Territorial Intellectual Property Rights in a Global Economy – Transit and Other ‘Free Zones’

Abstract

The conflict between the requirements of a global economy and the territorial nature of intellectual property rights is characteristic of the pressure that globalization exercises on traditional notions of territorially delimited jurisdictions, an issue by no means limited to or a specialty of intellectual property law. Harmonization or unification of the law, regional or world-wide, is one solution. Professor Josef Straus, to whom this article is dedicated, has committed his professional life to improving the legal environment for the protection of intellectual property. In the following we will describe a particular conflict between freedom of trade, intellectual property protection and territorial jurisdiction that has recently surfaced in the European Union, which shows that there are indeed unfortunate ‘free zones’, and perhaps legislation is needed to close the gap.Intellectual property rights are by their nature territorially limited. Goods are made where the business decisions of today's globally operating enterprises see advantages of cost, efficiency and quality. Intellectual property rights do not necessarily exist in all manufacturing countries. When goods that infringe in some jurisdictions pass through other jurisdictions on the way to their final destination, the question presents itself whether these goods may be seized where they are found, just as illegal drugs and other ‘illicit’ products are subject to seizure and destruction. The question of ‘attaching’ infringing goods does not only arise when gaps in protection exist in the country of origin or the country of destination, but also when the goods are protected everywhere, namely when the transit country is the place of litigation. Finally, we have the problem of product piracy, an evil which by now affects billions of Euros or Dollars. It often seems that the traditional nation-state approach to intellectual property rights, dating from the 19th Century, is inadequate to deal with this phenomenon.