Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio
Chapter I.11: Intellectual property, applicable law
I. Concept and notion
The concept of intellectual property comprises all subjective rights over intangible or incorporeal goods, ie creations of the human mind, that may be invoked erga omnes. The concept therefore includes not only copyright and neighbouring rights, but also industrial property, and p. 962particularly rights over distinctive signs such as trademarks, commercial names and designations of origin, as well as intellectual creations concerning industrial products or their appearance such as inventions and design. It further covers sui generis rights over certain incorporeal objects, such as topographies of integrated circuits, databases, domain names, plant varieties and traditional knowledge. In contrast, trade secrets, to the extent they are protected only by the rules on unfair competition and not by exclusive rights granted to their holders, do not qualify as objects of intellectual property.
II. Purpose and function
Intangible goods, which are devoid of physical existence, are incapable of being appropriated by anyone, although the tangible things in which they materialize (their corpus mechanicum), such as the copies of a novel or the machines produced under a patent, can be so. Unlike tangible goods, intangibles are ubiquitous. They may be used simultaneously by an unlimited number of persons without losing their properties. On the other hand, they cannot be possessed by a single person, which is why they are sometimes termed ‘public goods’. While the physical appropriation of a tangible good ensures its exclusive use and exploitation, in the case of intangible goods exclusivity requires that the law prohibits all other persons from using them, except for private purposes, and from exploiting them. This is the main function of intellectual property rules.
Exclusive rights over the use of intangible goods inevitably involve imposing restrictions upon competition and the free access of the members of the public to such goods. For this reason each legal system only usually grants those rights insofar as this is deemed to be socially useful, eg because that is the most effective way to stimulate intellectual creation or innovation. The prevailing notions as to the object, scope and content of those rights, as well as to the limitations and exceptions to which they are subject and the definition of who their original holders are, often differ from country to country. Each state therefore typically reserves for itself the prerogative of defining in what terms such rights are constituted, exercised and extinguished in its own territory. In cross-border situations, this raises the question of the extent to which intellectual property rights granted by one state may be enforced by the jurisdictions of another state. International intellectual property law addresses this problem.
III. Legal sources
Neither Roman law nor medieval law recognized exclusive rights on intangible goods. In the 15th century, after the invention of the printing press, European sovereigns began granting privileges to printers, and exceptionally also to authors of books and other intellectual works. Privileges concerning the exploitation of useful inventions were also granted in several European countries. However, the aims of these privileges were very different from those of contemporary copyrights and patents. Primarily, they were meant to compensate an investment, by protecting their beneficiaries from competition. They were also frequently a form of controlling the circulation of works and certain economic activities. This explains why they were ordinarily not granted to authors and inventors, but rather to those who reproduced or otherwise exploited their works or inventions. Moreover, those privileges were awarded discretionarily. One may therefore say that at the time intellectual creations were not the object of subjective rights.
It was only in the 18th century, when the pressure to protect authors and inventors mounted in Europe, that the idea was advanced that property should vest in the creators of intangible goods as naturally as it does in the owners of tangible goods. Thus, in 1790 Stanislas de Boufflers proclaimed, in his report to the French National Assembly on the draft new law on inventions, that ‘If a true property exists for a man, it is his thinking’. Further in the well-known words of Isaac Le Chapelier, drafter of the first French law on copyright: ‘The most sacred, the most legitimate, the most unassailable and, if I may say so, the most personal of all properties, is the work that is the outcome of a writer’s thinking’. The notion of intellectual property was thus born.
This notion blossomed in French law, which expressly adopted it in the law of 1791 concerning discoveries and inventions, as well as in the laws of 1791 and 1793 concerning, respectively, the right of public performance of literary works in theatres and the right of reproduction of literary and artistic works. It still prevails in modern French law. This is why the Code p. 963la propriété intellectuelle (French Intellectual Property Code, Act No 92–597 of 1 July 1992, as amended) states in art L-111-1: ‘L’auteur d’une œuvre de l’esprit jouit sur cette œuvre, du seul fait de sa création, d’un droit de propriété incorporelle exclusif et opposable à tous’.
According to this line of reasoning, authors’ rights stem from a fact, the creation of a work, and not from the law, which merely recognizes them as an emanation of the nature of things. Thus they vest in principle in the creator of that work. Due to French influence, this personalist notion of intellectual property was subsequently adopted by other countries of continental Europe and the rest of the world.
A different school of thought prevailed in common law countries. The recognition of intellectual property rights first took place in England by virtue of the Statute of Anne of 1710 (‘An Act for the Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors or Purchasers of such Copies, during the Times therein mentioned’, available at <www.copyrighthistory.com/anne.html>), which gave authors or their assignees, for a period of 14 years counting from the moment of the first publication, an exclusive right of reproduction (a ‘copyright’) over their literary works. This statute placed the emphasis on the commercial exploitation of works; and it made their protection dependent upon a registration prior to their publication. According to the statute’s preamble, its purpose consisted of ‘the encouragement of learned men to compose and write useful books’. The right enshrined in this statute was thus conceived as an incentive to create literary works, which the public could enjoy. It thus had a clearly utilitarian purpose. This concept of copyright was subsequently adopted by the United States Constitution, which proclaims in article 1(8) that ‘The Congress shall have power . . . to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries’. In England and in the USA copyright is thus not a natural right, but rather a monopoly granted by the law, which may only be exercised in the terms set out in legal rules. This is why in Donaldson v Beckett ( 1 ER 837) the House of Lords was able to reject the existence of a perpetual common law copyright and to hold instead that copyright was a creation of statute that could be limited in its duration. A utilitarian notion of intellectual property thus emerged.
Intellectual property law is currently one of the most internationalized branches of private law. Many of the most significant developments in this field during the past 100 years were the fruit of international treaties, including the Paris Industrial Property Convention (Paris Convention for the Protection of Industrial Property, 20 March 1883, with later amendments, 828 UNTS 305) and the Berne Convention (Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886, completed at Paris on 4 May 1896, revised at Berlin on 13 November 1908, completed at Berne on 20 March 1914, revised at Rome on 2 June 1928, revised at Brussels on 26 June 1948, revised at Stockholm on 14 July 1967 and revised at Paris on 24 July 1971, 1161 UNTS 3 and amended in 1979 Treaty Doc no 99-27, and 1985, 828 UNTS 221) of 1883 and 1886 respectively, the →TRIPS Agreement of 1994 (Agreement of 15 April 1994 on Trade-Related Aspects of Intellectual Property Rights, 1869 UNTS 299), the WIPO Internet Treaties of 1996 (WIPO Performances and Phonograms Treaty (WPPT) of 20 December 1996, WIPO Publication No 227 and WIPO Copyright Treaty (WCT) of 20 December 1996, WIPO Publication No 226) and, more recently, the Anti-Counterfeiting Trade Agreement (Anti-Counterfeiting Trade Agreement (ACTA) of 15 November 2010 (see text in Proposal for a Council Decision on the conclusion of the Agreement of 24 June 2011, COM(2011) 380 final)) concluded in 2010.
As a result of these developments, certain minimum standards concerning the protection of intellectual property rights have emerged, and are now adopted by most countries. Nevertheless, many significant differences remain between the common law and the civil law traditions. They concern among others (i) ownership of copyright in the case of works made for hire or in the course of employment, (ii) the extent to which originality may be required for the protection of intellectual creations, (iii) the scope of fair use and fair dealing, as well as of exceptions to copyright, (iv) the possibility of acquiring rights in trademarks without registration, (v) the patentability of computer programs, business methods and biotechnological inventions, (vi) the standards for determining the equivalence between a claimed invention and an allegedly infringing device and (vii) the possibility of awarding punitive or p. 964exemplary →damages in the case of an intellectual property infringement.
These differences do not merely reflect technical divergences between national legal systems. For the most part, they are the expression of divergent policies regarding the extent to which monopolies on intangible goods may be allowed, as well as the scope of the public domain (and hence of free competition) with regard to the use and exploitation of such goods. In some cases, national interests have also clashed in this field and prevented the adoption of uniform rules. In this regard it is sufficient to mention the 35-year long quest for a Unitary European Patent, which has only very recently borne its fruits. The ideal of a uniform, worldwide protection of intellectual property rights, which inspired the Universal Copyright Convention made in Geneva in 1952 (Geneva Universal Copyright Convention of 6 September 1952, as amended in Paris on 24 July 1971, 943 UNTS 194), thus remains largely unachieved.
In the EU, a geographically more restricted, but deeper, process of legal integration has occurred, thanks to the legal acts that have harmonized (and in some cases unified) Member States laws. This is notably the case of the 2001 Directive on copyright in the information society (Directive 2001/29/EC of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society  OJ L 167/10), the 2004 Directive on the enforcement of intellectual property rights (Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights  OJ L 157/45) and the 2008 Directive on trade marks (Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks  OJ L 299/25). In some cases, unitary, EU-wide exclusive rights were created by European legal acts, as was the case of the Community Design Regulation (Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs,  OJ L 3/1), the Community Trade mark Regulation (Council Regulation (EC) No 207/2009 of 26 February on the Community trade mark,  OJ L 78/1) and, more recently, the Regulation on a Unitary Patent Protection (Regulation (EU) No 1257/2012 of the European Parliament and of the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection  OJ L361/1).
European legal enactments in this field are largely based upon the idea that the establishment of an internal market in the EU requires common intellectual property rules that will ensure competitors a level playing field, although this goal has only partially been achieved. Important differences subsist between Member States’ legal systems, eg regarding free uses of copyrighted works, moral rights, collective management and unregistered trademarks. This is one of the reasons why the ‘Wittem Group’ undertook the task of drafting a European Copyright Code (available at <www.copyrightcode.eu>), which was published in 2010. However, this code focuses on only five topics: the definition of protected works, authorship and ownership, moral rights, economic rights and limitations. Thus it contains no rules concerning for example rental rights, resale rights, technological protection measures, the enforcement of rights and neighbouring rights. The problem of the law applicable to intellectual property rights and their infringement therefore subsists within the European space.
IV. The determination of the applicable law: current regulation
One of the longest-standing principles in this branch of the law is that of →territoriality, according to which intellectual property rights are governed by the law of the country for the territory of which their protection is claimed, the so-called lex loci protectionis. This principle is currently adopted among others in art 110(1) Swiss Private International Law Act (Bundesgesetz über das Internationale Privatrecht of 18 December 1987, 1988 BBl I 5, as amended; according to which: ‘Les droits de la propriété intellectuelle sont régis par le droit de l’Etat pour lequel la protection de propriété intellectuelle est revendiquée’); art 54(1) of the Italian Private International Law Act (Riforma del Sistema italiano di diritto internazionale private, Act No 218 of 31 May 1995 in Gazz.Uff, Supplemento Ordinario No 128 of 3 June l995, as amended; which states that: ‘I diritti su beni immateriali sono regulate dalla legge dello Stato di utilizzazione’); and art 93(1) Belgian Private International Law Act (Wet houdende het p. 965Wetboek von international privaatrecht/Code de droit international privé of 16 July 2004, BS 27 July 2004, p 57344, 57366; pursuant to which: ‘Les droits de propriété intellectuelle sont régis par le droit de l’État pour le territoire duquel la protection de la propriété est demandée’).
Despite this the scope of the →territoriality principle remains controversial. It can only be correctly defined bearing in mind the reasons that account for the adoption of that principle. In fact, applicability of the lex protectionis is fully justified with regard to the existence, content and scope of the protection granted to intellectual property rights. Given the public interests involved in these issues, each state should be able to regulate the exclusive rights for which protection is claimed in its own territory. Regarding initial ownership, however, it is subject to argument that such interests are at stake. If, for example, a work made for hire in the USA is deemed worthy of protection in Portugal as an intellectual creation that cannot be freely used, then this does not necessarily entail that Portuguese rules concerning the ownership of copyright over such a work should apply. This is because, from the point of view of the public interests at stake, it is irrelevant whether the copyright on that work vests in the person who has actually created the work or his employer. Other laws may thus be applied.
A possible option is the lex originis; another one is the lex contractus, ie the law that applies to the employment relationship between the author and the person for whom the work was created. Applying the lex originis may facilitate cross-border licensing and promote certainty as to the ownership of the right when this is exercised abroad. Application of the lex contractus will enhance legal harmony because the contract and the work created in performance of it will be subject to the same law. The law of the country of origin has long been applied by the Supreme Courts of France and Portugal, although French rules concerning authors’ moral rights, which are deemed to be règles d’application immédiate, considerably restrict that law’s scope of application. A lex originis rule may be found among others in private international law provisions of Portugal (art 48(1) Portuguese Civil Code (Código Civil approved by Decreto-Lei No 47.344, of 25 November 1966,  Diário do Governo I série 274/1883, with subsequent amendments)), Romania (art 60 Romanian Act on Private International Law (Law No 105 of 22 September 1992, effective 26 October 1993, on the Settlement of Private International Law Relations, Official Gazette of Romania No 245 of 1 October 1992)) and Greece (art 67(1) Law on Copyright (Law No 2121/1993 on Copyright, Related Rights and Cultural Matters (as last amended by Law No 3057/2002 (art 81) and by Law No 3207/2003 (art 10 par 33)))).
It is equally doubtful that the applicability of the lex loci protectionis should systematically extend to the remedies for the infringement of intellectual property rights. In French and Portuguese private international law this issue was traditionally governed by the lex loci delicti, or in some cases by the parties’ lex communis. A →dépeçage was therefore introduced in this regard. This seemed justified by the fact that the reasons militating in favour of the applicability of the former of these two laws do not require that remedies for the infringement of those rights also be governed by that law. The exclusive right that has been infringed and the right to →damages for its infringement are, in fact, distinct rights. Thus while the former implicates public interests, the latter basically protects a private interest. Accordingly, the right to compensation may be waived, while some intellectual property rights, such as authors’ moral rights, may not.
The territoriality principle is enshrined in the Berne Convention, which states in art 5(2) that ‘the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed’. The Convention thereby acknowledges the diversity of national legal systems with regard to copyright protection and the right of each country to set out the boundaries of the protection afforded to intellectual creations in its territory. However, this right is limited in two ways. On the one hand, through the national treatment principle enshrined in art 5(1) of the Convention, thanks to which foreign authors may not be discriminated against within Berne’s scope of application, and on the other hand, by the minimum rights granted by the Convention itself, which are reserved in art 5(2). Notwithstanding that, copyright was essentially conceived by the drafters of the Berne Convention as a territorial right, p. 966governed by the law of the country for which protection is claimed.
The same may be said about rights in patents and trademarks. Under the Paris Convention, each Member State applies its law to nationals and foreigners without distinction (art 2(a)). Furthermore, patents and trademarks obtained in the Member States of the Paris Union for the same inventions or distinctive signs are mutually independent (see arts 4bis(1) and 6(3)). As in the Berne Convention, this entails that the protection accorded in the territory of each Member State to such intangible goods is governed by local law.
Article 301 of the Waseda Principles in turn states that
Except as otherwise provided in §§ 302 and 321–323, the law applicable to determine the existence, validity, duration, attributes, and infringement of intellectual property rights and the remedies for their infringement is: (a) for registered rights, the law of each state of registration; (b) for other intellectual property rights, the law of each state for which protection is sought.
All matters concerning an intellectual property right as such, including its existence, validity, content, revocation and the like, shall be governed by lex protectionis unless otherwise provided by these Principles.
Subject to the preceding paragraph, lex protectionis is the law of the state for which protection is sought. In the case of a registered intellectual property right, this state is presumed to be the state in which that right is or will be registered, or which is deemed to be a state of registration under the convention to which that state belongs or the local law of that state.
Further pursuant to art 3:102 CLIP Principles, ‘The law applicable to the existence, validity, registration, scope and duration of an intellectual property right and all other matters concerning the right as such is the law of the state for which protection is sought’. An absolute territoriality of intellectual property rights, in the sense that the courts of each country should only apply the lex fori to their enforcement, was thus rejected by these soft law instruments.
Regarding initial ownership, the ALI Principles provide in § 313 for the application of a variant of the lex originis, the law of the creator’s residence, with regard to intellectual property rights that do not arise out of registration. The lex contractus applies if the subject matter was created pursuant to an employment relationship. The Waseda and the CLIP Principles have chosen a somewhat different path, by stating respectively in art 308(1) and in art 3:201(1) that initial ownership is in principle governed by the lex loci protectionis. Nevertheless, art 308(2) Waseda Principles provides that ‘Initial ownership of a copyrighted work is governed by the law of the state in which the copyrighted work is initially created’. Under art 3:201(2) CLIP Principles, if the situation has a close connection with another state that has a work made for hire provision, effect may be given to it. Pursuant to art 3:201(3), the law applicable in the case of a registered right claimed in the framework of an employment relationship is to be determined in accordance with the conflict rules concerning employment contracts. In many cases the practical result of the three proposals will be identical. However, the ALI and Waseda rules have some advantages over the CLIP solution with regard to predictability of the outcome of the dispute.
Regarding remedies for the infringement of intellectual property rights, a limited choice of the applicable law by the parties has been p. 967proposed in these international instruments. The ALI Principles state in § 302 that ‘Subject to the other provisions of this Section, the parties may agree at any time, including after a dispute arises, to designate a law that will govern all or part of their dispute’. The Waseda Principles provide in art 304(1) that ‘The law applicable to an alleged infringement and remedies is the law of each state for which protection is sought, provided that this shall not apply if the parties have chosen another law under the provisions of Article 302’. The CLIP Principles adopt a more restrictive rule in this respect. According to art 3:606(1), the parties may agree to submit the remedies claimed for the infringement to the law of their choice by an agreement entered into before or after the dispute has arisen. Furthermore, pursuant to art 3:606(2), if the infringement is closely connected with a pre-existing relationship between the parties, such as a contract, then the law governing the pre-existing relationship will also govern the remedies for the infringement. This is unless the parties have expressly excluded the application of the law governing the pre-existing relationship with regard to the remedies for infringement, or it is clear from all the circumstances of the case that the claim is more closely connected with another state. These rules are in line with the disposable nature of tort claims in most jurisdictions.
A final issue concerning the scope of the lex protectionis relates to whether it should also apply to security rights in intellectual property. Again, this problem should be solved in the light of the reasons that justify the applicability of that law. From this point of view, the lex protectionis should apply in order to determine whether an intellectual property right may be given as a security, since this is an issue that pertains to the content of that right. However, the rights and obligations of each party in a contract that provides for the creation or the transfer of a security in an intellectual property right, as well as the security rights themselves, should not be governed by that law, since the public interests that account for the applicability of the lex protectionis are not at stake here. This distinction is clearly made in arts 3:801 and 3:802 of the CLIP Principles.
In the EU, the principle of territoriality has prevailed in the →Rome II Regulation (non-contractual obligations) (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II),  OJ L 199/40), art 8(1) of which states: ‘The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed’. The Regulation has thus subjected remedies for the infringement of intellectual property rights to the law of the country for the territory of which protection is claimed. Those remedies and the preliminary question of the existence and the validity of the allegedly infringed right will accordingly be governed by the same law. Under art 8(3), the applicable law may not be derogated from by an agreement pursuant to art 14 of the Regulation. The applicability of the law governing a pre-existing relationship between the parties, such as a contract, is also not allowed. The lex protectionis therefore has a more extended scope of application in this Regulation than in the above-mentioned instruments.
V. Modern trends
In an era of globalization, in which the use and exploitation of intellectual creations increasingly occur on an international scale, a strictly territorial understanding of intellectual property law can hardly correspond to the needs of the economy. This is why an important deviation from this principle was enshrined in the 1968 Brussels Convention (Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters,  OJ L 299/32, consolidated version,  OJ C 27/1; and subsequently also in the Brussels I Regulation (Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,  OJ L 12/1) and Brussels I Regulation (recast) (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast),  OJ L 351/1; →Brussels I (Convention and Regulation))), which allowed the enforcement of intellectual property rights by the courts of the defendant’s country of domicile, even if this is not the country of protection of such rights. In the EU, the extraterritorial enforcement of intellectual property rights was thus allowed.
p. 968The AIPPI endorsed this view in its 2003 Resolution on Jurisdiction and Applicable Law in the Case of Cross-Border Infringement of Intellectual Property Rights ( AIPPI Yearbook 827–9), which states in art 1(1): ‘The courts of a given country should be allowed to make a ruling over infringing acts regarding certain intellectual property rights which have taken place in any other country . . .’. Article 2(1) of the same Resolution further provides that a clear distinction should be drawn between the conflict of jurisdictions and the conflict of laws.
The ALI, the Waseda and the CLIP Principles have also made this distinction since, notwithstanding the above-mentioned conflict rules, they adopt as a primary rule of jurisdiction concerning the infringement of intellectual property rights that a person may be sued in the courts of his or her state of habitual residence. In this sense, intellectual property rights are not strictly territorial in these sets of Principles.
Lucasfilm Ltd & Ors v Ainsworth & Anor  UKSC 39 illustrates this problem. That case concerned an alleged infringement of US copyright committed by the defendant in that country, where he had sold a number of copies of certain artefacts (notably helmets) originally produced by himself for the first Star Wars film. In a judgment rendered on 27 July 2011, the UK Supreme Court stated that, provided there is a basis for in personam jurisdiction over the defendant (as was the case), an English court has jurisdiction to try a claim for an infringement of this kind. This judgment thus constitutes an endorsement of the kind of extraterritoriality that the AIPPI Resolution and the said Principles allow.
This form of extraterritoriality was not provided for in the first intellectual property Conventions, which did not clearly distinguish the lex protectionis from the lex fori. The Berne Convention, for example, refers to the ‘laws of the country where protection is claimed’, instead of those of the ‘country for which protection is claimed’. This, of course, is due to the fact that its drafters did not contemplate the possibility of a court outside that country being competent for the enforcement of an intellectual property right.
The ECJ has also significantly contributed to this trend through its case-law on the community exhaustion of copyright, according to which distribution rights granted by the EU Member States may no longer be invoked in respect of copies of copyrighted works which have been lawfully marketed in other Member States. The degree of control that each EU Member State exercises over the monopolies that it grants on intellectual creations has thereby been considerably restricted.
Another important development in this regard concerns internet uses of protected works. The ubiquity of the internet has greatly enhanced the number of cases in which the use of a protected work may be deemed to have occurred simultaneously in several countries where it is made available online. In such cases, multiple laws may apply, exposing the user of the work to potentially contradictory requirements, that is a lawful user in one country may be held an infringer elsewhere. This in turn considerably inhibits the dissemination of intellectual creations through the internet. The ALI Principles, the Waseda Principles and the CLIP Principles attempt to solve this problem by providing that, in the case of a ‘ubiquitous infringement’, courts may apply the law of the state presenting the closest connection with the dispute (§ 321 ALI Principles; art 306(1) Waseda Principles; art 3:603(1) CLIP Principles). That connection may be evidenced among others by the parties’ residence or place of business, the country where their activities were carried out or the market to which they were directed. By virtue of this →‘escape clause’ (as it has been characterized) the cumulative applicability of different national copyright laws, which may ensue from the territoriality principle in the case of internet uses of protected works, can be avoided, and a single law may be applied. A further restriction to that principle has thus found its way into the three sets of Principles.
Still another deviation from territoriality may be found in art 3:604(2) CLIP Principles (→CLIP), which concerns secondary infringement. According to that provision, the law applicable to the liability of persons, such as Internet Service Providers, that offer facilities or services ‘capable of being used for infringing and non-infringing purposes by a multitude of users without intervention of the person offering or rendering the facilities or services in relation to the individual acts resulting in infringement’, is the law of the state where the ‘centre of gravity’ of the person’s activities relating to those facilities or services is located. That law only applies, according to art 3:604(3), if it provides at least for liability for failure to react in case of actual knowledge of a primary p. 969infringement or in case of a manifest infringement and liability for active inducement. The Principles have thus endeavoured to ensure that Internet Service Providers benefit from the rules providing for the exclusion of their liability (such as those contained in arts 12 to 15 of the e-Commerce Directive (Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce)  OJ L178/1)) which are in force in the country where they are established. According to the Principles, under these conditions, such rules prevail, over those of the lex protectionis.
A trend towards a mitigated form of territoriality has thus emerged, according to which the courts of each country may enforce foreign intellectual property rights, although they are with some exceptions bound to apply the law of the country for the territory of which their protection is sought.
Yet the need for restrictions to territoriality should not be overstated. Copyright and other intellectual property rights are basically exceptions to a principle of freedom that governs the use of intellectual creations. All uses of such creations that are not legally reserved to a given category of persons should be deemed free. Furthermore, like any other exclusive rights, intellectual property rights deeply affect social interests, notably in that they restrict public access to knowledge and information, as was stressed in the Washington Declaration on Intellectual Property and the Public Interest (available at <http://infojustice.org/wp-content/uploads/2011/09/Washington-Declaration.pdf>) adopted at the Global Congress on Intellectual Property and the Public Interest on 27 August 2011.
This is why the regulation of intellectual property rights still essentially belongs to states, which reserve for themselves the prerogative of defining, in conformity with their own assessment of the interests at stake, the conditions of acquisition, exercise and extinction of such rights in their territory, as well as the limits and exceptions to which they are subject. This is also why the exclusionary powers of intellectual property rights holders can only be exercised with regard to acts performed in the territory of the state that has granted those powers. To be sure, the enforcement of intellectual property rights may be requested of the jurisdictions of a different state, but in that case those jurisdictions shall apply the law of the state for the territory of which the protection of such rights is requested.
American Law Institute, Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes (American Law Institute Publishers 2008);
Jürgen Basedow and others (eds), Intellectual Property in the Conflict of Laws (Siebeck 2005);
Javier Carrascosa González, La propiedad intelectual en Derecho internacional privado español (Comares 1994);
Josef Drexl and Annette Kur (eds), Intellectual Property and Private International Law. Heading for the Future (Hart Publishing 2005);
Mireille van Eechoud, Choice of Law in Copyright and Related Rights: Alternatives to the Lex Protectionis (Kluwer 2003);
European Max Planck Group on Conflict of Laws in Intellectual Property (ed), The Conflict of Law in Intellectual Property: The CLIP Principles and Commentary (OUP 2013);
James Fawcett and Paul Torremans, Intellectual Property and Private International Law (2nd edn, OUP 2011);
Jane Ginsburg, ‘The Private International Law of Copyright in an Era of Technological Change’ (1998) 273 Rec. des Cours 239;
Toshiyuki Kono (ed), Intellectual Property and Private International Law: Comparative Perspectives (Hart 2012);
Peter Mankowski, ‘Das Internet im Internationalen Vertrags- und Deliktsrecht’ (1998) 62 RabelsZ 203;
Rita Matulionyte, ‘IP and Applicable Law in Recent International Proposals: Report for the International Law Association’  JIPITEC 3;
Pedro de Miguel Asensio, Contratos internacionales sobre propiedad industrial (2nd edn, Civitas 2000);
Pedro de Miguel Asensio, Derecho Privado de Internet (4th edn, Civitas 2011);
Marta Pertegás Sender, Cross-Border Enforcement of Patent Rights: An Analysis of the Interface Between Intellectual Property and Private International Law (OUP 2002);
Stig Strömholm, ‘Copyright: National and International Development’ IECL, vol 14, Copyright (Mohr Siebeck & Martinus Nijhoff 2007);
Stig Strömholm, ‘Copyright: Comparison of Laws’ IECL, vol 14, Copyright (Mohr Siebeck & Martinus Nijhoff 2007);
Alain Strowel, Droit d’auteur et copyright: Divergences et convergences. Etude de droit comparé (Bruylant & LGDJ 1993);
Eugen Ulmer, Die Immaterialgüterrechte im internationalen Privatrecht. Rechtsvergleichende Untersuchung mit Vorschlägen für die Vereinheitlichung in der Europäischen Wirtschaftsgemeinschaft (Carl Heymanns 1975);
Dário Moura Vicente, La propriété intellectuelle en droit international privé (Martinus Nijhoff 2009).