Opinion ID: 670596
Heading Depth: 2
Heading Rank: 2

Heading: The Extraterritoriality of the Copyright Act

Text: 27 Appellees additionally contend that, if liability for authorizing acts of infringement depends on finding that the authorized acts themselves are cognizable under the Copyright Act, this court should find that the United States copyright laws do extend to extraterritorial acts of infringement when such acts result in adverse effects within the United States. Appellees buttress this argument with the contention that failure to apply the copyright laws extraterritorially in this case will have a disastrous effect on the American film industry, and that other remedies, such as suits in foreign jurisdictions or the application of foreign copyright laws by American courts, are not realistic alternatives. 28 We are not persuaded by Appellees' parade of horribles. 10 More fundamentally, however, we are unwilling to overturn over eighty years of consistent jurisprudence on the extraterritorial reach of the copyright laws without further guidance from Congress. 29 The Supreme Court recently reminded us that [i]t is a long-standing principle of American law 'that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.'  EEOC v. Arabian American Oil Co. (Aramco ), 499 U.S. 244, 248, 111 S.Ct. 1227, 1230, 113 L.Ed.2d 274 (1991) (quoting Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69 S.Ct. 575, 577, 93 L.Ed. 680 (1949)). Because courts must assume that Congress legislates against the backdrop of the presumption against extraterritoriality, unless there is 'the affirmative intention of the Congress clearly expressed'  congressional enactments must be presumed to be  'primarily concerned with domestic conditions.'  Id. 499 U.S. at 248, 111 S.Ct. at 1230 (quoting Foley Bros., 336 U.S. at 285, 69 S.Ct. at 577 and Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147, 77 S.Ct. 699, 704, 1 L.Ed.2d 709 (1957)). 30 The undisputed axiom, 3 Nimmer, supra, Sec. 12.04[A][b], at 12-86, that the United States' copyright laws have no application to extraterritorial infringement predates the 1909 Act, see, e.g., United Dictionary Co. v. G. & C. Merriam Co., 208 U.S. 260, 264-66, 28 S.Ct. 290, 290-91, 52 L.Ed. 478 (1908) (Holmes, J.), and, as discussed above, the principle of territoriality consistently has been reaffirmed, see, e.g., Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657, 662 (2d Cir.1955) (citing American Code Co. v. Bensinger, 282 F. 829, 833 (2d Cir.1922) (The copyright laws of one country have no extraterritorial operation, unless otherwise provided. (citing Ferris v. Frohman, 223 U.S. 424, 32 S.Ct. 263, 56 L.Ed. 492 (1912)))); sources cited supra pp. 1093-94. There is no clear expression of congressional intent in either the 1976 Act or other relevant enactments to alter the preexisting extraterritoriality doctrine. Indeed, the Peter Starr court itself recognized the continuing application of the principle that infringing actions that take place entirely outside the United States are not actionable in United States federal courts. Peter Starr, 783 F.2d at 1442 (citing Robert Stigwood, 530 F.2d at 1101). 31 Furthermore, we note that Congress chose in 1976 to expand one specific extraterritorial application of the Act by declaring that the unauthorized importation of copyrighted works constitutes infringement even when the copies lawfully were made abroad. See 17 U.S.C.A. Sec. 602(a) (West Supp.1992). 11 Had Congress been inclined to overturn the preexisting doctrine that infringing acts that take place wholly outside the United States are not actionable under the Copyright Act, it knew how to do so. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 440, 109 S.Ct. 683, 691, 102 L.Ed.2d 818 (1989) (When it desires to do so, Congress knows how to place the high seas within the jurisdictional reach of a statute. (quoted in Aramco, 499 U.S. at 258, 111 S.Ct. at 1235)). Accordingly, the presumption against extraterritoriality, far from being overcome here, is doubly fortified by the language of [the] statute, Smith v. United States, --- U.S. ----, ----, 113 S.Ct. 1178, 1183, 122 L.Ed.2d 548 (1993) (quoting United States v. Spelar, 338 U.S. 217, 222, 70 S.Ct. 10, 13, 94 L.Ed. 3 (1949)), as set against its consistent historical interpretation. 32 Appellees, however, rely on dicta in a recent decision of the District of Columbia Circuit for the proposition that the presumption against extraterritorial application of U.S. laws may be overcome when denying such application would result in adverse effects within the United States. Environmental Defense Fund, Inc. v. Massey, 986 F.2d 528, 531 (D.C.Cir.1993) (noting that the Sherman Act, Lanham Act, and securities laws have been applied to extraterritorial conduct). 12 However, the Massey court did not state that extraterritoriality would be demanded in such circumstances, but that the presumption is generally not applied where the failure to extend the scope of the statute to a foreign setting will result in adverse [domestic] effects. Id. at 531 (emphasis added). In each of the statutory schemes discussed by the Massey court, the ultimate touchstone of extraterritoriality consisted of an ascertainment of congressional intent; courts did not rest solely on the consequences of a failure to give a statutory scheme extraterritorial application. 13 More importantly, as the Massey court conceded, see id. at 532-33, application of the presumption is particularly appropriate when [i]t serves to protect against unintended clashes between our laws and those of other nations which could result in international discord, Aramco, 499 U.S. at 248, 111 S.Ct. at 1230 (citing McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 20-22, 83 S.Ct. 671, 677-78, 9 L.Ed.2d 547 (1963)). 14 33 We believe this latter factor is decisive in the case of the Copyright Act, and fully justifies application of the Aramco presumption even assuming arguendo that adverse effects within the United States generally would require a plenary inquiry into congressional intent. At the time that the international distribution of the videocassettes in this case took place, the United States was a member of the Universal Copyright Convention (UCC), and, in 1988, the United States acceded to the Berne Convention for the Protection of Literary and Artistic Works (Berne Conv.). The central thrust of these multilateral treaties is the principle of national treatment. A work of an American national first generated in America will receive the same protection in a foreign nation as that country accords to the works of its own nationals. See UCC Art. II; Berne Conv. Art. V. See generally 1 International Copyright Law and Practice, Intr. Sec. 5, at 145-74 (Paul E. Geller & Melville B. Nimmer eds., 1993) [hereinafter Geller & Nimmer]; Stephen M. Stewart, International Copyright and Neighboring Rights 37-48 (2d ed. 1989). Although the treaties do not expressly discuss choice-of-law rules, see Geller & Nimmer, supra, Intr. Sec. 6, at 181-83, 189, 15 it is commonly acknowledged that the national treatment principle implicates a rule of territoriality. See London Film Prods. Ltd. v. Intercontinental Communications, Inc., 580 F.Supp. 47, 50 n. 6 (S.D.N.Y.1984); see also 3 Nimmer, supra, Sec. 17.05, at 17-39 (The applicable law is the copyright law of the state in which the infringement occurred, not that of the state of which the author is a national or in which the work was first published.). See generally Geller & Nimmer, supra, Intr. Sec. 6, at 182; Stewart, supra, at 46-47. Indeed, a recognition of this principle appears implicit in Congress's statements in acceding to Berne that [t]he primary mechanism for discouraging discriminatory treatment of foreign copyright claimants is the principle of national treatment, H.R.Rep. No. 609, 100th Cong., 2d Sess. 43 [hereinafter House Report], and that adherence to Berne will require careful due regard for the[ ] values of other member nations, id. at 20. 34 In light of the Aramco Court's concern with preventing international discord, we think it inappropriate for the courts to act in a manner that might disrupt Congress's efforts to secure a more stable international intellectual property regime unless Congress otherwise clearly has expressed its intent. The application of American copyright law to acts of infringement that occur entirely overseas clearly could have this effect. Extraterritorial application of American law would be contrary to the spirit of the Berne Convention, and might offend other member nations by effectively displacing their law in circumstances in which previously it was assumed to govern. Consequently, an extension of extraterritoriality might undermine Congress's objective of achieving  'effective and harmonious' copyright laws among all nations. House Report, supra, at 20. Indeed, it might well send the signal that the United States does not believe that the protection accorded by the laws of other member nations is adequate, which would undermine two other objectives of Congress in joining the convention: strengthen[ing] the credibility of the U.S. position in trade negotiations with countries where piracy is not uncommon and rais[ing] the like[li]hood that other nations will enter the Convention. S.Rep. 352, 100th Cong., 2d Sess. 4-5, reprinted in 1988 U.S.C.C.A.N., 3706, 3709-10. 16 35 Moreover, although Appellees contend otherwise, we note that their theory might permit the application of American law to the distribution of protected materials in a foreign country conducted exclusively by citizens of that nation. A similar possibility was deemed sufficient in Aramco to find a provision that, on its face, appeared to contemplate that Title VII would be applied overseas, insufficient to rebut the presumption against extraterritoriality. See Aramco, 499 U.S. at 254, 111 S.Ct. at 1234. Of course, under the Berne Convention, all states must guarantee minimum rights, see Berne Conv. Art. IV; Stewart, supra, at 39-40, and it is plausible that the application of American law would yield outcomes roughly equivalent to those called for by the application of foreign law in a number of instances. Nonetheless, extending the reach of American copyright law likely would produce difficult choice-of-law problems, cf. House Report, supra, at 43 ([Berne] does not, however, require all countries to have identical legal systems and procedural norms.), dilemmas that the federal courts' general adherence to the territoriality principle largely has obviated. See 3 Nimmer, supra, Sec. 17.05, at 17-39 (noting that the national treatment principle has resulted in the absence of [c]onflicts of law problems ... in the law of copyright); see also 2 Goldstein, supra, Sec. 16.2, at 681-82, Sec. 16.3, at 683. Even if courts, as a matter of comity, would assert extraterritorial jurisdiction only when the effects in the United States and the contacts of the offending party with this country are particularly strong, cf. Timberlane Lumber Co. v. Bank of Am., N.T. & S.A., 549 F.2d 597, 615 (9th Cir.1976), cert. denied, 472 U.S. 1032, 105 S.Ct. 3514, 87 L.Ed.2d 643 (1985), that the assertion of such jurisdiction would engender new and troublesome choice-of-law questions provides a compelling reason for applying the Aramco presumption. Cf. Massey, 986 F.2d at 533 (noting that the absence of  'choice of law' dilemmas in applying the National Environmental Policy Act to projects in Antarctica provided a reason for not applying the presumption). 36 Accordingly, because an extension of the extraterritorial reach of the Copyright Act by the courts would in all likelihood disrupt the international regime for protecting intellectual property that Congress so recently described as essential to furthering the goal of protecting the works of American authors abroad, see supra note 10, we conclude that the Aramco presumption must be applied. Cf. Benz, 353 U.S. at 147, 77 S.Ct. at 704 (For us to run interference in such a delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed.). Because the presumption has not been overcome, we reaffirm that the United States copyright laws do not reach acts of infringement that take place entirely abroad. It is for Congress, and not the courts, to take the initiative in this field.