1 resolving intellectual property and technology disputes through arbitration and mediation eun-joo...

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Resolving Intellectual Property

and Technology Disputes through Arbitration and

Mediation

Eun-Joo MINArbitration and Mediation Center

World Intellectual Property Organization (WIPO)Geneva, Switzerland

Arbitration and Mediation Center http://arbiter.wipo.int

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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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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

137 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 international bureau 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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WIPO Arbitration and Mediation Options


WIPO CONTRACT CLAUSE /

SUBMISSION AGREEMENT

MEDIATION

SETTLEMENT ARBITRATION EXPEDITED ARBITRATION

AWARD

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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://arbiter.wipo.int/arbitration/contract-clauses/clauses.html


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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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WIPO Mediation Example 2• US software provider licensed software applications to

European telecom provider:

– 10 named users

– WIPO Mediation followed by WIPO Expedited Arbitration

– Place mediation: Paris; Applicable law: English

• Request for Mediation:

– Alleged breach of license: more than 50 users

– Outstanding fees: USD 10 million

– European telecom asked to provide list of unauthorized users

– No settlement, but issues narrowed down

– Total duration: 2 months, mediator’s fees: USD 13,000


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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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Drafting Arbitration Clauses (1)• Essential elements:

– applicable rules, governing law

– number of arbitrators

– place of arbitration: arbitration-friendly environment; modern arbitration act

– language

• 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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Drafting Arbitration 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.”


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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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WIPO Arbitration and Mediation Case Experience (1)

• 45 mediations

• 49 arbitrations

• Parties from 16 countries (domestic & international)– France, China, Finland, Germany, Ireland, Israel, Italy,

Japan, the Netherlands, Panama, Romania, Switzerland, USA, etc.

• Place of Arbitration– France, Germany, the Netherlands, Switzerland, USA

• Procedures– English, French, German


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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 - 600 million


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WIPO Arbitration and Mediation Cases


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1998 1999 2000 2001 2002 2003 2004 2005 2006

Arbitration Mediation

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1998 1999 2000 2001 2002 2003 2004 2005 2006

Arbitration Mediation

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http://arbiter.wipo.int/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 NeutralsLIST 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://arbiter.wipo.int/ecaf/introduction.jsp


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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 ECAF Case

Management

• Case Overview

• Contact Information

Time Tracking

• Finance Overview

• Message Board Contact


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WIPO ECAF Security WIPO ECAF Use Example

• Authentication

– ECAF username

– ECAF password

– RSA SecurID password

– Changing passcode generated by RSA SecurID (Valid only for 60 seconds)

• Encryption

– Modern SSL (Secure Socket Layer) system

• Firewall protection


• 1 US Claimant; Respondents in 3 (US and Europe) locations

• Claimant represented by 2 NY firms, 1 German firm; Respondents represented by 2 German firms.

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Domain Name System v. Intellectual Property System

• Domain name system– largely privately administered– result in global presence– first come, first serve

• Intellectual property system– publicly administered– territorial rights– examination


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WIPO First Domain Name Process

• Commenced in July 1998 w/ endorsement by WIPO member states

• Final report published in April 1999• Main Recommendations

– Best Practices for Registration Authorities– Administrative Procedure Concerning Abusive Domain

Name Registrations– Exclusions for Famous and Well-Known Marks– New gTLDs


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Uniform Domain Name Dispute Resolution Policy (UDRP)

• Approved by ICANN in October 1999• Administrative procedure• Limited to abusive registrations• Mandatory submission by domain name registrants• Remedies

– Transfer or Cancellation only– No monetary damages


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Applicability of UDRP

• Applicable to all gTLDs (.biz, .com, .info, .net, .org)

• Applicable to certain ccTLDs (.ch, .co, .ec, .fr, .na, .ph, .ve, etc.)


ICANN

Registrar Accreditation

Agreement

Registrar

DN Registration Agreement

Domain Name Registrant

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UDRP Criteria• Conditions for obtaining remedies:

1. Domain name must be identical or confusingly similar to trademark; and

2. Registrant has no rights or legitimate interests in domain name; and

3. Domain name is registered and used in bad faith.

• Examples of rights or legitimate interests:– Registrant commonly known by the domain name – Use for bona fide offering of goods or services

• Examples of bad faith:– registration for purpose of profit sale to trademark owner– pattern of preventing trademark owners from registration


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Sampling of Disputed Domain Names

volvoautomobile.com, mazda.com.mxdknymall.com

gallerielafayette.commicrosoft.li

pfizerviagra.commadonna.com

morganfreeman.comviagra.com.ve

三共 .com

恒生指数 .comfortunéo.com

autos-yahoo.com, cn-yahoo.com, email-yahoo.com, greetings-

yahooo.com, greetingz-yahoo.com, hotels-yahoo.com, jejuyahoo.com,

music-yahoo.com,myanmaryahoo.com, news-yahoo.com, photos-yahoo.com, playhoo.com, play-

yahoo.com, t-yahoo.com, www-yahooshop.net, yaawoo.com,

yahaho.com,yahoobooting.net, yahoofinance.net,

yahoo-greeting-cards.com, yahoogreetings.net, yahoohouse.com,

yahooink.net, yahooselect.com, yahooshopping.net, yahootax.com, yahootravel.net, yaho-screen.com,

yahosoft.com, yaho1004.com, yahwhoo.com, 123yahoo.com ...

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Why the UDRP?

• Global• Directly enforceable decisions• Non-profit fees (USD 1,500 for 1-5 domain names)• Fast – within 2 months• Transparent – decisions publicly

available


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WIPO Domain Name Dispute Resolution


UDRP.info

Sunrise.biz STOP

.name ERDRP

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

Jan-Feb 2006 266 - - - 266

Total 8,620 15,172 338 5 24,135

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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 15-16, 2006

– WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, June 19-20, 2006

– WIPO Arbitration Workshop, October 17-18, 2006

– WIPO Advanced Workshop on Domain Name Dispute Resolution, October 19-20, 2006


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Information

• http://arbiter.wipo.int

• [email protected]

• [email protected]

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


1 resolving intellectual property and technology disputes through arbitration and mediation eun-joo...

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