Alternate Dispute Resolution and Intellectual Property

ADR

Globalization has been the key factor of development in the 21st Century.  The idea of the world being one “Global Village” has helped almost every nation of the world. As businesses and people are going global, it is also equally important that law (including IP law) goes global in nature too. Usually, Intellectual Property (IP) is territorial in nature but with big companies expanding their reach almost all over the world, protecting one’s IP in an international or global setup becomes an important aspect given that companies invest huge sums of money in it.

When a big company wants to enter a new market, the two most favorable methods are licensing or joint venture with a domestic company of that country (E.g. Hershey Co. partnered with the Indian conglomerate Godrej Group when it wanted to launch the Hershey’s brand in India). Usually, all licensing/joint venture agreements contain a well-drafted dispute resolution clause which talks about when/how the dispute will be resolved if any problems were to arise. International Arbitration has proven itself to be the most favorable form of dispute resolution, especially where parties are of different nationalities.

Intellectual Property has become global and have crossed their territorial borders in the form of licenses. Like any other agreement, IP licensing agreements also face the threat of a potential dispute. Certainly, a situation like that will raise obvious yet important questions, such as, should the parties battle it out in the courts when there is an actual dispute? Are courts usually biased towards their domestic companies? What would be the probability of a fair decision being delivered? Would the courts offer a speedy disposal of the matter? The list of questions can be long, but the answer is simple, and that is Arbitration.

When intellectual property has an international dimension, arbitration is very often the wisest and most efficient way to resolve licensing disputes. According to Law360, there is an increasing trend to opt for international arbitration when it comes to resolving intellectual property disputes. The World Intellectual Property Organization (WIPO), an agency of the United Nations, is the pioneer global agency for intellectual property services, strategy, policy and cooperation.

WIPO and International Arbitration

Established in 1967 with a goal “to encourage creative activity, to promote the protection of intellectual property throughout the world”, WIPO currently has 189 member countries. As a specialized agency of the United Nations, it overlooks global Intellectual property regulation, cooperation and services such as dispute resolution.

ADR or Alternate Dispute Resolution is the most favorable form of dispute resolution. Very simply, ADR is an “out of court settlement” between the parties, usually supervised or assessed by a neutral expert. WIPO provides ADR services through its arbitration and mediation center to facilitate private parties to efficiently settle their domestic or cross-border Intellectual Property disputes out of court.

Recently a WIPO arbitrator said, “Multinational companies are increasingly looking to resolve their IP issues through arbitration in order to avoid costly and time-consuming litigations.” WIPO is now seen as one of the leading arbitration institutions for intellectual property disputes. The center is surely on its way to become an arbitrator’s favorite institution, here’s why:

  1. WIPO is an agency of the United Nations. This means that it will follow the general arbitration rules laid out by the UNCITRAL (United Nations Commission on International Trade Law), thus aligning it to other leading arbitration institutions of the world.
  2. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly known as New York Convention) will enable the enforcement of the WIPO arbitration awards in all of its member countries.
  3. WIPO rules have also adopted the concept of ‘emergency arbitrators’. This will allow parties to seek emergency/interim reliefs within two days.
  4. Since WIPO rules were made specifically for Intellectual Property disputes, there are rules addressing the issue of confidentiality, in particular, protecting “information of commercial, financial or industrial significance”.
  5. WIPO has a unique platform for communication and information sharing. The Electronic Case Facility (ECAF) is a secured online portal that allows arbitrators and the parties to communicate electronically. According to Law360, ECAF has been in use since 2007 and it has a pretty clean record, not a single incident of hacking has been reported.

The idea of resolving IP disputes through arbitration might be a fairly new concept but it is steadily picking up pace all around the world. For a very long time international arbitration has been a popular recourse among parties of different nationalities for settling oil and gas disputes. Today, leading Arbitration Institutions like the SIAC (Singapore International Arbitration Centre) and the HKIAC (Hong Kong International Arbitration Centre) have appointed specialized panels of arbitrators for intellectual property disputes.

In conclusion, I cannot say with certainty that arbitration or any other ADR method will be the popular recourse or redressal method for IP disputes; but with leading institutions appointing IP experts and adopting specialized “IP-specific” rules, it will surely be interesting to see the growth and development of this popular dispute resolution method in context of the global Intellectual Property scenario.


Anay Amin graduated from Northwestern University, Pritzker School of Law with a Master of Laws (LLM) degree.  He holds bachelor’s degree in Arts (B.A, Honors) and his first Law degree (L.L.B., Honors) with a specialization in Intellectual Property from Institute of Law, Nirma University, India. Anay has a keen interest in international arbitration and its developments. In addition, he is a food-enthusiast and loves to cook and try new cuisines.

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