development, Report by the Max-Planck-Institute forIntellectual Property and Competition Law on behalf of
WIPO (author Josef Drexl, December 2013), 232.

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Kyoto Guidelines: Applicable Law
applicable law and the incorporation took place inanother State than the State of the CMO’s actual
seat of administration. Hence, in such instances,the corporate law of the State of incorporation still
applies in principle; but the law of the State of the
CMO’s actual seat of administration can limit the
freedom of the founders to choose among different
legal forms under the applicable corporate law
and, especially, to design the concrete corporate
structure of the CMO. Still, problems can arise where
the applicable law under Guideline 27(1)(a) requiresa particular corporate structure that is only available
under the law of the State of the CMO’s actual seatof administration. Such rule may indeed result in arequirement for a CMO to re-incorporate itself under
the law of its actual seat of administration.

rights and conditions of entrusting rights to a CMO,
on the one hand42, and for withdrawing such rights,
on the other hand.43
100 Inter alia, Guideline 27(1)(b)(ii) applies to the statutory
duty of a CMO to accept the collective managementof a given right holder (see Hypothetical 2, above)
and, more generally, to the principles that apply
for accepting the management of rights of a given
right holder. The latter may include thresholds ofrevenue generated from the management of rights,
general principles such as non-discrimination andthe important issue of whether CMOs can claim
exclusive authorization from the right holders.44
Some national laws may also limit the application ofcertain rules, including the limitation of the statutory
duty of a CMO to accept the collective management
to nationals.45 Regarding their characterization, suchrules can neither be regarded mandatory contract
rules governed by Guidelines 21 and 22, nor does
the lex loci proctectionis govern such rules according
to Guideline 25 on infringement. In addition, suchrules cannot be considered rules on transferability

Rights, conditions and principles concerning therelationship of the right holder with a CMO
98 Guideline 27(1)(b) provides for a choice-of-law
rule that makes the law of the State of the actual
seat of the CMO applicable to all rights, conditions
and principles concerning the relationship of theright holder with the CMO. To the extent that theserules include rights that define the contractual
relationship of right holders with the CMO in thesense of mandatory contract law or rules that can betaken into account in the framework of rules against
unfair contract terms, Guideline 27(1)(b) has to beconsidered a deviation from the freedom-of-choicerule of Guideline 21.
99 Regarding the rights and conditions for becoming
a member of a CMO, Guideline 27(1)(b)(i) is situatedat the borderline with Guideline 27(1)(a), since suchrights and conditions, read in a broader sense, also
affect the corporate structure of the CMO in thesense of the latter Guideline. Since both Guidelines
lead to the application of the same law of theState of the CMO’s actual seat of administration, aclear delimitation of the two rules is not needed.
The scope of application of Guideline 27(1)(b)(i) is characterized by the fact that these rules
specifically relate to access of rights holders tomembership.41 Yet this provision does not requirethat the concrete rule provides for a “right” of theright holder to become a member. It suffices thatmembership requirements can be addressed in a
private law dispute. Equally, the person relying onsuch rules before a private law court does not haveto be the right holder him/herself. It suffices thatthe law allows reliance on such rules, for instance,by a private person challenging the legality of thestatutes of the CMO. Guidelines 27(1)(b)(ii) and (iii)
address two sides of the same coin by referring to the41

1

An example of such rights and conditions can be found in
Article 6(2) European CMO Directive (2014/26/EU), [2014]
OJ L84/21.

64

42

As an example, see Article 5(2), 1st sentence, EU CMO
Directive (2014/26/EU), [2014] OJ L84/21, providing,among others, for a “right” of right holders “to authorize
a collective management organization of their choice
to manage the rights, categories of rights or types ofworks and other subject-matter of their choice, for the
territories of their choice, irrespective of the Member Stateof nationality, residence or establishment of either thecollective management organization or the right holder”.
See also Article 5(2), 2nd sentence, EU CMO Directive(2014/26/EU), [2014] OJ L84/21, providing that a CMO can
only refuse the management of rights under ‘objectively
justified reasons’.

43

As an example, see Article 5(4) EU CMO Directive (2014/26/
EU), [2014] OJ L84/21, providing for a “right” of rightholders “to terminate the authorization to manage rights,
categories of rights or types of works and other subjectmatter granted to them to a collective management
organization or to withdraw from a collective management
organization and of the rights, categories of rights ortypes of works and other subject-matter of their choice, as
determined pursuant to paragraph 2, for the territory of
their choice, upon serving reasonable notice not exceeding
six months”.

44

Whether CMOs can claim exclusivity is also a matter ofcompetition law.

45

In this regard, Article 5(2) EU Directive (2014/26/EU), [2014]
OJ L84/21, referring to the “Member State of nationality,
residence or establishment” can easily create the impressionthat the provision allows for discrimination against non-EU
nationals. However, such a discrimination would have to beconsidered a violation of the national treatment obligationof international copyright law.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
in the sense of Guideline 19. Thus, Guideline 27(1)(b)is indeed filling a gap left by the other Guidelines.

holding any rights.52 Regarding this latter issue,
a problem of delimitation appears in relation to
Guideline 19 regarding transferability. Whether a
CMO, based on a decision of its governing bodies,
can stipulate that part of the income will generally
be paid to the representatives of a certain groupof persons, such as the publishers in particular,
without evidence that they are actual right holders,will be governed by the law of the State of the
CMO’s principal seat of administration according to
Guideline 27(1)(b)(iv). Yet the preliminary questionof whether the specific rights, such as the right tofair compensation, can actually been transferred53
has to be decided according to the law of the State forwhich protection is sought according to Guideline 19(see Hypothetical 3, above).

101 Guideline 27(1)(b)(iii) governs the rights and rules on
the contractual freedom of right holders to withdraw
rights or, more broadly, to terminate the contractual
relationship with a given CMO. It is to be notedthat competition law has produced considerable
practice on these issues.46 Such practice, however,can only directly be considered within the scopeof the applicable competition law, as clarified by
Guideline 27(4).
102 Guideline 27(1)(b)(iv) completes the contract-law
related aspects by making the law of the State of
the actual seat of administration also applicableto the requirements regarding the calculation andthe distribution of the revenue.47 Inter alia, suchrules can stipulate by when the income must be
distributed to right holders,48 how the CMOs haveto deal with income that cannot be distributed
to the individual right holders49, whether rightholders are protected against loss of their right tobe remunerated after termination of their contract
with a CMO or withdrawal of their rights,50 whether
CMOs are allowed to make certain deductions fromthe income such as for social or cultural purposes51,
or whether and under which conditions part of theincome can be transferred to persons that are not

46

104 Guideline 27(1)(b) only provides for a non-exhaustive
list of issues regarding the relationship of CMOs with
their right holders to which the law of the State of
the CMO’s actual seat of administration applies. Still,
it appears as rather unlikely that issues regarding
the relationship with right holders will be at stakein private law proceedings that are not listed in
Guideline 27(1)(b).

Already in 1974, the CJEU established the need to protect
right holders against the market power of a CMO by ensuring“a balance between the requirements of maximum freedom
for authors, composers, and publishers to dispose of theirworks and that of effective management of their rights”. See
CJEU, 127/73, ECLI:EU:C:1974:25 - BRT v SABAM, paragraph 8.
This led to a test according to which a CMO can only impose
those restrictions on the freedom to right holders, including
the right to withdraw one’s rights, that are “absolutely
necessary” for the enjoyment of a position required for
the CMO to carry out its activity. Ibid., paragraphs 11 and12 (criticizing in particular the assignment of rights overan extended period after the member’s withdrawal from a
CMO).

47

As an example, see Article 11-13 EU CMO Directive (2014/26/
EU), [2014] OJ L84/21.

48

See Article 13(1)(2) EU CMO Directive (2014/26/EU), [2014]
OJ L84/21.

49

See Article 13(2) through (6) EU CMO Directive (2014/26/
EU), [2014] OJ L84/21.

50

Such protection is to be granted pursuant to Article 5(5) EU
CMO Directive (2014/26/EU), [2014] OJ L84/21.

51

See Article 12 EU CMO Directive (2014/26/EU), [2014] OJ L84/21.

1

103 Finally, Guideline 27(1)(b)(v) relates to rules that
require CMO to offer mechanisms of alternative
dispute resolution to right holders.54 Where suchmechanisms are in place, the respective disputesettlement bodies can make use of Guideline 27(1)(b)(v) especially to the extent that the national law
provides for more detailed rules on the scope ofthe disputes covered and the applicable procedural
rules.

The relationship between CMOs and users
105 Guideline 27(2) contains an exhaustive list of issues
regarding the activity of CMOs with regard to the65

52

See, in particular, the CJEU copyright decisions in CJEU,
C-277/10, ECLI:EU:C:2012:65 - Luksan; CJEU, C-572/13,
ECLI:EU:C:2015:750 - Hewlett-Packard v Reprobel. See also theGerman Federal Supreme Court, I ZR 198/13 = BGHZ 210, 77,
21 April 2016– Verlegerbeteiligung (no participation of publishers in the income generated from statutory remuneration rights, including the private copyright levy).

53

This was answered in the negative by the CJEU for the rightto fair compensation under EU copyright law by the CJEU.
See CJEU, C-277/10, ECLI:EU:C:2012:65 – Luksan, paragraphs
93 and 100 (holding that the right holder cannot waive theright to fair remuneration in the framework of the private
copying exemption).

54

See, in particular, Article 34(1) EU CMO Directive (2014/26/
EU), [2014] OJ L84/21, which also applies to conflicts between users and the CMO as well as among CMOs.

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Kyoto Guidelines: Applicable Law
use of works and rights to which the law of the Statefor which protection is sought (lex loci protectionis)
applies.

power of a representative of the copyright industry
to which the rights may otherwise be transferredor licensed without adequate remuneration. Thisis, for instance, the objective of the introduction of
the unwaivable remuneration right of authors andperformers regarding the rental of a phonogram ora film, where the exclusive right has been licensed
to a phonogram or a film producer, for which
EU law provides for mandatory collective rights
management (see Hypothetical 3, above).

106 This choice of law is particularly convincing in
the context of Guideline 27(2)(a) relating to thepresumption that a CMO is empowered to seek
protection for certain works or subject-matter ofrelated rights. A CMO will in particular need to relyon such a presumption when it aims to enforce
rights of a multitude of right holders against alleged
infringers in cases of mass uses of rights. According
to Guideline 27(2)(a) and Guideline 25, the samelaw applies to infringement and the question ofwhether a CMO can be presumed to be mandatedwith the enforcement of rights. The choice-of-law
rule in Guideline 27(2)(a) is not questioned by thedeparture from the lex loci protectionis for initialownership in copyright cases pursuant to Guideline20(2)(a) regarding initial ownership, since CMOs
are not initial owners. For the question of whether
they are effectively mandated to claim rights, it ismore relevant whether the rights are transferable.
According to Guideline 19, transferability is also
governed by the lex loci protectionis.

108 The same policy arguments explain why Guideline27(2)(c) also makes the lex loci protectionis applicableto rules that empower CMOs to grant licenses orcollect statutory remuneration without prior consent
of the right holder (so-called “extended collective
licensing or management”).56 Such extended
collective licensing systems can be particularly
helpful to enable the digitization of orphan57 andout-of-commerce works.58
109 Application of the lex loci protectionis is particularly
appropriate where rules on collective rights
management specifically protect the interest ofrights of the users against the bargaining power of
CMOs. Such rules can be grouped into two categories
that are addressed by Guideline 27(2)(d) and (e)respectively.

107 National laws can promote access to the use ofworks and the subject-matter of related rights
by exceptions and limitations to exclusive rights.
Still, they may take account of the interest ofright holders to fair compensation by providing
for statutory remuneration rights. To manage thecollection of such remuneration from the users
and distribution of the income to the right holders,legislatures often make use of mandatory collective
rights management. Equally, legislatures sometimes
also provide for such management for the grant oflicenses for the use of exclusive rights.55 In both cases
mandatory collective rights management strikes abalance between the interests of users in freely using
certain works or subject-matter of protection or in
getting licenses from a central licensing unit, on
the one hand, with the interest of right holders infair compensation, on the other hand. Applicationof the lex loci protectionis to mandatory collective
rights management according to Guideline 27(2)(b)guarantees uniformity of access and remuneration
in a given territory irrespective of the nationality or
residence of right holders or the seat of the CMO. The
same territoriality approach is also justified where
the legislature chooses mandatory collective rights
management as a means to protect the interest oforiginal right holders against the superior bargaining
55

1

110 The first group of rules, addressed in Guideline27(2)(d), relate to the conditions under which users
can claim the licensing of rights. Such rules canfor instance state general principles of licensing,including good-faith negotiation as well as principles

For EU law, this is the case for the cable retransmission rightaccording to Article 9(1) Council Directive of 27 September
1993 on the coordination of certain rules concerning
copyright and rights related to copyright applicable tosatellite broadcasting and cable retransmission, [1993] OJ
L248/15.

66

56

Such systems are particularly known from the copyrightlaws in the Nordic States. See also Article 9(2) EU Satellite
and Cable Directive, [1993] OJ L248/15, according to which a
CMO that manages cable retransmission rights for the same
category will be deemed to be mandated to manage also therights of right holders who have not given a prior mandate
for such management to this CMO.

57

National jurisdictions in the EU, especially the Nordic States,
have introduced extended collective licensing schemes forpromoting the digitization of orphan works. The EU Orphan
Works Directive does not mandate the introduction ofsuch systems, but safeguards existing national extended
collective licensing schemes. See Recital 24 and Article 1(5)Directive 2012/28/EU of the European Parliament and of
the Council of 25 October 2012 on certain permitted uses oforphan works, [2012] OJ L299/5.

58

On the level of EU law, Article 8(1) Directive (EU) 2019/790
of the European Parliament and of the Council of 17 April
2019 on copyright and related rights in the Digital Single
Market, [2019] OJ L130/92, and amending Directives 96/9/
EC, [1996] OJ L77/20, and 2001/29/EC, [2001] L167/10, now
provides for the grant of extended collective licenses forout-of-commerce works to cultural heritage institutions.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
112 Moreover, it has to be noted that, within the EU,
application of the lex loci protectionis of Guideline27(2)(d) and (e) can lead to the application ofdifferent national laws in private law disputes, on
the one hand, and administrative proceedings, on
the other. Under Guideline 27(2)(d) and (e), theclaimant will rely on the law of the Member Statefor which the license is sought or for which the CMO
seeks statutory remuneration, while the law of theMember State where the CMO is established applies
according to Article 36(1) EU CMO Directive to theextent that national authorities enforce the nationalrules adopted for the implementation of Article 16
EU CMO Directive on the licensing rates and thesetting of tariffs by CMOs in relation to users. The
reason for the latter is that the Directive generally
seeks to liberalize free provision of collective rights
management services in the EU internal market. It
therefore fully concentrates administrative control
in the hands of the authority of the Member State
where the CMO is established and, moreover,provides that such control will only be exercised
based on the national rules of that State. Yet suchinternal market considerations cannot justify adeviation of the application of the lex loci protectionis
for rules that are designed to be applied globally.
Yet Guideline 27(2)(d) and (e) also provides for theappropriate choice-of-law rules between EU Member
States. These rules guarantee that, where a dispute
relates to the licensing of rights or the collectionof statutory remuneration rights under the law ofan EU Member State, the law of this State will also
govern the substantive law principles concerning
the control of the CMO in this context. In addition,
since the Directive is not intended to change privateinternational law rules63, Guideline 27(2)(d) and (e) is
not in conflict with Article 36(1) EU CMO Directive.

of objectivity and non-discrimination.59 Some
States provide for an express duty to license.60 This
Guideline also relates to requirements concerning
the terms of licensing contracts.
111 Rules regarding the requirements on the calculationof the royalty rates and statutory remuneration,
as addressed by Guideline 27(2)(e), are mostimportant in practice. Disputes typically arise on
the appropriateness of the royalty rates of CMOs.
Guideline 27(2)(e) only relates to the substantive
standards of control of the royalty rates such as the
EU rule on appropriateness and reasonableness inrelation to the economic value of the use of the rights
in trade61, but not to procedural issues. Procedures,
however, matter enormously from a private law
perspective against the backdrop of a large diversityof specialized dispute settlement bodies that can befound in different jurisdictions. This explains why,to guarantee a functioning system of private law
control, it is important that the rules on jurisdiction
enable the dispute settlement bodies of the lociprotectionis to decide on such matters. To achievethis, Guideline 6 provides for optional jurisdictionof the courts of the States where the use takes
place.62 This allows the user or the CMO initiatingproceedings on the reasonableness of royalty rates
to seize the most appropriate dispute settlement
body, which will then apply its own substantive
law as a benchmark for the appropriateness of theroyalty rates pursuant to Guideline 27(2)(e).

59

See especially Article 16 EU CMO Directive (2014/26/EU),[2014] OJ L84/21.

60

Such a duty to license has traditionally been part of the German rights management law. This duty is maintained under
the law implementing the EU CMO Directive. See Section
34 German Act on Collective Rights Management Organizations of 24 May 2016. Other jurisdictions may recognize aduty to license as a matter of competition law. This is thecase also in the US under paragraph VI of the ASCAP Consent Decree: Second Amended Final Judgment entered in
United States v. ASCAP (S.D. N.Y. 2001).

61

See Article 16(2)(2) EU CMO Directive (2014/26/EU), [2014]
OJ L84/21.

62

Guideline 5 takes inspiration from the CJEU judgment inAustro-Mechana, which characterized the action of a CMO
for payment of the private copying levy as a delictual or
quasi-delictual conflict covered by Article 5(3) Brussels I
Regulation No. 44/2001, [2001] OJ L12/1 (now Article 7(2)Brussels Ia Regulation No. 1215/2012, [2012] OJ L351/1).
See CJEU, C-572/14, ECLI:EU:C:2016:286 - Austro-Mechana v
Amazon EU. Against the backdrop of this judgment, Guideline
6 can be understood as a clarification of Guideline 5.

1

The law applicable to multi-territorial licensing
113 Guideline 27 is not providing for any specific choiceof-law rules concerning multi-territorial licensing
especially of online rights by CMOs despite the factthat EU Member States have by now implemented
substantive rules on such multi-territorial licensingof online rights for works in music based on Title
III of the EU CMO Directive.64 The Guidelines aredrafted on the assumption that the general rulesof Guideline 27 and Guidelines 21 and 22 suffice
to provide for adequate choice-of-law rules for
issues concerning multi-territorial licensing.

67

63

Recital 56 EU CMO Directive (2014/26/EU), [2014] OJ L84/21.

64

Articles 23-32 EU CMO Directive (2014/26/EU), [2014] OJ
L84/21.

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Kyoto Guidelines: Applicable Law
114 In particular, Guideline 27(1) constitutes theadequate private international law framework forcases in which one CMO, thereby acting on behalfof its right holders, seeks to mandate another CMO
with the multi-territorial licensing of its repertoire.
In this context, Article 30 EU CMO Directive is mostimportant. Article 30(1) obliges Member States toensure that CMOs that grant multi-territorial licenses
are “required to agree” to a request by another
CMO to enter into a representation agreement forthe multi-territorial licensing of the repertoireof the requesting CMO. The most appropriate
implementation of this provision consists in a
private law duty to contract.65 Hence, pursuant to
Guideline 27(1)(b)(ii), the applicable law to the rightof a CMO to request another CMO to enter into anagreement of multi-territorial licensing is the law of
the State of the actual seat of administration of therequested CMO.

Short comments
116 The concept of public policy is well established inalmost all jurisdictions. Ever since the 1956 Hague
Convention on the law applicable to maintenanceobligations towards children, similar – if not quasiidentical – wording has been employed in numerous
international choice of law instruments whendrafting the public policy exception. The rationale
underlying this exception and the effects of its
application are equivalent to the implications ofoverriding mandatory provisions of the forum. In
both cases, the law determined under the choiceof law rules provided by the Guidelines can bedisregarded. Nevertheless, both mechanisms remain
different. Whereas overriding mandatory provisions
preempt the choice of law rules, the public policy
exception functions as a final safeguard that allows
a court to refuse the application of a provision of thelaw of any State specified by the choice of law rules
provided for by the Guidelines. The law designatedshould only be disregarded in cases of clear
incompatibility with the public policy of the forum.
In line with the usual drafting of this safeguard ininternational instruments, under the Guidelines,
the exclusion is applied only if the incompatibility
is “manifest”.

115 More complex issues concerning multi-territorial
licensing seem to arise in the context of Guideline27(2)(d) and (e). These rules will lead to parallel
application of several national laws as far as therelationships between the CMO and users areconcerned. The same phenomenon will appear
with regard to jurisdiction, since Guideline 6 would
especially allow users to initiate parallel proceedings
in different fora. Yet these consequences are not
per se inappropriate, even where a CMO grants a
uniform royalty rate for the entirety of the territoryof the States covered. In such instances, users could
question the appropriateness of the royalty rates
before any of the competent Courts pursuant to
Guideline 6 and any of the respective laws applicable
under Guideline 27(2)(d) and (e).

117 Guideline 28 requires to identify, on the one hand,the forum’s public policy and, on the other hand,
the manifest incompatibility between the designatedlaw and the public policy applied. Each step mustbe followed. The identification of the public policy
can be difficult because it is not a pure intellectual
property question but a broader question of thesocial, cultural and economic policies of the forum
State. It is subject to gradual change as long as thevalues of the society also change in the course oftime. The mere incompatibility is not enough to
exclude, according to the guidelines, the designatedrule. Then, the manifest incompatibility needs a
specific autonomous appreciation.

Josef Drexl

D. Other Provisions
28. Public Policy

Extended comments

The application of the law determined underthese Guidelines may be refused only to the extent
that its effects would be manifestly contrary to
the public policy of the forum.

Hypothetical
An infringement is committed in X. The infringer
is from Y. The plaintiff decides to bring an
infringement claim before the courts of State Y.
Under Guideline 25, the law of X is applicable,
protection being sought for X. Under X’s law,
punitive damages can be ordered. If punitive
damages are considered as being manifestly contrary
to Y’s public policy, the provisions of X providing forpunitive damages are not applied on that specificquestion. Y’s law is applicable only in order todetermine that punitive damages are not allowed.

See as reference provisions§ 322 ALI Principles
Art 3:902 CLIP Principles
Art 313 Joint Korean-Japanese Principles

65

1See, for instance, Section 69(1) German Act on Collective
Rights Management Organizations of 24 May 2016.

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
For the rest, X’s law remains applicable, since its
effects would not be manifestly contrary to the
public policy of Y’s law.66

application. In consequence, the interpretation of thecriterion of manifest incompatibility remains subject
to case-by-case analysis. Only serious breaches of
essential values and fundamental principles of thelaw of the forum would justify intervention by wayof this exceptional clause.

118 Since the choice of law rules are abstract and may
potentially lead to the application of the law of any
State in the world, it is possible that provisions of thelaw designated are in contradiction with basic values
and fundamental principles of the forum State. The
public policy exception allows a court to refuse theapplication of provisions of the designated foreign
law. The public policy exception concerns basic
values and fundamental principles of the law of theforum State, such as those regarding the protectionof intellectual property rights and their balancing
with freedom of expression and other fundamental
rights. The concept is the same as the one used
as a limit to the recognition and enforcement offoreign judgments in Guideline 34 (1). It should beobserved that the way in which a balance is achieved
between the protection of intellectual property andthe safeguard of the fundamental rights that may
be involved in these situations varies among States.
Such a balance is subject to political, economic andsocial change. This, in turn, may affect the way inwhich the judge applies those factors to the specificfacts of the case.67

120 Once the incompatibility has been identified, theeffect of the public policy’s exception is dual. The
relevant provisions of the law designated are notapplied. This is the negative effect of the exception
leading to the exclusion of the law designated.
Secondly, a decision is to be adopted as to thesubstance of the matter. The Guidelines do not solve
this issue and hence the private international law of
the forum should be determinative. In many States
the law of the forum shall be applied to decide on thesubstance of the matter instead of the law designated.
In other States more flexible approaches are possible,
including replacing the otherwise applicable law
with the law of other closely connected that is notcontrary to the public policy of the forum. This is the
positive effect of the exception. Nevertheless, sucha substitution is limited to the part of the applicablelaw being manifestly contrary to the public policy of
the forum. For the rest, the originally designated law
remains applicable.

119 Once public policy is identified, the application of
the foreign law to the case can be refused only if it ismanifestly contrary to the public policy of the forum.
First, the exception is limited to the public policy of
the forum State. Second, this safeguard requires morethan a mere incompatibility with the public policyof the forum. This second precondition requires
the court to find special grounds for upholding an
objection to the application of foreign law. The term“manifestly” is intended to make it clear that thisdevice is an exception that is subject to restrictive
interpretation. In practice, however, the provision
does not provide any additional guidance as to its

Edouard Treppoz, Nicolas Binctin

66

See as reference provisions§ 323 ALI Principles
Art 3:901 CLIP Principles
Art 312 Joint Korean-Japanese Principles

67

1

29. Overriding Mandatory Provisions
1. Nothing in these Guidelines shall restrict
the application of the overriding mandatory
provisions of the law of the forum.
2. When applying under these Guidelines thelaw of a State to a contract, the court may
give effect to the law of another State where
the obligations arising out of the contract
have to be or have been performed.

See French Court of Cassation, n° 09-13303, (2010)
considering that punitive damages as such are not contrary
to French Public Order, except if they are disproportionate.
See also, Paris Court of Appeal, Feb. 1st 1989, RIDA oct.
1989, paragraph 301. See also: Card Reader Case, JapaneseSupreme Court Decision (Heisei 14.9.26) Minshu vol. 56 no.
7, paragraph 1551 ff, in that case the Japanese Supreme
Court considered that the application of the U.S. Patent Act
is contrary to “public order” as described in Article 33 ofHorei.

Short comments
121 Overriding mandatory provisions limit choice oflaw rules, by preempting the law determined underthese Guidelines. Overriding mandatory provisions
are directly applicable to situations falling within
their scope, irrespective of the law designated by
the otherwise applicable choice of law rule. The
effect of overriding mandatory provisions of theforum is equivalent to the public policy exception.
Indeed, both mechanisms exclude the applicationof provisions of the foreign law determined by
the choice of law rule. Nevertheless, overriding

The draft of the Guideline is in line with the text of the
public policy exception in international conventions on
choice of law, such as the conventions adopted by the Hague
Conference of Private International law. Such a wording
has also become common to many national and regional
codifications of choice of law rule, as illustrated in the EU
by Article 26 of the Rome II Regulation.

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Kyoto Guidelines: Applicable Law
125 Identification of overriding mandatory provisions
is usually a complex and challenging question, tothe extent that legislation does not expressly madeclear that it applies to cross-border situations
irrespective of the law otherwise applicable. Indeed,
the legislature rarely indicates the overriding
mandatory nature of the provisions. One remarkable
exception is Section 32 b of the German Act on
Copyright and Related Right, which states that
equitable remuneration is compulsory if German
law would be applicable to the contract of use in
the absence of a choice of law or to the extent thatthe agreement covers significant acts of use within
the territory to which the Act applies.

mandatory provisions are directly applicable. They
preempt the choice of law rule, which is not applied.
122 The effect of overriding mandatory provisions varies
depending on their origin. When they belong to thelaw of the forum, judges are under a duty to apply
them to all situations falling within their scope.
They prevail over the otherwise applicable law.
Additionally, in situations concerning contracts, thepossibility to give effect to overriding mandatory
provisions of third States is also envisaged withlimitations. In certain situations, Courts may
give effect to such rules after having taken into
account the connection between the dispute andthe overriding mandatory provisions and all otherrelevant factors, such as the nature and purposeof those provisions. The latter possibility is only
envisaged with regard to contracts. Only overriding
mandatory provisions belonging to the law of theState, where the obligations arising out of thecontract have to be or have been performed, may
preempt the lex contractus.

126 Under Guideline 29(1) overriding mandatory rulesof the law of the forum prevail always within theirscope of application. Once the identification is made,the spatial scope of these overriding mandatory
rules has to be determined. In the French Hustoncase mentioned above, the overriding mandatory
rule was applicable for protection sought in France.
If the lex loci protectionis would have been applicable,
overriding mandatory rules would have been uselessin that case.

Extended comments
123 The concept of overriding mandatory provisions ismuch more restrictive than the broader concept of“mandatory rules”, which is relevant with regard
to domestic situations. Overriding mandatory rules
constitute an exception and hence are subject torestrictive interpretation. In this context, they haveto be distinguished from local mandatory provisions.
Only a small part of local mandatory provisions
may be characterized as overriding mandatory
provisions, preempting the choice of law rules. As
an example of such a restrictive understanding of
the concept, it can be mentioned that under EU law,overriding mandatory rules are defined as being“provisions the respect for which is regarded as crucial bya country for safeguarding its public interests, such as its
political, social or economic organization, to such an extent
that they are applicable to any situation falling within
their scope, irrespective of the law otherwise applicable “(Rome I Regulation Article 9 1).

127 Under Guideline 29(2) a court may also give effectto overriding mandatory provisions of the law of athird State in situations involving an international
contract. The term “give effect” may be found in
this context in Article 9(3) of the Rome I Regulation.
Also in Guideline 29 the term “to apply” must be
distinguished from the concept “to give effect”. As
explained in the Lagarde-Guiliano Report69, “thewords “effect may be given” impose on the court theextremely delicate task of combining the mandatory
provisions with the law normally applicable to thecontract in the particular situation in question”.
128 Only overriding mandatory provisions belonging
to the law of another State where the obligations
arising out of the contract have to be or have been
performed may preempt the lex contractus. This
limitation is in line with article 9 (3) of Rome I
Regulation. According to this provision “effect may
be given to the overriding mandatory provisionsof the law of the country where the obligations
arising out of the contract have to be or have been
performed”. However, it is important to note thatwhen interpreting this provision the CJEU has
established that it “does not preclude overriding
mandatory provisions of a State other than theState of the forum or the State where the obligations
arising out of the contract have to be or have been

124 For instance, under French law, certain moral
rights have been considered as being an overriding
mandatory rule.68 As a consequence, it prevails
over the otherwise applicable law. In that specificcase, US law was applicable in accordance with therelevant French choice of law rule. Nevertheless,the French Court applied provisions of French lawthat were regarded as overriding mandatory rules
and on that basis such provisions prevailed over
US law designated by the French choice of law rule.

68

1

French Court of Cassation, n° 89-1952 89-19725 (1991) Huston case.

69

70

Report on the Convention of the law applicable tocontractual obligations, Eur Lex 319080Y1031(01).

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Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
performed from being taken into account as amatter of fact, in so far as this is provided for by a
substantive rule of the law that is applicable to thecontract pursuant to the Regulation”.70

on contractual and non-contractual obligation.
For instance, the choice of law rules of the Hague
Convention of 2 October 1973 on the Law Applicableto Products Liability establish that the applicable law
shall be the “internal law” of the designated State(see, e.g., articles 4, 5 and 6). Additionally, pursuant to
Article 24 of the Rome II Regulation “The applicationof the law of any country specified by this Regulationmeans the application of the rules of law in force inthat State other than its rules of private internationallaw”. A similar rule may be found in Article 20 of theRome I Regulation. Renvoi is also excluded underarticle 8 of the Hague Principles on Choice of Law inInternational Commercial Contracts. The exclusionof renvoi is deemed to foster legal certainty andpredictability.

Edouard Treppoz, Nicolas Binctin
30. Renvoi
The application of the law of any State determined
under these Guidelines means the application of
the rules of law in force in that State other than
its rules of private international law.
See as reference provisions§ 324 ALI Principles
Art 3:903 CLIP Principles
Art 310 Joint Korean-Japanese Principles

Edouard Treppoz, Nicolas Binctin
31. Arbitrability

Short comments

When assessing the arbitrability of disputes
concerning intellectual property rights,
courts and arbitral tribunals shall take into
consideration the law of the arbitration, to theextent that the rights in dispute have a close
connection with it, and that of the State ofprotection, particularly insofar as the award has
to be recognized and enforced in that State.

129 Guideline 30 solves the question of the nature andscope of the referral by the choice of law rule. In
particular, it addresses the issue whether thereferral covers only substantial rules or also privateinternational rules. The renvoi doctrine is based on
the assumption that the application of the law of theState designated by the choice of law rules includes
the application of its rules of private internationallaw. Such a mechanism is complex and may leadto unpredictable results. Therefore, Guidline 30
excludes renvoi and provides that the applicationof law designated by the Guidelines means theapplication of the rules of law in force in that Stateother than its rules of private international law.

Short comments
131 Guideline 31 addresses the issue of arbitrability ofintellectual property disputes, on which significant
differences exist between national legal systems,
such differences being a considerable source of
uncertainty in international trade. In this respect,
the Guideline seeks to provide direction to
adjudicators, while at the same time allowing them acertain degree of flexibility. It also bears in mind theneed to ensure the enforceability of arbitral awards
rendered on matters of intellectual property.

Extended comments
Hypothetical
A work created by an artist from A and publishedfirst in A is infringed in State B. Under Guideline
25, B’s law is applicable, protection being soughtin B. Nevertheless under B’s private internationallaw, “copyright in a published work shall be governedby the legislation of the State in which the work is firstmade lawfully accessible to the public”. If renvoi wereapplicable, A’s law would have to be applied to thatissue. The exclusion of the renvoi excludes to apply
B’s choice of law rules, the application of B’s law
being limited to substantial B rules.

132 In view of this, the Guideline provides that judges
and arbitrators shall take into consideration theprovisions of the two laws that are more relevant
to govern the said issue. These laws are, on the one
hand, the lex arbitri, which in a large number oflegal systems is that of the State of the seat of thearbitration, whose courts may set the award aside
for lack of arbitrability of the subject matter of the
dispute; and, on the other hand, the lex protectionis,
i.e., the law of the State for the territory of which
protection of the disputed right is sought, insofar
as compliance with the provisions of that law isrequired in order to safeguard the enforceability of
the award in that State.

130 Guideline 30 and its exclusion of renvoi is in linewith most modern instruments in the field, such as
the Hague conventions on the law applicable to noncontractual obligations and the EU Rome Regulations
70

1

Judgment of the CJEU, C-135/15, EU:C:2016:774 – Nikiforidis,
paragraph 51.

71

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Kyoto Guidelines: Applicable Law
Extended comments

Agreement on a Unified Patent Court entered into by
a number of Member States of the European Union
on 19 February 2013.72

Hypothetical 1

The different national approaches with respect to thearbitrability of intellectual property disputes

A sues B for the alleged breach of a license concerning
the use of a patent registered in France before an
arbitral tribunal sitting in Belgium. B raises as adefense the invalidity of that patent. Under both thelex arbitri and the lex protectionis the arbitral tribunal
may decide on the validity of the patent, althoughpursuant to the former of those laws such a decision
may only be rendered with inter partes effects. The
arbitral tribunal is free to rule on the defense, sincenone of the laws involved rejects its arbitrability andhence, from this point of view, the enforceability of
the award is ensured in both States.

135 Intellectual property rights are, to a large extent,
monopolies on the use of intangible goods, which
affect competition within the territory of the State
that grants them. For this reason, jurisdiction overintellectual property disputes is often reserved tothe courts of the granting State. In those cases, noarbitration of such disputes is allowed, at least inwhat concerns registered rights. This is the case, e.g.,of South Africa as regards patent matters.73
136 Other States allow arbitration of disputes concerning
such rights, but set substantial limitations thereto,e.g., by not permitting arbitral tribunals to rule on
their validity, as happens in Germany, where thejurisdiction of the Federal Patent Court is generally
held to be exclusive in what concerns validity
issues;74 or by empowering arbitral tribunals to do soonly with inter partes effects, as is the case of France,75
Portugal,76 and the United States77.

Hypothetical 2
A sues B for the alleged infringement of a trademark
registered in Germany before an arbitral tribunal
sitting in Switzerland. The issue of the validity ofthe trademark is raised by the defendant in theproceedings. Although Swiss law allows the arbitral
tribunal to rule on that issue, under German law
the matter is not arbitrable and, accordingly, theenforcement of an arbitral award that ruled on thatissue could be refused in Germany on the basis of
Article V(2)(a) of the New York Convention.71 Insofar
as the award is intended to be enforced in Germany,
the arbitral tribunal should take into consideration
German law when ruling on its own jurisdiction.

137 Full arbitrability of such disputes, including thevalidity of industrial property titles, is neverthelessallowed by a third group of States, which includes,e.g., Belgium.78
138 Considerable differences also exist in what concerns
the arbitrability of claims concerning non-registeredrights: while some States, such as France, deem moral
rights as inalienable, and thus disputes concerning
such rights are in principle not arbitrable, otherStates allow certain transactions regarding moral
rights, such as consent to the modification of aliterary or artistic work. Disputes arising from suchtransactions are thus arbitrable in those States.79

The contemporary trend towards the liberalization of
intellectual property arbitration
133 Parties may choose arbitration as an alternative
to court litigation in intellectual property
disputes, inter alia, for the following reasons: theconcentration of proceedings in disputes arisingfrom the cross-border exploitation of intellectual
property rights; the avoidance of parallel litigation
before national courts and inconsistent decisions
ensuing therefrom; the confidentiality and greater
expediency of the proceedings; the neutrality andexpertise of adjudicators; and the extended crossborder enforceability of arbitral awards allowed by
the New York Convention.
134 A trend towards the liberalization of intellectual
property arbitration has thus emerged over the
past few decades. A recent expression of this was
the creation of a Mediation and Arbitration Center
seated in Lisbon and Ljubljana by Article 35 of the71

1

See New York Convention on the Enforcement andRecognition of Foreign Arbitral Awards (1958).

72

72[2013] OJ C175/1.

73

See article 18(1) of the South African Patent Act.

74

See § 65 of the German Patent Act.

75

See the ruling of the French Supreme Court of 28 February
2008, Société Liv Hidravlika D.O.O v. S.A. Diebolt.

76

See Article 3(3) of Law no. 62/2011, of 12 December 2011, as
amended by Decree-Law no. 110/2018, of 10 December 2018.

77

See Section 294 of the Patent Act.

78

See Article 51(1) of the Patent Law.

79

See, for instance, the ruling of the Supreme Court of Canada
in Desputeaux v. Éditions Chouette, 1 SCR 178 [2003].

2021

Marie-Elodie Ancel, Nicolas Binctin, Josef Drexl et al.
139 Claims concerning patrimonial rights are generally
regarded as arbitrable.80 However, since droit desuite is a non-waivable patrimonial right, it is not
an arbitrable matter in legal systems, such as the
French one, in which only disputes concerning droits
disponibles are arbitrable.81

146 Guideline 31 is thus meant to serve both asan orientation to adjudicators and as a rule ofrestraint, in cases where the connection with theabovementioned laws is scant, while simultaneously
giving courts and arbitrators sufficient discretion totake into consideration the particular circumstancesof the case.

The need for uniform conflict rules

Dário Moura Vicente

140 The situation described above is a source of
uncertainty with respect to the enforceability ofarbitral awards on intellectual property disputes.
There is thus a clear need for uniform conflict oflaws rules on the issue of arbitrability of intellectual
property disputes, even if only soft law ones.

by:Marie-Elodie Ancel
Prof. Dr. iur., Professor of Private International Law andArbitration Law, Université Paris 2 Panthéon-Assas,
contact: marie-elodie.ancel@u-paris2.fr

141 Such is the purpose of the present Guideline. It isaddressed both to State courts and arbitral tribunals:
the former may have to determine the arbitrabilityof a dispute on intellectual property rights either
in annulment or enforcement proceedings; thelatter may have to do so when assessing their own
jurisdiction under the Kompetenz-Kompetenz rule.

Nicolas Binctin
Prof. Dr. iur., Professor of Private Law and International
Property Law, Université de Poitiers, contact: nicolas.
binctin@univ-poitiers.fr
Josef Drexl
Prof. Dr. iur., LL.M. (Berkeley), Managing Director of the
Max Planck Institute for Innovation and Competition,
contact: josef.drexl@ip.mpg.de

The relevant laws
142 As mentioned above, two laws are most strongly
entitled to govern this issue: the lex arbitri (i.e., thelaw governing the arbitration), the application ofwhich ensures the enforceability of the arbitralaward in the State of the seat of the tribunal; andthe lex protectionis (i.e., the law of the State for the
territory of which protection of the disputed rights
is sought), compliance with which may be necessary
in order to safeguard the enforceability of its award.

Mireille van EechoudProf. Dr. iur., Professor of Information Law, Universiteit
van Amsterdam, contact: m.m.m.vaneechoud@uva.nl
Jane C Ginsburg
Morton L. Janklow Professor of Literary and Artistic
Property Law, Columbia University School of Law, contact:
ginsburg@law.columbia.edu
Toshiyuki Kono
LL.M. (Kyoto), Professor of Private International Law,
Kyushu University, contact: konoto@law.kyushu-u.ac.jp

143 The present Guideline recognizes the need to take
into consideration both laws when deciding issuesof arbitrability of intellectual property disputes,
although some restraint should be adopted in
respect of both of them.

Gyooho Lee
J.S.D. (St. Louis), LL.M. (Seattle), Professor of Private
International and Intellectual Property Law, Chung-Ang
University School of Law, Seoul, contact: ghlee@cau.ac.kr

144 Regarding the lex arbitri, its competence togovern the issue at stake may, in fact, be limited
if the intellectual property rights in issue have no
relationship with that law, e.g., because it is the lawof the arbitral seat and this has been chosen by theparties merely because it provides a neutral forum
regarding the interests in dispute.

Rita Matulionyte
Dr. iur., LL.M. (Munich), Senior Lecturer in Law, Macquarie
University, Sydney, contact: rita.matulionyte@mq.edu.au
Edouard Treppoz
PhD, Professor of Law, Université Lyon 3 Jean Moulin,contact: edouard.treppoz@univ-lyon3.fr

145 The lex protectionis may also not be decisive withrespect to the issues at stake if, for example, theDário Moura VicenteProf. Dr. iur., Professor of Civil Law and Private
International Law, Universidade de Lisboa, contact:
dmouravicente@fd.ulisboa.pt

arbitral award is not intended for recognition in aState where the disputed right is registered.
80

See, e.g., in France, Article L 331-1 of the French Code ofIntellectual Property.

81

See Article 2059 of the French Civil Code.

1

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Kyoto Guidelines: Recognition and Enforcement

International Law Association’s Guidelines
on Intellectual Property and Private
International Law (“Kyoto Guidelines”):
Recognition and Enforcement
by Pedro de Miguel Asensio and Marketa Trimble

Abstract:
This section of the the chapter “Recognition and Enforcement” of the International Law
Association’s Guidelines on Intellectual Property andPrivate International Law (“Kyoto Guidelines”) establishes the conditions under which the effects ofjudgments rendered in a country may be extended
to foreign jurisdictions. It seeks to favor international coordination and legal certainty by facilitating the cross-border recognition and enforcementof judgments relating to IP disputes. The Guidelines
are based on a broad concept of judgment with restrictions concerning judgments not considered final
under the law of the State of origin as well as certain provisional measures. The main provision of thissection lays down the list of grounds on which a requested court must refuse to recognize and enforce
a foreign judgment.

© 2021 Pedro de Miguel Asensio and Marketa Trimble
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Pedro de Miguel Asensio and Marketa Trimble, Kyoto Guidelines: Recognition and Enforcement, 12(2021) JIPITEC 74 para 1

32. Object of Recognition and Enforcement

and enforceable without prior service ofprocess to that party shall not be recognized
or enforced.

1. A foreign judgment may be recognized andenforced in accordance with this part of the
Guidelines.

See as reference provisions§§ 401(1), (2), and (4), 402, 411(1), 412(1), 413(1) ALI
Principles
Arts 4:102(1) and (5), 4:301(2), 4:801 CLIP Principles
Arts 402, 403 Transparency Proposal
Arts 405, 408 Joint Korean-Japanese Principles

2. If a judgment is still subject to appeal in
the State of the rendering court, or if theperiod for launching ordinary review has
not expired in that State, the requested court
may stay the recognition and enforcement
until the appeal is decided or the period
expires, or may make it a condition of therecognition and enforcement that the party
seeking it provide security.

Short comments
1

3. Provisional and protective measures adopted
without prior hearing of the adverse party
1

74

Guideline 32 provides for the recognition andenforcement of foreign judgments as defined in
Guideline 2. Guideline 32, together with Guidelines
33-35, applies to both recognition and enforcement
irrespective of whether the requested court decides2021

Pedro de Miguel Asensio and Marketa Trimble
Hypothetical 2

on them in separate proceedings or in a single
proceeding. It applies also to situations in which
recognition requires no special procedure. The aimof the Guidelines is to achieve the maximum degreeof recognition and enforcement of foreign judgments
while providing adequate safeguards to the requested
States. Matters of recognition and enforcement
not covered by the Guidelines, particularly thoseregarding procedure, are to be governed by the lawsof the requested State. Such domestic rules should
not undermine the effectiveness of the Guidelines.
2

A obtains a judgment against B from a court in State
X for copyright infringement that B committed in
X. A then files for the recognition and enforcementof the judgment in a court of State Y – the State ofB’s habitual residence. B objects because under X’s
law, B could still appeal the judgment in X’s courts.
Y’s court requires that A provide security if A wants
the court to proceed while X’s judgment may still
be appealed in X. After A provides security, thecourt in Y recognizes X’s judgment and enforces the
judgment against B. As an alternative, Y’s court may
decide to stay the recognition and enforcement until
the appeal is decided or the period for launchingordinary review expires.

Guideline 32 provides for two exceptions to thegeneral rule. The exception in paragraph 2 is
discretionary and concerns foreign judgments thatare or may still be subject to an appeal in the State oforigin. Hence, it refers to judgments not considered
final under the law of the rendering State. Suchjudgments might or might not be enforceable in theState of origin. Since non-final judgments may berevised in the State of origin, particular safeguards
have to be provided. In cases involving non-final
judgments the requested court has three options: (1)follow the general rule and recognize and enforce thejudgment; (2) stay the recognition and enforcement
proceeding until the appeal is decided in the Stateof the judgment’s origin or until the period forfiling of an appeal expires; or (3) recognize and/or
enforce the judgment but require security from theparty seeking the recognition and/or enforcement.

3

Recognition and Enforcement of Judgments

Under the mandatory exception in paragraph 3 therequested court must not recognize and/or enforce
provisional and protective measures if the rendering
court issued the measures without a prior hearingof the respondents and the enforcement is to occur
without notice to the respondent. This provision isintended to ensure adequate protection of the rightto be heard. Judgments issued without notice to the
respondent that are not provisional and protective
measures are addressed in Guideline 34. Guideline
34 also lists additional grounds for non-recognitionand non-enforcement of foreign judgments.

4

Guideline 32(1) states the fundamental rule forrecognition and enforcement, which is guided by
the objective of achieving maximum recognition andenforcement of foreign judgments. The rule applies
to both recognition and enforcement, and applies
irrespective of whether a court decides on only one
or both of them and irrespective of whether a court
decides on them in a single proceeding or in two
separate proceedings. It applies also to situations inwhich recognition requires no special procedure,such as situations in which recognition of a foreign
judgment may be raised as an incidental question in
judicial proceedings.

5

Guideline 32(1) does not define the term “judgment”;
the definition of “judgment” is in Guideline 2, which
defines judgments broadly so as to include a variety
of decisions such as judgments, decrees, orders,and court-approved settlements. Guideline 32(1)is not limited to judgments that are considered“final”1; Guideline 32(2) addresses issues that may
be associated with a lack of finality of foreign
judgments. Guideline 33 addresses the extent of theeffects that foreign judgments should have in therequested State.

6

The following terminology is adopted in Guidelines
32 – 35: The term “foreign” refers to a judgment
originating in a State other than the State whererecognition and enforcement are sought. The State
where the judgment is rendered is called the “Stateof origin.” The jurisdiction in which recognitionand enforcement is sought is called the “requested
State”.

1

CLIP Principles comment 4:102.C13 on p. 403. Cf. § 401(2) ALI
Principles; Article 402 Transparency Proposal.

Extended comments
Hypothetical 1
A obtains a judgment against B from a court in State
X for copyright infringement that B committed in
X. A then files for the recognition and enforcementof the judgment in a court of State Y – the State ofB’s habitual residence. Provided that all provisionsof this part of the Guidelines are satisfied, Y’s court
should recognize and enforce the judgment.

1

75

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Kyoto Guidelines: Recognition and Enforcement
Judgments Subject to an Appeal in the State of Origin
7

8

heard in cross-border situations. The provision does
not interfere with the possibility of a State to provide
for ex parte measures as a tool for the enforcementof intellectual property rights; the provision only
excludes cross-border recognition and enforcementof such measures. Hence, only courts that are closest
to the particular circumstances should issue ex parteprovisional and protective measures in accordancewith national procedures. If such measures areissued ex parte and are to be enforced without a
respondent being served prior to enforcement, themeasures must not be recognized and/or enforced
by a court in another State.

Guideline 32(2) allows for the recognition and/or enforcement of foreign judgments that either
are or might be subject to an appeal in the Stateof origin.2 Periods during which and the extent
to which judgments may be appealed vary among
jurisdictions, as does the definition of when ajudgment is considered to be final. Finality of ajudgment is governed by the law of the State oforigin. Guideline 32(2) adopts a flexible approachby giving the requested court three options; therequested court, based on its own law, will decide
which of the three options is best suited to its own
procedural system and the circumstances of theparticular case: recognition and enforcement, astay of recognition and enforcement, or recognitionand enforcement subject to the requesting party’s
providing security. Guideline 32(2) does not dictate
what factors the requested court must or should
consider when deciding on which of the three
options to adopt. A consideration that the requested
court may take into account is whether the pendingor possible appeal in the State of origin might change
the foreign judgment.3

10 The term “service of process” refers to specific forms
of service of process that international agreementson service of process require.6 For a measure to berecognized and enforced, the enforcement of themeasure is to occur with notice to the respondent,
and a respondent must be served a reasonable time
before enforcement in the requested court in orderto give the respondent an opportunity to object tothe measure. Service of process must be directly tothe respondent; a public announcement on a court’s
official notice board or on a court’s website will not
suffice.

None of the three options exclude the possibility thatthe decision of the requested court may have to berevised if an appeal in the State of origin reverses
or changes the original judgment. Under the first
option, when the requested court recognizes
and/or enforces an appealable foreign judgment,
the requested court should have some procedure
available to adjust the resulting circumstances
based on the new judgment. Under the second
option, when a proceeding is stayed, no conflictwith a later appellate judgment should arise. Under
the third option, when security is provided, anylater adjustments to the original judgment will
be supported by the security that the requested
court imposes on the party that has requested therecognition and enforcement of the judgment.4

11 Guideline 32(3) concerns ex parte provisional andprotective measures that are to be enforced without
notice. Other provisional and protective measures
are subject to the following Guidelines 32 – 35, as are
any other “judgments” that are defined in Guideline
2.7 Judgments issued without notice, other than exparte provisional and protective measures, are also
subject to Guidelines 32 – 35, and a lack of noticein instances of these judgments is addressed in
Guideline 34.
33. Effects of a Foreign Judgment
The effects of a foreign judgment, including
its enforceability, in the requested State shallto the extent possible be the same, and underno circumstances greater, than in the State oforigin.

Ex Parte Provisional and Protective Measures without
Service of Process
9

Guideline 32(3) prohibits the recognition andenforcement of ex parte provisional and protective
measures that are to be enforced without priornotice to the respondent.5 This provision is intended
to ensure adequate protection of the right to be

2

Article 4:102(5) CLIP Principles.

6

E.g., the Hague Convention on Service of Process.

3

408 Joint Korean-Japanese Principles; ALI note f on § 401.

7

4

Article 403(4) Transparency Proposal.

5

Article 4:301(2) CLIP Principles; Article 402(ii) (in general)
and Transparency Article 403(1) Transparency Proposal.

See Article 4:101 CLIP Principles; § 401(4) ALI Principles;
Article 405 Joint Korean-Japanese Principles. ALI limits
court jurisdiction to issue provisional and protective
measures only to a court in the territory for which
intellectual property rights at issue are registered or “inwhich tangible property is located.” § 214(2) ALI Principles.

1

See as reference provisions§ 401(3) ALI Principles
Art 4:102(2) – (4) CLIP Principles
Art 404 Transparency Proposal

76

2021

Pedro de Miguel Asensio and Marketa Trimble
Short comments

concern certain activities or assets of the defendant;
remedies will be limited to the territory of the Stateof origin, to the territory of a different State, to theterritory of multiple States, or they will be global;
remedies will be permanent (e.g., a permanent
injunction) or temporary (e.g., an ongoing royalty
to be paid until the patent expires).

12 Guideline 33 requires that the requested court, when
it recognizes and/or enforces a foreign judgment,
ensures that the effects of the recognition and/or enforcement do not exceed the effects that the
judgment has in the State of origin, or would have
had in the State of origin were the judgment enforced
there. The Guideline is phrased generally in order tocover all types of procedural effects, including claim
preclusion (res judicata), issue preclusion (collateralestoppel), and enforceability. If the judgment is notenforceable under the law of the State of origin, it
may not be held enforceable in the requested State.

14 The law of the State of origin determines the scopethat the foreign judgment is intended to have andthus defines its effects.9 The law of the requested
State governs the scope of the recognized andenforced judgment, including the extent of thejudgment’s preclusive effect in the requested State.10

Extended comments

15 The requested court must assess whether the effects
in the requested State will be the same or smaller
than the effects in the State of origin. Guideline
33 prohibits the effects from being greater in therequested State than in the State of origin. The
Guideline prefers identical effects, and accepts
smaller effects in the requested State as an alternative
only if identical effects cannot be achieved. Legal andprocedural constraints may restrict the remedies
available in the requested State.

Hypothetical 1
A obtains a judgment against B from a court in State
X for copyright infringement that B committed in
X. A then files for the recognition and enforcementof the judgment in a court of State Y – the State ofB’s habitual residence. Before Y’s court decides on
the recognition and enforcement of X’s judgment,
the judgment is rendered unenforceable in X. Y’scourt should deny recognition and enforcement of
X’s judgment.

16 Smaller effects should be reserved for exceptional
cases, primarily when it is not possible – either
physically or legally – to achieve identical effects in
the requested State. Guideline 35 allows the requested
court to adapt the foreign judgment to achieveeffects that are as close to identical to the effects in
the State of origin as is possible. For example, if therendering court, based on the substantive law of theState of origin, awards extraterritorial profits forsales of infringing products in the requested State11
and the same profits are also subject to a domestic
judgment in the requested State concerning theparallel intellectual property right in the requested
State, the requested court may reduce the remedies
awarded by the foreign judgment to prevent a
duplication of the award of profits. Similarly, any
potential territorial overlap of a foreign-issued

Hypothetical 2
A sues B in a court of State X for infringementof copyright based on B’s making available ofinfringing works on the internet. X’s court grants
A an injunction that is limited to X’s territory.
Subsequently, A files in a court of State Y – theState of B’s habitual residence – for recognition andenforcement of the judgment. Y’s court recognizes
X’s judgment but enforces it only as to X’s territory
by requiring that B use geo-blocking to prevent theenjoined activity only in X and not outside of X or
globally.
Effects of the Recognized and Enforced Foreign
Judgmentin Article 402).

13 Under Guideline 33 the effects of the recognized andenforced foreign judgment must not be greater than
the judgment’s effects are or should be in the Stateof origin. The effects of a foreign judgment under
Guideline 33 are to be understood broadly in order
to cover all types of procedural effects, including
claim preclusion (res judicata), issue preclusion(collateral estoppel), and enforceability. The scopeof the effects may have substantive, territorial, andtemporal dimensions.8 For example, remedies will8

Article 4:102(3) CLIP Principles; Joint Korean-Japanese
Principles, notes on p. 152 (addressing territorial effects
under the provision on partial recognition and enforcement

1

77

9

ALI Principles Comment d on § 401, p. 169; Article 4:102(3)CLIP Principles.

10§ 401(3) ALI Principles; Article 4:703(3) CLIP Principles(“Enforcement takes place in accordance with the law of therequested State and to the extent provided by such law.”)
and comments 4:102.C08 and C09 on pp. 400-401.

11E.g., United States Court of Appeals, L.A. News Service v.
Reuters Tel. Intern. Ltd., 149 F.3d 987 [9th Cir. 1998]; UnitedStates Court of Appeals, L.A. News Service v. Reuters Tel.
Intern. Ltd., 340 F.3d 926 [9th Cir. 2003]; United States Courtof Appeals, WesternGeco LLC v. ION Geophysical Corp., 138 S.Ct.
2129 [Fed. Cir. 2018].

2021

Kyoto Guidelines: Recognition and Enforcementf) the rendering court exercised jurisdiction
in violation of the rules of jurisdiction
under these Guidelines.

injunction with another injunction that is a domestic
injunction may be remedied by adapting the foreign
judgment or by awarding an alternative remedy,
such as damages, under Guideline 35(3).12

2. A court may decline to recognize and enforce
a foreign judgment if the rendering court
designated the applicable law in violationof the rules in Guidelines 20 – 24 protecting
creators, performers and employees.

17 The extent of the effects of a judgment may be explicit
or implicit. For example, with respect to territorial
scope of a measure, the rendering court may state ina judgment the States that are covered by the court’s
injunction; or the rendering court might not specify
for which States it issued the injunction, in whichcase the injunction’s scope may be implied from thenational laws that the rendering court applied in its
proceedings. The requested court should focus on
explicit scope of measures but should also consider
their implicit extent when necessary.
34. Grounds for
Non-Enforcement

Non-Recognition

3. In assessing the rendering court’s
jurisdiction, the requested court is bound by
the findings of fact made by the rendering
court in the original proceeding.
4. Without prejudice to such review as may benecessary for the application of Guidelines 33
and 34, the requested court shall not review
a foreign judgment as to its merits.

and

1. A court shall not recognize and enforce aforeign judgment if:

See as reference provisions§§ 401 – 403 ALI Principles
Arts 4:201 – 4:601 CLIP Principles
Art 402 Transparency Proposal
Arts 401, 406, 407 Joint Korean-Japanese Principlesa) such recognition or enforcement would
be manifestly incompatible with afundamental public policy of the requested
State;

Short commentsb) the proceedings leading to the judgment
were manifestly incompatible with thefundamental principles of procedural
fairness of the requested State;

18 Guideline 34(1) lists the mandatory grounds on whicha requested court must refuse to recognize and/or
enforce a foreign judgment. The list is exhaustive,
and a requested court must not refuse recognition
and/or enforcement on a ground that is not listed
in Guideline 34. Under the Guidelines no reciprocity
is required for recognition and enforcement offoreign judgments. Any one of the grounds listed
in Guideline 34(1) will suffice for non-recognition
and/or non-enforcement. The first three grounds
concern public policy and fundamental due process
requirements. The fourth and fifth grounds address
conflicts with prior judgments that are inconsistent
with the foreign judgment that is subject to therecognition and/or enforcement request. The sixth
ground is a jurisdictional filter; it requires that therendering court follow the rules of jurisdiction in
the Guidelines.

c) the judgment was rendered by default
where(i) the defendant to the proceeding was
not adequately and timely notifiedof the proceeding, or(ii) the defendant was deprived ofan adequate and meaningful
opportunity to present its casebefore the rendering court;d) the judgment is inconsistent with a priorjudgment rendered in the requested State
that has preclusive effect;

19 Guideline 34(2) provides a discretionary groundfor non-recognition and non-enforcement. It
allows the requested court to deny recognition andenforcement if the rendering court did not respect
the provisions of Guidelines 20 – 24 on the choice of
applicable law protecting creators, performers andemployees.

e) the judgment is inconsistent with an earlier
judgment given in another State between
the same parties and having the samecause of action, provided that the earlier
judgment fulfils the conditions necessary
for its recognition in the requested State;

121

20 Guidelines 34(3) and (4) require that the requested
court respect the findings of fact made by therendering court and that the requested court notreview the foreign judgment on the merits. The
only exceptions to the prohibition against review§ 412(1)(b) ALI Principles.

78

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Pedro de Miguel Asensio and Marketa Trimble
22 The public policy ground in Guideline 34 should
be used only in exceptional circumstances.15 The
incompatibility must be manifest and public policy
covers only fundamental values, principles andrules of the requested State.16 Mere differences insubstantive laws should not suffice for the public
policy exception to apply.17 Similarly, an error inlaw that does not constitute a breach of an essential
rule of the requested State should not suffice.18 The
already high degree of harmonization of intellectual
property rights should have eliminated manydifferences among national intellectual property
laws, but differences persist, and at least someof the differences may arise from differences infundamental public policies.19

on the merits are under circumstances in which
the requested court needs to assess the intended
effects of the foreign judgment for the purposes of
Guideline 33, and when the requested court needs
to assess the applicability of one of the grounds for
non-recognition and/or non-enforcement listed in
Guideline 34.
Extended comments
Hypothetical 1
A sues B in a court of State X for copyright
infringement that B committed in State Z. X’s court
renders a judgment against B for infringement that
B committed in Z. A files in a court of State Y – theState of B’s habitual residence – for recognition andenforcement of the judgment. Y’s court should deny
the recognition and enforcement because, underthese Guidelines, X’s court did not have jurisdiction
over B in this case.

23 The public policy ground is to be assessed
according to the effects that the recognition and/or enforcement would have in the requested State.
The cause of action’s repugnancy to the public policyof the requested State is not to be evaluated by therequested court;20 any repugnancy of the cause ofaction would play a role only if the repugnancy
were translated into effects that the judgment
would have if it were recognized and/or enforcedin the requested State. Similarly, procedural issues
in the rendering court will not be considered by therequested court under Guideline 34(1)(a); Guideline34(1)(b) is designed to prevent the recognition and/or enforcement of a foreign judgment renderedin proceedings that were incompatible with thefundamental principles of procedural fairness of
the requested State.

Hypothetical 2
A obtains a judgment against B from a court in State
X for copyright infringement that B committed in
X. A then files for the recognition and enforcementof the judgment in a court of State Y – the State ofB’s habitual residence. However, a court in State Y
earlier rendered a judgment declaring that B did
not infringe A’s copyright in Y and X. Y’s court will
not recognize and enforce X’s judgment because X’s
judgment is inconsistent with the prior judgment
rendered in Y that has preclusive effect.

24 Requested courts may use the public policy groundto refuse to recognize and/or enforce certain
types of remedies, for example punitive damages,
if the requested State considers such damages tobe penal in nature and therefore not recognizableand enforceable in the requested State.21 However,under Guideline 35 the requested court will assess

Public Policy Exception
21 Public policy as an exceptional device preventing
recognition and enforcement of judgments is widely
recognized in national and international regimes.13
Only a manifest incompatibility with a principle,
value, or right regarded as fundamental should
justify the application of the ground in Guideline34(1)(a). “Public policy” in general is not defined in
the Guidelines; the term “public policy” is broad14
and also amorphous – each State will have a different
understanding of its public policies and which ofthem are fundamental, and the understanding may
develop over time.
13

14

1

Cf. § 403(1)(e) ALI Principles (referring solely to “the public
policy”); Article 4:401(1) CLIP Principles (referring solely
to “the public policy”); Article 402(3) Transparency Proposal(mandating the denial of recognition and enforcement whena judgment and its proceedings are “contrary to the public
policy in Japan”).
Article 401(1)(iii), notes on p. 151, Joint Korean-Japanese
Principles.

79

15

CLIP Principles comment 4:401.C04 on pp. 432-433.

16

Article 4:404(1) CLIP Principles and comment 4:401.C02 on
p. 432.

17

See CJEU, C-38/98, EU:C:2000:225 – Renault, paragraphs 3034. CLIP Principles comment 4:401.C05 on p. 433.

18

In the EU context, see CJEU, C-681/13, EU:C:2015:471 –Diageo, paragraph 52.

19

CLIP Principles comment 4:401.C07 on p. 434.

20

See ALI Principles comment c on § 403 on p. 175 (“[T]heenforcement court should consider only the outcome of
litigation…”).

21

Article 407 Joint Korean-Japanese Principles.

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Kyoto Guidelines: Recognition and Enforcement
Default Judgments

whether at least a portion of the judgment may berecognizable under the Guidelines, or whether the
judgment may be adaptable under Guideline 35; if
possible, the requested court will recognize andenforce the remainder of the judgment or adapt the
judgment.22 In some instances the requested court
may hold that the territorial scope of the judgment
makes the judgment manifestly incompatible
with a fundamental public policy of the requested
State;23 in such cases the requested court will denyrecognition and/or enforcement under Guideline34(1)(a) and consider if it may be possible to adapt
the judgment under Guideline 35. In some requested
States the protection of consumers or employees as
weaker parties may stem from fundamental public
policies that will be reflected in requested courts’
decisions not to recognize and enforce judgmentsof rendering courts that do not satisfy a requested
State’s internationally mandatory rules that are
based on these fundamental public policies.24

26 Under Guideline 34(1)(c) default judgments are
not to be recognized and enforced when either(a) there was no adequate notice to the defendantof the proceeding in the rendering court,29 or (b)the defendant had no adequate and meaningful
opportunity to present its case before the rendering
court.30 Other default judgments will be recognizedand enforced unless there is another ground fortheir non-recognition and non-enforcement.31 Ex
parte provisional and preliminary measures to be
enforced without notice will not be recognized and/or enforced under Guideline 32(3).
Prior Judgments
27 Guidelines 34(1)(d) and (e) address situations inwhich one or more prior judgments exist that areinconsistent with the foreign judgment that isrequested to be recognized and enforced. Paragraph(d) concerns the scenario in which the requested
court faces two judgments – a foreign judgment
and an earlier judgment from the requested State(a “domestic judgment”). If the domestic judgment
has preclusive effects, the requested court will give
preference to the domestic judgment and decline torecognize and enforce the later foreign judgment.32
The requested court will apply its own law todetermine whether the domestic judgment has
preclusive effects vis-à-vis the foreign judgment; theGuideline does not set a standard for res judicata.33

Procedural Fairness
25 Under Guideline 34(1)(b) the requested court willuse its own standard of “fundamental principles
of procedural fairness” to determine whether therendering court, in the proceedings that led to theissuance of the foreign judgment, proceeded in amanner that is “manifestly incompatible” with therequested State’s principles.25 “Procedural fairness”
is to be interpreted broadly; it covers due process
requirements, such as timely notice and opportunity
to defend.26 The ground also covers instances inwhich the proceeding of the rendering court does
not meet the standard because of serious systemic
problems in the judicial system of the State oforigin, such as lack of an impartial judiciary,27 orlack of integrity of the rendering court (e.g., fraud,
bribery).28

22

Article 407 Joint Korean-Japanese Principles (calling for therecognition and enforcement of an “amount of compensatory
damages” if the “punitive damages or similar monetary
relief manifestly exceed … compensatory damages”).

23

CLIP Principles comments 4:401.C12 and C13 on pp. 436-437.

24

28 Paragraph (e) concerns the more complex scenario
in which the requested court faces two foreign
judgments – a judgment for which recognition
and/or enforcement is sought, and another foreign
judgment that pre-dates the judgment that therequested court is asked to recognize and enforce.
The choice of judgment that has priority will havepolicy implications: Giving priority to the judgment
first issued rewards the party that filed a lawsuit
first and penalizes the party that attempted tocircumvent the first judgment by obtaining a
conflicting second judgment. Giving priority to
the judgment issued later rewards the party that
pursued its rights diligently by filing the second
29§ 403(1)(c) ALI Principles; Article 401(1)(ii) Joint KoreanJapanese Principles; Article 402(ii) Transparency Proposal.

See Article 4:204 CLIP Principles.

30§ 403(1)(d) ALI Principles.

25

See Article 4:401(2) CLIP Principles.

31

26

Article 4:501(1) CLIP Principles.

Article 401(1)(ii) Joint Korean-Japanese Principles; Article
402(ii) Transparency Proposal.

27§ 403(1)(a) ALI Principles.

32

Article 402(5) Transparency Proposal; Article 4:501(3) CLIP
Principles.

28§ 403(1)(b) and (d) ALI Principles.

33

Cf. Article 406(1) Joint Korean-Japanese Proposal.

1

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Pedro de Miguel Asensio and Marketa Trimble
lawsuit; it penalizes the party that filed the firstlawsuit but then failed to argue res judicata in thesecond proceeding.34 The Committee opted for the
first-in-time rule; though the choice is not without
controversy, the Committee believes that this is thebetter rule within the framework of the Guidelines.

rendering court follow the rules of jurisdiction under
the Guidelines.39 Guideline 34(1)(f) thus reinforces
the functioning of the system under the Guidelines
because it provides an incentive to apply the groundsof jurisdiction so that the resulting judgment will
be recognizable and/or enforceable under the
Guidelines.

29 Guideline 34(1)(e) gives preference to the earlier
judgment, but only if the earlier judgment could
be recognized and enforced in the requested State
under the Guidelines.35 Therefore, if the earlier
judgment was obtained by fraud, for example, oris in conflict with the jurisdictional rules of the
Guidelines, the requested court will give preference
to and recognize and enforce the later judgment.

33 Only if the rendering court’s exercise of jurisdiction
was in violation of the Guidelines will there be
grounds for non-recognition and non-enforcement.
The requested court will recognize and enforce theforeign judgment even if the rendering court’s
exercise of jurisdiction was not supported by ajurisdictional ground under the Guidelines if anotherground of jurisdiction under the Guidelines would
have been applicable.40 Guideline 16 provides a listof insufficient grounds for jurisdiction which are
relevant when applying the jurisdictional filter in thecontext of recognition and enforcement. Moreover,to the extent that the requested court must assess
foreign judgments on the merits to determine if
there is an alternative ground for jurisdiction,
Guideline 34(4) allows the requested court to do so.

30 The earlier foreign judgment need not be formallyrecognized and enforced in the requested State inorder for it to serve as a basis for non-recognition
and/or non-enforcement of the later foreign
judgment. But if the earlier foreign judgment
had previously been formally recognized in therequested State, the earlier foreign judgment is tobe treated as a domestic judgment, and any conflictwith a later foreign judgment will be assessed under
Guideline 34(1)(d).36

The Discretionary Ground Concerning Choice ofApplicable Law

31 The inconsistency of judgments may be at thelevel of res judicata; for example, a judgment of
infringement in the first litigation and a later
judgment of invalidity in the second litigation of
the same right that was held to be infringed in the
judgment from the first suit will be inconsistent.37
While not just any difference between the effectsof two judgments will automatically make thejudgments inconsistent,38 some differences will makethe judgments inconsistent.

34 Guideline 34(2) provides a discretionary groundfor non-recognition and non-enforcement. It
allows the requested court to decline recognitionand enforcement if the rendering court did notrespect the rules in Guidelines 20-24 on the choiceof applicable law protecting creators, performers
and employees. This ground of non-recognition isintended to prevent circumvention of the protective
rules on choice of law concerning creators,
performers and employees where the circumvention
is a result of a choice of forum agreement granting
jurisdiction to the courts of a State not applying suchprotective rules.

Rules of Jurisdiction
32 Guideline 34(1)(f) creates a jurisdictional filter byrequiring that for recognition and enforcement the34

Under the “last-in-time” rule, the last judgment will
generally prevail. The rule applies, for example, to sister
state judgments under the law of the State of New York. See
Supreme Court of the State New York, Byblos Bank Europe,
S.A. v. Sekerbank Turk Anonym Syrketi, 885 N.E.2d 191 [C.App.
N.Y. 2008]. However, even under New York law, “the lastin-time rule … need not be mechanically applied wheninconsistent foreign State judgments exist.” Id., 193.

35

Article 4:501(4) CLIP Principles; Article 406(2) Joint KoreanJapanese Principles.

36

CLIP Principles comment 4:501.C18 on pp. 452-453.

37

CLIP Principles comment 4:501.C20 on p. 453.

38

CLIP Principles comment 4:501.C20 on p. 453.

1

35 The Guidelines only envisage the review of the
choice of law rule applied by the rendering court in34(2). In exceptional circumstances, in particular,in situations where the court of origin manifestly
undermined the territoriality of intellectual
property rights and disregarded the lex lociprotectionis criterion in violation of the provisions on
applicable law of the Guidelines, recourse to public
policy under Article 34(1)(a) could become relevant.

81

39

See § 401(1)(a) ALI Principles (compliance with the Principles
in general), 402, and 403(1)(f) – (h) and (2); Articles 4:201
and 4:301(1) CLIP Principles; Article 401(1)(i) Joint KoreanJapanese Principles; Article 402(i) Transparency Proposal.

40

See CLIP Principles comment 4:201.C08 on p. 412.

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Kyoto Guidelines: Recognition and Enforcement
The Rendering Court’s Findings of Fact and the Meritsof the Foreign Judgment

35. Partial and Limited Recognition and
Adaptation

36 The principles of legal certainty and judicial economy
underscore Guidelines 34(3) and (4). Findings offacts made by a rendering court and the rendering
court’s decision on the merits should not become thesubject of re-evaluation by the requested court.41 It is
expected that parties will have adequate opportunity
to ensure that the rendering court makes correct
findings of fact and determines the merits of the casecorrectly. If the rendering court’s procedure does
not allow the parties to ensure this level of fairness,the procedure will disqualify the foreign judgmentfrom recognition and enforcement on the basis of
Guideline 34(1)(b).

1. If a foreign judgment contains elements thatare severable, one or more of them may beseparately recognized and enforced.
2. If a foreign judgment awards noncompensatory, including exemplary or
punitive, damages that are not available
under the law of the requested State,recognition and enforcement may be refused
if, and only to the extent that, the judgmentawards damages that do not compensate aparty for actual loss or harm suffered andexceed the amount of damages that could
have been awarded by the courts of therequested State.

37 The requested court will rely on the facts as they
were established by the rendering court,42 andthe requested court will not conduct any new oradditional fact finding. Even when the requested
court conducts a review of the merits under thelimited circumstances listed in Guideline 34(4), therequested court will conduct its review based on thefacts as established by the rendering court.43

3. If a judgment contains a measure that is notknown in the law of the requested State,that measure shall, to the extent possible,
be adapted to a measure known in the lawof the requested State that has equivalenteffects attached to it and that pursues similaraims and interests.

38 If the requested court conducts a review of the merits
it will do so from the position of the rendering court,
including a consideration of the rendering court’srules of procedure, such as the rendering court’s
choice-of-law rules, if any. A review of the merits
by the requested court is permitted only in thecircumstances listed in Guideline 34(4), which are (a)when the requested court needs to assess the effects
that the foreign judgment is intended to have forpurposes of Guideline 33, and (b) when the requested
court needs to determine whether any grounds for
non-recognition and/or non-enforcement apply
under Guideline 34.44 Under Guideline 34(1)(f),the requested court may have to assess the factsof a case to determine whether the rendering
court’s exercise of jurisdiction was in compliancewith the jurisdictional rules of the Guidelines.45

41

See Article 4:601 CLIP Principles; Article 401(2) Joint KoreanJapanese Principles, notes on p. 152.

42

See Joint Korean-Japanese Principles, notes on pp. 151-152.

43

See Article 4:203 CLIP Principles.

44

See § 403(3) ALI Principles.

45

See Article 401(2) Joint Korean-Japanese Principles, notes
on p. 151.

1

4. If a foreign judgment includes a decision
concerning the validity of a registeredintellectual property right and the rendering
court is not a court of the State of registration,
the decision on the validity shall be effective
only between the parties to which the foreign
judgment pertains.
See as reference provisions§ 411(2), 412(1)(b), 413 ALI Principles
Arts 4:102(6), 4:202, 4:402, 4:703(3) CLIP Principles
Art 404 Transparency Proposals
Arts 402 – 404, 407 Joint Korean-Japanese Principles

Short comments
39 To achieve the maximum degree of recognitionand enforcement, Guideline 35 provides for partial
recognition and/or enforcement and for partial or
full adaptation of judgments so that if judgmentsor parts of judgments cannot be recognized and/or
enforced, either at least some parts of the judgments,
or entire judgments with adaptation, can berecognized and/or enforced. If the grounds for nonrecognition and non-enforcement in Guideline 34, orlimitations on recognition and/or enforcement in
Guidelines 32(2) and (3), apply to parts of a foreign
judgment, the remainder of the judgment may berecognized and/or enforced, and Guideline 35 will
facilitate a partial recognition and/or enforcement.
Guideline 35 also provides for adaptations so that
foreign judgments or their parts may be adjusted to
be enforceable in the requested State.
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Pedro de Miguel Asensio and Marketa Trimble
Extended comments

State, under Guideline 34(1)(a) the requested court
will not recognize and enforce the damages. Even
if an award of non-compensatory damages is not
manifestly incompatible with the public policyof a requested State, and there is therefore no
ground to deny recognition and enforcement of thejudgment under Guideline 34(1)(a), Guideline 35(2)allows a requested State to deny recognition andenforcement purely because such types of damages
are not available in the requested State. However, inboth cases a requested court may deny recognition
and/or enforcement only as to the amounts thatexceed the amounts that could have been awarded
by the requested court.48

Hypothetical 1
A sues B in a court of State X for copyright
infringement in X. X’s court issues a judgment andawards A enhanced statutory damages because of B’s
willfulness. Subsequently, A asks a court in State Y– the State of B’s habitual residence – to recognize
and enforce X’s judgment against B. The law in
Y does not provide for statutory damages or for
punitive or enhanced damages. Y’s court recognizes
X’s judgment and enforces X’s judgment up to theamount that Y’s court considers to be compensatory,
which in the view of Y’s court includes not only
damages but also litigation costs.

42 A requested court will apply its own law to determine
what parts of damages awarded by a rendering court
are to be considered compensatory. When assessing
a compensatory amount, the requested court might,
if such determination is consistent with its own
law, include amounts such as attorneys’ fees andother litigation costs.49 The fact that a rendering
court designates a certain part of damages as“compensatory,” “statutory,” “exemplary,” or“punitive” should have no effect on the decisionof a requested court.50 Also, a rendering court’s
designation of damages as “compensatory” does
not require a requested court to find such damages
to be non-penal in nature; the requested court may
still find such damages to be penal in nature if thedamages exceed an amount that the requested court
would consider to be compensatory.51

Hypothetical 2
A sues B for patent infringement in State X. X’s court
issues a judgment in which the court orders B topay damages and to apologize publicly. The publicapology must follow specific rules in X; it must beoral and it must be televised. Subsequently, A asks acourt in State Y – the court of B’s habitual residence– to recognize and enforce X’s judgment. Y’s court(a) recognizes X’s judgment, (b) serves and enforces
the part of the judgment concerning damages, and(c) adapts the order of public apology to correspondto a type of order known in Y – an order to have thejudgment published in a major daily newspaper at
B’s expense.
Severability

Unknown Measures

40 The Guidelines prefer maximum recognition andenforcement; if part of a foreign judgment cannot berecognized and/or enforced, for example because of
the public policy exception formulated in Guideline34(1)(a), the remainder of the judgment should be,whenever possible, severed and recognized and/or enforced separately under Guideline 35(1).46 A
denial of recognition and enforcement of part of ajudgment should not automatically result in a denialof recognition and/or enforcement of the entire
judgment.47

43 A rendering court’s judgment may include
injunctions and other measures (“measures”) thatare unknown to the legal system of the requested
State. A requested court may deny recognition andenforcement of such measures on public policy
grounds under Guideline 34(1)(a) if circumstances
call for the application of the ground. Guideline
35 provides for an additional scenario in which ameasure is not manifestly incompatible with arequested State’s fundamental public policy but themeasure does not exist in the law of the requested

Non-Compensatory Damages
41 If a rendering court awards non-compensatory
damages, and the law of the requested State considers
such damages to be penal in nature and therefore
unrecognizable and unenforceable in the requested
46

Article 4:102(6) CLIP Principles; Article 402 Joint KoreanJapanese Principles; Article 404(1) Transparency Proposal.

47

Article 4:703(3) CLIP Principles (“Enforcement takes placein accordance with the law of the requested State and to theextent provided by such law”).

1

83

48

§ 411(2) ALI Principles; Article 4:402(1) CLIP Principles. See
examples of judgments granted by courts in Germany, Italy,
Japan, and Spain that are mentioned in CLIP comment 4:402.
C05 on p. 444.

49

§ 411(2) ALI Principles and comment e on § 411 on p. 189;
CLIP Article 4:402(2).

50§ 411(1) ALI Principles. Cf. ALI Principles note b on § 411 on
p. 188.

51

CLIP Principles comments 4:402.C07 and C.08 on p. 445.

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Kyoto Guidelines: Recognition and Enforcement
47 Guideline 35(4) attaches only inter partes effects
to such decisions, meaning that the decisions arebinding only for the parties to the particular dispute.57
The judgments do not result in cancellation of the
grant or registration or removal of the intellectual
property rights from the registries; validity decisions
under Guideline 35(4) affect only the relations
between or among the parties in the dispute.

State.52 Such unknown measures may present
insurmountable enforcement difficulties – either
immediately (a measure cannot be implemented)
or in the future (e.g., a requested court has no means
to achieve the effective enforcement of a measurein the future).
44 The unavailability of a particular measure thatis ordered by a rendering court should not
automatically result in the denial of recognition
and/or enforcement of an entire judgment.53 Rather,a requested court may under Guideline 35(3) identify
a measure that is available under the requested
State’s law, has equivalent effects when comparedwith similar measures in the foreign judgment, andpursues goals similar to the goals of the measurein the foreign judgment; the requested court may
then replace the foreign-ordered measure with therequested State’s measure.

48 Rights are considered to be “registered” only if aregistration or grant is necessary for the right tovest. An optional registration does not convert
unregistered intellectual property rights into
registered rights; for example, the fact that
unregistered well-known marks or copyrights may
be registered in some States does not convert therights into registered rights if registration is not
required for the existence of the rights in the State.58
49 Other decisions on the validity of intellectual
property rights made in judgments that are definedin Guideline 2 will be recognized and enforced andwill have erga omnes effects,59 namely: (1) A validity
decision concerning an unregistered intellectual
property right, such as copyright, regardless ofwhich State’s court rendered the decision; and (2) avalidity decision concerning a registered intellectual
property right if the decision was rendered by acourt in the State where such right was granted orregistered. Decisions on validity that are not includedin judgments, such as preliminary assessments ofpatent validity that are not included in judgments,
are not subject to recognition and enforcement
under the Guidelines.

45 The adaptation under Guideline 35(3) should bebased on a requested court’s assessment of theparticular circumstances; the adaptation should
not be a mechanical exercise in which the requested
court ignores the circumstances of the particularcase. While replacing one foreign measure with aparticular similar measure in the requested Statemight be suitable in some cases, the same adaptation
might not work in other cases. In some cases arequested court may award monetary relief in lieu ofenforcing a measure ordered by a rendering court if
no measure with equivalent effects is available in therequested State.54 The requested court may use thisprovision to adapt global injunctions to measuresavailable in the requested State.55

50 Issues associated with circumstances underwhich an intellectual property right is found to
be invalid after the right had been found to be
infringed are to be governed by national laws
unless they fall within the scope of the Guidelines.60

Decisions on the Validity of Registered Rights
46 Guideline 35(4) concerns decisions on the validityof intellectual property rights, but only if three
conditions are met: (1) the decision is in a judgment
as defined in Guideline 2; (2) the decision concernsa registered intellectual property right, such as apatent, a registered trademark, or a registered
design; and (3) the rendering court is not a court of
the State where the right was registered or granted.
Guideline 35(4) covers such decisions, regardless ofwhether they invalidate the intellectual property
right or confirm its validity.56

by:Pedro de Miguel Asensio
Prof. Dr. iur., LL.M. (Amsterdam), Professor of Private
International Law, Universidad Complutense de Madrid,
contact: pdmigue@ucm.es
57

Article 404(2) Transparency Proposals..

58

Under U.S. law, copyright registration is required to file a
copyright infringement lawsuit and for other purposes, but
it is not a condition of the existence of copyright, whichvests automatically upon the fixation of a work in a tangible
medium of expression.

52

CLIP Principles comment 4:703.C05 on p. 465.

53

Cf. Article 403 Joint Korean-Japanese Principles.

54

ALI Principles comment d on § 412 on pp. 191-192.

55

CLIP Principles comment 4:102.C10 on pp. 401-402.

59

See § 413(1) ALI Principles; Article 4:202 CLIP Principles.

56

Cf. § 413(2) ALI Principles; Article 404 Joint Korean-Japanese
Principles.

60

CLIP Principles comments 4:202.C07 – 4:202.C09 on pp. 419420.

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Pedro de Miguel Asensio and Marketa Trimble

Marketa Trimble
J.S.D. (Stanford), J.S.M. (Stanford), Samuel S. Lionel
Professor of Intellectual Property Law, William S. Boyd
School of Law, University of Nevada, contact: marketa.
trimble@unlv.edu

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Annex

Annex
Guidelines on Intellectual Property andPrivate International Law (“Kyoto Guidelines”)
by ILA Committee on Intellectual Property and Private International Law© 2021 ILA Committee on Intellectual Property and Private International Law
Everybody may disseminate this article by electronic means and make it available for download under the terms andconditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: ILA Committee on Intellectual Property and Private International Law, Kyoto Guidelines, 12 (2021)
JIPITEC 86 para 1

enhance the cross-border recognition and enforcementof judgments in civil and commercial matters involving
intellectual property claims;

RESOLUTION 6/2020

BELIEVING that the adoption of model provisions on
the private international law aspects of intellectual
property, which may guide the interpretation and reformof national legislation and international instruments,
contributes to the building of a more reliable andpredictable legal framework;

ILA COMMITTEE ON INTELLECTUAL
PROPERTY AND PRIVATEINTERNATIONAL LAW

TAKING INTO ACCOUNT the development ofinternational, regional and national rules, as well as
the previous efforts to draft model provisions in thisfield, especially those undertaken by the American Law
Institute, the European Max Planck Group on Conflicts ofLaws in Intellectual Property, the Japanese Transparency
Project, and members of the Private International Law
Association of Korea and Japan;

The 79th Conference of the International Law Association,
held in Kyoto, Japan, November 29 – December 13, 2020:

RECOGNIZING that the enforcement of intellectual
property rights in the global context of the informationsociety raises new challenges to the traditional models of
structuring transactions and adjudicating international
disputes;

HAVING CONSIDERED the reports of the Committee onIntellectual Property and Private International Law;
ADOPTS the Kyoto Guidelines on Intellectual Property
and Private International Law annexed to this Resolution;

APPRECIATING the importance and benefits of providing
legal certainty with regard to the jurisdiction of courts
and the law applicable, as well as fostering cooperation to
1

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ILA Committee on Intellectual Property and Private International Law
2. “Judgment” means any judgment rendered bya court or tribunal of any State, irrespectiveof the name given by that State to theproceedings that gave rise to the judgment or
the name given to the judgment itself, such as
decree, order, decision, or writ of execution.
“Judgment” also includes court-approved
settlements, provisional and protective
measures, and the determination of costs or
expenses by an officer of the court.

COMMENDS the Guidelines to organizations, Statesand interested groups that are working on national,
regional or international initiatives in the field, with aview to foster international cooperation, achieve greater
legal certainty and an adequate balance of all interests
involved;
REQUESTS the Secretary-General of the International
Law Association to forward a copy of this Resolution andits annex to appropriate international organizations, inparticular the Hague Conference of Private International
Law and WIPO;

Jurisdiction

RECOMMENDS to the Executive Council that theCommittee on Intellectual Property and Private
International Law, having accomplished its mandate,be dissolved.

Basic Forum
3. Defendant’s Forum

ANNEX

Unless otherwise provided for in these Guidelines,
the defendant should be subject to the jurisdictionof the courts of the State in which he or she ishabitually resident. The courts’ jurisdiction shallbe territorially unlimited.

Guidelines on Intellectual Property
and

Alternative Fora

Private International Law (“Kyoto

4. Contracts

Guidelines”)

In disputes concerning intellectual property
license or transfer contracts, a person may besued in the courts of the State for which thelicense is granted or the right is transferred; thecourt’s jurisdiction shall be territorially limited
to the State in which the court is situated.

General Provisions
1. Scope of the Guidelines

5. Infringements

1. These Guidelines apply to civil andcommercial matters involving intellectual
property rights that are connected to morethan one State.

In a case of an alleged infringement a person may
be sued:2. These Guidelines may be applied mutatis
mutandis to claims based on unfair
competition, if the matter arises from thesame set of facts as relating allegations
involving intellectual property rights, andon the protection of undisclosed information.

a) In the courts of the States where the alleged
infringer has acted to initiate or further
the alleged infringement; the courts’jurisdiction to award remedies arisingfrom those acts shall be territoriallyunlimited; orb) In the courts of the States where theinfringement may have caused direct
substantial harm unless it could not
be anticipated that the infringement
would cause that harm there; the courts’jurisdiction shall be territorially limited
to the State in which the court is situated.

2. Definitions
1.

1“Intellectual property right” means copyrightand related rights, patent, utility model,
plant breeder’s right, industrial design,
layout-design (topography) of integrated
circuits, trademark and similar rights.

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Annex6. Statutory Remuneration for the Useof Works or Subject-Matter of Related
Rightsrelationship unless the parties express theirintent to restrict the court’s jurisdiction. Suchjurisdiction shall be exclusive unless the parties
have agreed otherwise.

In cases concerning disputes on a statutory
remuneration for the lawful use of copyrighted
works or the subject-matter of related rights, aperson may be sued in the courts of the State
where the right to remuneration accrues; thecourt’s jurisdiction shall be territorially limited
to the State in which the court is situated.

10. Submission and Appearance
A court shall have jurisdiction if the defendant
appears and does not contest jurisdiction in thefirst defense.

7. Consolidation

11. Validity Claims and Related
Disputes

A plaintiff bringing an action against a defendantin a court of the State in which the defendantis habitually resident in accordance with
Guideline 3 may proceed in that court against
other defendants not habitually resident in that
State if –1. In proceedings which have as their main
object the grant, registration, validity,
abandonment, or revocation of a registeredintellectual property right the court of theState of registration shall have exclusive
jurisdiction.

a) The dispute involves the same or
substantially related intellectual property
rights granted for one or more States, and

2. Any other court having jurisdiction may
decide on these matters when they arise inproceedings other than those referred to inparagraph 1. However, the resulting decision
shall not have any effect on third parties.

b) The claims against the defendant
habitually resident in that State and theother defendants are so closely connectedthat they should be adjudicated together
to avoid a serious risk of inconsistentjudgments, and12. Declaratory Actions
A court may hear an action for a negative or apositive declaration on the same ground as acorresponding action seeking substantive relief.

a) As to each defendant not habituallyresident in that State, there exists a
substantial connection between theintellectual property rights at issue andthe dispute involving that defendant.

13. Provisional and Protective
Measures
1. A court having jurisdiction as to the meritsof the case shall have jurisdiction to orderprovisional and protective measures.

8. Title and Ownership
In cases concerned only with title and ownership,
the court of the State where the intellectual
property right exists or for which application ispending shall have jurisdiction.

2. Other courts shall have jurisdiction to orderprovisional and protective measures within
their territory.

Other Fora

14. Scope of Injunctions
The scope of an injunction is limited by the extent
of the jurisdiction of the court. In addition, thescope shall not be broader than necessary toprotect the intellectual property rights enforced.

9. Choice of Court
The parties to a particular relationship may
designate in an agreement a court to havejurisdiction over any dispute that has arisen or
may arise in connection with that relationship.
The chosen court shall have jurisdiction to decide
all contractual and non-contractual obligations
and all other claims arising from that legal
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15. Counterclaimsin the court first seized does not proceedwithin a reasonable time or this court
concludes that it is not the appropriate
forum to hear the dispute.

A court which has jurisdiction to determine aclaim under these Guidelines shall also havejurisdiction to determine a counterclaim arisingout of the same set of facts on which the original
claim is based.

b) Where the court that is not first seized
has authority to dismiss on forum nonconveniens grounds or to transfer to amore convenient forum, it shall consider
which court is the most convenient forum,taking into account the private interestsof the litigants, the interests of the public,
and administrative issues. If the court
first seized is more convenient, the court
second seized shall dismiss or transfer
the case unless the court first seized has
dismissed or transferred the case.

16. Insufficient Grounds for Jurisdiction
Insufficient grounds for exercising jurisdiction
include inter alia:a) the presence of (any) assets, physical or
intellectual property, or a claim of the
defendant in a State, except when thedispute is directly related to that asset;

2. This Guideline does not apply if:b) the nationality of the plaintiff or the
defendant;a) the proceeding is within the exclusive
jurisdiction of the court subsequently
seized;c) the mere residence of the plaintiff in that
State;b) the proceeding is for provisional orprotective measures; ord) the mere conduct of commercial or otheractivities by the defendant in that State,
except when the dispute is related to those
activities;c) it is shown by the party invoking thejurisdiction of the court subsequently
seized that a judgment of the court first
seized would not be recognized in theState of the court subsequently seized.

e) the mere presence of the defendant or theservice of process upon the defendant inthat State; or

18. Related Proceedingsf) the completion in that State of theformalities necessary to execute anagreement.

Where related proceedings are pending in
the courts of more than one State, any of thecourts may take any step permitted by its own
procedures that will promote the fair and efficient
resolution of the related proceedings considered
as a whole. The scope of this guideline includes
both consolidating proceedings in one court
and coordinating the conduct of proceedings indifferent courts.

Coordination and Cooperation
17. Proceedings Between the Same
Parties on the Same Cause of Action
1. Where proceedings between the same parties
on the same cause of action are brought inthe courts of more than one State, suchcourts shall consider the coordination ofproceedings in the following terms:

Applicable Law
General Rulesa) Where the court that is not first seized has
authority to suspend its proceedings on
grounds of lis pendens, it shall do so until
such time as the jurisdiction of the court
first seized is established, and thereafter
it shall terminate its proceedings. A
suspension may be lifted if the proceedings

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19. Existence, Scope and Transferability(lex loci protectionis)
The law applicable to determine the existence,
validity, registration, duration, transferability,
and scope of an intellectual property right, andall other matters concerning the right as such,

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Annexa) if the contract deals with intellectual
property granted for one State only, by
the law of this State, unless it is clear
from all the circumstances of the case thatthe contract is manifestly more closely
connected with another State. Then thelaw of that other State shall apply;is the law of the State for which protection issought.

20. Initial Ownership and Allocation of
Rights(1) (a) Initial ownership in registered intellectual
property rights, unregistered trademarks andunregistered designs is governed by the law of
the State for which protection is sought.

b) if the contract deals with intellectual
property granted for more than one
State, by the law of the State with which
the contract is most closely connected; indetermining this State, the court shall take
into consideration among other possible
factors:(b) In the framework of a contractual relationship,in particular an employment contract or a
research and development contract, the law
applicable to the right to claim a registeredintellectual property right is determined inaccordance with Guidelines 21 to 23.

-(2) (a) Initial ownership in copyright is governedby the law of the State with the closest connection
to the creation of the work. This is presumed tobe the State in which the person who createdthe subject-matter was habitually resident at
the time of creation. If the protected subjectmatter is created by more than one person, they
may choose the law of one of the States of theirhabitual residence as the law governing initialownership. This paragraph applies mutatis
mutandis to related rights.

-

2. For the purpose of this provision, the habitualresidence of a party shall be determined at
the time of conclusion of the contract.

23. Employment Contracts(b) If the underlying policy of the law of the Statefor which protection is sought so requires evenin international situations, the allocation ofrights which cannot be transferred or waived isgoverned by the law of that State.

1. An employer and its employee whose efforts
give rise to an intellectual property right may
choose the law governing their contractual
relationship in accordance with Guideline 21.
Such a choice of law shall not, however, havethe result of depriving the employee of theprotection afforded to him by the provisions
that cannot be derogated from by agreement
under the law that, in the absence of choice,would be applicable pursuant to paragraphs
2 and 3.

Contracts
21. Freedom of Choice
1. Parties may choose the law governing theircontractual relationship.

2. In the absence of choice of law by theparties, the contractual relationship between
employer and employee shall be governed by
the law of the State in which or, failing that,from which the employee habitually carries
out his work in performance of the contract.

2. Such a choice of law shall not, however,
have the result of depriving the creatoror performer of the protection afforded tohim/her by the provisions that cannot bederogated from by agreement under the law
that, in the absence of choice, would havebeen applicable pursuant to Guideline 22.

3. The State where the work is habitually carriedout shall not be deemed to have changed if
the employee is temporarily employed inanother State. Where it is clear from all thecircumstances of the case that the contract
is more closely connected with a State otherthan that indicated in paragraph 2, the lawof that other State shall apply.

22. Absence of Choice
1. In the absence of choice of law by the parties
pursuant Guideline 21, a contract other thanan employment contract shall be governed,1

the common habitual residence ofthe parties;
the habitual residence of theparty effecting the performance
characteristic of the contract;
the habitual residence of one of theparties when this habitual residence
is located in one of the States coveredby the contract.

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24. Formal Validity

2. In situations where paragraph (1) is applied,
any party may prove that, with respect toparticular States covered by the action, thesolution provided by any of those States’ laws
differs from that obtained under the law(s)chosen to apply to the case as a whole. The
court must take into account such differences
when fashioning the remedy.

1. Any contract dealing with intellectual
property rights shall be formally valid
to the extent that it satisfies the formal
requirements:a) of the law of the State which governs thecontract pursuant Guidelines 21-23, or

3. Paragraphs (1) and (2) above may apply
mutatis mutandis in cases of secondary
or indirect infringements of intellectual
property rights.

b) of the law of the State in which either ofthe parties has its habitual residence atthe time of the conclusion of the contract,orc) of the law of any other State with which
the contract is connected.

27. Collective Rights Management in
the Field of Copyright and Related
Rights

2. This provision shall not deprive creators,
performers and employees of the protection
resulting from Guideline 21 paragraph 2 andGuideline 23, paragraph 1.

1. The law of the State where a collective rights
management organization has its actual seatof administration shall govern

Infringementsa) the requirements for the specific corporate
structure of collective rights management
organizations;25. Basic Rule on Infringementb) the rights, conditions and principles
concerning the relationship of the rightholder, as well as of another collective rights
management organization representing
right holders, vis-à-vis a collective rights
management organization, such as

1. The law applicable to the infringement of an
intellectual property right is the law of eachState for which protection is sought.
2. The law applicable to the remedies for the
infringement may be chosen by the parties.

(i) the right and conditions for becoming
a member of this organization;

26. Law Applicable to Ubiquitous orMulti-state Infringements(ii) therightandconditions
for entrusting rights to thisorganization;

1. When the infringement in multiple Statesis pleaded in connection with the use of
ubiquitous or multinational media, the court
may apply to the infringement as a whole
the law or laws of the State(s) having anespecially close connection with the global
infringement. Relevant factors to determine
the applicable law (or laws) in these situations
include:1-

the place where the harm caused by
the infringement is substantial in
relation to the infringement in its
entirety;-the parties’ habitual residences or
principal places of business;-the place where substantial activities
in furthering the infringement havebeen carried out.

(iii) the rights and conditions forwithdrawing the management ofrights from this organization;(iv) the requirements regarding the
calculation and distribution of
the organization’s revenue to theright holders and other collective
rights management organizations
representing right holders; and(v) the rights and conditions on accessto alternative dispute resolution to
be offered by the collective rights
management organization; and

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Annex30. Renvoic) in absence of a choice of law by the parties,
the contract under which the right holder
entrusts rights to this organization.

The application of the law of any State determined
under these Guidelines means the application of
the rules of law in force in that State other than
its rules of private international law.

2. The law of the State for which protection issought shall governa) the presumption that a collective rights
management organization is empowered
to seek protection for certain works or
subject-matter of related rights;

31. Arbitrability
When assessing the arbitrability of disputes
concerning intellectual property rights,
courts and arbitral tribunals shall take into
consideration the law of the arbitration, to theextent that the rights in dispute have a close
connection with it, and that of the State ofprotection, particularly insofar as the award has
to be recognized and enforced in that State.

b) mandatory collective rights management;c) the power of an individual collective
rights management organization to grant
licenses or collect statutory remuneration
without prior consent of the right holder;d) the issue of whether and under which
conditions a collective rights management
organization has to license rights to users;
andRecognition and Enforcement
32. Object of Recognition and
Enforcemente) the requirements regarding the calculation of the royalty rates and statutory
remuneration.

1. A foreign judgment may be recognized andenforced in accordance with this part of the
Guidelines.

3. The law of the forum shall govern legal
standing of a collective right management
organization before a court.

2. If a judgment is still subject to appeal in
the State of the rendering court, or if theperiod for launching ordinary review has
not expired in that State, the requested court
may stay the recognition and enforcement
until the appeal is decided or the period
expires, or may make it a condition of therecognition and enforcement that the party
seeking it provide security.

4. This guideline applies without prejudice tothe applicable competition law rules.

Other Provisions
28. Public Policy
The application of the law determined underthese Guidelines may be refused only to the extent
that its effects would be manifestly contrary to
the public policy of the forum.

3. Provisional and protective measures adopted
without prior hearing of the adverse party
and enforceable without prior service ofprocess to that party shall not be recognized
or enforced.

29. Overriding Mandatory Provisions

33. Effects of a Foreign Judgment

1. Nothing in these Guidelines shall restrict
the application of the overriding mandatory
provisions of the law of the forum.

The effects of a foreign judgment, including
its enforceability, in the requested State shallto the extent possible be the same, and underno circumstances greater, than in the State oforigin.

2. When applying under these Guidelines thelaw of a State to a contract, the court may
give effect to the law of another State where
the obligations arising out of the contract
have to be or have been performed.

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34. Grounds for Non-Recognition and
Non-Enforcement

35. Partial and Limited Recognition
and Adaptation

1. A court shall not recognize and enforce aforeign judgment if:

1. If a foreign judgment contains elements thatare severable, one or more of them may beseparately recognized and enforced.

a) such recognition or enforcement would
be manifestly incompatible with afundamental public policy of the requested
State;

2. If a foreign judgment awards non-compensatory, including exemplary or punitive, damages that are not available under the law of
the requested State, recognition and enforcement may be refused if, and only to the extent that, the judgment awards damages that
do not compensate a party for actual loss orharm suffered and exceed the amount ofdamages that could have been awarded by
the courts of the requested State.

b) the proceedings leading to the judgment
were manifestly incompatible with thefundamental principles of procedural
fairness of the requested State;c) the judgment was rendered by default
where

3. If a judgment contains a measure that is notknown in the law of the requested State,that measure shall, to the extent possible,
be adapted to a measure known in the lawof the requested State that has equivalenteffects attached to it and that pursues similaraims and interests.

(i) the defendant to the proceeding was
not adequately and timely notifiedof the proceeding, or(ii) the defendant was deprived ofan adequate and meaningful
opportunity to present its casebefore the rendering court;

4. If a foreign judgment includes a decision
concerning the validity of a registeredintellectual property right and the rendering
court is not a court of the State of registration,
the decision on the validity shall be effective
only between the parties to which the foreign
judgment pertains.

d) the judgment is inconsistent with a priorjudgment rendered in the requested State
that has preclusive effect;e) the judgment is inconsistent with anearlier judgment given in another Statebetween the same parties and having thesame cause of action, provided that theearlier judgment fulfils the conditions
necessary for its recognition in therequested State;f) the rendering court exercised jurisdiction
in violation of the rules of jurisdiction
under these Guidelines.
2. A court may decline to recognize and enforce
a foreign judgment if the rendering court
designated the applicable law in violationof the rules in Guidelines 20 – 24 protecting
creators, performers and employees.
3. In assessing the rendering court’s
jurisdiction, the requested court is bound by
the findings of fact made by the rendering
court in the original proceeding.
4. Without prejudice to such review as may benecessary for the application of Guidelines
33 and 34, the requested court shall not review a foreign judgment as to its merits.

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Journal ofIntellectual Property,
Information Technology,
and Electronic CommerceLawwww.jipitec.eu