Alternate Dispute Resolution for Intellectual Property

Globalization has been the critical factor of development in the 21st Century. The idea of the world being one "Global Village" has helped almost every nation of the world. As businesses are going global, it's also essential that law (including IP law) goes global, too.

Usually, intellectual property (IP) is territorial in nature. But with big companies expanding their reach worldwide — protecting your IP internationally becomes very important.

The role of licensing and joint venture agreements

When a big company wants to enter a new market, the two most favorable methods are licensing or a joint venture with a domestic company in that country.

Consider how Hershey co-partnered with the Godrej Group when it wanted to launch Hershey's in India.

Usually, all licensing/joint venture agreements contain a well-drafted dispute resolution clause.

This talks about when/how the dispute will be resolved if any problems arise. International arbitration has proven to be the most favorable form of dispute resolution. This is especially true where parties are of different nationalities.

Intellectual property has become global and has crossed territorial borders through licenses.

Like any other agreement, IP licensing agreements also face the threat of a potential dispute.

The difficult questions

Indeed, a situation like that will raise obvious yet essential questions, such as:

• Should the parties battle it out in the courts when there is an actual dispute? Is traditional litigation necessary, then?
• Are courts usually biased towards their domestic companies during conflict resolution?
• What would be the probability of a fair decision being delivered? Would the courts offer a speedy disposal of the matter?

The list of questions can be long, but the answer is simple: arbitration.

When intellectual property has an international disputes dimension:

Arbitration is very often the wisest and most efficient way to resolve licensing disputes. According to Law360, opting for international arbitration to resolve disputes is an increasing trend.

The World Intellectual Property Organization (WIPO), an agency of the United Nations, is the pioneer for IP:

• Services
• Strategy
• Policy
• Cooperation

WIPO and international arbitration

The WIPO was established in 1967 to “ encourage creative activity, to promote the protection of intellectual property throughout the world.”

It currently has 193 member countries.

As a specialized agency of the United Nations, it overlooks global intellectual property regulation, cooperation, and services such as dispute resolution.

Alternative Dispute Resolution (ADR) is the most favorable form of dispute resolution. Very simply, ADR is an "out-of-court settlement" between the parties, usually supervised or assessed by a neutral expert. The WIPO provides Alternative dispute resolution services through its arbitration and mediation center. It helps private parties efficiently settle domestic or cross-border intellectual property disputes out of court.

A WIPO arbitrator said, “Multinational companies are increasingly looking to resolve their IP issues through arbitration in order to avoid costly and time-consuming litigations.”

The WIPO is now seen as one of the leading arbitration institutions for intellectual property disputes. 

About the WIPO

The WIPO is an agency of the United Nations.

This means it will follow the general arbitration rules laid out by the UNCITRAL. Ultimately, this aligns it with other leading arbitration institutions of the world.

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards enables the enforcement of the WIPO arbitration awards in all its member countries.

WIPO rules have also adopted the concept of "emergency arbitrators." This will allow parties to seek emergency/interim reliefs within two days.

Since WIPO rules were explicitly made for intellectual property disputes, there are rules addressing the issue of confidentiality.

In particular, there are rules addressing “information of commercial, financial or industrial significance.”

The WIPO has a unique platform for communication and information sharing. The Electronic Case Facility (ECAF) is a secured online portal. It allows arbitrators and the parties to communicate electronically.

According to Law360:

ECAF has been in use since 2007, and it has a pretty clean record; not a single incident of hacking has been reported.

The idea of resolving IP disputes through arbitration might be a reasonably new concept. But it's steadily picking up pace all around the world.

For a long time, international arbitration has been a widespread recourse among parties of different nationalities for settling oil and gas disputes. Today, leading Arbitration Institutions like the SIAC (Singapore International Arbitration Centre) and the HKIAC (Hong Kong International Arbitration Centre) have appointed specialized panels of arbitrators for intellectual property disputes.

The future of intellectual property rights dispute resolution

The landscape of intellectual property dispute resolution is rapidly evolving. Arbitration, especially under the auspices of organizations like the WIPO, is becoming the preferred method for resolving international IP disputes.

This shift away from traditional court litigation to specialized arbitration reflects a growing need for efficient, unbiased, and expert handling of complex IP issues in a globally connected world. As this trend continues, we can expect to see further refinements in arbitration processes. 

We can also anticipate an increasing reliance on these mechanisms to manage and resolve IP disputes worldwide.