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Re: Annee Phil. followup...International Law?

Legal discussions between non-lawyers always create more confusion than
clarification.  The discussions in recent weeks about jurisdiction clauses
in license agreements are no exception.

Contracts - and licenses are contracts - between parties in different
countries or states usually agree that any dispute should be subject to a
chosen jurisdiction.  This is normal practice.  It is designed to avoid a
dispute about where a case is to be heard and under what law is it to be
judged, prior to dealing with the substantive dispute.

It is well known that many public-sector institutions in many states or
countries - notably most US states - require that all contracts be subject
to their own jurisdiction.  In the case of content licenses, most
publishers know and accept this.  For the publisher, this is essentially a
commercial decision: do the deal in return for a slight risk of things
going wrong and the dispute being subject to 'foreign' rules and hearings
- and additional legal expense.

If jurisdiction is not provided for, that may get the deal done.  But if
there is a dispute, there is a preliminary issue to be resolved: where is
the case to be heard?  Jurisdiction clauses mean that the issue has
already been decided in the contract.

International law is a body of rules designed to regulate the activities
of states and any disputes between them.  It does not attempt to second
guess national law in contract or any other branch of the law.  Its only
relevance to licenses is that it provides the rules for deciding where and
under which law a dispute between parties in different national
jurisdictions can be heard, if jurisdiction has not been provided for.

Arbitration was originally devised as a low cost alternative to litigation
through the courts.  Through the years, arbitration has become very
expensive, and has involved the creation of a different set of rules for
dispute resolution.  And it does not get round the issue of jurisdiction,
as the arbitrator needs to know what legal rules apply to the dispute in
question.  So it is no alternative.

There are two ways of dealing with the jurisdiction issue:

1.  The first is for the publisher to adopt the jurisdiction of its
customer.  Most sensible publishers already do this, but it does depend on
libraries making it very clear to publishers that this is the only basis
on which the deal can be done; if publishers are not made to understand
this, they will not change.  If the publisher still does not accede to
this requirement, don't do business with them and tell them so.  I am
afraid that there is no cure for commercial stupidity.

2.  The second is to delete the jurisdiction provision.  This leaves to
chance whether a dispute will get as far as court action.  In the academic
community, as in most walks of life, breach of contract is usually
resolved long before the matter gets to the litigation stage.  Although
lawyers will advise against deletion, the risk is low.

John Cox

John Cox Associates
Rookwood, Bradden
TOWCESTER, Northants NN12 8ED
United Kingdom
Tel: +44 (0) 1327 860949
Fax: +44 (0) 1327 861184
E-mail: John.E.Cox@btinternet.com

----- Original Message -----
From: "Diana Kichuk" <Diana.Kichuk@usask.ca>
To: <liblicense-l@lists.yale.edu>
Sent: 1 August 2002 11:19 pm
Subject: Re: Annee Phil. followup...International Law?

> James J. O'Donnell,
> I would like to point out another possible option. FAOSTAT has an
> interesting clause in its agreement: Governing Law; Disputes. The clause
> states that the agreement will be governed by general principles of law,
> "to the exclusion of any single national system of law". Any disputes,
> controversy or claim will be settled by "mutual agreement." If the parties
> cannot reach an agreement a request will be made for binding arbitration
> "in accordance with the Arbitration Rules of the United Nations Commission
> on International Trade Law".
> Perhaps some model license creators have considered International Law as a
> source for arbitration of jurisdiction disputes.
> While I have attempted to incorporate provincial jurisdiction is new
> licenses (with varying success), I am not at all certain what this would
> mean if a real dispute arose. Would my change have any impact? Would it
> stand up in a court of law? Would I be better off if a single
> international authority (possibly with national jurisdictions or offices)
> could be responsible for arbitrating just such disputes or controversies?
> Diana Kichuk
> Electronic Resources Librarian
> University of Saskatchewan Library
> (306) 966-5926
> (306) 966-5932 (fax)
> Diana.Kichuk@usask.ca