ADR v Litigation in IPR Disputes
One Judge’s Perspective
Why do the English Courts encourage ADR?
• Save cost to public purse
– Trial time
– Brings whole dispute to an end
• No appeal
• Fewer satellite elements e.g. enforcement
• Can lead to better outcomes – more creative
possibilities – win win
How do English Courts encourage ADR?
• The rules for all cases (including IP) require it
– Pre-Action Protocol para 1.2 requires parties to consider
using a form of ADR
– CPR PD 29 para 4.10(9) provides:
• (9) in such cases as the court thinks appropriate, the court may
give directions requiring the parties to consider ADR. Such
directions may be, for example, in the following terms:
– The parties shall by [date] consider whether the case is capable of
resolution by ADR. If any party considers that the case is unsuitable for
resolution by ADR, that party shall be prepared to justify that decision at
the conclusion of the trial, should the judge consider that such means of
resolution were appropriate, when he is considering the appropriate
costs order to make.
– The party considering the case unsuitable for ADR shall, not less than 28
days before the commencement of the trial, file with the court a witness
statement without prejudice save as to costs, giving reasons upon which
they rely for saying that the case was unsuitable.
Costs sanction
• In general in English Courts costs follow the
event.
• But a failure to engage in ADR can lead to the
winner being deprived of costs
• Halsey v Milton Keynes NHS Trust [2004]
EWCA Civ 576 considered a failure to mediate
Halsey
• Clear court can take a failure to mediate into
account in relation to costs. Party unwilling to
mediate may well have to justify their position
• Factors include:
– Merits of case. Maybe reasonable not to mediate if party has
a strong case
– Most cases are inherently suitable
– Cost of mediation relative to what is at stake
– Would mediation delay trial?
Success of ADR in IP cases
• An aggregate success rate reported by CEDR
Mediators of 90% (CEDR Fifth Biennial
Mediation Audit 15 May 2012). General, not IP
specific.
• No statistics I am aware of for IP.
• Anecdotally: settlement rate for IP cases is
lower than for general commercial cases
• May be because what is at stake is not purely
money
Identifying cases suitable for ADR
• IP can be unsuitable when really about an all
or nothing injunction. Mediation can suit
money disputes
• Experience in Patents County Court / IPEC
– Architects plans copyright case
– Cost prohibitive
• Experience as practitioner
– med-arb a major patent licensing dispute
What can the court do?
• Conduct Early Neutral Evaluation?
– Some use in IPEC
– Trade mark cases may be suitable for ENE.
• Propose settlements? – different legal
traditions vary.
• Decide FRAND royalty instead of litigating the
patents?
IP ADR in cross-border cases
• IP rights are territorial
• Some large territories – USA, UPC(?)
• Choice – litigate all over the world or conduct
a single ADR
– Reduce costs
– End dispute once and for all
– All eggs in one basket? May be a lower risk to fight
all over, winning here, losing there – and then
settle.
IP ADR in cross-border disputes II
• Some states will not readily enforce foreign
judgments but…
• Often they will enforce contracts and arbitral
awards
• 1958 New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards –
has many signatories inc. USA, UK, Malaysia,
India and China. Will enforce in commercial
cases
Conclusion
• ADR has a clear role in IPR disputes
• Real potential advantages
• But like any tool, it has to be used properly
THANKS