A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 1 Resolving...

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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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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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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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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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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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• 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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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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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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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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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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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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Routes to ADR

• Court Annexed (in particular mediation)• Voluntary decision of the parties

Submission Agreement ADR Clause

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WIPO Center: ADR Options

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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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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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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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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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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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Final Award (1 month)


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)


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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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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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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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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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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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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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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http://www.wipo.int/amc/en/arbitration/contract-clauses/clauses.html

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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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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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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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http://www.wipo.int/amc/en/center/caseload.html

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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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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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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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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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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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ECAF: Log-In

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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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WIPO ECAF Case Management

Case Overview

• Contact Information

• Time Tracking

• Finance Overview

• Message Board

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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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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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Information

• http://www.wipo.int/amc

• [email protected]

• [email protected]

• Mailing list: http://arbiter.wipo.int/subscribe

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A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 1 Resolving...

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