Transcript Alternative Dispute Resolution in Intellectual Property Adam Rattray WIPO Arbitration and Mediation Center.

Alternative Dispute Resolution
in Intellectual Property
Adam Rattray
WIPO Arbitration and Mediation Center
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WIPO Arbitration and Mediation Center
• Purpose:
– To provide services for the resolution of commercial disputes
between private parties involving intellectual property (IP)
and technology, through procedures other than court litigation
(‘ADR’)
• Principal characteristics:
– International
– Specialized in IP/technology
• Institution
• Procedural rules/clauses
• Neutrals
– Not-for-profit
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Mediation, Arbitration, Expert Determ.
• Mediation: an informal procedure in which a neutral
intermediary, the mediator, assists the parties in reaching a
settlement of their dispute, based on the parties’ respective
interests and enforceable as a contract.
• Arbitration: a private procedure in which the parties submit their
dispute not to a court but to one or more chosen arbitrators, for
a formal decision based on the parties’ respective rights and
obligations and enforceable as an award under arbitral law.
• Expert Determination: a procedure in which the parties submit
a dispute or a difference between them 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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WIPO Center Caseload
• Leading provider for Internet domain name disputes:
– 2,329 domain name disputes in 2008
– +15,000 domain name disputes since 2000
• +110 arbitrations and +70 mediations
– Contractual: Patent licenses, patent pools, distribution
agreements, R&D, joint ventures, software/IT, copyright
collecting societies, trademark coexistence agreements,
settlement agreements
– Non-contractual: patent infrigement
– Cases referred by courts
– Confidentiality of procedures
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WIPO ADR Options
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WIPO Cases: Legal Basis
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Domestic and international
Contract clause and submission of existing disputes
Contractual and (occasionally) non-contractual
Arbitration or mediation, or combined (in each
‘direction’)
• Sometimes following court litigation which the parties
had commenced
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WIPO Mediation Case Example
• R&D company disclosed patented invention to
manufacturer during consulting contract, without
transfer or license of patent rights
• Manufacturer started selling products which R&D
company alleged used its patent
• Negotiation of patent license failed; threat of multijurisdictional infringement proceedings
• Parties:
– Submitted to WIPO Mediation
– Worked with WIPO-appointed mediator
– Agreed license and new consulting contracts
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WIPO Expedited Arbitration
• Main features compared to regular arbitration:
– Shorter procedural timelines
– In principle, a sole arbitrator
• When consider WIPO Expedited Arbitration?
– Value in dispute does not justify the cost of more extensive
procedures
– Limited number of issues in dispute
– Parties urgently need a final and enforceable decision
– Parties wish to commence with an ambitious time/cost frame,
subject to case developments
– Trademarks and software disputes
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WIPO Arbitration Case Example
• Finance agreement in connection with artistic
production
– German party - Swiss/Panamanian party
– WIPO Expedited Arbitration clause
– Each represented by US lawyers
• Urgent solution required: issue of contract
interpretation under German law
• WIPO appointed Germany-based US arbitrator
• Short deadlines for written submissions
• One-day hearing
• Award rendered five weeks after commencement of
arbitration
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WIPO Cases:
Remedies, Value, Numbers, Locations
• Remedies: damages, infringement declarations,
specific performance
• Value: from Euro 20,000 to US$ 600 million
• Numbers: over 170 (see WIPO web site)
• Locations: mostly Europe and US (see WIPO
website)
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WIPO Cases: Types of Procedure
Expedited
Arbitration
10%
Arbitration
49%
Mediation
41%
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WIPO Cases: Domestic / International
Domestic
25%
International
75%
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WIPO Cases: Substantive Law
US
28%
Dutch
English
3%
7%
German
34%
Sw iss
14%
French
14%
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WIPO Cases: Place of Arbitration
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Geneva
1
Germany
2
Berlin
2
US
3
New York
3
Switzerland
4
Frankfurt
4
France
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Los Angeles
5
The Netherlands
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San Francisco
6
UK
7
Amsterdam
8
Hamburg
9
London
10
Paris
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WIPO Cases: General Subject Matter
Other
18%
Patent
46%
IT
22%
Copyright
9%
Trademarks
5%
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WIPO Cases: Business Areas
Ot her
Pharmaceut icals
22%
14%
Luxury Goods
Mechanicals
2%
Chemist ry
18%
2%
Ent ert ainment
9%
Lif e Sciences
4%
IT/ Telecom
29%
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WIPO Cases: Subject Matter
• Contractual
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Patent licenses
Distribution agreements
Research and development agreements
Joint ventures
Software/IT transactions
Disputes involving copyright collecting societies
Trademark coexistence agreements
• Non-contractual
– Patent infringement
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WIPO Case Results
24%
Not
settled
3%
Pending
19%
Pending
54%
Settled
73%
Settled
Mediation
27%
Award
Arbitration
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Country
Characteristic of Legal System
Average Length
Average Cost
France
- Civil Law
- Unified Litigation
- No specialized courts
- Civil Law
- Bifurcated Litigation
- Specialized court for invalidity
First Instance: 18-24 months
Appeal: 18-24 months
€80,000-150,000 (1st Inst.)
First Instance: 12 months
Appeal: 15-18 months
€50,000 (1st Inst.)
€70,000 (App.)
- Civil Law
- Unified Litigation
- Specialized courts
- Civil Law
- Unified Litigation
- Commercial Courts
- Common Law
- Unified Litigation
- Specialized courts
- Mediation promoted
First Instance: few months –
24 months
Appeal: 18-24 months
First Instance: 12 months
Appeal: 12-18 months
€50,000-150,000 (1st Inst.)
€30,000-70,000 (App.)
First Instance: 12 months
Court of Appeal: 12 months
House of Lords: 24 months
China
- Civil Law
- Bifurcated Litigation
- Specialized courts
Japan
- Civil Law
- Bifurcated Litigation
- Specialized courts
First Instance: 6 months (in
law)
Appeal: 3 months, no limit
when foreigners litigate
First Instance: 14 months
Appeal: 9 months
€750,000-1,500,000 (1st
Inst.)
€150,000-1,500,000 (App.)
€150,000-1,500,000 (House
of Lords)
Not Available
USA
- Common Law
- Unified Litigation
- Specialized court of appeals
(CAFC)
Germany
Italy
Spain
UK
First Instance: up to 24
months
Appeal: 12 + months
€100,000 (1st Inst.)
€50,000 (2nd Inst.)
Not Available
Up to $4,000,000 (1st Inst.)
$150,000-250,000 (App.)
Source: Kluwer Law
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Anticipating IP Dispute
Resolution Needs
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International
Neutral expertise
Efficiency
Confidentiality
Preserving party relationships
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International (1)
• Intellectual property rights are often:
– Created through international collaboration
– Exploited through international commerce
– Protected in a multitude of jurisdictions
• Intellectual property disputes often:
– Involve parties from different jurisdictions
– Concern commerce in a multitude of jurisdictions
• Court litigation:
– Which court(s) is (are) competent?
– Risk of inconsistent results
• Epilady case: European Patent Office patents infringement litigation
in 9 countries; found “infringed” in 5 countries, “no infringement” in 4
countries
– Time and cost of foreign litigation
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International (2)
• In arbitration, parties designate a single forum for
resolving the entire dispute
– Comprehensive and consistent resolution
• Rather than patchwork of court decisions
– Neutrality
• No party is forced to litigate in the other’s home country
• International (procedural) standards
• International Enforceability: New York Convention
– 144 Member States (including Germany)
– International arbitral awards to be recognized and enforced like
final national court judgments
– Only limited exceptions
• Mediation is not rooted in any jurisdiction or law
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Neutral Expertise
• IP disputes tend to be technical/specialized
– Law, technical background (patents, software, etc.)
• Most courts are not specialized in IP (IBA 2005 Survey)
• In ADR, parties control selection of neutral(s)
– Can select neutral(s) with expertise in the relevant legal, technical
or business area
• WIPO Center
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1,500 candidates from 70 countries
Further candidates added in function of case particulars
Broad range of ADR, IP and technical backgrounds
Detailed professional profiles
Used for Center recommendations and appointments
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Efficiency
• IP covers fast-evolving technology, used in highly
competitive markets
• Often seen as the true cost of litigation:
opportunity/management cost
• Need for efficient dispute resolution procedures
– ADR offers party control (short deadlines)
– WIPO expedited arbitration case example
• Comprehensive dispute resolution
– One procedure, one law, one language, same lawyers, expert
neutral(s), final result (award or settlement)
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Confidentiality
• Often required in IP/technology disputes
– Examples: patented technology, know-how, reputation
– Except: where public precedent needed
• ADR is a private procedure
• WIPO Arbitration Rules
– Except as agreed otherwise or required by law, all
participants to preserve confidentiality regarding:
• Existence
• Disclosures
• Award
– Specific protection of trade secrets
• WIPO Mediation Rules also prohibit disclosure in
subsequent proceedings
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Preserving Party Relationships
• IP often developed/exploited in long-term relationships
between partners
– Industry, SMEs, universities
• Arbitration
– Private procedure, agreed by the parties
– Flexible, can be tailored to the parties needs
– Confidentiality helps parties to focus on the merits of the dispute,
without concern about its public implications
• Mediation
– Interest-based, rather than rights-based
– Less acrimoneous
– No real downside: 70% settlement rate; defines issues; shows
risks of alternatives; can walk out; limited cost; has court support
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Limitations of IP ADR (1)
• Contractual basis
– No obligation to submit to ADR procedure without contract clause
– Difficult to agree on clause once dispute has arisen
– Unsuitable for bad-faith infringement (e.g. counterfeiting)
• Parties must pay fees of neutrals
– Crucial importance of getting value for money
– ADR efficiency and results can make for substantial benefits
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Limitations of IP ADR (2)
• Outcome binding only between the parties (inter partes)
– No public precedent (erga omnes)
– No general declaration of (in)validity
– No direct office action (registration, cancellation)
• But: inter partes effect proves mostly sufficient
• ICC interim award 6097 (1989) confirming arbitrability
– Japanese claimant asserting breach of patent license by German
licensee, who invoked invalidity of claimant’s patents
– Party agreement:
• Place of arbitration: Zurich, Switzerland
• Contract interpretation: Japanese law
• Patent infringement: German law
– Primacy of party intent in arbitration
– Submission to arbitration is form of free disposal, like rights
transfer or license (‘any dispute involving property’)
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WIPO Electronic Case Facility (‘ECAF’)
http://www.wipo.int/amc/en/ecaf/index.html
• Web-based electronic case file
– For WIPO cases (also used under America’s Cup Rules)
– Facilitates online communication and storage
– Submission in most common formats (word, pdf, others)
– Searchable by author, date, subject title
– Email alerts
• Case management information
– Names and contact details
– Case overview
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The Uniform Domain Name
Dispute Resolution Policy
(UDRP)
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Background to the UDRP
• Background (WIPO advice to ICANN - 1998-1999)
– Need for a procedure permitting trademark owners
to resolve clear cases of abusive domain name
registration (‘cybersquatting’) without going to
court
• UDRP adopted by ICANN and took effect in 1999.
• Has proved to be an effective expedient
alternative to court action, while preserving court
options.
• Now 10 years old, with a maturing decision base.
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UDRP (2)
• Applicable to gTLDs: .com, .net, .org
– .aero, .biz, .coop, .info, .museum, .name, .pro. (&
some ccTLDs)
• Remedies – limited transfer or cancellation
– No costs or damages
• Source of law: contract
– domain name registrants are bound to the UDRP
through their registration agreement
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Center Staff
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25 nationalities, 17 languages
Case Managers
Case Secretariat
IT Support
Lawyers
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UDRP
(PROCEDURE)
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UDRP: Procedure At a Glance
Average duration: approx 60 days
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UDRP: Procedure
• The Complaint is filed by the Complainant
• The Respondent is given 20 days to respond to the Complaint
• An independent panel is appointed from the Center’s list (1- or
3-member Panels)
– Intellectual property and Internet specialists
– 384 members from more than 50 countries in all regions (including 25
Australians)
• The Panel issues a decision
– Based on written evidence (ie, Complaint, Response), no in-person
hearings
• The Registrar implements the Panel’s decision
– At the end of 10 calendar days, if no court challenge
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UDRP (SUBSTANCE)
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UDRP: The Three Elements
WHAT IS REQUIRED?
– Trademark must be identical or confusingly
similar to the domain name (Policy, s. 4.(a)(i)); and
– The registrant of the domain name must have no
rights or legitimate interests in the domain
name
(Policy, s. 4.(a)(ii)); and
– The domain name must have been registered
and used in bad faith (Policy, s. 4.(a)(iii)).
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UDRP - open-ended examples
Provides (non-exhaustive) examples of:
• rights or legitimate interests (Policy, para. 4 (c)):
– Includes prior use of domain name for bona fide offering of
goods or services, or being commonly known by the domain
name
• registration and use in bad faith (Policy, para. 4
(b)):
– Includes for the purpose of selling a domain name to the
trademark owner, or of attracting web traffic through the
creation of likely confusion with a TM for commercial gain
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Rights in a Mark
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Trade Mark Rights
• Trademark rights are a threshold
requirement under the UDRP (paragraph
4(a)(i)).
• A registered trademark will generally
suffice (although unexamined
registrations may receive less deference).
• Other rights not covered (e.g. GI’s /
content)
• Geographic location of mark generally
irrelevant for the purpose of standing.
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Unregistered TM Rights (1)
• Unregistered or common law rights may be
established where a complainant can show that
the claimed mark has become a ‘distinctive
identifier’ associated with the complainant or its
goods and services.
• E.g. Tom Cruise <tomcruise.com> found to be a
distinctive identifier of acting services provided
by that individual.
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Identical or Confusing Similarity?
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Identical or Confusingly Similar to a
Trademark
• Identical to Trademark
– Punctuation
– Design Elements
• Confusingly Similar
to Trademark
– ‘Typosquatting’
– Addition of Other Words
– Content of Website
– Gripe Sites
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Confusing Similarity
• Consensus view among Panels that:
– Test for confusing similarity is comparison between the
trademark and the domain name to determine the
likelihood of confusion.
– Content of website irrelevant for purposes of this
particular test.
– Rationale: Initial interest confusion - if the object is to
get an Internet to the website, the presence of content
on arrival will not prevent this.
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Confusingly Similar
‘Typosquatting’
http://www.JoeCarton.com
http://www.ElectronicBotique.com
http://www.0xygen.com
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Confusingly Similar
Addition of Generic Term
http://www.BuyPorsche.com
http://www.VogueMag.com
http://www.SpanishPlayboy.com
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Gripe Sites
http://www.AOLsucks.com
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Gripe Sites
Is a domain name consisting of a trademark and
a negative term confusingly similar to the
complainant’s trademark?
Minority view: Not confusingly similar because
Internet users are not likely to associate the
trademark holder with a domain name consisting
of the trademark and a negative term.
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THE SECOND ELEMENT
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Rights or Legitimate Interests
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Demonstrable Preparations to Use
Bona Fide Offering
Commonly Known
Noncommercial or Fair Use
– Agency and Distributorship
– Free Speech
• Criticism/Gripe Sites
• Fan Sites
– Generic/Dictionary Words
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Free Speech -- Fan Sites
Can a fan site constitute a right or legitimate interest in
the disputed domain name?
View 2: Respondent does not have rights to express its view, even if
positive, on an individual or entity by using a confusingly similar
domain name, as the respondent is misrepresenting itself as being that
individual or entity.
In particular, where the domain name is identical to the trademark,
and the respondent is preventing the trademark holder from using its
mark in a DN and managing its presence on the Internet.
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The Third Element
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Registered and Used in Bad Faith
• UDRP contains inclusive examples of evidence of
registration and use in bad faith (paragraph
4(b)(i)-(iv) of the UDRP)
• For example:
– registering a domain name primarily for primary
purpose of selling to a trademark owner for
profit; or
– registering a domain name to prevent trademark
owner from registering their mark in a
corresponding domain name, where there is a
pattern of such conduct;
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Registered and Used in Bad Faith
(Contd) or
– registering a domain name primarily for the
purpose of disrupting the business of a
competitor; or
– using a domain name to intentionally attempt to
attract for commercial gain, Internet users to a
website or on-line location by creating a
likelihood of confusion with a trademark as to
the source, sponsorship, affiliation, or
endorsement.
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ccTLDS
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Thank You
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More Information on
WIPO Dispute Resolution
• WIPO Center
– http://www.wipo.int/amc/en/
– [email protected]
• Arbitration and mediation caseload/case examples
– http://www.wipo.int/amc/en/center/caseload.html
• ECAF introduction and users manual
– http://www.wipo.int/amc/en/ecaf
• WIPO Workshops
– http://www.wipo.int/amc/en/events
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