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What to Know about Intellectual Property ADR
(“Alternative Dispute Resolution”)?
Commerce involving intellectual property (IP) rights commonly crosses international borders today. When a dispute arises between parties over intellectual property, it activates complex procedural questions of international law that may delay resolution for months, and incurs massive legal bills for all involved. Arbitration or mediation may be venues for a more economical resolution to the dispute, and may yield a more satisfactory result.
Time is often of the essence when addressing IP dispute resolution; technology advances now at an exponential rate, and by the time the court resolves the issue, the product or idea at issue may be outdated. It is important to consider arbitration agreements in intellectual property contracts or post-dispute arbitration or mediation as a solution.
Save the business relationship using mediation or arbitration
Arbitration is useful when both parties in dispute have a long-term or long-standing business relationship. Arbitration can be less adversarial than litigation, though this is less often the case than before. In these cases, mediation may be a more attractive proposition than arbitration. Mediation is to be a resolution where the two parties in the dispute come together to hammer out details, rather than having lawyers act as advocates. However, even parties in mediation have lawyers ready to offer advice and discuss agreements.
Use mediation or arbitration when amount at issue is small
Legal observers have considered arbitration to be the faster, cheaper method of resolving disputes; however, more studies show arbitration is not always either faster or less expensive, especially when dealing with intellectual property or patents. A 2007 survey by the American Intellectual Property Lawyers Association (AIPLA) showed that arbitration can be less expensive – and less risky – if the amount at issue is relatively small. When the researchers observed cases involving as much as $25 million, litigation became the cheaper method. This is likely because of how arbitration fees are structured. They grow as the amount at issue increases, whereas court fees do not increase. So then, IP professionals in a dispute should use the courts when the amount at issue is high.
Both parties are similarly situated
Arbitration can be an advantage when the dispute is between two entities in a similar business position. Both parties will be on equal footing in terms of the ability to settle a dispute using alternative resolution. Since both parties in intellectual property mediation or arbitration share the initial expenses, it is less likely to create enmity between the parties.
Lacking substantive evidence
In some matters, a dispute will arise based on fuzzy facts, and there will be a lack of substantial evidence to present. Those factors would make moving forward in court difficult. However, with the relaxed evidentiary rules in an arbitration hearing, arbitration would potentially allow such a dispute to be resolved.
Keeping the dispute out of the public eye
There are instances where it would be bad for business for one or both parties engaged in an intellectual property dispute to take their battle to court. The tech press may end up making one or both sides look bad, or the trial itself may be corrupted by the publicity if it is a jury trial. Arbitration is part of the “private” legal process, and all matters may be confidential by stipulation in contract.
Save time with an expert mediator or arbitrator
IP disputes are likely to involve very complex technological facts as they intersect with questions of law. With mediation or arbitration, the parties can select an arbitrator or mediator with expert knowledge in the field at issue. Both sides may be assured that the facts at issue are clearly understood rather than having to expend energy explaining matters to a judge or jury.
Mediation or arbitration as a gateway to negotiation
Mediation can lead to direct negotiation between parties. When a software company conflicted with a telecom company over licensing issues, the parties entered into contractually mandated mediation to resolve the dispute. The mediation did not resolve all the issues; however, rather than moving forward to arbitration or to court, the parties agreed to settlement via negotiation.
Intellectual property disputes grab headlines when they head to court. The tech giants in telecommunications, software and hardware shake the ground when the battle. They prefer this, even though litigation has a reputation for being more expensive and time consuming. Using the courts to settle a dispute allows the winner to send a message to other businesses not to trifle with the victor. Moreover, the judge may set a precedent that will clarify how these companies to business going forward. However, some businesses may prefer a quieter resolution and seek out an intellectual property arbitration firm to bring both parties together.