To: Richard Stallman
From: Jamie Love
Date: October 1, 2000*
Re: Proposed Hague Treaty on Jurisdiction and Foreign
Judgments in Civil and Commercial Matters
This is a response to your request for a basic explanation of the
Hague Treaty. I don't consider myself an expert on the treaty,
and am still trying to understand how it works, so these comments
are preliminary. For additional information, you might contact
Jeff Kovar from the US Department of State
or see: http://www.cptech.org/ecom/jurisdiction/hague.html
I. Background
The formal title is the "Hague Treaty on Jurisdiction and Foreign
Judgments in Civil and Commercial Matters." The treaty will
affect a lot of different things. It was first proposed in 1992,
I believe by the US government. It was in the beginning
primarily about recognition of judgments from private
litigation. As I understand the background, the US wanted to
make it easier to collect judgments when a party did not have
assets in the country where the money was owed. At this point,
no one was thinking about the Internet, and the treaty was
probably not of interest to very many people.
Beginning in 1995, the use of the Internet and Internet commerce
began to expand dramatically, and some persons began to see that
the treaty would have significant consequences for ecommerce.
Lots of what is done on the Internet crosses borders.
The main purpose of the treaty is to provide for recognition of
foreign judgments. When there is cross country litigation, the
treaty addresses such issues as the jurisdiction of the court
(where will the case be litigated) and which laws will apply.
Different combinations are possible. You could be sued in China,
but your rights might be based upon a US law, or the other way
around. You could also be sued in the UK under UK laws, and if
you lost the case, the judgment would be recognized in the
country where you live.
The treaty is designed to address nearly all private commercial
litigation, so its scope is very broad. In its present draft, it
would involve, for example, intellectual property claims (patent,
copyright, trademark, trade secret, unfair competition, etc),
libel, slander, contractual disputes, fraud, private antitrust
litigation and just about anything where a court would award
damages in private litigation.
II. What does the Treaty Change?
Individuals, organizations or firms can now be sued in foreign
jurisdictions, but since it is very difficult to collect foreign
judgments, people don't have to worry much, unless they have
assets in that country. And, before the Internet became
important, there were also fewer cases where what people did was
considered of legal consequence in a foreign country.
Today the Internet is important, and now speech, the
distribution of software and music, and lots of other things
done on the Internet are considered cross border transactions.
Thus, if the Hague treaty creates domestic liability for
foreign judgments, it will be a big thing.
This is a form of globalization, but it is different from
approaches that are based upon the international harmonization of
laws. While institutions like WIPO and the WTO seek to create a
global system with the same laws, the Hague treaty would create a
world where things you do on the Internet could give rise to
liability under laws in any Hague convention member, even when
the foreign laws are far different from the laws where you live.
This would be true, for example, for different laws (and legal
traditions) on libel, slander, copyright, patents, trade secrets
and many other things.
III. ADR for Business/Consumer transactions
I should also note one area where there are special rules and
controversy. For Internet business to consumer transactions
(B2C), the US government has blocked language in the draft treaty
(Article 7) that would ensure that consumers could sue businesses
in courts where the consumer lives. Business interests (with
lots of help from US trade officials) are pushing for a system
where consumer protection and privacy issues would be resolved by
business run "alternative dispute resolution" (ADR) systems, that
would largely enforce contracts of adhesion or consider industry
codes of practice, like the Truste program. This is a huge
priority for AOL, Microsoft, IBM and many ecommerce businesses,
who seek to avoid dealing with different consumer protection and
privacy laws in different countries.
Thus, in the B2C transactions, businesses see the treaty as
a way to reduce liability from foreign courts.
IV. How would the treaty affect the free software movement?
There are many areas where the treaty would present problems
for the free software movement. This is a list of only a few
issues.
1. People who write free software will likely be sued in
foreign countries for infringement of software patents.
Of course, people who live in countries without
software patents will face liability for patents issued
in countries where such patents are issued. But also,
there will be the increased risk of being sued for
really bad (overly broad, not novel) foreign patents.
Many Hague member countries do not have much of an
examination system, where it is even easier to get
patents approved than in the US or Europe.
2. Likewise, there will be potential liability in cases
alleging infringements of copyrights, violations of
trade secrets, restrictive unfair competition laws,
foreign sui generis database protection laws, and other
types of intellectual property laws, including those
foreign laws that are far more restrictive in terms of
the public's rights.
3. For example, some countries do not permit reverse
engineering. A software developer living in the US who
does reverse engineering could face being sued in a
country that banned reverse engineering. So too with
other types of fair use exceptions that exist in some
countries, but not in others.
4. Different national laws on digital copyright and even
hyper-text linking could give rise to liability for web
pages that pointed to software considered illegal under
various national laws protecting digital copyrighted
works. Even if the software was considered legal where
you lived, it might be considered illegal somewhere
else.
5. Although this isn't directly related in software
development, the treaty would make it possible to be
sued in libel or slander in foreign countries, where
libel or slander laws would be far more restrictive
than the USA.
V. Where does the process stand?
The Treaty has been discussed since 1992, and it was supposed to
be finished this year. I only learned about the treaty earlier
this year, when US NGOs heard about it from European consumer
groups. The FTC and the US department of commerce provided its
first NGO briefing on the treaty earlier last spring. Some
American Bar Association committees and several business groups
have been engaged for some time.
Right now there are four important intergovernmental
meetings scheduled for the proposed treaty. They include:
1. ADR and the Hague Treaty. December 11-12 in the Hague.
This is a meeting co-sponsored by OECD/International Chamber
of Commerce and the Hague Conference. Businesses and US
trade officials are pushing to have Alternative Dispute
Resolution (ADR) become a substitute for national
jurisdiction on consumer protection and privacy aspects of
business to consumer transactions. Apparently only 250
people will be invited to attend this meeting.
2. WIPO meeting on Hague treaty and IPR. January 30-31, 2001
in Geneva. This is potently a very important meeting for
the free software movement. I am trying to find out how to
participate in the meeting.
3. Ottawa II meeting on Hague Treaty and E-Commerce. Last
week of February. This is a follow up to earlier experts
meetings looking at the treaty in terms of ecommerce. In
the last meeting a CPT lawyer was not permitted to read our
statement at the meeting, but we were allowed to distribute
the statement to the experts who attended the meeting. This
meeting may be difficult to attend.
4. The Diplomatic Conference on the Treaty, June 2001. In
theory, this is when the treaty would be adopted, or parts
of it adopted, depending upon progress in negotiations.
In general, there is quite a bit of work yet to be done on the
treaty, including precisely those areas of interest: ecommerce
and intellectual property rights. We are a big late in the
process, but not too late to make a difference.
VI What can be done?
There are several things that could be done to address concerns
about the treaty, but I might group them into the two categories
of (1) fix it or (2) kill it.
1. Make it more acceptable. Specific concerns about the treaty
could be addressed in the negotiations. For example, among the
"fixes" that we might pursue:
a. Ask the US government to push for changes that would protect
US traditions in free speech, looking specifically as issues
such as recognitions of foreign judgments for libel or
slander, for example.
b. Ask the US government to push for changes in the treaty to
protect consumer IPR rights found in US laws, such as fair
use under patent, copyright and trademark laws.
c. Ask that intellectual property issues be excluded from the
treaty altogether. This is a pretty promising strategy,
given the difficulty of reconciling different national laws
and the existence of other global fora (WIPO and WTO) for
harmonization.
d. Ask the US government to push for changes that would address
problematic "unfair competition" laws in some countries.
Note, for example, that in some national laws on unfair
competition, it is illegal to mention a competitor's
products, or to say anything critical about a brand. Under
Germany competition laws Wal-Mart recently ran into trouble
for lowering prices.
e. CPT and other consumer groups oppose proposals for binding
arbitration consumer and privacy protections. This is a
very sensitive area of the treaty.
f. Exclude all Internet ecommerce transactions from the treaty.
This would limit the impact of the treaty to the types of
transactions for which it was first intended.
(2) Kill the treaty. This is feasible, but would require a
fair amount of mobilization. Right now few members of Congress
or the public know anything about the treaty.
My own inclination is to begin by seeking fixes in the treaty,
and to see how things go. If the negotiators are not interested
in making changes, then option (2) becomes more important. I
would add that our concerns about the treaty are very deep,
and we are troubled by many different aspects of the treaty,
but we are also still learning, and seeking new information.
VII. Final comments.
We have an NGO meeting with the US government, at the Washington,
DC offices of the American Library Association on October 5, from
noon to 2 pm. The US Department of Commerce and the US
Department of State have agreed to try to answer several sets of
questions we have submitted on the treaty. Let me know who is
interested in following this. We may set a list to discuss the
treaty.
Sincerely,
James Love
Consumer Project on Technology
cc: kovarj@ms.state.gov
<------Members of the Hague Convention=------->
http://www.hcch.net/e/members/members.html
Argentina
Australia
Austria
Belgium
Bulgaria
Canada
Chile
China
Croatia
Cyprus
Czech Republic
Denmark
Egypt
Estonia
Finland
Former Yugoslav Republic of Maced
France
Germany
Greece
Hungary
Ireland
Israel
Italy
Japan
Republic of Korea
Latvia
Luxembourg
Malta
Mexico
Monaco
Morocco
Netherlands
Norway
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Suriname
Sweden
Switzerland
Turkey
United Kingdom of Great Britain and Northern Ireland
United States of America
Uruguay
Venezuela
* a few spelling errors corrected.