A Current View of IP ADR APAA 63rd Council Meeting Penang November 9, 2014 Erik Wilbers, Director, WIPO Arbitration and Mediation Center, Geneva 2 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 Erik Wilbers - WIPO Arbitration and Mediation Center 3 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: consensual procedure in which the parties submit their dispute to one or more chosen arbitrators, for a binding and final decision (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. Erik Wilbers - WIPO Arbitration and Mediation Center 4 WIPO ADR Options WIPO Contract Clause/ Submission Agreement Party Agreement (Negotiation) First Step Mediation Expert Determination Determination Expedited Arbitration Settlement Erik Wilbers - WIPO Arbitration and Mediation Center Arbitration Award Procedure Outcome 5 WIPO Case Subject Matter and Business Areas Subject Matter Business Areas Luxury Goods 4% Copyright 8% Other 21% Trade mark 15% Other 23% Patent 39% IT 32% Mechanic Life al Sciences 16% 14% IT Law 17% Entertain ment 10% Erik Wilbers - WIPO Arbitration and Mediation Center Chemistry 1% 6 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) Erik Wilbers - WIPO Arbitration and Mediation Center 7 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 Erik Wilbers - WIPO Arbitration and Mediation Center 8 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 Erik Wilbers - WIPO Arbitration and Mediation Center 9 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 Erik Wilbers - WIPO Arbitration and Mediation Center 10 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 Erik Wilbers - WIPO Arbitration and Mediation Center 11 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 Erik Wilbers - WIPO Arbitration and Mediation Center 12 Source: WIPO statistics database, April 2014 Erik Wilbers - WIPO Arbitration and Mediation Center 13 Source: WIPO statistics database, April 2014 Erik Wilbers - WIPO Arbitration and Mediation Center 14 WIPO 2013 International Survey on Dispute Resolution in Technology Transactions Oceania, 3% 8% South America, 8% Japan 5% Singapore 2% China 2% Other Asian Countries 6% North America, 21% Europe, 52% 52% 15% Brazil 2% Colombia 2% Other South American Countries 4% Asia, 15% Africa, 1% Germany 11% France 7% Switzlerland 7% United Kingdom 6% Spain 6% Italy 3% The Netherlands 2% Other European Countries 11% 21% Place of Survey Respondent Business Operations 3% 1% http://www.wipo.int/amc/en/center/survey/results.html Government Body, 3% 3% 3% United States of America 17% Canada 2% Other North American Countries 1% Other, 3% Law Firm (for client), 52% Type of Survey Respondent 24% 52% 7% Individual / Self Employed, 7% 6% Research Organization, 6% 5% University, 5% Company, 24% Erik Wilbers - WIPO Arbitration and Mediation Center 15 Scope of Agreements: Parties/Technology 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 16 Top Ten Considerations in Choice of Dispute Resolution Clause Domestic Contracts International Contracts Costs – 71% Costs – 71% Time – 59% Time – 57% Quality Outcome – 44% Enforceability – 53% Confidentiality – 33% Quality Outcome – 44% Enforceability – 33% Neutral Forum – 36% Business Solution – 30% Confidentiality – 32% Neutral Forum – 18% Business Solution – 29% None in Particular – 9% Support Provided by Institution – 9% Setting Precedent – 6% None in Particular – 6% Support Provided by Institution – 6% Setting Precedent – 5% Erik Wilbers - WIPO Arbitration and Mediation Center 17 How Are Technology Disputes Resolved? Erik Wilbers - WIPO Arbitration and Mediation Center 18 Relative Time and Cost of Technology Dispute Resolution Erik Wilbers - WIPO Arbitration and Mediation Center 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 Erik Wilbers - WIPO Arbitration and Mediation Center 19 20 Tailored WIPO ADR for Specific Sectors 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 21 More Information about WIPO ADR wipo.int/amc arbiter.mail@wipo.int 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