IP and ADR:
Using Mediating to Successfully
Resolve Intellectual Property
Disputes
Erica Bristol, Esq.
(c) 2014 EB Resolution Services. All rights
reserved.
Disclaimer
This presentation does not constitute legal
advice, does not create an attorney-client
relationship and should not be considered a
substitute for professional legal advice.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Topics Covered
• WHAT IS MEDIATION?
• BENEFITS VS. LIMITATIONS
• MEDIATION CONFIDENTIALITY/PRIVILEGE:
STATE VS. FEDERAL
• DRAFTING CONSIDERATIONS
• ELEMENTS OF A MEDIATION SESSION:
BEFORE, DURING, AFTER
• TIPS FOR SUCCESSFUL MEDIATIONS
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
WHAT IS MEDIATION?
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Definition of Mediation
• CA Evidence Code §1115: “a process in which
a neutral person or persons facilitate
communication between the disputants to
assist them in reaching a mutually acceptable
agreement.”
• One method of alternative dispute resolution
(ADR)
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Mediation Compared to
Other Forms of ADR
• Mediation
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–
–
–
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Out of court
Informal
Mediator has no decision-making power
Parties control outcome, cost, attendees
Confidential
• Arbitration
–
–
–
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Out of court
Informal discovery rules
Parties control cost
Arbitrator has decision-making power
• Binding or Non-Binding
• Early Neutral Evaluation
– Strength/weakness assessment
– Evaluation of possible outcome in court
– Recommendations persuasive but not binding
• Fact Finding, Mini-Trial
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
What Kind of IP Disputes Can Be
Resolved Using Mediation?
•
•
•
•
•
Patent
Copyright
Trademark
Trade Secret
Licensing
–
–
–
–
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Accounting/royalty calculation/audit provisions
Determination of license grant
Term, territory, rights, limitations, exclusivity
Subcontractor performance
Use beyond license grant
• Infringement matters
• Breach of Contract
• Vague, ambiguous terms
• Damages (VIP)
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
BENEFITS VS.
LIMITATIONS
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Benefits of Mediation
• Less Expensive than litigation
– Parties control cost
•
•
•
•
•
Less time (session can be scheduled quickly)
Confidential
Parties control outcome
Solutions not available in litigation/arbitration
In Person or “Virtual”
– Conference call, web conference, Skype™
• Saves travel/lodging costs
– Depends on dispute
• Good success rate (if parties want to settle)
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Limitations of Mediation
• No decision binding on parties
• Parties don’t have to settle
• May end up in arbitration/litigation anyway
– Longer time frame for resolution
• Confidentiality restrictions
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
How Much Does Mediation Cost?
•
•
•
•
•
Varies
Hourly, Half Day, Full Day
$300/hr.+
Admin Fees
Include mediation costs in legal budget
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Who Should Attend?
• Parties
• Counsel
– Knowledge of case, good negotiation skills
• Other Attendees (discretionary)
– Witnesses
– Consultants
– Experts
– Translators
– Insurance Representatives
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
When Does Mediation Take Place?
• Before lawsuit/arbitration
• During litigation
• Pursuant to contract
– Informal attempt to resolve (aka “negotiation”)
– Mediation
– Arbitration/Litigation
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Voluntary vs. Involuntary Mediation
Voluntary: by contract (oral or written)
– Usually prior to arbitration/litigation
– Parties can spontaneously agree
Involuntary: court-ordered mediation
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Court-Ordered Mediation
• Litigated cases
• Federal and state courts
– State courts: mediation statutes, California Rules of Court
– Federal courts: local rules
• Typically 6-12 months from filing complaint
• Mediator selected by
– Parties (from court panel)
• First 3 hours free
– Court randomly selects
– Parties hire private mediator (fee)
• Sometimes too early
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
California Rules of Court
Court-connected mediation in civil cases
– 3.850, et. seq. (mediator rules of conduct)
– 3.865, et. seq. (complaint procedures)
– 3.894 (serve participant list 5 days before session;
must appear in person unless excused by
mediator)
– 3.1385 (notify mediator of settlement 2 days
before session or possible fines)
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Selecting a Mediator
•
•
•
•
•
•
•
•
Panel vs. Individual
Attorney vs. Non-Attorney
Experience
Skills
Referral
Location
Fees
Conflict check
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
MEDIATION
CONFIDENTIALITY AND
PRIVILEGE:
CA VS. FEDERAL
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
California’s Mediation Laws:
Evidence Code §703.5, §§1115-1128
Confidentiality
Admissibility
Communications
Documents/Materials
Mediator testimony, competency
Conclusion of Mediation (by Law)
Enforceability of mediated settlement agreements
– oral and written
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Confidential and Privileged
Communications, Writings
1119(a): Statements and admissions in mediation
inadmissible, not subject to discovery, disclosure can’t be
compelled in non-criminal action
1119(b): Writings prepared in connection with mediation
inadmissible, not subject to discovery, disclosure can’t be
compelled in non-criminal action
1119(c): All communications, negotiations, or settlement
discussions by and between participants in the course of a
mediation or a mediation consultation shall remain
confidential.
Ok for criminal?
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Confidentiality Continues after
Mediation Ends
1126: Communications and writings remain
inadmissible, protected from disclosure, and
confidential to the same extent after the
mediation ends.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
What about the Mediator’s Findings,
Recommendations?
1121: Inadmissible, unless all parties agree in
writing (or orally per Section 1118)
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Mediators Incompetent to Testify
Evidence Code §703.5
Exceptions:
Statement or conduct that could
– (a) give rise to civil or criminal contempt,
– (b) constitute a crime,
– (c) be the subject of investigation by the State Bar
or Commission on Judicial Performance, or
– (d) give rise to disqualification proceedings under
paragraph (1) or (6) of subdivision (a) of Section
170.1 of the Code of Civil Procedure
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Subpoenaing Mediator Testimony/ Production
1127: no subpoenaing mediators to testify or
produce a writing
If testimony/writing found to be inadmissible or
protected from disclosure, court/administrative
body shall award reasonable attorneys’ fees
and costs to the mediator
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Reference to Mediation During Trial
1128: Reference to mediation during
subsequent trial is an Irregularity per CCP 657
Grounds for vacating or modifying the decision
in that proceeding, in whole or in part, and
granting a new or further hearing on all or part
of the issues, if the reference materially
affected the substantial rights of the party
requesting relief.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Evidence Otherwise Admissible
1120: Evidence otherwise admissible or subject
to discovery outside of a mediation or a
mediation consultation shall not be or become
inadmissible or protected from disclosure solely
by reason of its introduction or use in a
mediation or a mediation consultation.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Communications/Writings
Related to Mediation Admissible If:
1122:
• All participants agree in writing (or orally per section 1118)
• Communication/writing was prepared by/on behalf of less
than all participants:
– those participants expressly agree in writing (or orally per Section
1118) to its disclosure, and
– the communication/writing does not disclose anything said or done or
any admission made in the mediation.
• If mediator expressly agrees to disclosure, that binds
mediator’s assistants
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Are Mediated
Settlement Agreements Enforceable?
1123: yes, if:
• Signed by parties
• Says it’s admissible/subject to disclosure/words to that effect;
or
• States it’s enforceable/binding/words to that effect; or
• All parties to agreement expressly agree in writing (or orally
per Section 1118) to its disclosure; or
• Agreement is used to show fraud, duress, or illegality relevant
to an issue in dispute.
Admissibility of oral agreements: Section 1124
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Are Oral Agreements in Mediation
Binding on Parties?
• 1118: yes, if:
– (a) Recorded by court reporter or reliable means
of audio recording
– (b) Terms put on record in presence of
parties/mediator and parties state on record they
agree to terms
– (c) Parties state on record agreement is
enforceable/binding/words to that effect.
– (d) Recording is reduced to writing and signed by
parties within 72 hours after recorded.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
When Does a Mediation End (by Law)?
(For purposes of confidentiality)
• No communication between mediator and any of the parties
for 10 calendar days
– Mediator and parties may shorten/extend time by
agreement
• Parties execute settlement agreement that fully resolves
dispute
• Oral agreement under Section 1118 fully resolves dispute
• Mediator gives participants signed writing that states
mediation is terminated or words to that effect consistent
with Section 1121
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
When Does a Mediation
End by Law, cont.
• Party provides mediator, participants with signed writing
mediation is terminated or words to that effect consistent with
Section 1121.
– More than two parties: mediation may continue with
remaining parties or terminate
• Partially resolved disputes:
– Parties execute written settlement agreement that partially
resolves the dispute
– Oral agreement that partially resolves the dispute is reached
per Section 1118
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Cases
• In re Marriage of Eisendrath (2003) 109 Cal. App.
4th 351
• Foxgate Homeowners' Association, Inc. v.
Bramalea California, Inc. (2001) 26 Cal.4th 1
• Cassel vs. Superior Court (2011) 51 Cal.4th 113
But, see
• Milhouse v. Travelers Commercial Ins. Co.
(C.D.Cal. 2013) 982 F.Supp.2d 1088
– currently on appeal to 9th Circuit (Case No. 13-56959)
• CA Law Commission activity
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Federal Mediation
Confidentiality and Privilege
• Confidentiality: Yes (28 U.S.C. § 652(d))
– Local rules
– Parties’ obligations to each other
• Privilege: Court-by-court basis!
– 4th, 9th declined to adopt, federal circuit punted the issue
– Northern District CA: yes; others, no
• Cases
– Babasa v. LensCrafters, Inc., (9th Cir. 2007) 498 F.3d 972
– Facebook, Inc. v. Pacific Northwest Software, Inc., (9th Cir. 2011) 640 F.3d 1034
– Kimberly-Clark Worldwide v. First-Quality Baby Products, (2011) No. 20111157 (unpublished)
Time for a federal mediation privilege for IP issues?
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
DRAFTING
CONSIDERATIONS
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Typical Elements of a Mediation Clause
•
•
•
•
“Condition Precedent” to arbitration/litigation
Trigger (written notice)
Selection of Mediator
Place
– State, county?
– Know rules for jurisdiction (local rules)
•
•
•
•
Who pays
Exclusions (certain claims, equitable remedies, e.g. prelim. injunction)
Tolling of SOL while in mediation
Time frame for completion
– What happens if not completed w/in time frame
• Consequences for failing to mediate
– No recovery of attorneys’ fees, costs
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Sample Mediation Clauses*
In the event of any dispute arising out of or relating to this
Agreement, or the breach thereof, the parties hereto shall use their
good faith efforts to settle the dispute through mediation in [specify
city/county, State] [administered by {specify provider organization} in
accordance with its mediation rules OR in accordance with the select:
CPR Mediation Protocol or similar] in effect as of the date of the
request for mediation, as a condition precedent to [select:
commencing legal action OR filing a claim in arbitration].
The filing of an action in court for the purpose of obtaining any of the
following shall not be a violation of the obligation to mediate: writ of
attachment, temporary restraining order, preliminary injunction,
receivership, or other provisional remedies.
Erica Bristol
*© 2009-2012 State Bar of CA. Reproduced with permission
of Litigation
Section.,Services.
ADR Committee
(c) 2014
EB Resolution
All rights
reserved.
Sample Mediation Clauses, cont.
If a party [select: commences any action or proceeding at law or in
equity OR files a claim in arbitration] without first offering to
mediate, or if a party fails to respond to a request for mediation
within [specify: number of calendar days] after the date of such
request, or otherwise refuses to participate in mediation in good
faith, then that party shall not be entitled to recover the attorneys
fees, if any, to which it would otherwise have been entitled under
this Agreement as prevailing party in [select: litigation OR
arbitration].
“Good faith” participation shall mean direct participation in the
mediation by executives who are authorized to resolve the matter on
behalf of the parties whom they represent, and shall not mean that
any party is required to come to any agreement.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Sample Mediation Clauses, cont.
The mediator shall be [specify qualifications, e.g., ‘with
substantial training and experience as a mediator’] and
shall be selected [specify manner of selection, e.g. in
accordance with the afore-mentioned mediation rules, by
mutual agreement of the parties, or by mutual selection
from a panel of mediators offered by the provider
organization {NOTE that in the event one of the two latter
alternatives is selected, the provision needs to add a
clause as to what happens if parties fail to reach
agreement within a certain period of time, for example by
naming an appointing authority}]. Mediation fees,
including any administrative fee, shall be borne by the
parties in equal shares.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Sample Mediation Clauses, cont.
If and to the extent that, within [specify number] calendar days
after the date of the request for mediation, or within [specify
number] calendar days after the mediator’s notice of acceptance,
whichever occurs later, the dispute between the parties has not
been fully resolved, then unless both parties have agreed to
extend the time for completion of the mediation, [select: either
party shall be free to pursue any and all remedies available under
this Agreement or at law or in equity OR the unresolved issues
shall be finally resolved by binding arbitration pursuant to the
terms of Paragraph___ of this Agreement OR the matter shall be
finally resolved by judicial reference pursuant to the terms of
Paragraph___ of this Agreement].
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
ELEMENTS OF A
MEDIATION SESSION:
BEFORE, DURING AND
AFTER
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Typical Mediation Session
• Before:
– Attorneys communicate with mediator
– Agenda
– Mediation Briefs
• During:
– In Person vs. “Virtual”
– Joint session vs. caucus
– “Mediator’s Proposal”
– Settlement: Short/Long Agreement (should be in writing, use
“enforceable” language)
• After:
– Long settlement agreement drafted (use enforceable, binding
language)
– Try to settle after session/schedule another session
– Stay in contact with mediator (confidentiality)
– No settlement-proceed to arbitration, litigation
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
TIPS FOR SUCCESSFUL
MEDIATION SESSIONS
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
MEDIATION TIPS
• Prepare!
• Set agenda
• Manage client expectations
– Ethical duty to explain mediation, confidentiality/privilege?
• Come with the desire to settle
– Consider creative settlement options
•
•
•
•
•
Work on settlement agreement ahead of time
Don’t Fear the “Joint Session”
Negotiate, don’t litigate
Know how to calculate damages (VIP!)
Consider “mock mediation”
– Good for new attorneys
– Work on skills, weaknesses
• Sometimes, the problem is YOU
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
CONCLUSION
• Mediation is a great alternative to litigating
intellectual property disputes.
• Helps parties save time, money, reputation.
• Mediated settlement agreements can be
enforceable.
• Quick and confidential resolution strengthens
client relationships and trust.
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Questions?
Erica Bristol
(c) 2014 EB Resolution Services. All rights
reserved.
Thank You!
Erica Bristol, Esq.
(818) 753-2326
16133 Ventura Boulevard, 7th Floor
Encino, CA 91436
www.ebresolution.com
ericab@ebresolution.com
(c) 2014 EB Resolution
Services.
rights
(c) 2014 EB
Resolution All
Services.
Allreserved.
rights
reserved.
Erica Bristol