Global Intellectual Property Protection: Structural Challenges And The Shifting Paradigm Of Cross-Border Enforcement

Introduction

Digital innovation is moving more quickly than ever before. The Cloud, Generative Artificial Intelligence, Platform Commerce, and Globally Integrated Supply Chains all provide ways to scale inventions and create works across jurisdictions virtually instantaneously. Product cycles are shortening; user adoption can now occur anywhere in the world; and markets are quickly diffusing across geographic boundaries. Rapidly spreading innovations via digitally expedited distribution methods are currently being researched throughout the world. Conversely, present-day copyright, trademark, and patent laws are still territorial laws based on the country in which they originated. The differences between the systems for obtaining protection create a structural divergence that defines modern-day international disputes concerning intellectual property.

By establishing minimum levels of protection and enforcement for intellectual property rights (IPR) across all member states of the World Trade Organization (WTO), the TRIPS Agreement provided the basis for protection of IPR at the global level¹. While providing a strong foundation for global protection, TRIPS does not create a common forum or harmonized remedy for IPR enforcement. Thus, enforcement of IPR is dependent upon the enforcement mechanisms of national courts and administrative agencies. As a result, the global IPR protection is provided by independent sovereign countries, which are connected by their common membership in the WTO. Thus, for practitioners, the main issue is not the legal uncertainty created by inconsistent enforcement of IPR, but the increasing rate of structural changes in the enforcement mechanisms of IPR.

Structural Foundations of Global IP Enforcement

Layered treaty obligations that have been developed over many decades make up the foundation of today's global IP regime. Principles of national treatment and priority were incorporated into the Paris Convention² on the Protection of Industrial Property and the Berne Convention³ on the Protection of Literary and Artistic Works; although territorial grant and enforcement mechanisms continue in the international system, the Patent Cooperation Treaty streamlined the process of filing for patents in multiple countries.⁴

TRIPS significantly strengthened the obligation to enforce IP rights by requiring member Countries to have effective civil remedies and to include measures at the border to stop counterfeit and pirated products⁵. However, enforcement is still done by each member Country individually and defines different standards for issues such as injunctive relief, calculating damages, evidence requirements, discovery procedures, timelines, etc.

For multinational companies, this means that the global strategy for IP must take into account the actual rights afforded to the company, as well as the speed of enforcement, the judicial system of the Country. This is not incidental to the global IP system; it is in fact structural fragmentation.

Jurisdictional Complexity and Procedural Leverage

Cross border IP disputes are increasingly driven by jurisdictional strategy in a digital world where conduct takes place in one jurisdiction, causes damage in another, and involves multiple parties globally. Courts must therefore determine both the location of the infringement and the limits of their adjudicative authority.

Without a global IP tribunal, parallel proceedings are frequent, particularly in SEP litigation (standard essential patents). In Unwired Planet International Ltd v Huawei Technologies Co Ltd⁶, the UK Supreme Court affirmed that UK courts have the authority to set global FRAND (fair, reasonable and non-discriminatory) licensing terms for multinational patent portfolios and how the authority of a domestic court can affect conduct outside that country.

Anti-suit injunctions add further complexity to the situation by permitting courts to stop parallel litigation in other jurisdictions. The growing use of anti-suit injunctions raises global legal issues related to international comity. Thus, the litigation of cross border IP is based as much on leverage from procedure as it is on substantive rights. While arbitration helps, particularly in licensing disputes under the New York Convention⁷, the scope of an arbitration award does not allow an arbitrator to invalidate patents erga omnes or to bind non-signatories. However, the public law aspects of patent validity mean that domestic courts will always play a key role in assisting parties to navigate through their various jurisdictions.

The Great Acceleration: Diffusion and the Compression of Enforcement Windows

Recent technological advancement has significantly changed the time aspect of enforcement. WIPO's research⁸ shows that due to digital technologies, they are spreading around the world faster than before. Worldwide acceptance of digital products through AI platforms, software ecosystems and technology that use networks will occur in a matter of months or less after being developed.

Because this is occurring so fast, there is less time for enforcement activity. By the time a patent is issued, or a final ruling has been made, it is possible that a competitor has changed the competitive landscape. The traditional way of handling patent disputes through reactive litigation, which takes years to complete, no longer fits with today's commercial realities.

Therefore, firms need to think about enforcement when developing their products and how to launch them. A preliminary injunction request, expedited patent counting processes and the enforcement of customs laws that comply with TRIPS will all be very important to companies. More companies are monitoring publicly available patent filings for information about the activities of competitors. Planning for enforcement will begin before a company actually experiences infringement. Speed of enforcement has become an essential variable with respect to global intellectual property law.

Regional Power Centers and Strategic Enforcement Models

1. Europe: Centralization and Procedural Consolidation

The creation and development of the Unified Patent Court (UPC)⁹ is one of the most important institutional changes made to the way European patents can be enforced. The UPC offers unified jurisdiction for the enforcement of European patents and Unitary Patents in the Member States which have agreed to be bound by its terms, thereby allowing rights holders to seek redress in multiple jurisdictions through a single institution.

At the same time as the UPC was established, the jurisprudence resulting from the application of the Brussels I Regulation (Recast)¹⁰ has provided greater clarity on cross-border jurisdiction within the EU. While enforcement of foreign patents is still limited to the geographical borders of the respective countries, procedural consolidation has made Europe much more relevant from a global perspective for resolving disputes.

The Digital Services Act¹¹ is another example of the way in which Europe is moving towards a single regulatory system by streamlining notice-and-action requirements for digital intermediaries. Judicial centralisation and platform accountability collectively represent a comprehensive approach to regional enforcement.

2. China: Institutional Strengthening and Normative Influence

In recent years China has made big changes to their rules concerning the protection of ideas from being copied by others. They now have special courts that deal only with cases involving protecting creative works from being copied and more ways to prove that money was lost because of having an idea copied. The changes also include dealing with enforcing them through different ways of doing business such as providing more information to law enforcement agencies.

China has become one of the top countries filing patents globally and being involved with lawsuits between countries over patents and the use of ideas worldwide. Countries have begun using the law against other countries who do not follow the laws regarding protecting ideas in ways that involve their governments and politics. The way we think of protecting creative works in China has changed to include being a positive way for China to expand its economy and help their people.

3. United States: Trade-Based Leverage and Expansive Remedies

The United States has strong tools for enforcing its laws including Section 337¹² of the Tariff Act of 1930 (which allows proceedings at the U.S. International Trade Commission to impose exclusion orders on goods that infringe). These proceedings provide a fast track for obtaining an exclusion order, which provides significant leverage over businesses engaged in importing infringing products.

In WesternGeco LLC v. ION Geophysical Corp.,¹³ the Supreme Court also considered the extent of extraterritorial recovery (i.e., damage for lost profit) under U.S. patent law. This case illustrates how domestic judicial systems can also impact the enforcement of foreign laws through the application of remedial theories. The U.S. system is a combination of judicial adjudication, trade regulation, and economic security and is referred to as hybrid enforcement.

Digitalization and the Expansion of Enforcement Modalities

Counterfeit markets have been radically altered by the emergence of digital markets. In addition to digital market locations, new ways of doing business have developed, including the use of decentralized sellers, the use of platform-based distribution and small consignment shipments, making it even more difficult for traditional methods of customs enforcement to be successful in this new marketplace. Regulatory legislation, such as the Digital Services Act, demonstrates the increasing expectation for intermediaries to bear a greater degree of structured compliance responsibility.

Simultaneously, customs enforcement is quickly transitioning from a reactive means of removing counterfeit products to an economic disruption approach. In addition to takedown procedures, rights holders are utilizing asset freeze strategies and revenue recovery models to disrupt the economic viability of infringing enterprises. Thus, the enforcement framework is transitioning away from a reactive response framework towards a proactive deterrence model.

Artificial Intelligence and the Redefinition of Inventorship and Authorship

There are doctrinal issues with AI and where the software fits within patent law and copyright law. In Thaler v. Vidal,¹⁴ the Federal Circuit Court of Appeals determined that only natural persons can be classified as inventors under the Patent Act. The court confirmed that human involvement continues to be a requirement for patentability.

As patent offices become more focused on documenting human involvement with AI-generated inventions, the need to establish clear chains of title and assign inventorship will be increasingly critical given today's world of algorithm-based assistance. Copyright systems also require human authorship; however, there is substantial variance between different jurisdictions as it relates to statutory provisions surrounding the authorship of works created by computer. There is a significant chance that diverging regulatory requirements surrounding data used to train AI and the output produced by machines will lead to additional global fragmentation of standards.

Cybersecurity and the Protection of Intangible Assets

Intangible Assets in the Corporate World are now the primary source of the Companies' value. While such assets were once stolen from companies through physical Espionage, they are now more often stolen through high tech Cyber-intrusion and from inside the company (Insider Attackers). Today, many Trade Secrets are stolen via digital transmission vs. physical Espionage.

To protect their intangible assets, Corporations must now integrate Cybersecurity Governance into the Total IP Strategy. The combined use of Continuous Monitoring, Behaviour Analysis, and Cross-Border Investigative Coordination work in conjunction with existing legal remedies to protect all types of Intellectual Property. There is no longer a boundary between IP Enforcement and Information Security.

From Reactive Litigation to Proactive IP Governance

The cumulative effects of the acceleration of technology, emerging digital commerce, the integration of artificial intelligence, and increased geopolitical competition have driven a transformational change in the Global strategy with respect to intellectual property. The management of intellectual property portfolios is increasingly driven as dynamic strategic assets and linked to a corporation's overall corporate governance framework. Corporations are also utilizing AI-based monitoring systems that enable them to monitor new, published patents, identify infringing activities on the Internet, and evaluate emerging competitive threats in real time. In addition to the above, corporations are coordinating teams across different functional areas (including legal, engineering, compliance, and cybersecurity) in order to manage intellectual property-related risks in a holistic manner.

Conclusion

Intellectual property protection on a global scale ultimately falls within the confines of territorial sovereignty; however, innovation has increasingly moved across borders at an ever-accelerating pace. The establishment of multilateral treaties, such as TRIPS, has facilitated foundational harmonization of the law throughout our world; however, enforcement of those treaties continues to occur on a decentralized and regionally differentiated basis. Each region Europe's centralized patent system, China's enhanced trade-related protections, and the U.S. hybrid judicial approach to enforcement provides different responses to the same underlying structural challenges. In addition to these ongoing challenges, the rapid growth of digitalization, the proliferation of artificial intelligence, and the rise in cyber-related threats have added a new and further complexity to the jurisdictional landscape.

The future of intellectual property enforcement in the global marketplace will not come through the elimination of territorial law, but rather through the creation of adaptive and integrated systems that can effectively function across multiple jurisdictions from a legal, technological, and strategic standpoint. The ever-growing interconnectedness of the innovation ecosystem creates significant pressures on the governance of intellectual property that demand an equally high degree of precision and agility in how that governance will continue to evolve.

Footnotes

1. Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, 1869 U.N.T.S. 299.

2. Paris Convention for the Protection of Industrial Property art. 2, Mar. 20, 1883, as revised July 14, 1967, 828 U.N.T.S. 305.

3. Berne Convention for the Protection of Literary and Artistic Works art. 5, Sept. 9, 1886, as revised July 24, 1971, 828 U.N.T.S. 221.

4. Patent Cooperation Treaty, June 19, 1970, 1160 U.N.T.S. 231.

5. Agreement on Trade-Related Aspects of Intellectual Property Rights arts. 41, 51–60, Apr. 15, 1994, 1869 U.N.T.S. 299.

6. Unwired Planet Int'l Ltd v. Huawei Techs. Co. Ltd [2020] UKSC 37.

7. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S. 3.

8. World Intell. Prop. Org., World Intellectual Property Report 2022: The Direction of Innovation (2022).

9. Agreement on a Unified Patent Court, Feb. 19, 2013, 2013 O.J. (C 175) 1.

10. Regulation (EU) No 1215/2012, 2012 O.J. (L 351) 1.

11. Regulation (EU) 2022/2065, 2022 O.J. (L 277) 1.

12. Tariff Act of 1930 § 337, 19 U.S.C. § 1337 (2022).

13. WesternGeco LLC v. ION Geophysical Corp., 585 U.S. 407 (2018).

14. Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.