Rethinking Forum Shopping in Cyberspace

A game-theoretic analysis of forum shopping reveals how opportunities for strategic choices can influence the behavior of plaintiffs and defendants. If neither party has the opportunity to make strategic choices about participation or forum choices, we should expect no adverse selection or moral hazard problems. By contrast, if only one of the parties can control both the participation and forum selection choices, then we could expect pervasive adverse selection and moral hazard problems. In this paper we build on this simple game-theoretic framework, to analyze Dreyfuss and Ginsburg’s (2001) Draft Convention on Jurisdiction and Recognition of Judgments in Intellectual Property Matters. We suggest that if the parties are faced with a bilateral strategic problem (i.e., if one party has control over one strategic choice and the other party has control over the other strategic choice), the extent of opportunistic behavior by either party, and the resulting deadweight losses, are likely to be minimized. In this respect, the Dreyfuss-Ginsburg proposal sensibly minimizes the strategic problems of forum shopping and creates an enforcement scheme which leaves intact the innovation incentives underlying intellectual property rights. Dreyfuss and Ginsburg’s (2001) Draft Convention on Jurisdiction and Recognition of Judgments in Intellectual Property Matters addresses jurisdiction and enforcement of foreign judgments in the area of intellectual property. The proposal follows in many aspects the text of the Hague Conference Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters. The authors of this proposal perceive that a special convention on intellectual property disputes would be particularly advantageous, not only in light of the uncertain prospects of the Hague Convention, but also for the peculiar problems emerging in the adjudication and recognition of foreign judgments in the field of intellectual property: [A] convention drafted for intellectual property disputes would be able to take account of issues uniquely raised by the intangibility of the rights in issue. For example, where a general convention’s jurisdiction provisions speak generally of “acts,” “omissions,” and their foreseeability, an instrument on intellectual property disputes can be geared specifically to the events that comprise infringement. 1 Associate Professor of Law, George Mason School of Law. 2 Professor of Law, George Mason School of Law and Co-Director, J.M. Buchanan Center for Political Economy, Program in Economics and the Law. 3 The Dreyfuss and Ginsburg proposal is indeed adapted from the October 30, 1999, Hague Draft Convention. 4 Dreyfuss and Ginsburg (2001). Some commentators have suggested that unlike real property claims, intellectual property claims, raise unique and difficult jurisdiction issues due to the intangible nature of the property and should be dealt with in a separate, standalone treaty. See, e.g ., Aippi Report, Finale Resolution, On the Hague Convention on Private International Law, Mar. 30, 2001, available at www.aippi.org/reports/resolutions (suggesting the deletion of intellectual property matters from the Hague Convention because of a lack on international consensus on how to handle them); Justice Jacob, The Deioma Lecture, 32 CASE W. RES. J. INT'L L. 507 (2000) (suggesting that the Hague Convention eliminate intellectual property from its purview and leave the nation-state litigation systems in place). In response to a request for comments on the Hague Convention from the United States Patent & Trademark Office