There are strategic points at which legal theories are put to the test of practice. Some of these are the points in lawsuits at which courts are asked to grant remedies, such as provisional injunctions and money awards. It will be argued here that, in intellectual property, cross-border acts may best be localised, for purposes of resolving conflicts of laws, by considering consequences for judicial remedies. This method will be tested by applying it to the hard case of infringement in global networks.

The Territorial Framework

Each community lives by its own law. As transport and media improve, transactions increase between distinct communities. As a result, conflicts tend to arise between the respective laws of these communities. For example, a judge may ask whether to apply the law of the forum community, or that of another community, in a case where one of the parties is from the other community or where a private transaction moves between the communities. In the middle ages, these communities were not necessarily territorial; they only became so with the modern advent of the nation-state. [FN1]

The nation-state arose as geographers were mapping the world in co-ordinates of latitude and longitude. [FN2] National law was then asserted as sovereign within territorial borders traced out in this geographic space. In the nineteenth century, von Savigny conceived of each set of legal relations as having its focal point in one such territory. [FN3] For example, rights of real property could be seen as assuring the power of the owner of land to control trespass and like behaviours of any and all legal subjects relative to that land. Such property claims, von Savigny concluded, were subject to the law in effect at the situs of the land. [FN4]

Von Savigny sought a method for choosing the same laws to govern the same legal claims, no matter where suit was brought or who brought it. [FN5] His method may be encapsulated in the following three steps: First, determine the appropriate focal point, sometimes called a connecting factor or point of attachment, for each category of legal claim. [FN6] Secondly, in order to know what points are appropriate in a given case, characterise (qualifier) each claim asserted in the case in terms of legal categories. Thirdly, localise the corresponding point of attachment in a given state whose law then applies to the claim at issue.

For von Savigny, there could be no interplay between characterisation (qualification) and localisation for a simple reason. He posited that legal relations developed inside, but without impacting on, geographic space. [FN7]

For broad-ranging torts such as defamation or the infringement of intellectual property, the analysis is less simple. Nonetheless, the classic premise that geographic space is a fixed framework for conflicts analysis has not been questioned in the field of intellectual property. The Berne and Paris Conventions, and later treaties, impose the principle of national treatment supplemented by minimum rights, as well as the principle of the independence of rights. [FN8] That is, foreign treaty claimants enjoy the same rights as nationals of a treaty country, the so-called protecting country, unless they are entitled to more extensive minimum rights, and the rights in one state do not depend on those in others. This approach corresponds to the classic conflicts rule in the field of torts: the law of the place of infringing acts governs resulting claims. [FN9]

The Ambiguity of Territoriality

It is in this sense that laws of intellectual property are territorial. The category at the heart of the classic conflicts rule, the place of infringing acts, is territorial. In the nineteenth century, the meaning of this category seemed self-evident to courts considering infringement claims at home. They easily localised places where copyright works were put on stage or published, where trade marked goods were sold, and where patented inventions were used or made. Such acts took place where live performances, hard copies or products, or factories were found, on one side or the other of clearcut borders, inside a patchwork of national markets. [FN10]

Unfortunately, the key category here, the place of infringing acts, can be doubly ambiguous. To start, before knowing what place that is, a court must localise the acts in question, but authorities differ about what law or laws provide terms in which to characterise infringing acts. [FN11] In addition, the place of such acts can be extended backwards to that of preliminary acts, such as organising the infringement, or forwards to the place of damages. At the end of the twentieth century, the meaning of this place, once obvious in geographical space, is becoming impossible to pin down in cyberspace. The points where acts of infringement begin and end become indistinguishable as transactions cross multiple borders simultaneously in global, interactive networks. [FN12]

This ambiguity arises out of the increasing efficacy of the media and technology. Legal relations develop within spaces in which, with increasing speed and power, subjects communicate with each other and control objects at a distance. [FN13] To the extent that legal claims bear on communication and control itself, as they will in fields such as defamation and intellectual property, a principle of indeterminacy comes into play. Depending on what laws govern claimants' rights in such fields, their respective positions of power will change in what might be called social space, that is, in the relevant communication and control networks. Thus characterisation and localisation are not categorically independent of each other, but rather tied together to the extent that they impact on the values at stake in the overall resolution of any conflict of laws which they help to formulate. In these threshold inquiries to determine the places of infringing acts, the public policies underlying conflicts analysis, ultimately considerations of ordre public, already come into play. Courts in the United States may approach this cluster of issues functionally by following the Second Restatement, which expressly allows for resolving conflicts in the light of public policies. [FN14] Courts in Europe tend to approach these issues in more categorically rule-bound analyses, although notions such as ordre public exceptionally allow for taking account of underlying values. [FN15]

Since more powerful media accentuate the ambiguity of territoriality, it is to be expected that the Internet dramatises the policies at stake in localisation. In particular, in localising the place of the infringing act in one spot or another, a court might apply the law of one country or another throughout any global network. If the law of one country provides too little protection, or another too much protection, applying one or the other law can result in pirate havens or choke points for data flow in the network. For example, what law should govern transmitting raw data from a European database via the Internet to the United States or China? Suppose, on the one hand, that a court localises the relevant acts in the United States or China, where data is received but not strongly protected: then, to European eyes, pirates may find havens in these countries, from which data might be more or less freely retransmitted. [FN16] Suppose, on the other hand, that a court localises inside *127 Europe all unauthorised transmissions of raw data from Europe: then a European law granting property rights in the data [FN17] might apply to the transmissions, even to the United States or China. That choice of law might well choke off data flow to or at points within the Internet that policies in these countries would still leave open. [FN18]

Typically, while reasoning in terms of fixed territorial categories, courts vacillate considerably in localising infringing acts and choosing applicable laws. Courts in the United States have not been consistent in choosing copyright laws to apply to cross-border transactions, sometimes applying domestic law to copies made at home but exploited abroad, although the best case law tries to avoid extending that law to foreign acts. [FN19] These same courts continue to apply domestic trade mark law more or less aggressively to cross-border transactions, including foreign acts, speaking of its "extraterritorial" application. [FN20] European courts had held that cross- border broadcasts infringed copyright or neighbouring rights in the countries where the broadcasts were received. [FN21] A Community directive now compels localisation of satellite-relayed broadcasts in those countries where transmissions are respectively initiated. [FN22]

Resolving the Ambiguity

Recall that conflicts of laws arise as transactions increase in frequency between distinct communities with different laws, while smaller communities tend eventually to come together into larger communities. [FN23] Courts have a choice here: either they treat conflicting laws as arising out of communities that are static and unchanging, or they resolve conflicts in the light of the historical dynamics that have been bringing communities together. Under the static view, it is difficult to transcend the incoherence that tends to arise when courts respectively follow their own established laws in formulating conflicts of laws. Under the dynamic view, it is possible to look to globalising law that is emerging to govern many smaller communities as they come together into larger communities. The Internet has now accelerated just such processes. [FN24]

Law may emerge in many forms to bring communities together. Supranational law, like that of the European Union, effectively recognises a larger community as an autonomous law-making entity. Public international law stops short of this point, rather recognising smaller communities, notably nation-states, as autonomously submitting to overriding law that binds a group of such states, most clearly by virtue of treaty language. [FN25] Private international law, optimally following such emerging law between communities, is subject at *128 least to treaty provisions and, more broadly, to considerations of international public policy, ultimately to ordre public international. [FN26] Traditionally, only after conflicts analysis resulted in possible choices of law would a court refer to ordering principles or public policies, ultimately to ordre public, as grounds for rejecting any of these choices as objectionable. [FN27] Under the analysis proposed here, the court is to take account of the policy goals of the international regime of intellectual property at the very threshold of analysis, that is, as soon as it starts localising infringement. [FN28]

Fortunately, a treaty regime rather systematically governs conflicts of law in the field of intellectual property. Furthermore, it is common ground that courts must interpret key legal terms consistently with the treaties applicable in a given field. [FN29] This article will accordingly ask: what remedial desiderata should guide interpreting the notion of the "country where protection is sought" in order to achieve the goals of the treaty regime in intellectual property? The TRIPs Agreement has most recently restated treaty goals for intellectual property as providing "adequate standards" and "effective and appropriate means for ... enforcement" worldwide, while "taking into account differences in national legal systems." [FN30] On the one hand, the goal of "effective and appropriate means for ... enforcement" implies a globally seamless fabric of remedies in which neither pirates nor counterfeiters might find havens. In particular, the TRIPs Agreement provides for seizures of infringing copies and goods to stop them from crossing borders to reach markets in geographical space. [FN31] The new WIPO treaties in the field of copyright contemplate "effective" and "expeditious remedies" to protect markets against pirates in cyberspace as well. [FN32] On the other hand, the goal of "taking into account differences in national legal systems" implies a globally coherent fabric of remedies. Here the principle of national treatment comes into play. [FN33]

The first desideratum, a globally seamless fabric of remedies, should lead courts to stop infringing transactions in their tracks. A distinction may be drawn between inward-bound and outward-bound transactions relative to any given country, often but not always the forum country, which this article will call the "home" country. [FN34] Inward-bound transactions commence outside the home country, for example, with preparatory acts such as authorising and organising infringement and fabricating infringing copies or products abroad, but end up in acts of marketing inside the home country; outward-bound transactions commence in the home country but are consummated in acts of exploitation in foreign markets. The case law provides instances of U.S. and European courts that, with jurisdiction over parties abroad who are engaging in inward-bound infringing transactions that threaten markets at home, localise these transactions as taking place in the home country in that they enjoin them under that country's law. [FN35] By parity of reasoning, courts should localise outward-bound transactions, not where they commence in the home country, but in the other countries whose markets they target and apply the laws of these foreign countries, respectively, to enjoin acts at home that authorise or otherwise generate infringing exploitation abroad. Some cases fall outside this distinction, notably where copies that are illicit under the law of the home country transit that country's territory on their way to another country where they may be marketed, perhaps legitimately. Special provisions may still mandate seizure in the home country. [FN36]

Some or all of these relations can operate across global, interactive networks at the same time. To the extent that this takes place, the inquiry into localisation, as well as the fashioning of remedies, becomes more complex. For example, in the 1980s Playboy had the Italian magazine Playmen enjoined from infringing its *129 trade mark in the United States. [FN37] In the 1990s, the Italian publisher set up a Playmen web site in Italy, after having registered that title as a trade mark in Italy. The Southern District of New York then ordered the publisher either to stop access to the web site in the United States or to shut down the site entirely. [FN38] In imposing the latter alternative, the court would seem to have lapsed into the questionably extraterritorial application of domestic trade mark law. One fact, however, distinguishes the case: as the court noted, Playboy had succeeded in asserting its mark against Playmen in European countries besides Italy. [FN39] Thus the web site effectively also infringed foreign marks, making the case one in which infringing transactions were potentially inward-bound relative to many countries at once, although infringement outside the United States was neither pleaded nor remedied as such. It has been argued that, in such cases where infringement ostensibly takes place in many jurisdictions at once, the courts should apply the most protective of the laws effective in all these possible protecting countries. [FN40] This argument has the merit of providing grounds for a preliminary injunction to stop the unauthorised haemorrhaging of protected materials into a global network. However, eventually, a court should explore more differentiated solutions in the light of all applicable laws. [FN41]

The second desideratum, a coherent web of remedies, becomes critical as courts reach final judgment, specifically in granting monetary awards for market losses. The international regime of intellectual property is predicated on national treatment, so that enterprises normally consult the law of a country before marketing in that country. [FN42] To be coherent with this principle, the law of a given country should apply to ascertaining monetary awards to remedy infringement which usurps the market for protected materials in that country. Unfortunately, national courts have not adopted fully consistent approaches to granting monetary awards in cross-border cases, sometimes ascertaining damages or profits incurred abroad under their own home laws. Consider a pair of recent cases. In a U.S. case, videos of the 1992 Los Angeles riots were copied in New York and transmitted across the Atlantic for exploitation in Europe without consent, and the Court of Appeals allowed damages under U.S. law for exploitation overseas. [FN43] In a Canadian case, a court followed a similar approach, applying only Canadian law, indeed rejecting defences akin to U.S. fair use, while it awarded profit shares deriving from sales in the U.S. market. [FN44] Only a rule awarding monetary remedies under the law of the country whose market is impacted would avoid the inconsistent awards that such effectively extraterritorial holdings portend. Thus one U.S. court, with an eye on the "international regime", sidestepped such holdings in refusing to apply home law as the basis for awarding monetary relief for marketing abroad. [FN45]

This analysis then localises the place of infringement in the country of the targeted market. Thus the law of this country will generally apply to incoming transactions to the extent that these threaten or cause damage in this country's market, but this law will not normally apply to outgoing transactions aiming at foreign markets. In Internet cases where many markets are targeted at once, the court may find it sufficient to base an injunction on the laws of most of the countries whose markets are threatened if indeed these laws support the injunction; however, the court should base compensatory monetary awards on the laws of each of the countries whose markets are respectively damaged. [FN46] In extreme cases, it might be possible to argue for exceptions to this general approach by invoking international public policy, the ordre public international, that underlies the treaty regime of intellectual property. Such policy is most authoritatively manifest in the TRIPs Agreement, which provides for specific injunctive remedies to stop cross-border piracy, while it generally contemplates "remedies which constitute a deterrent to further infringements". [FN47] Thus, in a case where no other remedy is available to stop haemorrhaging Internet infringement, this policy could be invoked to support injunctive relief under home law even for outgoing transactions that target only foreign markets. [FN48] Similarly, in a case of egregiously deliberate piracy, purely deterrent monetary awards allowable under home law, for example, statutory or treble damages, could arguably apply to outgoing transactions.

Remedial anomalies complicate matters here. To start, the lex fori determines the procedures for obtaining injunctions and establishing monetary awards. Where suit is brought in one court for infringement in many countries, this court's procedures might lead to results different from those otherwise resulting in the *130 courts and under the laws of these countries. [FN49] Furthermore, courts may well differentiate cross-border remedies when digital content is protected in one country but not in another, but there is no assurance that computers routing such content within global networks can always be easily reprogrammed to comply with such differentiated relief. Still other problems will arise as computerised systems are introduced to manage or police digital content. [FN50]

Conclusion
Courts will increasingly encounter difficult conflicts of law in the field of intellectual property. Many difficulties, it has here been argued, may be resolved by localising infringing acts with an eye to satisfying the remedial desiderata of the international regime. Other difficulties, however, arise out of basic disharmonies, some substantive and some procedural, and courts will have to exercise their ingenuity to resolve them as equitably as they can from case to case. Progress toward a systematic international code of intellectual property would eventually help us transcend such difficulties. [FN51]