Changing Nature of IP Disputes
Intellectual property (IP) rights have become a truly international phenomenon. Technology is constantly changing. So too are the ways in which businesses seek to protect proprietary information. Indeed, the concept of what is “proprietary” also continues to develop. This development, together with the growth of international transactions, has seen the potential for cross-border IP disputes increase significantly. Meanwhile, the economic downturn continues to squeeze litigation budgets. In such circumstances, there is an incentive for stakeholders to seek a more adaptable, comprehensive and efficient resolution to IP disputes than court litigation. This makes international arbitration an increasingly attractive option.
Types of IP Disputes Being Arbitrated
Arbitration is, by no means, a new method to resolve IP disputes. Arbitration is regularly used in more traditional commercial disputes concerning IP, primarily license disputes. It is also increasingly being used in disputes that are normally considered to be the jurisdiction of domestic courts, including the validity of trade-marks and patents that are used in multiple jurisdictions. All of the major arbitration centres, such as the ICC, the London Court of International Arbitration and the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center, have adapted their arbitration rules to better suit IP disputes. As a result, the number of IP cases being heard by these centres continues to rise.
Benefits of International Arbitration
The increased use of arbitration to resolve IP disputes can be explained by several significant advantages arbitration offers in comparison to litigation:
- Choice of decision maker: Parties are free to choose their arbitral tribunal and thereby ensure that their dispute is resolved by decision makers they trust, that they consider to be independent, impartial and competent in the relevant subject matter.
- Flexible process: The arbitral process can be designed and adapted by the parties to best fit their commercial relationship or a specific dispute. Such adaptations can include processes to ensure that confidentiality is maintained, and setting strict parameters on discovery rights, reducing the overall cost of the arbitration. Parties can also chose the most convenient place and language of the arbitration. On the other hand, an arbitration can be designed to accommodate a large, complex dispute, involving multiple parties, from various jurisdictions.
- Speed and efficiency: Several features of international arbitration favour faster and more efficient proceedings, including a greater flexibility in schedules, the absence of appeal routes, the absence of a pre-existing set of procedural rules and backlogs of cases in domestic courts.
- Universal solution: Arbitration has the potential of reaching a universal solution to an issue that relates to multiple jurisdictions through one proceeding. An international arbitral award rendered in one country can be enforced in another. The New York Convention on the Recognition and Enforcement of Arbitral Awards has been ratified by over 140 countries and, subject only to a few limited exceptions, requires signatory states to recognize arbitral awards rendered in other countries. In addition, courts in a number of jurisdictions, including the United States, the United Kingdom and Canada, have confirmed that issues of validity may be resolved by arbitration, and do not require individual domestic court proceedings. A single proceeding also has the potential of greatly reducing litigation costs.
- Confidentiality: A significant concern in IP disputes is the protection of technical and commercial information. Arbitration allows the parties to control the manner and extent of the dissemination of sensitive information, ensuring that it remains confidential.
With a full understanding of the array of options available, businesses can chose a dispute resolution process that is effective and efficient in meeting their business needs.