Texas A&M University School of Law Texas A&M Law Scholarship Faculty Scholarship 7-2012 Region Codes and the Territorial Mess Peter K. Yu [email protected] Follow this and additional works at: https://scholarship.law.tamu.edu/facscholar Part of the Law Commons Recommended Citation Peter K. Yu, Region Codes and the Territorial Mess, 30 Cardozo Arts & Ent. L.J. 187 (2012). Available at: https://scholarship.law.tamu.edu/facscholar/402 This Article is brought to you for free and open access by Texas A&M Law Scholarship. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Texas A&M Law Scholarship. For more information, please contact [email protected]. REGION CODES AND THE TERRITORIAL MESS PETER K. Yu* INTRODUCTION ............................................... 188 I. HISTORICAL ORIGINS.................................... 192 I. LIMITED BENEFITS.................................. 99 A. Sequential Release .............................200 B. Price Discrimination ................ ..... 206 C. Distribution and Licensing Arrangements................. 209 D. Censorship Ratings and Regulatory Standards.......... 213 E. Summary ....................................216 III. UNINTENDED CONSEQUENCES ........................... 216 A. Consumption..........................217 B. Competition ................. .......... 220 C. Cultural Rights.............. ........... 226 D. Censorship............................230 E. Summary.............................233 IV. THREE MODEST PROPOSALS ............... .............. 234 A. Voluntary Removal ................. ..... 235 B. Multiregion Players ...................... 239 C. The Right to Circumvent .........................245 * Permission is hereby granted for noncommercial reproduction of this Article, in whole or in part, for educational or research purposes, including the making of multiple copies for classroom use, subject only to the condition that the name of the author, a complete citation, and this copyright notice and grant of permission be included on all copies. * Kern Family Chair in Intellectual Property Law and Director, Intellectual Property Law Center, Drake University Law School; Wenlan Scholar Chair Professor, Zhongnan University of Economics and Law. This Article was presented at Cardozo Arts & Entertainment Law Journal Thirtieth Anniversary Symposium on "Piracy and the Politics of Policing: Legislating and Enforcing Copyright Law" at Benjamin N. Cardozo School of Law, Yeshiva University. The Author would like to congratulate the Journal and its members on achieving this historical milestone. Earlier versions of the Article were also presented at the 2011 ATRIP Congress at the National University of Singapore, the Law & Informatics Institute and Northern Kentucky University Law Review Symposium at Salmon P. Chase College of Law, Northern Kentucky University, and the 2012 Works-in-Progress Intellectual Property Colloquium at the University of Houston Law Center. The Author is grateful to Jon Garon and Jan Rosdn for their kind invitations and hospitality and Olufunmilayo Arewa, Derek Bambauer, Molly Beutz Land, Leah Chan Grinvald, William Ford, Yaniv Heled, Kenneth Katkin, Yvette Liebesman, Benjamin Liu, Lydia Loren, Rostam Neuwirth, Lisa Ramsey, Clare Sullivan, Marketa Trimble, and the participants of these events for their valuable comments and suggestions. He would like to thank Linzey Erickson and Erica Liabo for excellent research and editorial assistance. He also benefits from the insights and experience of the participants of the Home Theater Forum, hosted by Robert Silva on About.com. 0 2012 Peter K. Yu. 187 188 CARDOZO ARTS & ENTERTAINMENT [Vol. 30:187 D. Summary ........................ ..... 252 V. WHY DVD REGION CODES? . .. 252 CONCLUSION................................................ 263 INTRODUCTION Intellectual property rights are territorial by nature.' Copyright holders cannot yet obtain unitary protection throughout the world. Instead, they obtain rights in Australia, Brazil, China, France, South Africa, and the United States. What type of rights they obtain, how strong these rights will be, and whether the rights will be effectively enforced depend largely on the intellectual property system each individual country has put in place. It is therefore no surprise that copyright holders seeking to protect their works in multiple markets remain frustrated by the "territorial mess" created by national divergences in laws, policies, and institutions, not to mention the additional differences in market capacities and consumer expectations. 2 Although countries have occasionally enforced laws extraterritorially to abate this "territorial mess," 3 especially in situations involving the Internet, a less intrusive approach is to harmonize the laws of different countries. Since the nineteenth century, sovereign governments have worked with each other to address cross-border challenges by establishing international intellectual property agreements.4 These agreements ranged from the Paris, Berne, and Rome Conventions5 to the Agreement on Trade-Related Aspects of I See Berne Convention for the Protection of Literary and Artistic Works art. 5(3), Sept. 9, 1886, S. Treaty Doc. No. 99-27, 828 U.N.T.S. 221 (revised at Paris July 24, 1971) [hereinafter Berne Convention] ("Protection in the country of origin is governed by domestic law."); Paris Convention for the Protection of Industrial Property art. 4bis(l), Mar. 20, 1883, 13 U.S.T. 2, 828 U.N.T.S. 305 (revised July 14, 1967) [hereinafter Paris Convention] ("Patents applied for ... by nationals of a country of the Union shall be independent of patents obtained for the same invention in other countries .... ); General Council, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health 6(i), WT/L/540 (Sept. 2, 2003), 43 I.L.M. 509 (2004) (noting "the territorial nature of the patent rights"); see also Frederick M. Abbott, Seizure of Generic Pharmaceuticals in Transit Based on Allegations of Patent Infringement: A Threat to International Trade, Development and Public Welfare, 1 WIPO J. 43, 44 (2009) (noting the difference between the territoriality and the independence of intellectual property rights). 2 See Peter K. Yu, Teaching InternationalIntellectual Property Law, 52 ST. Louis U. L.J. 923, 943 (2008) (noting "the 'messiness' of international intellectual property law"). 3 For discussions of extraterritorial enforcement of intellectual property rights, see generally Curtis A. Bradley, Territorial Intellectual Property Rights in an Age of Globalism, 37 VA. J. INT'L L. 505 (1997); Jane C. Ginsburg, Extraterritorialityand Multiterritorialityin Copyright Infringement, 37 VA. J. INT'L L. 587 (1997). 4 See generally Peter K. Yu, Currents and Crosscurrents in the International Intellectual Property Regime, 38 LOY. L.A. L. REv. 323, 330-75 (2004) [hereinafter Yu, Currents and Crosscurrents](providing the history of the development of the international intellectual property regime). 5 Berne Convention, supra note 1; Paris Convention, supra note 1; International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, Oct. 26, 2012] REGION CODES AND THE TERRITORIAL MESS 189 Intellectual Property RightS6 ("TRIPS Agreement") of the World Trade Organization ("WTO") to the 1996 Internet Treaties7 of the World Intellectual Property Organization ("WIPO"). While territorial challenges posed by national borders continue to exist and remain quite significant, rapid globalization, the increased mobilization of goods and people, and the arrival of the Internet and new communications technologies have further exacerbated these challenges. In the mid-1990s, the popularization of the Internet led commentators and netizens to question the success and appropriateness of using existing laws and regulations to govern the borderless Cyberspace.8 In A Declaration of the Independence of Cyberspace, for example, John Perry Barlow provocatively declared: Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear. 9 By now, it is quite clear that Cyberspace, though borderless, is far from unregulable. As Lawrence Lessig, Joel Reidenberg, Tim Wu, and many others have reminded us, code can become law.10 By 1961, 496 U.N.T.S. 43. 6 Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex IC, 108 Stat. 4809, 869 U.N.T.S. 299 [hereinafter TRIPS Agreement]. 7 WIPO Copyright Treaty, Dec. 20, 1996, S. Treaty Doc. No. 105-17, at 1 (1997); WIPO Performances and Phonograms Treaty, Dec. 20, 1996, S. Treaty Doc. No. 105-17, at 18 (1997). 8 David Post and Jack Goldsmith provided the now classic exchange on this particular topic. See David R. Johnson & David G. Post, Law and Borders-The Rise ofLaw in Cyberspace, 48 STAN. L. REV. 1367 (1996) (discussing how efforts to control the flow