• USPTO opposes inclusion of IP law in the proposed Hague Convention
  • US fears bad faith litigation and imposition of overbroad GI rights
  • The issue is currently dividing opinion in the IP community

The United States Patent & Trademark Office (USPTO) used the recent quarterly meeting of its Trademark Public Advisory Committee (TPAC) to announce its opposition to the inclusion of IP law in the proposed Hague Convention on the Recognition and Enforcement of Foreign Judgements. The office’s newly-announced position brings it into conflict with the European Union on an issue which is proving to be divisive in the IP community.

The USPTO’s position was clarified in comments made by the USPTO’s chief policy officer and director for international affairs, Shira Perlmutter. At the TPAC meeting she addressed the organisation’s stance on the Hague Convention, a proposed multilateral legal agreement by which contracting states would commit to recognise and enforce legal judgements on civil and commercial matters made by courts in other contracting states. The idea for the agreement arose in March 2016 from the Hague Conference on Private International Law, following which a special commission drew up a draft convention in February 2017. This draft currently excludes IP from the scope of the convention, but crucially makes an exception for trademarks (registered and unregistered) and copyrights. Perlmutter’s comments come just before a new round of negotiations on an updated draft kicks off.

Declaring the USPTO’s opposition to the inclusion of any IP rights in the Hague Convention, Perlmutter enumerated a number of reasons for the organisation’s position. “This country’s courts would be required to recognise and enforce the judgement of another contracting state whose IP system may be incompatible with ours, and possibly incompatible with TRIPS and Paris (Convention).” she said, adding: “That could mean that we have to enforce here, a judgement that may not be seen as legitimate under US law.” This could have adverse consequences, Perlmutter elaborated: “It could allow for a viral spread of different approaches than what we take here in the United States”. It might also be “used as an anti-competitive weapon towards companies competing in foreign markets […] damage could be done by bad faith filers in countries where that sort of thing is tolerated.” The inclusion of IP in the convention might similarly give rise to litigants shopping around the world for the most favourable jurisdictions, she claimed.

Other risks identified by Perlmutter included the danger that global companies using generic terms which conflicted with geographical indication rights recognised in some parts of the world. She noted that rules on GI rights, unlike trademarks, were not well-harmonised. Also, the risk to US companies from global injunctions was raised. Given these concerns, she concluded that “the US government and most of our IP stakeholders have not been convinced that the draft is a solution to the challenges US companies face when engaged in global IP enforcement”.

The USPTO’s position conflicts with that of the EU, which favours the inclusion of IP rights in the Hague Convention. IP rights, the EU’s discussion document on the existing draft states, are “an important economic factor” which should retained in the scope of the convention. Especially given the difficulties of enforcing intellectual property in an age of global online infringement, “a secure legal framework for cross-border cases is of the essence”, it argues. While the EU does not propose to include interim relief and interlocutory rulings in the convention, it does advocate that damages arising from IP infringement – rather than merely from IP licensing disputes – should be built-in in to the mechanism. Unsurprisingly, it also wishes to include GI rights, unlike the USPTO.

The split between the US and EU governments on these questions seems also to correspond to a broader chasm which is opening between a variety of IP stakeholders. While the IP Federation – a body representing UK innovators - opposes the inclusion of IP law in the convention, as does the American Intellectual Property law Association, the International Trademark Association (INTA) broadly supports the EU position.

The Hague Conference is a consensus-based organisation, and this schism could have the effect of thwarting the convention, or ensuring that IP remains outside its scope. “It is possible to block and Congress would have to ratify the convention,” Perlmutter made clear, responding to a question from a committee member.

On the other hand, a convention agreeable to the US might still be achievable. Perlmutter hinted at the USPTO’s commitment to working towards a consensus, stating that a number of other non-EU countries shared the US government’s scepticism. Whether a draft can be agreed upon which includes IP rights in some way – possibly with additional safeguards – remains to be seen.

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