Smartness boomerangs!

Pratap Ravindran

SHERLOCK Holmes, in a somewhat tenuous and yet deft demonstration of his deductive skills, solves a mystery on the basis of his observation that the dog did not bark.

Extrapolating from this, one may start from the lack of canine response in India to the late June Hague convention on Jurisdiction and Foreign Judgements treaty which is being negotiated under the Hague Conference on Private International Law to arrive at the conclusion that the exponents of e-commerce in India know, in their silicon hearts, that business over the Net is a non-starter here and, as such, trans-national laws governing it are of scant interest to them.

Quite simply, the treaty proposed by the Hague Conference on Private International Law will set the rules for jurisdiction -- a legal minefield in cyberspace -- and, in doing so, will stand globalisation on its head by conceding the continuance of the substantive laws of the various countries while requiring their enforcement of foreign judgments.

However, before we get down to the nitty-gritty, it is necessary to understand what exactly the Hague Conference on Private International Law is and why its proposed treaty is crucial to emergent e-commerce.

The Hague Conference on Private International Law is a somewhat obscure organisation that held its first meeting in 1893 but did not achieve a permanent status till 1951. Since then, it has adopted 34 international conventions, covering distinctly arcane points in procedural law.

It currently has 49 members -- and counting. India, as of now, is not one of them. But that, as we shall see, is of little consequence.

The conference first came to public notice in 1965 when it adopted a convention on the choice of court for civil litigation -- which was endorsed by one country, Israel. In some sense, its current initiative represents an attempt to catch up with issues relating to civil and commercial litigation arising out of the increasing use of the Internet to transact business. To back up a little, the US Government, in 1992, proposed a treaty -- formally known as the Hague Treaty on Jurisdiction and Foreign Judgments in Civil and Commercial Matters -- which would provide for the recognition of foreign judgements. At that point of time, the US wasn't thinking about the Internet, it simply wanted to protect itself in cases involving entities or persons.

The convention rests on the following planks:

* Signatories to it agree to follow a set of rules regarding jurisdiction for cross-border litigation running the civil/commercial gamut;

* Every signatory agrees to enforce the judgments/injunctive orders emanating from the other member countries, subject to exceptions involving judgements that are ``manifestly incompatible with public policy;''

* A judgement in any country will be enforced by all Hague Convention members -- even if that country has nothing to do with a particular dispute.

* Member countries are not required to synch their substantive laws and no restrictions govern the kinds of national laws that can be enforced.

Sounds good, doesn't it? But it isn't. Not if you're planning to do anything at all on the Internet.

The problem here is that the convention rests on the premise that there is no need for the harmonisation of the substantive laws in various countries and that only the jurisdictional rules and the enforcement of laws need to be brought into alignment.

Given the sheer sweep of the treaty under discussion -- it covers intellectual property claims (patent, copyright, trademark, trade secret, unfair competition et al), libel, slander, contractual disputes and so on, it will, in the words of James Love of the Consumer Project on Technology, ``strangle the Internet with a suffocating blanket of overlapping jurisdictional claims, expose every Web page publisher to liabilities for libel, defamation and other speech offences from virtually any country, effectively strip Internet Service Providers (ISPs) of protection from litigation over the content they carry, give businesses who sell or distribute goods and services the right to dictate via contracts the countries where disputes will be resolved...

He goes on to point out: ``It provides a mechanism to greatly undermine national policies on the `first sale' doctrine, potentially ending royalty free video rentals for corporate entities with overseas assets, and it opens the door for cross-border enforcement of a wide range of intellectual property claims, including new and novel rights that do not have broad international acceptance. It will lead to a great reduction in freedom, shrink the public domain and diminish national sovereignty.''

Dealing specifically with Internet issues, Love writes: ``For example, under the treaty, different national laws concerning libel or slander will give rise to judgements and injunctions, as will different national laws regarding copyright, patents, trademarks, trade secrets, unsolicited e-mail, unfair competition, comparative advertising, parallel imports of goods, and countless other items. As a consequence, people will find that activities that are legal where they live are considered illegal in a different country and that, under the treaty, the foreign country will likely have jurisdiction, and their laws will be enforceable in all Hague member countries.'' Ironically, a good deal of the opposition to the treaty comes from the US -- which got this particular ball rolling in the first place.

Thus, Zdnet.com, for instance, quotes Barbara Welbery, a partner at Morrison and Foerster's Washington, DC, office and former chief counsellor for e-commerce to the US Commerce Department's Under-Secretary for International Trade, as saying that the treaty could ``exacerbate a trend of foreign countries claiming jurisdiction over US Web sites.''

She is quoted as having told a hearing before a House Energy and Commerce sub-committee: ``The result could be that the Internet is reduced to the lowest common denominator where Web sites avoid any but the safest content for fear of offending someone and being hauled into court.''

Zdnet.com further quotes Marc Perl, a partner at the Shaw Pittman law firm which is coordinating the US e-commerce industry's input to the American delegation for the Hague negotiations, as saying: ``We cannot allow the Hague process to place us into a situation that balkanises the Internet and limits the ability of e-commerce to flourish.''

And then again, SiliconValley.com observes: ``Thankfully, some powerful interests on the other side of this debate have begun to notice the debacle the treaty might create. Data communications companies, in particular, recognise how vulnerable they would be to other nations' laws and to the entertainment industry's insatiable greed.''

``They don't want to be forced to police their customers' activities - adding huge costs and wrecking what's left of online privacy - and they're among the opponents urging that the proposed treaty be modified or even derailed.''

Obviously, the Internet-driven businesses in the US are beginning to figure out that, sometimes, a country can be too smart for its own good!