APAA PENANG 2014
Taking Control of Your IP Dispute Using ADR
9 November 2014
Keum Nang Park
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Contents
I.
Court Litigation or ADR mechanisms?
II.
Benefits of ADR for IP Disputes
III.
IP-dedicated ADR Institutions in Korea and Japan
IV.
Arbitrability of IP Disputes
V.
How to Promote ADR for IP Disputes
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Ⅰ. 서론
Court Litigation or ADR mechanisms?
Ⅰ. 서론
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Comparison of Court Litigation and ADR
Court Litigation
Multiple proceedings under
different laws, with risk of
conflicting results
International
Technical
ADR
Single proceeding under the
law determined by the parties
Neutral to law, venue, etc.
Possibility of actual or
perceived home court
advantage of the party
litigating in its own country
Decision maker might not
have relevant expertise
Parties can select an
arbitrator/mediator with
expertise
Procedures often delayed
Urgent
Parties can shorten procedure
Injunctive relief available
Require Finality
Possibility of appeal
Limited appeal option
Confidentiality/trade
secret and risk to
reputation
Public proceedings
Proceeding and outcome are
confidential
Source : WIPO Arbitration and Mediation Center
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Court Litigation or ADR mechanisms?
Neither Court Litigation nor ADR mechanisms can offer a comprehensive soluti
on in all circumstances. Indeed, each transaction is likely to have its own dispu
te resolution requirements.
For international patent disputes, it is important to take account of any existing s
pecialized courts and judges, bifurcation of proceedings, requirement and availab
ility of injunctions, possible parallel litigation, and enforceability.
Court
Litigation
ADR
Enforceability
Expertise
Confidentialit
y
Injunctions
Time and
Costs
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Ⅰ. 서론
Benefits of ADR for IP Disputes
Ⅰ. 서론
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Benefits of ADR for Resolving IP Disputes
A single procedure
• avoids the complexity of multiple court actions in
the jurisdictions concerned. ADR is suitable for
cross-border IP disputes.
Party autonomy
• ADR procedures are flexible and allow the parties
to have full control, including timelines.
Cost and time
efficiency
• save costs when compared to multi-jurisdictional
and/or multi-instances litigation.
Expertise
• The parties can select arbitrators, mediators or ex
perts with specific expertise in the relevant legal,
technical or business area.
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Benefits of ADR for Resolving IP Disputes
Confidentiality
• Important in IP disputes where trade secrets are at
stake
Neutral Forum
• Prevents forum shopping and potential perception
of national bias
Enforcement of
arbitral awards
• Arbitral awards are not subject to appeal and their
enforcement is facilitated by the New York
Convention
Preserving longterm relationship
• High settlement figures especially in mediation
• Cross-licensing and joint development agreement
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Relative Time and Costs of Dispute Resolution
The cost of foreign litigation typically exceeds that of ADR.
• Litigation in home jurisdiction takes around 3 years and costs about US$475,000. Litigati
on in foreign jurisdiction takes around 3.5 years and about US$850,000.
• Mediation takes around 8 months, and typically costs less than US$100,000. Arbitration
takes on average just over a year and costs about US$400,000.
Source : WIPO Arbitration and Mediation Center. International Survey on Dispute Resolution in Technology Transactions
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How to Choose the Most Appropriate ADR?
Mediation is an attractive option for the parties that value the preservation or
enhancement of their relationship, confidentiality, or want to reach a speedy set
tlement yielding significant time and cost savings.
Adding arbitration as a next step in a multi-tier approach can enhance the chanc
es of settlement if mediation fails.
Negotiation
Mediation
Arbitration
or Litigation
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Ⅰ. 서론
IP-dedicated ADR Institutions in Korea and Japan
Ⅰ. 서론
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IP-dedicated ADR Institutions in Korea
In Korea, there exist multiple ADR institutions dedicated to IP disputes apart
from the Korean Commercial Arbitration Board.
Industrial Property Right
Dispute Mediation
Committee
• mediation of industry property disputes
• established by KIPO on 27 December 1994
Internet Address Dispute
Resolution Committee
• mediation of domain-name-related disputes
• established on 8 October 2004
Korea Copyright
Commission
• mediation, conciliation of copyright disputes
• established on 23 July 2009
Content Dispute
Resolution Committee
• mediation between contents providers/users
• established on 28 April 2011
Design Dispute
Resolution Committee
• mediation of design-related disputes
• established on 6 November 2012
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Industrial Property Right Dispute Mediation Committee
IPRDMC was established under the Korea Intellectual Property Office (KIPO) in 1
995.
Empowering
Statutes
• Invention Promotion Act
Organization
• The Vice Commissioner of KIPO is the Chairma
n of the IPRDMC.
• IPRDMC consists of 20 members
Subject-matter
• Idea, patent, utility model, industrial design, a
nd trademarks, employee inventions
• Validity issues are excluded.
Submissions
• 5.6 cases a year (107 submissions in total
between ’95-‘13)
Success Rate
• 24% (27 out of 107)
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IPRDMC Mediation Procedure
Source : http://www.kipo.go.kr/kpo/user.tdf?a=user.html.HtmlApp&c=5067&catmenu=m03_02_03_03
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Internet Address Dispute Resolution Committee
IDRC was established as a statutory committee on 8 October 2004 for the purpo
se of settling disputes of domain names promptly and fairly.
Empowering
Statutes
• Internet Address Resources Act
Organization
• 30 or fewer committee members
Subject-matter
• disputes over the registration, holding or use
of Internet addresses
Submissions
• 40 cases a year
Decisions
• 34 cases a year
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IDRC Mediation Procedure
Source : http://www.idrc.or.kr/english/dispute/flowChart.jsp
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Korea Copyright Commission
KCC is the Korea’s agency solely dedicated to copyright-related affairs.
Empowering
Statutes
• Copyright Act
Organization
• between 20 and 25 commission members
• 7 panels (each panel comprises 3 members)
Subject-matter
• Literary works, musical works, paintings,
photographic works, cinematographic works,
computer programs, derivative works
Submissions
• 70-80 cases a year
Success Rate
• around 50%
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Contents Dispute Resolution Committee
KCDRC was established on 28 April 2011.
Empowering
Statutes
• Contents Industry Promotion Act
Organization
• between 15 and 30 committee members
Subject-matter
• disputes over the transaction and use of
contents
Submissions
Features
• 626 cases in 2011 → 3,445 cases in 2012 →
4,817 cases in 2013
• 4 divisions(game, motion pictures, knowledge
information, and cartoon/characters)
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Design Dispute Mediation Committee
Design Dispute Mediation Committee was established under the Korea Institute
of Design Promotion (KIDP) on 6 November 2012.
Empowering
Statutes
• Industrial Design Promotion Act
Organization
• 20 committee members
• 4 divisions(product, visual, environment, and
multimedia)
Subject-matter
• Disputes over transaction and use of industrial
designs and fair trade issues
Submissions
• 14 cases as of May 2013
Success Rate
• 5 cases completed out of 14 cases
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Korea Commercial Arbitration Board
KCAB, established in 1966, is the only authorized commercial arbitration instituti
on in Korea to settle any kind of commercial dispute.
Empowering
Statutes
• Korean Civil Code Article 32, the Arbitration
Act of Korea
Organization
• 1,090 arbitrators as of Oct. 2013
Subject-matter
• any kind of commercial dispute
Submissions
• over 800 cases a year in total
• less than 30 IP cases a year
Success Rate
• over 50%
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IP-dedicated ADR Institution in Japan
The Japan Intellectual Property Arbitration Center(JIPAC) was established by the Japan Pa
tent Attorneys Association and the Japan Federation of Bar Associations.
JIPAC issues advisory opinions on infringement/validity of IP rights, issues advisory opinio
ns on standard essential patent, and resolves IP domain names disputes.
Japan Intellectual Property
Arbitration Center
• Consultation, Mediation, and Arbitration
• Originally founded in 1998 as the
Industrial Property Rights Arbitration
Center
• Patent right, utility model right, design
right, and trademark right
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ADR is Not Actively Used for IP Disputes
ADR is Not Actively Used for IP Disputes in neither Korea nor Japan
District Courts and
Korean IP Tribunal
Industrial Property
Dispute Resolution
Committee
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Reasons Why IP ADR Is Not Actively Used in Korea
The majority of respondents are willing to
actively use systematic, reliable and efficient
IP ADR systems.
• 39% cited lack of awareness and advertiseme
nt of ADR mechanisms for IP disputes.
• 36% pointed out that existing IP ADR
institutions still lack technical expertise or
management of time efficiency.
• 15% cited lack of reliability of ADR
institutions when compared to court systems.
• Other opinions include the need for on-line
ADR system for small disputes, the lack of
enforceability, and confusion due to existence
of too many institutions.
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Other Reasons why IP ADR mechanisms are avoided
Need for a preliminary injunctive relief
• IP right holders may need a preliminary injunctive relief.
• Injunctive relief is more likely obtained from a public court rather than from an
arbitration tribunal.
Strategic need for precedent or publicity
• An IP right holder or an alleged infringer may desire a public vindication of its
rights.
ADR simply is not available for IP disputes
• ADR depends on the consent of the parties.
• Many IP disputes, particularly infringement claims, are between parties with no
pre-existing relationship and who are not inclined to agree to submit their dispute
to ADR.
Arbitrability
• Patent rights by nature include the power to preclude competition and require
registration; only public courts, and not private arbitrators, may resolve IP disputes.
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Ⅰ. 서론
Arbitrability of IP Disputes
Ⅰ. 서론
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Different Views on Arbitrability of Patent Disputes
All patent issues are
not arbitrable.
Validity issues are
inarbitrable.
• restrict all aspects of a
patent dispute, both
infringement and
validity issues, from
being settled by
arbitrators
• separate a private law
claim from public one.
• A rendered award will
not be enforceable in
that country
• Validity issues are not
arbitrable,
• South Africa
• Infringement issue is
arbitrable because it
addresses contractual
rights and obligations.
Both infringement
and validity issues are
arbitrable.
• Award cannot
invalidate the patent
but has an inter partes
effect binding only
between the parties.
• USA after 1983,
Switzerland
• Most countries
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Arbitrability of Patent Disputes in Korea
Korea has a bifurcated patent trial system. Arbitral
tribunal has to stay its proceeding until invalidity issue has
been decided.
Recently, the Korean Supreme Court, in a Grand Bench
ruling, held that any person seeking to exercise patent
rights based on a patent that is clearly invalid will be liable
for abuse of patent rights.
Based on this holding, it may arguably be possible for an
arbitration tribunal to decide on validity issues underlying
the dispute. An award is binding only between the parties
and the patent will remain valid until it is revoked.
Supreme Court
Patent Court
High Courts
Patent
Tribunal
District
Courts
Invalidation
Infringement
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Ⅰ. 서론
How to Promote ADR for IP Disputes?
Ⅰ. 서론
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How to Promote ADR Mechanisms for IP Disputes?
Publicize the existence and advantages of ADR for IP disputes.
Promote inclusion of ADR clauses or multi-tier clauses providing
ADR prior to court litigation as part of IP contracts.
Enhance court-ordered ADR proceedings for a certain class of IP
disputes.
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How to Promote IP ADR in APAA Countries?
Establish Asian Patent ADR Center dedicated to international IP
dispute resolution.
Align laws of APAA countries regarding the arbitrability issues of
IP disputes.
Develop Internet-based ADR mechanisms geared to IP dispute
resolution.
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감사합니다
Thank
You
Keum Nang Park
keumnang.park@leeko.com
82.2. 2191. 3036
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