A Current View of IP ADR

APAA 63

rd

Council Meeting

Penang November 9, 2014

Erik Wilbers, Director, WIPO Arbitration and Mediation Center, Geneva

World Intellectual Property Organization Arbitration and Mediation Center

Facilitates the resolution of commercial disputes between private parties involving IP and technology, through procedures other than court litigation (alternative dispute resolution: ADR) Offices in Geneva and Singapore ADR of IP disputes requires a specialized ADR provider WIPO neutrals experienced in IP and technology - able to deliver informed results efficiently Non-profit WIPO fee structure International neutrality Services include mediation, arbitration, expedited arbitration, expert determination 2 Erik Wilbers - WIPO Arbitration and Mediation Center

Mediation, Arbitration, Expert Determination

Mediation

: informal consensual process in which a neutral intermediary, the mediator, assists the parties in reaching a settlement of their dispute, based on the parties’ respective interests. The mediator cannot impose a decision. The settlement agreement has force of contract. Mediation leaves open available court or agreed arbitration options.

Arbitration

decision : consensual procedure in which the parties submit their dispute to one or more chosen arbitrators, for a binding and final (award) based on the parties’ respective rights and obligations and enforceable under arbitral law. As a private alternative, arbitration normally forecloses court options.

Expert Determination

: consensual procedure in which the parties submit a specific matter (e.g. technical question) to one or more experts who make a determination on the matter, which can be binding unless the parties have agreed otherwise.

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Expert Determination

WIPO ADR Options

WIPO Contract Clause/ Submission Agreement (Negotiation) Mediation Expedited Arbitration Arbitration Party Agreement First Step Procedure 4 Outcome Determination Settlement Award Erik Wilbers - WIPO Arbitration and Mediation Center

WIPO Case Subject Matter and Business Areas

Subject Matter Copyright 8% Trade mark 15% Other 21% IT Law 17% Patent 39% Entertain ment 10% Business Areas Luxury Goods 4% Chemistry 1% Other 23% IT 32% Life Sciences 14% Mechanic al 16%

Erik Wilbers - WIPO Arbitration and Mediation Center 5

Typical IP Transactions in WIPO Cases

Patent licenses Software and other information technology Research and development agreements Trademark coexistence agreements Patent pools Distribution agreements Joint ventures Copyright collecting societies IP settlement agreements (Non-contractual infringement of IP rights) 6 Erik Wilbers - WIPO Arbitration and Mediation Center

WIPO Mediation Example (I)

Patent infringement dispute R&D company holding patents disclosed patented invention to Asian manufacturer during consultancy 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 7 Erik Wilbers - WIPO Arbitration and Mediation Center

WIPO Mediation Example (II)

WIPO appointed an experienced mediator with expertise in the subject matter of the dispute Parties and mediator met during one week Settlement agreement reached, including grant of license for royalties, and a new consultancy agreement Process duration: 4 months Mediator fees: USD 24,000 8 Erik Wilbers - WIPO Arbitration and Mediation Center

WIPO Arbitration Example (I)

Asian inventor granted exclusive license over a European patent and five US patents to US manufacturer Clause provided that disputes whether royalties had to be paid in respect of products manufactured by US party be resolved through WIPO Expedited Arbitration US party rejected claim that its products embodies technologies covered by the licensed patents and refused to pay royalties 9 Erik Wilbers - WIPO Arbitration and Mediation Center

WIPO Arbitration Example (II)

Inventor initiated WIPO case Center appointed sole arbitrator under WIPO Expedited Arbitration Rules Arbitrator had to consider whether products infringed the ‘claims’ asserted for each of the patents and whether patents had been anticipated by prior art Complex legal and technical issues Business secrets, models, site visits Eight days hearing Final award in 15 months 10 Erik Wilbers - WIPO Arbitration and Mediation Center

Why Consider IP ADR?

Internationalization of creation/use of IP

Calls for cross-border solutions

Technical and specialized nature of IP

Calls for specific expertise of the neutral

Short product and market cycles

Calls for time-efficient procedures

Confidential nature of IP

Calls for private procedures

Collaborative nature of IP creation and commercialization

Calls for mechanisms that preserve relations

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Source: WIPO statistics database, April 2014 Erik Wilbers - WIPO Arbitration and Mediation Center 12

Erik Wilbers - WIPO Arbitration and Mediation Center Source: WIPO statistics database, April 2014 13

WIPO 2013 International Survey on Dispute

14

Resolution in Technology Transactions

http://www.wipo.int/amc/en/center/survey/results.html

Place of Survey Respondent Business Operations Oceania, 3% South America, 8% Brazil 2% Colombia 2% Other South American Countries 4% Asia, 15% Japan 5% Singapore 2% China 2% Other Asian Countries 6% North America, 21% United States of America 17% Canada 2% Other North American Countries 1% Africa, 1% Europe, 52% Germany 11% France 7% Switzlerland 7% United Kingdom 6% Spain 6% Italy 3% The Netherlands 2% Other European Countries 11% Other, 3% Government Body, 3% University, 5% Research Organization, 6% Individual / Self Employed, 7% Law Firm (for client), 52% Type of Survey Respondent Company, 24% Erik Wilbers - WIPO Arbitration and Mediation Center

Scope of Agreements: Parties/Technology

15 91% of respondents conclude agreements with

parties from other jurisdictions

.

+80% of respondents conclude agreements relating to

technology patented in multiple jurisdictions

.

Erik Wilbers - WIPO Arbitration and Mediation Center

Top Ten Considerations in Choice of Dispute Resolution Clause

Domestic Contracts

Costs – 71% Time – 59% Quality Outcome – 44% Confidentiality – 33% Enforceability – 33% Business Solution – 30% Neutral Forum – 18% None in Particular – 9% Setting Precedent – 6% Support Provided by Institution – 6%

International Contracts

Costs – 71% Time – 57% Enforceability – 53% Quality Outcome – 44% Neutral Forum – 36% Confidentiality – 32% Business Solution – 29% Support Provided by Institution – 9% None in Particular – 6% Setting Precedent – 5% Erik Wilbers - WIPO Arbitration and Mediation Center

How Are Technology Disputes Resolved?

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Relative Time and Cost of Technology Dispute Resolution

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WIPO Recommendations from Survey Results

Contracting on technology should

anticipate

disputes Dispute policy should prepare for likelihood of

international

aspect in parties, rights, and law Dispute policy should be designed to minimize

time and cost

, more than other considerations Dispute policy should include

mediation

Between arbitration and court litigation, consider arbitration as the faster and cheaper option When choosing arbitration, subject to dimension of dispute, consider

expedited

versions In

non-contractual

disputes, there is scope for greater use of party negotiation and mediation 19 Erik Wilbers - WIPO Arbitration and Mediation Center

Tailored WIPO ADR for Specific Sectors

20 Internet domain names Information and communication technology Research and development/technology transfer Patents in standards (FRAND disputes) Intellectual Property Offices Trade fairs Erik Wilbers - WIPO Arbitration and Mediation Center

More Information about WIPO ADR

wipo.int/amc [email protected]

WIPO Center Office in Geneva WIPO Headquarters +41 22338 8247 WIPO Center Office in Singapore Maxwell Chambers +65 6225 2129 Erik Wilbers - WIPO Arbitration and Mediation Center 21