Encyclopedia of Private International Law
Show Less

Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
Buy Book in Print
Show Summary Details
Limited access

Chapter T.2: Territoriality

Toshiyuki Kono

I. Territoriality in private international law

Territoriality has, as a corollary of the sovereignty of a state, multiple connotations in private international law. First, territoriality is a jurisdictional concept. Judicial authority to resolve a case with a foreign element could be seen as emanating from state territorial sovereignty. Therefore, courts can assume jurisdiction over certain facts in the territory of the forum.

In the context of the application of law, territoriality has various connotations. First, territoriality could mean that all individuals and institutions in a particular state are subject to the regulations applicable in the territory of that state. Second, territoriality could define the spatial reach of domestic statutes. This issue would arise when states are willing to extend the territorial reach of their own regulations over acts which are committed abroad. Third, territoriality concerns the methodology of applying law. This function could be further distinguished between two types. First, states apply their own laws unilaterally, ie without recourse to choice-of-law rules. Public laws, for example, are effectuated once the criteria of applicability set out in that particular statute are met, or when designated procedural requirements are met (eg filing of a petition to the competent governmental agency). Second, a more refined methodology of choice between pertinent private law statutes of different states has evolved over time. Choice-of-law rules usually refer to a specific connecting factor which then points to a particular domestic or supranational law. Also in this context, there are nuanced differences. For example, a type of connecting factor leads to application of forum law (→lex fori) to materialize the interests of the forum state, while in another type of connecting factor, such as the location of property (locus rei sitae), place of celebration (locus celebrations) or place of tort (locus delicti), territoriality is abstracted in different territorial concepts. The interpretation of such territorial connecting factors varies to a great extent in the jurisprudence of national courts.

II. Presumption against extraterritoriality

The activities of private individuals and multinational corporations often spill over the borders of several states. This can cause many difficulties for national regulatory authorities due to the limited territorial reach of the local statutes.

In common law countries, there is a long-standing practice of the so-called ‘presumption against extraterritoriality doctrine’. It means that domestic statutes do not apply to the activities abroad, unless it is made explicitly clear in the statute itself. The original traces of this doctrine can be found in the medieval case-law of common law p. 1703courts in admiralty cases. For instance, in early common law criminal cases such as Lacy’s case ((1582)1 Leon. 270) courts were not able to adjudicate the case, if any matters constituting the elements of crime occurred outside England. If an element of the crime occurred abroad then the crime itself was deemed to be extraterritorial. Such crimes were not subject to the court’s jurisdiction, unless there was an act of parliament clearly stating that domestic criminal statutes apply towards such extraterritorial crimes. In the 18th century, courts started to push common law jurisdiction forwards by asserting jurisdiction over claims in cases when a man received a fatal wound at sea but died in territorial waters. Yet, the presumption against extraterritoriality remained as a bedrock principle in regulating any cross-border wrongful conduct.

In the modern-day international law arena, the principle of territoriality has been triggered by the willingness of some states to apply their domestic statutes in cases concerning wrongful acts committed in the territory of another state. This is often based on the ‘effects theory’ which assumes that the foreign acts of the defendant which produces effects within the state confer jurisdiction upon the courts.

The effects theory has often been applied in antitrust cases decided by American courts. In a landmark case, US v Aluminum Co of America (148 F.2d 416 (2d Cir 1945)), it was held that ‘any state may impose liabilities . . . for conduct outside its borders that has consequences within its borders which the state reprehends’. Over time, the effects doctrine was ‘refined’ by adding an intention requirement. US law has gradually become rather hostile towards foreign corporations who feared broad pre-trial discovery proceedings and treble →damages awards. As a reaction to that, US courts added additional criteria such as a balancing test and a jurisdictional rule of reason which aimed to ensure that US courts would exercise jurisdiction, only when foreign acts have significant effects in the US.

To be mentioned in this context is the US Supreme Court decision in Hoffman-LaRoche Ltd v Empagran (542 U.S. 155 (2004)). In this case, exceptions of non-applicability of the Sherman Act for conduct that significantly harms imports, domestic commerce or American exporters created by the Foreign Trade Antitrust Improvement Act of 1982 (FTAIA, § 402, 15 U.S.C. § 6a (1982)) were at stake. In this case, vitamin purchasers filed a class action against a number of domestic and foreign vitamin manufacturers and distributors for a massive and long-running conspiracy to fix the price of vitamin globally and sought compensation for damages under US antitrust laws. The defendants argued that the case should be dismissed because the defendants’ conduct affecting the plaintiffs occurred entirely abroad and that none of the plaintiffs suffered injuries as a result of participation in US commerce. The Supreme Court unanimously held that foreign plaintiffs couldn’t bring claims for treble damages based solely on a foreign effect. The price-fixing conduct significantly and adversely affects customers both outside and within the US, but the adverse foreign effect is independent of any adverse domestic effect.

The presumption against extraterritoriality is followed not only in antitrust disputes, but also in other situations where the territorial reach of American statutes governing various areas of economic activity is unclear. For example, § 271(f)(1) of the US Patent Act (35 U.S.C. §§ 1 et seq (consolidated Patent Laws as of September 2007)) was a source of controversy, which provided that infringement does occur when one ‘suppl[ies] . . . from the United States’, for a ‘combination’ abroad a patented invention’s ‘components’. This provision has often been invoked by US patent holders who sought compensation for alleged infringers liable under US law for acts that took place abroad (see eg Microsoft v AT&T Corp, 127 S.Ct. 1746 (2006)). The Supreme Court has several times restated its cautious approach and noted that the presumption against extraterritoriality in patent law should be understood in the potential differences of foreign states’ approaches towards the relative rights of inventors, patentees and the public.

Another prominent example in the debate about extraterritoriality is the US Alien Tort Statute (henceforth ATS, 28 U.S.C. § 1350). It provides that ‘[T]‌he district courts shall have original jurisdiction of any action by an alien for a tort only, committed in violation of the law of nation or a treaty of the US’. The ATS, adopted in 1789 as a part of the Judiciary Act, became widely applied since the 1980 decision of the Court of Appeals for the Second Circuit in Filartiga v Pena Irala (630 F.2d 876 (2d Cir 1980)). In Filartiga, a claim was brought by two citizens of →Paraguay against a Paraguayan police chief for alleged torture and murder of family members. At the time of the proceedings, p. 1704all parties were resident in the USA. The US Court of Appeals the Second Circuit held that federal courts had jurisdiction, because the law of nations ‘has always been a part of the federal common law’. Furthermore, the court referred to the prohibition of torture under multilateral treaties as well as UN declarations.

Since Filartiga, more than a dozen cases were decided on the basis of the ATS, some of which reached the US Supreme Court. In Sosa v Alvarez-Machain, 542 U.S. 692 (2004), the Supreme Court confirmed that only violations of well-established rules of international law such as genocide, crimes against humanity, war crimes, slavery as well as other abuses by government officials could be invoked by private individuals.

Among many controversies surrounding the application of the ATS is the question whether corporations could be held liable for the violations of human rights, environmental harm and other injuries abroad. The 2013 decision of the US Supreme Court in Kiobel v Royal Dutch Petroleum Co, 133 S.Ct. 1659 (2013) concerns this issue. The plaintiffs as Nigerian citizens claimed that Dutch, British and Nigerian oil-exploration corporations aided and abetted the Nigerian government in committing violations under customary international law during the 1990s. In particular, it was argued that Royal Dutch Shell compelled its subsidiary in Nigeria to cooperate with the government to crush local community resistance to an oil development project. One of the main tenets of the Kiobel litigation was the presumption against extraterritorial application. The Supreme Court held that ‘this presumption serves to protect against unintended clashes between the United States’ laws and those of other nations which could result in international discord’ and noted that nothing in the ATS rebutted the presumption against extraterritorial application. The issue of corporate liability for human rights violations was to be decided under the rules and principles of customary international law; and the Supreme Court refused to hold Shell liable for human rights violations.

III. Territoriality and international enforcement of intellectual property law

The principle of the territoriality of IP law has deep historical roots. Various privileges related to economic activities (eg printing or producing of certain goods such as alcohol) were granted by kings or princes to a particular merchant or tradesman. Such royal privileges had effects only within the territorial boundaries of the town-states or monarchies simply because granting kings had no sovereign powers in foreign territories. This idea of individual privileges granted by sovereign kings underwent a remarkable transformation during the time of the Industrial Revolution. The case-by-case granting of privileges gradually turned into a more formalized system where copyright protection was enshrined in domestic statutory provisions. By the mid-19th century almost all countries in Europe and some in the Americas had their own copyright legislation. Although domestic copyright statutes aimed to achieve similar objectives, the means for realizing them varied from state to state.

In the 19th century, it became clear that a closer cooperation among states was inevitable. However, the differences among national laws were so great that the idea of unification of substantive laws was not feasible. Accordingly, a decision was made to retain the idea of national treatment, conjoined with minimum rights. Issues related to the protection of industrial property rights were harmonized in the Paris Convention for the Protection of Industrial Property (20 March 1883, with later amendments, 828 UNTS 305) while the protection of literary and artistic works was subject to the regulations of the 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). Many more multilateral conventions were drafted in the second half of the 20th century both on an international level and as part of regional endeavours for economic integration.

Under the current IP regime, the minimum requirements for obtaining IP protection are harmonized internationally. Three main principles underpin the functioning of international IP treaties. First, the principle of national treatment aims to make sure that foreign nationals can trust that they will enjoy similarly favourable national treatment as domestic creators. The second principle common to multilateral IP conventions is territoriality. Just like medieval privileges, IP rights obtained in a Member State of a treaty p. 1705have legal effects within that particular country. The rights conferred as well as the extent of the protection in those countries will be determined by the laws of the place for which protection is sought. The third principle is the so-called independence of IP rights. This principle is intended to retain a relatively level playing field for states and their economic, social and cultural interests.

Although the granting of IP rights has been harmonized to a significant extent, international treaties in the area of IP do not provide for a comprehensive mechanism to help proprietors efficiently protect their rights on an international level. The territoriality of IP rights dictates that the right holder has to take active steps before each and every state in which protection is sought. The most challenging issue in the current international IP regime concerns the cross-border exploitation of IP rights. Cross-border exploitation and enforcement of IP rights involves intricate private international law questions: which court decides? Which state law should be applied?

In common law countries, subject matter jurisdiction must be satisfied. One of the earliest cases, which became a landmark precedent on subject matter jurisdiction for international adjudication of multistate IP cases, was decided by the High Court of Australia in 1905, Potter v Broken Hill Pty Co Ltd (1906) 3 CLR 479. The High Court adopted a distinction between local and transitory actions which was first introduced by an English Court in the late 19th-century case, British South Africa Co v Compania de Moçambique ([1893] AC 602). Local actions were related to the facts occurring in a particular place (eg land, trespass). Such local actions were subject to the jurisdiction of the courts where those facts occurred. A similar logic was applied by the Australian court in the Potter case where patent rights were deemed to be tantamount to land rights. Consequently, the Court considered New South Wales and Victoria as different states and decided that an action for an infringement of a patent granted in New South Wales cannot be justiciable in a Victorian court. In subsequent judgments, common law countries all around the globe followed the Potter rationale and usually adhered to the non-justiciability of the foreign IP rights idea. For more than a century, common law courts consistently refused to adjudicate claims concerning foreign IP rights, indicating that they do not possess subject matter jurisdiction.

The same logic was applied to foreign copyright in the judgment of the High Court in Lucasfilm Ltd v Ainsworth ([2008] EWHC 1878 (Ch) (31 July 2008)) where at the centre of this dispute was the protection of some Imperial storm trooper helmets that were used in the 1977 film, Star Wars. The High Court stated that even if the defendant habitually resides in the UK, the UK court cannot adjudicate, since infringement of US copyright is the issue of the case. However, the UK Supreme Court in 2011 ([2011] UKSC 39 (27 July 2011)) found that there are no impediments for English courts to hear actions for the infringement of foreign copyrights. It held that the act of state doctrine was outdated and that traditional approaches should be reconciled in the light of changing market realities. If – and how – this judgment would affect other courts in the Commonwealth needs further observation.

Also in the USA, a territorial approach has been adopted. Hence, the US courts will exercise jurisdiction over infringements of IP rights only if the infringing acts occurred in the USA. For instance, in the case of Subafilms Ltd v MGM-Pathe Communications Co (24 F.3d 1088 (9th Cir 1994)), which concerned the exploitation of the Beatles’ single Yellow Submarine in a cartoon, it was held that it could grant the plaintiff monetary relief only for infringements which occurred within the USA. To be noted however, was the fact that the Court did not pay attention to the foreign nature of the rights.

In civil law countries, exclusive jurisdiction performs a similar function. Article 22(4) of 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, [2001] OJ L 12/1; →Brussels I (Convention and Regulation)) provided for exclusive jurisdiction of the country of registration over procedures on the registration and validity of IP rights. A question arose regarding the scope of this provision in the case C-4/03 GAT v LuK ([2006] ECR I-6509), concerning a dispute between two German companies. LuK considered that GAT infringed LuK’s French patents. GAT sued LuK before the German courts and filed a declaratory action for non-infringement arguing that LuK’s French patents were invalid. The European Court of Justice clarified that exclusive jurisdiction is applicable to any case, as long as the validity of the IP rights is at stake, irrespective of whether the issue is raised by way of an action or as a p. 1706defence. The text of art 24(4) of the 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), [2012] OJ L 351/1; →Brussels I (Convention and Regulation)) includes now that clarification. The Japanese Code of Civil Procedure (Act No 109 of 26 June 26 1996, as amended, henceforth CCP) has a similar provision in arts 3–5 para 3 of the CCP, but the precise scope of this provision is not clear.

In the 21st century, multiple infringements of substantially identical IP rights could easily occur by making certain works available to the public on the Internet via Internet providers without the right holder’s authorization or by coordinating a number of persons’ actions in each of the states where the rights exist. In complex IP cases, where the IP rights are infringed by multiple parties, the possibility of suing multiple foreign defendants before one court is limited (→Intellectual property, jurisdiction).

The approach taken by the US courts could be best illustrated by a decision in Voda v Cordis, 476 F.3d 887 (Fed. Cir 2007). In that case, the plaintiff, Voda, owned patents for identical inventions in the USA, Canada, the United Kingdom, Germany and France. The defendant, Cordis, was a US-based corporation established in Florida with foreign affiliates in France, Germany, Italy and the Netherlands. Voda instituted judicial proceedings against all related corporate infringers before a US court alleging infringements of its American, British, French, German and Canadian patents. The district court decided it had supplemental jurisdiction pursuant to 28 U.S.C. § 1367(c) to hear foreign patent infringement claims. Yet, regardless of Voda’s arguments that a consolidated multinational patent adjudication would be more efficient, the Federal Circuit ruled that the district court abused its discretion by asserting jurisdiction and held that considerations of comity, judicial economy, convenience, fairness and other exceptional circumstances constituted compelling reasons to decline jurisdiction. In coming to this conclusion, the Federal Circuit relied on such notions as the independence of national patents, stating that ‘only a British court, applying British law, can determine the validity and infringement of British patents’.

In the EU, the Brussels I Regulation (recast) does not provide for joinder of claims, but according to art 8(1), under certain conditions, a person domiciled in a Member State may also be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled. This provision would enable a plaintiff to sue several defendants in one court. However, in Case C-539/03 Roche Nederland BV and Others v Frederick Primus and Milton Goldenberg ([2006] ECR I-6535), where a US-firm tried to consolidate infringement claims against eight companies that belong to the same corporate group, the European Court of Justice stated that art 8(1) does not apply to such a case. Such a strictly territorial approach towards the adjudication of multistate IP disputes has been the object of some disagreement on the grounds that dissatisfaction with mosaic state-by-state litigation creates high costs.

Even if the court finds that it has jurisdiction over the case, several additional complications may arise with regard to the determination of the governing law. In the case of Card Reader (Fujimoto v Neuron Co. Ltd (Card Reader), Supreme Court of Japan, September 26, 2002, Minshu Vol 56, No 7, 1551) for instance, the plaintiff was a Japanese national residing in Japan who owned a patent in the USA. The defendant, another Japanese company with its principal place of business in Japan, produced an infringing product in Japan and exported it to the USA through a wholly owned subsidiary. Having found that the infringing product was sold in the USA, the proprietor of the patent sued in Japan seeking an injunction against production and export of the infringing products to the USA, destruction of the infringing products and compensation for damages. The Supreme Court of Japan stated in its 2002 judgment (Card Reader) that the law of the country where the patent is registered should be applied to the question of an injunction. According to sec 271 of the US Patent Law, both the infringer and the person who induced the infringement overseas are liable. However, the Japanese Supreme Court was of the opinion that the extraterritorial application of the US Patent Law would undermine the public policy of Japan and refused to grant the injunction. The claim for damages was also denied by applying a double-actionability clause.

The cases discussed above indicate some of the problems that arise when it comes to the enforcement of IP rights. The lack of p. 1707harmonization with regard to the enforcement of IP rights leads to quite burdensome and costly situations. In this context it is easy to note the clear conflict between the global market and territorial jurisdiction. The open question remains how should the principle of territoriality be adjusted to meet the needs of a global market.

Due to difficulties in unifying the aspect of the enforcement of IP rights, a possible solution might be to adopt uniform rules on international jurisdiction and applicable law in areas related to IP.

Several scholarly projects have published draft principles or draft legislation advancing such a view. These include the ALI Intellectual Property Principles (American Law Institute, Intellectual Property: Principles Governing Jurisdiction, Choice of Law and Judgments in Transnational Disputes, St. Paul 2008) and the CLIP Principles (European Max Planck Group on Conflict of Laws in Intellectual Property, Conflict of Laws in Intellectual Property: The CLIP Principles and Commentary, Oxford 2013; →CLIP).

After these projects were completed, the Committee on IP and Private International Law was established under the auspices of the International Law Association. Since 2011, this Committee has been drafting guidelines which would be valid worldwide, covering the outcome of the preceding projects as well as new issues with which the preceding projects did not deal.

IV. Territoriality and cross-border insolvencies

An insolvency proceeding has the nature of collective enforcement: once an insolvency proceeding is commenced following a debtor’s non-payment, his creditors are, in principle, not allowed to individually exercise their rights to claim and enforce; the trustee appointed by a court should collectively exercise their rights on behalf of all creditors; the trustee is usually provided with such power that, under certain conditions, he could even cancel a debtor’s prior transactions if it is in the collective interests of creditors. Since the insolvency proceeding as an enforcement represents the sovereign power, its scope and effects should be limited to the territory of the particular state. Territorialism is thus currently the international law of bankruptcy and the basic principle of cross-border insolvency. A good example of territorialism was art 3 of the Japanese Bankruptcy Act (Act No 75 of June 2, 2004, as last amended by Act No 109 of 15 December 2006) before it was amended in 2000.

However, as a result of globalization (→Globalization and private international law), many corporations have expanded their activities throughout the world. These corporations have and will have their assets in multiple jurisdictions. Still, under strict territorialism, an insolvency proceeding must be commenced in each jurisdiction wherever the debtor has assets, ie there is a lack of cross-border cooperation. However it would cause problems, especially if a debtor company wants to collect its assets in one jurisdiction to restart its business.

The standard argument against territorialism is universalism, under which, ideally, there should be only one forum which deals with all of the assets of a debtor, irrespective of their location and their distribution, and only one country’s laws govern the insolvency. The proponents of universalism claim that a universalist system would promote greater efficiency than a territorial system and that a universalist rule has the potential to bring greater returns to all creditors. In addition, a universalist system would produce more equality of distribution among creditors and would serve a global standard of fairness.

A pure universalism, under which one insolvency proceeding commences and other nations cooperate with that proceeding, does not work under the current legal systems in the world. Universalism therefore needs certain modifications, for example by reserving to local courts the discretion to evaluate the fairness of the home country’s procedures and to protect the interests of local creditors.

UNCITRAL adopted the Model Law on Cross-Border Insolvency in 1997 (UNCITRAL (ed), Model Law on Cross-Border Insolvency with Guide to Enactment (1997): Model Law on Cross-Border Insolvency of the United Commission on International Trade Law, Resolution 52/158 adopted by the General Assembly, 30 January 1998, No E.99.V.3, General Assembly Resolution 52/158 of 15 December 1997). The Model Law has four features: access, recognition, relief and cooperation. The ‘centrality of cooperation’ in cross-border insolvency cases is emphasized in order to achieve the efficient conduct of proceedings and to ensure an optimal result. But the Model Law does not specify how that cooperation and communication might be achieved, but rather leaves that up to each jurisdiction and the p. 1708application of its own domestic laws and practices. Still at least such countries as →Australia, →Canada, →Chile, →Colombia, Eritrea, Greece, Japan, Mauritius, Mexico, Montenegro, New Zealand, Poland, Republic of →Korea, →Romania, →Serbia, →Slovenia, →South Africa, Uganda, →United Kingdom, →USA, amended their insolvency laws under the influence of the Model Law. In this sense, the idea of universalism has been influential in recent law reforms in this area.

Among some basic concepts and ideals of the Model Law, the COMI (Center of Main Interest) is the decisive factor for a foreign proceeding to be a foreign ‘main’ proceeding (art 2(b)). Thus the representative appointed in that foreign proceeding could be recognized and reach the debtor’s assets located in other jurisdictions. The Model Law presumes the debtor’s registered office as the COMI (art 16(3)). But after the adoption of the Model Law, due to diverse judgments in some important jurisdictions, clarification became necessary. The Guide to Enactment and Interpretation of the UNCITRAL Model Law confirms that the ‘concept of a debtor’s centre of main interests is fundamental to the operation of the Model Law’. However, in a case where the debtor’s COMI may not coincide with the place of registration, the COMI will be identified by other factors. In most cases, the location (i) where the central administration of the debtor takes place and (ii) which is readily ascertainable by creditors could be identified as COMI. If this does not work, a number of additional factors concerning the debtor’s business may also be considered.

Large business could be operated by a group of enterprises, each of which is an independent juridical entity. A key question is how to conceptualize the COMI for this entire group. One view states that the COMI should be adapted as it applies to an individual debtor to the situation of an enterprise group, enabling all proceedings with respect to group members to be commenced in, and administered from, a single centre through one court and subject to a single governing law. Another suggestion is to identify a coordination centre for the group, which might be determined by reference to the location of the parent of the group or to permit group members to apply for insolvency in the state where proceedings have commenced with respect to the insolvent parent of the group.

On a regional level, a good example of universalism is the European Insolvency Regulation (Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings, [2000] OJ L 160/1). According to this Regulation, activities of undertakings have more and more cross-border effects, so there is a greater need for a Community act requiring coordination of the measures to be taken regarding an insolvent debtor’s assets. This Regulation adopts a mechanism combining insolvency jurisdiction (art 3) and the recognition of foreign insolvency proceedings (art 16), and provides for general and special rules on applicable laws (arts 4–15).

V. Future of territoriality

Territoriality remains the guiding benchmark of the international legal system and conflict of laws. Territorial →connecting factors are crucial in determining the governing law and asserting judicial competence over cases with foreign elements. While many disputes can be resolved by domestic courts applying national statutes, the expansion of global business models and cross-border activities will bring about challenging territoriality-based notions in the future. As the examples of cross-border insolvencies or intellectual property disputes show, territoriality may come at a huge cost. Mere splitting of cases depending on territorial connections often leads to a mosaic of adjudication schemes, a high risk of abuse and discordant solutions. Yet, in the absence of a unitary lawmaker at an international level, territoriality will remain the bedrock for the conflict of law. Territorial limitations could be overcome, at least to some degree, if more emphasis is given to the enhancement of institutional cooperation between courts and governmental agencies. The development of mutual trust-based regimes could be a great task for developments in the near future.


  • Christian Von Bar and Peter Mankowski, Internationales Privatrecht (Beck 2001) ch 4;

  • Jürgen Basedow, ‘Foundations of Private International Law in Intellectual Property’ in Jürgen Basedow, Toshiyuki Kono and Axel Metzger (eds), Intellectual Property in the Global Arena (Mohr Siebeck 2010) 3;

  • Graeme Dinwoodie, ‘Developing a p. 1709Private International Intellectual Property Law: The Demise of Territoriality?’ [2009] Wm. & Mary L.Rev. 711;

  • William S Dodge, ‘Extraterritoriality and Conflict of Laws Theory: An Argument for Judicial Unilateralism’ [1998] Harv.Int’l L.J. 102;

  • Paul Goldstein and Bernt Hugenholtz, International Copyright (OUP 2013) ch 4; Lynn M LoPucki, ‘The Case for Cooperative Territoriality in International Bankruptcy’ [2000] Mich.L.Rev. 2216;

  • Ralf Michaels, ‘Two Paradigms of Jurisdiction’ [2005–2006] Mich.J.Int’l L. 1003;

  • Alex Mills, Confluence of Public and Private International Law (CUP 2009) 234;

  • Robert K Rasmussen, ‘Resolving Transnational Insolvencies through Private Ordering’ [2000] Mich.L.Rev. 2252;

  • Dan Jerker B Svantesson, Extraterritoriality in Data Privacy Law (Ex Tuto 2013).