WIPO Arbitration and Mediation Center...Oct 06, 2007 · WIPO Arbitration and Expedited Arbitration WIPO Mediation WIPO Expert Determination (new) WIPO list of arbitrators, mediators,

AIPPI FORUM Singapore, October 6, 2007

Session XII

IP ADR and the Experience of the WIPO Arbitration and Mediation Center

Erik WilbersWorld Intellectual Property Organization (WIPO)

Geneva, Switzerland

2

Erik Wilbers (WIPO) – Session XII – AIPPI Forum – Singapore – October 6, 2007

Intellectual Property Litigation

• Median cost US patent litigation: US$ 1-4 million (AIPLA 2005)

Not counting management time and opportunity cost

• Much intellectual property litigation is multi-jurisdictional

• IBA 2005 Survey: not enough intellectual property specialization in courts

3


Intellectual Property Litigation Expense (U.S.)

$0.00

$1'000'000.00

$2'000'000.00

$3'000'000.00

$4'000'000.00

$5'000'000.00

$6'000'000.00

Copyright Trademark TradeSecret

Patent

< 1m1 - 25m> 25m

AIPLA Economic Survey 2005 (Mark Partridge)

4


Patent Litigation in Various JurisdictionsCountry Characteristic of Legal System Average Length Average Cost

France - Civil Law - Unified Litigation - No specialized courts

First Instance: 18-24 months Appeal: 18-24 months

€80,000-150,000 (1st Inst.)

Germany - Civil Law - Bifurcated Litigation - Specialized court for invalidity

First Instance: 12 months Appeal: 15-18 months

€50,000 (1st Inst.) €70,000 (App.)

Italy - Civil Law - Unified Litigation - Specialized courts

First Instance: few months – 24 months Appeal: 18-24 months

€50,000-150,000 (1st Inst.) €30,000-70,000 (App.)

Spain - Civil Law - Unified Litigation - Commercial Courts

First Instance: 12 months Appeal: 12-18 months

€100,000 (1st Inst.) €50,000 (2nd Inst.)

UK - Common Law - Unified Litigation - Specialized courts - Mediation promoted

First Instance: 12 months Court of Appeal: 12 months House of Lords: 24 months

€750,000-1,500,000 (1st Inst.) €150,000-1,500,000 (App.) €150,000-1,500,000 (House of Lords)

China - Civil Law - Bifurcated Litigation - Specialized courts

First Instance: 6 months (in law) Appeal: 3 months, no limit when foreigners litigate

Not Available

Japan - Civil Law - Bifurcated Litigation - Specialized courts

First Instance: 14 months Appeal: 9 months

Not Available

USA - Common Law - Unified Litigation - Specialized court of appeals (CAFC) - Jury trial available - Mediation promoted

First Instance: up to 24 months Appeal: 12 + months

Up to $4,000,000 (1st Inst.) $150,000-250,000 (App.)

5


Analyzing Dispute Resolution Experience• Did the outcome obtained require the process

that was followed?Did parties really need a third-party neutral?If so, did it really need to be a decision-maker?If so, did it really need to be a judge?

• Often both parties expect to win• What is ‘right’ may not be constructive

« In business you always meet twice »A compromise can be a win

• Most cases end in settlement

6


U.S. Federal Court Civil Action Resolution

22%

63%

14% 1%

No actionDiscoveryPretrialAt Trial

Federal Judicial Center, September 30, 2006 (MP)

Cases Filed: 272,644Cases Tried: 3,555

7


IP-Specific Dispute Resolution Factors• Internationalization of creation/use of IP

Calls for cross-border solutions• Technical and specialized nature of IP

Calls for specific expertise of ‘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

commercializationCalls for mechanisms that preserve relations

8


In-House Attitudes on Alternatives to Litigation

0%10%20%30%40%50%60%

Arbitration Mediation

FavorNeutralDisfavor

Corporate Legal Times, October 2004 (MP)

9


WIPO Arbitration and Mediation Center• Resource center

IP ADR guidance, workshops, publications• Administering authority

Contract clauses and rules for IP disputesWIPO Arbitration and Expedited ArbitrationWIPO MediationWIPO Expert Determination (new)

WIPO list of arbitrators, mediators, expertsSpecialized in different areas of IP; detailed profilesFrom 70 countries in all regionsWIPO not limited by list

Administration of cases• Design and operation of procedures for

special categories of IP disputes (e.g. UDRP)

10


WIPO Procedures

11


WIPO Rules• Suitable for all commercial disputes• Accommodating ‘international cases’• Party autonomy and flexibility• Including IP-oriented provisions

ConfidentialityExistence of caseDisclosures during caseOutcome of case

Court interim measures (Arbitration Rules)Evidence (Arbitration Rules)

ExpertiseExperiments

12


WIPO Cases: Scope and Numbers• Domestic and international• Prior clause and posterior submission• Contractual and (occasionally) non-

contractual• Arbitration and mediation (in each ‘direction’)• Value from Euro 20,000 to US$ 600 million• Caseload

Close to 100 requests for arbitrationClose to 75 requests for mediationPosted (‘sanitized’) case exampleshttp://www.wipo.int/amc/en/center/caseload.html

13


WIPO Cases: Subject Matter

• Patent licenses• R&D agreements (biotech/pharma) • Patent infringement• Copyright / collecting societies• Software / information technology• Trademark co-existence agreements• Trademark / domain name issues• General including IP (construction, finance,

employment)

14


WIPO Cases: Mediation ExampIe (part 1)

• Parties from Asia and Europe

• R&D company disclosed patented invention to manufacturer during consulting contract, without transfer or license of patent rights

• Manufacturer started selling products which R&D company alleged used its patent

• Negotiation of patent license failed; threat of multi-jurisdictional infringement proceedings

15


WIPO Cases: Mediation ExampIe (part 2)

• Parties submitted to WIPO Mediation

• Parties worked with WIPO-appointed mediator

Australian mediator

Understanding of subject matter

International experience

• Parties agreed license and new consulting contracts

16


WIPO Cases: Arbitration Example (part 1)• 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

17


WIPO Cases: Arbitration Example (part 2)• 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’

Highly complex legal and technical issuesBusiness secrets, models, site visitsEight days hearingFinal award in 15 months

18


(IP) ADR Trends• Arbitration

Containing complexity, time, cost of process• Mediation

Increasing roleMediator trainingParty preparation

• GeneralCourt-mandated ADRIP Office-offered ADRDispute resolution as business decision

Company policyPledgesClient expectations

Use of information technology

19


WIPO Electronic Case Facility• Web-based custom-created application

For WIPO arbitration and mediation casesBy party agreement in consultation with neutral(s)Customized version of WIPO ECAF created for and used by America’s Cup arbitration

• Principal functionsElectronic case file

Filing, storage, search, retrievalEmail alerts to all participants for each new filing Message Board for communication outside case file

Case management informationTime tracking, case overview, finance, contact details

20


WIPO ECAF Security

• AuthenticationECAF usernameECAF passwordRSA SecurID password

Changing passcode generated by RSA SecurID (Valid only for 60 seconds)

• EncryptionSSL (Secure Socket Layer) system

• Firewall protection

21


WIPO Center Information• Website: http://www.wipo.int/amc

WIPO RulesWIPO model clausesWIPO case examples

• ECAF introduction and users manualhttp://www.wipo.int/amc/en/ecaf/index.html

• Contact the WIPO [email protected]

• Publicationshttp://www.wipo.int/center/amc/en/publications/

Documents

WIPO Arbitration and Mediation Center...Oct 06, 2007 · WIPO Arbitration and Expedited Arbitration WIPO Mediation WIPO Expert Determination (new) WIPO list of arbitrators, mediators,