MEDIATION AND ARBITRATION OF INTELLECTUAL PROPERTY AND TECHNOLOGY DISPUTES

• Author: Ignacio DE CASTRO LLM (King's College, London); Abogado (Spain), Solicitor (England and Wales); Deputy Director, World Intellectual Property Organization Arbitration and Mediation Center; Head, IP Disputes Management Section, World Intellectual Property Organization Arbitration and Mediation Center. Panagiotis CHALKIAS LLM (International Dispute Settlement) (Geneva); Advocate (Greece); Consultant, World Intellectual Property Organization Arbitration and Mediation Center.
• Date: 01 December 2012
• Published date: 01 December 2012

The Operation of the World Intellectual Property Organization Arbitration and Mediation Center

The World Intellectual Property Organization Arbitration and Mediation Center, as an international and neutral alternative dispute resolution provider, is witnessing the emergence of trends and strategies regarding the choice of private parties for the resolution of their intellectual property and technology disputes. In this article, the authors present the latest developments on the Center's activities. They also elaborate on the specificities of intellectual property disputes and analyse the advantages of alternative dispute resolution services for specific intellectual property sectors. The Center's caseload provides examples of some of the issues that arise in arbitration proceedings of intellectual property disputes.

I. Introduction

A. The services of the World Intellectual Property Organization Arbitration and Mediation Center

1 The World Intellectual Property Organization Arbitration and Mediation Center (“WIPO Center”) is an independent and impartial body that forms part of WIPO, a specialised agency of the UN, dedicated to developing a balanced and accessible international intellectual property (“IP”) system. While the origins of WIPO date back to 1883 and 1886 when the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works, respectively, were concluded, WIPO was constituted through the 1967 Convention Establishing the World Intellectual Property Organization1 (“WIPO Convention”). Following the entry into force of the WIPO Convention, WIPO became in 1974 a specialised agency of the UN system of organisations, with a mandate to administer IP matters recognised by the member states of the UN. With offices in Geneva, Switzerland and, since 2010, Singapore's Maxwell Chambers, the WIPO Center is a neutral, independent, international and non-profit dispute resolution provider that offers alternative dispute resolution (“ADR”) procedures, such as mediation, arbitration, expedited arbitration and expert determination, to enable parties to efficiently settle their disputes. The WIPO Center2 is particularly recognised for the administration of international IP, technology and entertainment disputes involving private parties, and is the leading institution in the administration of domain name disputes.

2 The number of IP disputes continues to increase as a result of the constant multiplication of international IP transactions. Although an IP dispute can be brought before a court, litigation is not always well equipped to take account of the distinctive elements of this type of dispute.3 In this context, ADR procedures can be particularly advantageous in resolving IP disputes, especially IP—and technology-related contractual disputes involving parties from different jurisdictions. As Francis Gurry, the Director General of WIPO, explained, “The underlying reason for the establishment of the Center was a belief in the specificity of intellectual property as a subject matter, and thus of disputes concerning intellectual property, coupled with the conviction that arbitration and other dispute resolution alternatives offered particularly suitable means of accommodating the specific characteristics of intellectual property disputes.”4 Based on these

considerations,5 the WIPO Center, in consultation with a group of leading experts in dispute resolution practices and IP, has developed Mediation, Arbitration, Expedited Arbitration and Expert Determination Rules (“WIPO Rules”). In recent years, the WIPO Center has become an established and specialised neutral and international dispute resolution provider for IP and technology disputes.6

3 Referral to the WIPO Rules is consensual, and to facilitate party agreement, the WIPO Center provides recommended contract clauses (for the submission of future disputes under a particular contract) and submission agreements (for existing disputes). These model clauses and model submission agreements are available in a number of languages including Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian and Spanish.7 As mentioned above, the WIPO Center makes available four ADR procedures8 that parties can use, either as a stand-alone procedure or in a combined manner. Mediation is an informal procedure whereby parties ask a neutral intermediary, the mediator, to assist them in reaching a settlement of the dispute. Mediation helps to find business-oriented solutions and to preserve long-term relationships. Any settlement reached by the parties is enforceable as a contract between them. Parties submitting their dispute(s) to arbitration are opting for a procedure in which the dispute is adjudicated by one or three independent and impartial arbitrators who render a binding decision, the arbitral award, which is normally final and not subject to appeal. Expedited arbitration is similar to a “standard” arbitration procedure, but it is conducted within shortened timelines, at a reduced cost and by a sole arbitrator.9 Expert determination is a procedure in which a specific matter is submitted to one or more experts who make a determination on the issue referred to them. It is particularly appropriate for technical issues such as the determination of a royalty amount. The determination of the expert(s) is binding, unless the parties have agreed otherwise.

4 As of June 2012, the WIPO Center has administered some 280 mediation and arbitration cases,10 filed by large companies, small—and medium-sized enterprises, research organisations and universities. Fifty-three per cent of cases filed with the WIPO Center have been submitted to the WIPO Mediation Rules, 26% to the WIPO Arbitration Rules and 21% to the WIPO Expedited Arbitration Rules. So far, expert determination has not been used as a stand-alone procedure but as part of highly complex arbitrations. In fact, in 15% of WIPO arbitrations, reports prepared by party-appointed experts assisted the arbitral tribunal to assess the scope of patent claims or the interpretation of national patent legislations. It is important to highlight here that in 33% of the mediation, expedited arbitration and arbitration cases filed with the WIPO Center, the parties used an escalation clause providing for WIPO mediation followed by WIPO expedited arbitration or WIPO arbitration.

5 The WIPO Center has administered mediations, arbitrations and expedited arbitrations involving a range of issues such as patent infringement, patent licences, patent pools, information technology (“IT”) transactions (including telecommunications), distribution agreements for pharmaceutical and consumer products, copyright issues, research and development (“R&D”) agreements, trade mark co-existence agreements, art marketing, artistic production, media-related agreements, joint venture agreements and cases arising out of agreements in settlement of prior multi-jurisdictional IP litigation. However, the WIPO Rules can be used for the resolution of all commercial disputes including those not involving IP. In fact, they have also been applied in disputes related to other areas such as art marketing, construction, employment and insurance. To date, 42% of cases filed with the WIPO Center involve patent-related issues, followed by IT and telecommunication disputes (23%), trade marks (12%), copyright (6%) and other legal areas (17%). Figure 1 below shows the distribution of WIPO cases in accordance with their legal and business areas.

Figure 1: Legal and Industry Areas of the World Intellectual Property Organization Mediation and Arbitration Cases 11

6 The venues of WIPO mediation, arbitration and expedited arbitration proceedings have included France, Germany, Ireland, Italy, the Netherlands, Singapore, Spain, Switzerland, the UK and the US, and the proceedings have been conducted in several languages including Chinese, English, French, German, Italian and Spanish.

7 In connection with the specific subject matter of each case, the WIPO Center ensures that the appointed mediators, arbitrators and experts have the required IP expertise and ADR experience to deliver informed results in an efficient and expeditious manner. Thanks to its international network, the WIPO Center maintains a database12 of more than 1,500 qualified neutrals, including arbitrators, mediators and experts from more than 70 countries, with further candidates13 added according to the needs of each case. These neutrals not only have dispute resolution experience but also expertise in IP and technology, life sciences, entertainment and other areas from which IP disputes arise. Their geographical diversity suits the international character of IP disputes and their respective applicable substantive laws. Parties can also appoint a neutral who is not on the WIPO list of neutrals.

8 In mediation and arbitration cases submitted to the WIPO Center, parties can choose to use the WIPO Electronic Case Facility14 (“WIPO ECAF”) to manage and submit communications electronically into an online docket. With the WIPO ECAF, parties, neutrals and the WIPO Center may securely file, store, search and retrieve case-related submissions in an electronic case file, from anywhere in the world, at any time. When a submission is made, all parties receive an e-mail alert and may view the case file. All information stored in WIPO ECAF is firewall-protected and encrypted.

9 As a non-profit organisation,15 the WIPO Center offers a very competitive schedule of fees and costs for the administration of mediation,16 (expedited) arbitration17 and expert determination18 cases. The WIPO Center ensures that all fees charged in a WIPO ADR procedure19 are appropriate in light of the circumstances of the dispute. The neutrals' fees are fixed by the WIPO Center, in consultation with the arbitrators, mediators or experts and the parties...