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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Arbitration, Mediation and Expert Determination
Time- & Cost-Efficient Dispute Resolution Tools
Eun-Joo MINArbitration and Mediation Center
World Intellectual Property Organization
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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
Expert Determination
Combined procedures
Specialized Procedure: Domain Name Dispute Resolution
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Trends in IP Disputes (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 (cost; risk of contradictory results – Angiotech patent 2007) Avoid home-court advantage Need for cross-border injunctions
• Growth of complex long-term relationships; strategic alliances; need to co-exist
Licensing, cross-licensing, patent pooling, standards
Need for mechanisms that preserve relations
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Trends in IP Disputes (2)
• Increasingly technical and specialized nature of IP Need for specific expertise of “neutral”
• Closely guarded relationships: confidentiality
• Highly competitive areas; Short product and market cycles Need for time-efficient procedures
• Dispute resolution as business decision
Routine IP litigation on a multi-country front complex, uncertain, protracted, expensive
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Preferred Processes for Resolving Cross-Border Disputes
(Source: www.pwc.com/arbitrationstudy) (2006)
Arbitration incombination with
other ADR processes44%
Arbitration only29%
Mediation and Other ADR processes
16%
Litigation only11%
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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 procedure in which the dispute is submitted to one or more arbitrators who
make a binding decision on the dispute.
• Expert determination A procedure in which a dispute/difference (frequently discrete issues of
technical, scientific or related business nature) is submitted to one or more experts who make a determination on the matter referred. A WIPO determination is binding, unless the parties agreed otherwise.
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Mediation
• Non-binding procedure controlled by the parties
• Confidential procedure
• Interest-based procedure
(party-to-party communication)
• High success rate; low risk
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Mediation Example
• 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
Outcome: agreed license and new consulting contracts
Total duration: 4 months
Mediator’s fees: USD 24,000
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Arbitration
• Consensual & flexible procedure: choice of arbitrator(s)
• Party autonomy
• Neutral
• Confidential
• Efficient
• Interim Measures (WIPO Rules, Art. 46)
• Experts (WIPO Rules, Art. 48, Art. 55)
• Remedies (damages, performance, injunctions, declaratory relief, costs, etc.)
• Final Award
• Award enforceable
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (142 States have ratified)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Arbitration Example 1
• License agreement between European software developer and Japanese media company
Platform for sale and licensing of mobile payment service in Japan
WIPO Arbitration: one arbitrator, place of arbitration Geneva
• Request for Arbitration filed by Japanese party:
Alleged breach of license: failure to provide technical service and support
Claim for damages: +USD 2 million
• Interim measures: bank guarantee
• Conciliation conference suggested by arbitrator
• Settled
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Arbitration Example 2
• 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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Expedited Arbitration Examples
• Financing Agreement Both parties see urgency and agree on short deadlines Only one issue in dispute One-day hearing Final Award: 5 weeks Arbitrator’s fees: USD 20,000
• 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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Mediation, Arbitration and Expert Determination (1)
• Party control / autonomy / consensual
• Flexibility : “à la carte”
• Expertise
Party selection of neutrals; tailored appointment
• Neutral
Arbitrator/mediator/expert, 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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Mediation, Arbitration and Expert Determination (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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Routes to ADR
• Court Annexed (in particular mediation) e.g. US District Court for the District of Delaware
• Voluntary decision of the parties Submission Agreement
ADR Clause
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Drafting ADR Clauses
• 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
• “Make it fit” (e.g. expedited arbitration)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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 […].”
(http://www.wipo.int/amc/en/arbitration/contract-clauses/clauses.html)
Recommended WIPO Expert Determination Clause
Any dispute (…) shall be referred to expert determination in accordance with the WIPO Expert Determination Rules. The determination made by the expert shall [not] be binding upon the
parties. The language to be used in the expert determination shall be […].
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Center: ADR Options
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Combined ProceduresCombining the Benefits
• Mediation followed by Arbitration
• Mediation followed by Expert Determination
• Expert determination followed by Arbitration
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Arbitration and Mediation Case Experience (1)
• 70+ mediations
• 100+ 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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Arbitration and Mediation Case Experience (2)
• Subject matter:
Contractual: patent licenses (inc. standard-related), 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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
http://www.wipo.int/amc/en/center/caseload.html
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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)
• List of neutrals (arbitrators, mediators, experts)
Over 1,000 mediators, arbitrators, experts
70 nationalities
Broad range of ADR, IP, and technical backgrounds
• 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
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Schedule of Fees
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
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, May 26-27, 2008
WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, May 29-30, 2008
WIPO Arbitration Workshop, October 21-22, 2008
WIPO Advanced Workshop on Domain Name Dispute Resolution, October 23-24, 2008
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Center Domain Name Case Experience (1)
• Over 28,000 domain name cases
• Mostly under WIPO-initiated Uniform Domain Name Dispute Resolution Policy (UDRP)
• Over 50 national domains (ccTLDs)
• Examples
columbiapictures.com, dreamworks-china.com, emiwarnermusic.com, espn.com.au, ifpi.com, elpais.com, 産経新聞 .com, jkrowling.ir, mariovargasllosa.org, microsoft.org
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
WIPO Center Domain Name Case Experience (2)
UDRP .info Sunrise .biz STOP .name ERDRP .mobi Sunrise.mobi Premium
NamesTotal
1999+2000 1'858 - - - - - 1'858
2001 1'557 1'579 53 - - - 3'189
2002 1'207 13'593 285 1 - - 15'086
2003 1'100 - - - - - 1'100
2004 1'176 - - 3 - - 1'179
2005 1'456 - - 1 - - 1'457
2006 1'824 - - 1 18 105 1'948
2007 2'156 - - 1 - - 2'157
Jan-Feb 2008 355 - - - - - 355
Total 12'689 15'172 338 7 18 105 28'329
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment May 20 to 22, 2008
Information
• Website: http://www.wipo.int/amc
• Emails: [email protected]
• Mailing list: http://arbiter.wipo.int/subscribe