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1
A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Resolving Intellectual Property Business Disputes through Arbitration
and Mediation
Eun-Joo MINArbitration and Mediation Center
World Intellectual Property Organization (WIPO)Geneva, Switzerland
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Trends in IP ADR (1)
• Internationalization of creation and use of IP rights & globalization of markets; need for cross-border solutions for disputes
Accommodate different languages, cultures, (geographically limited) laws
Avoid litigation in several jurisdiction Avoid home-court advantage
• Growth of complex long-term relationships; strategic alliances; need to co-exist
Licensing, cross-licensing, patent pooling
Need for mechanisms that preserve relations
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Trends in IP ADR (2)
• Increasingly technical and specialized nature of IP
need for specific expertise of “neutral”
• Growth of IP/technology contracts
• Closely guarded relationships: confidentiality• Highly competitive areas; Short product and market
cycles Need for time-efficient procedures
• Increasing cost of multi-front litigation• Dispute resolution as business decision
Alternative to ADR?
Routine IP litigation on a multi-country front
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Litigation (1)
• Globalization: While the exploitation of IP is global, IP rights are still territorial. Enforcement is usually made on country-by-country basis.
• Overview of Litigation in Different Jurisdictions - Patents as an Example:
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Country Characteristic of Legal System Average Length Average Cost
France - Civil Law - Unified Litigation - No specialized courts
First Instance: 18-24 months Appeal: 18-24 months
€80,000-150,000 (1st Inst.)
Germany - Civil Law - Bifurcated Litigation - Specialized court for invalidity
First Instance: 12 months Appeal: 15-18 months
€50,000 (1st Inst.) €70,000 (App.)
Italy - Civil Law - Unified Litigation - Specialized courts
First Instance: few months – 24 months Appeal: 18-24 months
€50,000-150,000 (1st Inst.) €30,000-70,000 (App.)
Spain - Civil Law - Unified Litigation - Commercial Courts
First Instance: 12 months Appeal: 12-18 months
Not Available
UK - Common Law - Unified Litigation - Specialized courts - Mediation promoted
First Instance: 12 months Court of Appeal: 12 months House of Lords: 24 months
€750,000-1,500,000 (1st Inst.) €150,000-1,500,000 (App.) €150,000-1,500,000 (House of Lords)
China - Civil Law - Bifurcated Litigation - Specialized courts
First Instance: 6 months (in law) Appeal: 3 months, no limit when foreigners litigate
Not Available
J apan - Civil Law - Bifurcated Litigation - Specialized courts
First Instance: 14 months Appeal: 9 months
Not Available
USA - Common Law - Unified Litigation - Specialized court of appeals (CAFC) - J ury trial available - Mediation promoted
First Instance: up to 24 months Appeal: 12 + months
Up to $4,000,000 (1st Inst.) $150,000-250,000 (App.)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
• Disadvantages of litigation: systems too different too expensive risk of contradictory results (eg Angiotech patent 2007)
• Possible Solutions: European Patent Litigation Agreement: setback on January
20, 2007 when the European Parliament’s Legal Service decided that it does not comply with the standards of European law
Brussels Convention on Jurisdiction and Enforcement on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters
Hague Convention on Jurisdiction and Foreign Judgments was never agreed
Litigation (2)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Cross-border injunctions granted by Dutch Courts: rejected by the European Court of Justice on July 13, 2006
ConsolidationUSA: Voda v. Cordis: District court allowed
consolidation of foreign patent infringements, but the CA vacated the decision on February 1, 2007
Japan: in Fujimoto v. Newlon (May 13, 2003) the Supreme Court of Japan rejected that Japanese courts had authority to try infringements on foreign patents
Alternative Options?
Litigation (3)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Mediation, Arbitration, Expert Determination
• Mediation: a non-binding procedure in which a neutral intermediary, the mediator, assists the parties in reaching a settlement of a dispute.
• Arbitration: a neutral procedure in which the dispute is submitted to one or more arbitrators who make a binding decision on the dispute.
• Expert determination: a neutral procedure in which a dispute/difference (frequently discrete issues of technical, scientific or related business nature) is submitted to one or more expert who make a determination on the matter referred. A WIPO determination is binding, unless the parties agreed otherwise.
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Arbitration and Mediation (1)
• Party control / autonomy / consensual
• Flexibility : “à la carte”
• Expertise Party selection of neutrals; tailored appointment
• Neutral Arbitrator/mediator, language, law, venue
• Confidential Existence, disclosures, result (WIPO Arb Rules Arts. 52, 73-76)
• Less adversarial than court litigation Restore a working business relationship
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Arbitration and Mediation (2)
• Single Procedure Multi-jurisdictional disputes in one proceeding
No jurisdictional problems
Time & cost effective (WIPO Arb Rules, Art 38)
• Arbitration: finality / enforceability of awards New York Convention
with limited exceptions (e.g. denial of due process), “automatic” enforcement of arbitral awards
142 signatories
inter-partes effect
• Mediation: commercial solutions
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Arbitration and Mediation Center
• Time & cost efficient resolution of IP and technology disputes, between private parties, away from court
• Established in 1994 as part of WIPO • Procedures
Mediation
(Expedited) Arbitration
Mediation followed, in the absence of a settlement, by arbitration
Expert Determination
Domain Name Dispute Resolution
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Routes to ADR
• Court Annexed (in particular mediation)• Voluntary decision of the parties
Submission Agreement ADR Clause
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Center: ADR Options
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Mediation Process
Commencement
Appointment of Mediator
Initial Conference
Meetings
Conclusion
Request for Mediation (Art 3-5); Fees Art 21)
Role of the mediator (Art 13); Appointment (Art 6-7)
Conduct of the mediation (Art 9-12)
Set up the first meeting; Agree on preliminary exchange of document, if any
Agree on ground rules of the process; Gather information and identify issues; Explore the interests of the parties; Develop options for settlement; Evaluate options
80% success; costs USD 6,000-60,000; duration 1-7months
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Mediation Example 1
• Patent infringement dispute
R&D company holding patents disclosed patented invention to manufacturer during consulting contract
No transfer or license of patent rights
Manufacturer started selling products which R&D company alleged included patented invention
Negotiation patent license failed
Parallel infringement proceedings in several jurisdictions?
• Parties submitted to WIPO Mediation
Agreed license and new consulting contracts
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Final Award (3 months)
Closure of Proceedings
Hearings
Further Written Statements and Witness Statements
Statement of Defense (30 days)
Statement of Claim (30 days)
Appointment of Arbitrator(s)
Answer to Request for Arbitration (30 days)
Request for Arbitration
• Party autonomy
• Flexibility
• Efficiency
• Rules on technical evidence
• Confidentiality provisions
•Two exchange of pleadings
– Request & Answer
– Statement of Claim & Defense
WIPO Arbitration
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Arbitration Example 1 [patent]
• Exclusive R&D and licensing agreement biotech co. and pharma co.
• Alleged delays development and regulatory approval biotech compound
• R&D entity terminated agreement started WIPO arbitration proceedings
• Arbitrator expert in biotech-pharmaceutical
• Two-day hearing
• Settlement agreement
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Arbitration Example 2 [trademark]
• US university registers TM for email system in US, Canada, etc.
• CN IT manufacturer registers TM for computer products in 16 countries
• Opposition proceedings & litigation for 6 years
• TM coexistence agreement; WIPO arbitration clause
• US university’s TM application in CN refused, requests CN manufacturer’s collaboration
• Request for specific performance (proxy registration & license); sole arbitrator
• Interim award (specific performance)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Final Award (1 month)
Closure of Proceedings
Hearing (maximum 3 days)
Appointment of Arbitrator
Answer to Request for Arbitrationand Statement of Defense (20 days)
Request for Arbitrationand Statement of Claim
Final Award (3 months)
Closure of Proceedings
Hearings
Further Written Statements and Witness Statements
Statement of Defense (30 days)
Statement of Claim (30 days)
Appointment of Arbitrator(s)
Answer to Request for Arbitration (30 days)
Request for Arbitration
WIPO Arbitration WIPO Expedited Arbitration
One exchange of pleadings ; Shorter time limits; Sole arbitrator; Shorter hearings; Fixed arbitrators fees
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Expedited Arbitration Example 1
• Insurance Both parties see urgency and agree on short deadlines
Only one issue in dispute
One-day hearing
Final Award: 5 weeks
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Expedited Arbitration Example 2
• Exclusive Patent License Dispute involving 1 European and 5 US patents
US party rejected Asian party (inventor)’s claim that its products embodies technologies covered by licensed patents and refused to pay royalties
Complex legal and technical issues (infringement, validity, enforceability, contract defense)
Business secrets, models, site visits (protective orders)
12 procedural orders, 2 preliminary awards
eight-day hearing
Final Award: 15 months
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Mediation followed by Arbitration
• Try mediation before arbitration, at least until
lapse of time period
termination
• Combining the benefits
arbitration well-prepared
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Expert Determination
• Accommodate expeditious resolution of disputes between parties, concerning an issue of limited scope (e.g. royalty rate dispute) or clarification of certain technical or scientific issues by a neutral third party
• More informal, flexible and expeditious than arbitration
• Determination binding (unless parties agree otherwise)• May be combined with other WIPO procedures
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Drafting ADR Clauses (1)
• Essential elements: Type of ADR
Applicable rules
Location, language of ADR
Number of neutrals
Governing law, if arbitration
Place of arbitration: arbitration-friendly environment; modern arbitration act
• Use model clauses and modify only as necessary
• Combine options, including mediation High settlement rate
• If arbitration, “make it fit” (e.g. expedited)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Recommended WIPO Mediation Clause
“Any dispute (…) shall be submitted to mediation in accordance with WIPO Mediation Rules. The place of mediation shall be […]. The language to be used in the mediation shall be […].”
Recommended WIPO Arbitration Clause
“Any dispute, (…) shall be referred to and finally determined by arbitration in accordance with the WIPO Arbitration Rules. The arbitral tribunal shall consist of [three arbitrators][a sole arbitrator]. The place of arbitration shall be […]. The language to be used in the arbitral proceedings shall be […]. The dispute, controversy or claim shall be decided in accordance with the law of […].”
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
http://www.wipo.int/amc/en/arbitration/contract-clauses/clauses.html
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Drafting ADR Clauses (2)
• Examples of defective arbitration clauses “Arbitration in Geneva” “Any disputes shall be solved by arbitration between the
parties; failing that, arbitration in the English language shall be conducted in Houston, according to the Paris Convention, which shall be final and binding upon the parties.”
• Examples of “creative” arbitration clauses “Disputes relating to patent infringement shall be finally
determined in accordance with the WIPO Expedited Arbitration. Contractual disputes [different institution].”
“Disputes relating to US patents: US arbitrator. Disputes relating to European patents: EU arbitrator. Each award can be challenged by and finally determined by arbitration in accordance with WIPO Arbitration Rules. The tribunal shall consist of three arbitrators.”
• And… WIPO arbitration with 3 arbitrators: amount in dispute USD
60,000
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Arbitration and Mediation Case Experience (1)
• 64 mediations
• 70 arbitrations
• Parties from 18 countries (domestic & international)
Austria, Canada, China, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Panama, Romania, Spain, Switzerland, UK, USA, etc.
• Place of Arbitration France, Germany, the Netherlands, Switzerland, USA
• Procedures English, French, German, Italian
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Arbitration and Mediation Case Experience (2)
• Subject matter: Contractual: patent licenses, pharmaceutical distribution
agreements, R&D, joint ventures, software/IT, copyright collecting societies, trademark coexistence agreements, art marketing, other commercial relationships (construction, finance, employment).
Patent infringement
• High success rate Value in dispute: USD 20,000 – USD 600 million
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
http://www.wipo.int/amc/en/center/caseload.html
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Role of the WIPO Center as an Administering Authority (1)
• Administered vs. Ad Hoc? Hard to agree on procedure once dispute arisen; do you know
suitable neutrals; which administering institution (do not combine)
• Rules with IPR orientation Mediation, (Expedited) Arbitration, Expert Determination
e.g. WIPO Arb Rules Arts 48-52: special rules on experiments, site visits, agreed primers and models, trade secrets and confidential information, protective orders, confidentiality advisor
• Model contract clauses
• List of neutrals (arbitrators, mediators, experts)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Role of the WIPO Center as an Administering Authority (2)
• Competitive fees
• Efficient and cost-effective case administration Establishment of the Tribunal, challenges, support in appointment of
experts, management of fees and costs
• Hearing facilities Free of charge in Geneva and Singapore
• WIPO Electronic Case Facility (ECAF)
• International, institutional knowledge, guidance, supervision
• Design and operation of procedures for special categories of IP disputes (UDRP)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Neutrals
LIST OF MEDIATORS AND ARBITRATORS
BIOGRAPHICAL DATA
David W. PLANT, Esq.215 Little Lake Sunapee RoadNew London, NH 03257United States of America
Telephone: (1-603) 526 2653/2655 Facsimile: (1-603) 526 2654E-mail: [email protected]
Date of Birth: April 22, 1931Nationality: USA
EDUCATIONAL AND PROFESSIONAL QUALIFICATIONS
Registered to practice before United States Patent & Trademark Office, 1982;Licensed to practice in United States Supreme Court, 1968;Licensed to practice law, N.Y. State Bar, 1957;LLB, Cornell University, 1957;BME, Cornell University, 1953.
• Over 1,000 experts
• 70 nationalities
• Broad range of ADR, IP, and
technical backgrounds
• Appointment in WIPO Cases
• Referral Service
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Schedule of Fees (Arbitration) : Competitive Rates
Amount in dispute Expedited Arbitration
Arbitration
Registration Fee Any Amount $1,000 $2,000Administration Fee * Up to $2.5 M $1,000 $2,000
Over $2.5 M and up to $10 M
$5,000 $10,000
Over $10 M $ 5,000+0.05% of amount
over $10 M up to a maximum fee of
$15,000
$10,000+0.05% of amount
over $10 M up to a maximum fee of
$25,000
Arbitrator(s) Fees * Up to $2.5 M $20,000(fixed fee)
Over $2.5 M and up to $10 M
$40,000(fixed fee)
Over $10 M As agreed by the Center in
consultation with the parties and the
arbitrator
As agreed by the Center in consultation with the parties and
the arbitrator(s)
Indicative rate(s)$ 300 to $ 600 per hour
(All amounts are in United States dollars)
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Electronic Case Facility (ECAF)
• Available for arb / med cases under WIPO Rules Certain exceptions: America’s Cup Jury Procedure
• Main features Web-based electronic docket
Facilitation of party / neutral case management
Easy, Instant, Location-independent, Secure
• User Information http://www.wipo.int/amc/en/ecaf
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
ECAF: Log-In
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO ECAF Docket
• Docket allows submission in most common formats (Word, PDF, JPG, etc.)
• All actors may view and search the Docket (by submitting actor, date, subject title)
• Email alerts communicated to all actors when new submission made
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO ECAF Case Management
Case Overview
• Contact Information
• Time Tracking
• Finance Overview
• Message Board
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
WIPO Domain Name Dispute Resolution
UDRP.info
Sunrise.biz STOP
.name ERDRP
.mobi Sunrise
.mobi Premium Names
Total
1999 1 - - - - - 1
2000 1,857 - - - - - 1,857
2001 1,556 1,579 53 - - - 3,188
2002 1,208 13,593 285 1 - - 15,087
2003 1,100 - - - - - 1,100
2004 1,176 - - 3 - - 1,179
2005 1,456 - - 1 - - 1,457
2006 1,823 - - 1 18 105 1,947
Total 10,177 15,172 338 6 18 105 25,816
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Role of the WIPO Center as a Resource Center
• IP ADR guidance
• Publications
• Workshops, conferences (upcoming events) WIPO Workshop for Mediators in Intellectual Property Disputes,
June 11-12, 2007
WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, June 14-15, 2007
WIPO Arbitration Workshop, October 16-17, 2007
WIPO Advanced Workshop on Domain Name Dispute Resolution, October 18-19, 2007
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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007
Information
• http://www.wipo.int/amc
• Mailing list: http://arbiter.wipo.int/subscribe