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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
LESI Meeting ManilaJune 7-10, 2009
Alternative Dispute Resolutionin Intellectual Property and
the WIPO Experience
Erik WilbersWIPO Arbitration and Mediation Center
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration and Mediation Center
• Purpose:– To provide information about, and case services for, the
resolution of commercial disputes between private parties involving intellectual property (IP) and technology, through procedures other than court litigation (‘ADR’)
• Principal characteristics:– International
• No ‘home turf’
– Specialized in IP/technology• Institution
• Procedural rules/clauses
• Neutrals
– Not-for-profit
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Mediation, Arbitration, Expert Determ. • Mediation: an informal procedure in which a neutral
intermediary, the mediator, assists the parties in reaching a settlement of their dispute, based on the parties’ respective interests and enforceable as a contract.
• Arbitration: a private procedure in which the parties submit their dispute not to a court but to one or more chosen arbitrators, for a formal decision based on the parties’ respective rights and obligations and enforceable as an award under arbitral law.
• Expert Determination: a procedure in which the parties submit a dispute or a difference between them to one or more experts who make a determination on the matter, which can be binding unless the parties have agreed otherwise.
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Country 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)
First Instance: up to 24 months Appeal: 12 + months
Up to $4,000,000 (1st Inst.) $150,000-250,000 (App.)
Source: Kluwer Law
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
$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
< 1m
1 - 25m
> 25m
Intellectual Property Litigation Expense (U.S.)
AIPLA Economic Survey 2005 (M. Partridge)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
22%
63%
14% 1%
No action
DiscoveryPretrial
At Trial
U.S. Federal Court Civil Action Resolution
Federal Judicial Center, September 30, 2006 (MP)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Anticipating IP Dispute Resolution Needs
• International• Neutral expertise• Efficiency• Confidentiality• Preserving party relationships
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
International (1)• Intellectual property rights are often:
– Created through international collaboration– Exploited through international commerce– Protected in a multitude of jurisdictions
• Intellectual property disputes often:– Involve parties from different jurisdictions– Concern commerce in a multitude of jurisdictions
• Court litigation:– Which court(s) is (are) competent?– Risk of inconsistent results
• Epilady case: European Patent Office patents infringement litigation in 9 countries; found “infringed” in 5 countries, “no infringement” in 4 countries
– Time and cost of foreign litigation
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
International (2)
• In arbitration, parties designate a single forum for resolving the entire dispute– Comprehensive and consistent resolution
• Rather than patchwork of court decisions
– Neutrality• No party is forced to litigate in the other’s home country
• International (procedural) standards
• International Enforceability: New York Convention– 144 Member States– International arbitral awards to be recognized and enforced like
final national court judgments– Only limited exceptions
• Mediation is not rooted in any jurisdiction or law
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Neutral Expertise
• IP disputes tend to be technical/specialized– Law, technical background (patents, software, etc.)
• Most courts are not specialized in IP (IBA 2005 Survey)• In ADR, parties control selection of neutral(s)
– Can select neutral(s) with expertise in the relevant legal, technical or business area
• WIPO Center– 1,500 candidates from 70 countries– Further candidates added in function of case particulars – Broad range of ADR, IP and technical backgrounds– Detailed professional profiles– Used for Center recommendations and appointments
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Efficiency
• IP covers fast-evolving technology, used in highly competitive markets
• Often seen as the true cost of litigation: opportunity/management cost
• Need for efficient dispute resolution procedures– ADR offers party control (short deadlines)– WIPO expedited arbitration case example
• Comprehensive dispute resolution– One procedure, one law, one language, same lawyers, expert
neutral(s), final result (award or settlement)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Confidentiality
• Often required in IP/technology disputes– Examples: patented technology, know-how, reputation– Except: where public precedent needed
• ADR is a private procedure• WIPO Arbitration Rules
– Except as agreed otherwise or required by law, all participants to preserve confidentiality regarding:
• Existence• Disclosures• Award
– Specific protection of trade secrets• WIPO Mediation Rules also prohibit disclosure in
subsequent proceedings
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Preserving Party Relationships• IP often developed/exploited in long-term relationships
between partners– Industry, SME’s, universities
• Arbitration– Private procedure, agreed by the parties– Flexible, can be tailored to the parties needs– Confidentiality helps parties to focus on the merits of the dispute,
without concern about its public implications
• Mediation– Interest-based, rather than rights-based– Less acrimoneous– No real down side: 70% settlement rate; defines issues; shows risks
of alternatives; can walk out; limited cost; has court support
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Limitations of IP ADR (1)
• Contractual basis– No obligation to submit to ADR procedure without contract clause– Difficult to agree on clause once dispute has arisen– Unsuitable for bad-faith infringement (e.g. counterfeiting)
• Parties must pay fees of neutrals– Crucial importance of getting value for money– ADR efficiency and results can make for substantial benefits
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Limitations of IP ADR (2)• Outcome binding only between the parties (inter partes)
– No public precedent (erga omnes)– No general declaration of (in)validity– No direct office action (registration, cancellation)
• But: inter partes effect proves mostly sufficient
• ICC interim award 6097 (1989) confirming arbitrability– Japanese claimant asserting breach of patent license by German licensee,
who invoked invalidity of claimant’s patents– Party agreement:
• Place of arbitration: Zurich, Switzerland• Contract interpretation: Japanese law• Patent infringement: German law
– Primacy of party intent in arbitration– Submission to arbitration is form of free disposal, like rights transfer or
license (‘any dispute involving property’)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Center as Administering Authority
– Contract clauses and rules for IP disputes• WIPO (Expedited) Arbitration• WIPO Mediation• WIPO Expert Determination
– WIPO list of arbitrators, mediators, experts• Specialized in different areas of IP• From numerous countries in all regions
– Administration of cases• Under WIPO Rules• Under special procedures
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO ADR Options
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration Rules
• IP-specific elements– e.g. Confidentiality, technical evidence, interim relief
• But: WIPO Rules can apply to all commercial disputes– Commercial contract may have IP component– IP contract may cause ‘regular’ commercial dispute
• Combining guidance with flexibility– Arbitration Rules pre-structure the entire proceeding– For most part can be modified by arrangement between
arbitrator(s) and parties
• For domestic and international cases– Bridging/accommodating different legal/procedural traditions
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Expedited Arbitration
• Main features compared to regular arbitration:– Shorter procedural timelines– In principle, a sole arbitrator
• When consider WIPO Expedited Arbitration?– Value in dispute does not justify the cost of more extensive
procedures– Only a limited number of contained issues in dispute
• Although difficult to predict at the contracting stage
– Parties urgently need a final and enforceable decision
– Parties wish to commence with an ambitious time/cost frame,
subject to case developments
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: Legal Basis
• Domestic and international• Prior clause and posterior submission• Contractual and (occasionally) non-contractual• Arbitration or mediation, or combined (in each
‘direction’)• Sometimes following court litigation which the parties
had commenced
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
A Few General ADR Clause Pointers
• Use model clauses as basis and modify/extend only as necessary– Do not divide per type of right, remedy, dispute, or party
case status
• Combine options, include mediation– Like court cases, many ADR cases get settled– Consider suitability of expert determination before arbitration
• If arbitration, ‘make it fit’ (e.g. expedited)• ‘Institutional’ or ‘ad hoc’?
– Hard to agree on procedure once dispute arisen– Do you know suitable neutrals– Which administering institution
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: Types of Procedure
Expedited Arbitration
10%
Arbitration 49%
Mediation 41%
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: Remedies, Value, Numbers, Locations
• Remedies: damages, infringement declarations, specific performance
• Value: from Euro 20,000 to US$ 600 million
• Numbers: some 200 (see WIPO web site)
• Locations: Europe, US, Asia (see WIPO web site)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: Domestic / International
Domestic25%
International75%
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: General Subject Matter
IT22%
Trademarks 5%
Patent 46%
Other 18%
Copyright 9%
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: Business Areas
Mechanicals
18%
IT/Telecom
29%
Luxury Goods
2%
Other
22%
Life Sciences
4%
Entertainment
9%
Chemistry
2%
Pharmaceuticals
14%
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Cases: (Contractual) Subject Matter
• Contractual– Patent licenses– Distribution agreements– Research and development agreements– Joint ventures– Software/IT transactions– Disputes involving copyright collecting societies– Trademark coexistence agreements
• Non-contractual– Patent infringement
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Case Results
24%Not
settled
73% Settled
3% Pending
19% Pending
54% Settled
27% Award
Mediation Arbitration
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Mediation Case Example
• 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
• Parties:
– Submitted to WIPO Mediation
– Worked with WIPO-appointed mediator
– Agreed license and new consulting contracts
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration Case Example 1 (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
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration Case Example 1 (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’– Highly complex legal and technical issues– Business secrets, models, site visits– Eight days hearing– Final award in 15 months
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration Case Example 2• Finance agreement in connection with artistic
production– German party - Swiss/Panamanian party– WIPO Expedited Arbitration clause– Each represented by US lawyers
• Urgent solution required: issue of contract interpretation under German law
• WIPO appointed Germany-based US arbitrator• Short deadlines for written submissions• One-day hearing• Award rendered five weeks after commencement of
arbitration
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Arbitration Case Example 3
• Major agreement for creation of web presence for popular national newspaper– WIPO Mediation followed by WIPO Expedited Arbitration
• Mediator appointed; no settlement, but mediation narrowed down and informed the issues
• Arbitrator appointed; parties settled after hearing• Total timeframe: within eight months from
commencement
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
General Mediation Developments
• Growing acceptance
– Corporate dispute policies
– Corporate pledges
– Client expectations
– Institutional integration (e.g. UK Patent Office)
• Professionalization of the mediator profession
• Party focus on preparation for mediation
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
General Arbitration Developments
• The impact of the globalization of commerce• Convergence of procedural norms, e.g.
– UNCITRAL (Model Law, Notes on Organizing Arbitral Proceedings, work on interim measures, revision of Rules)
– IBA (Rules of Ethics, Guidelines on Conflicts of Interest, Rules on the Taking of Evidence)
– Others (e.g. ABA, AAA, ICC)• Multi-party arbitration• Electronic discovery (US)• How to contain process and cost• Settlement in arbitration• Increasing use of information technology, including
online facilities (e.g. WIPO ECAF)
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
Using IT to Facilitate ADR• Purposes
– Facilitate case communication (process)• Time and cost
• Includes recording and submitting evidence
– Enhance result (product)
• Standard tools– Email, Internet, ‘Video conferencing’
• Hearings, meetings, witnesses, deliberations
• Custom-made applications
• e.g., WIPO ECAF
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO Electronic Case Facility (‘ECAF’)http://www.wipo.int/amc/en/ecaf/index.html
• Web-based electronic case file– For WIPO cases (but also used under America’s Cup
Rules)
– Facilitates online communication and storage
– Submission in most common formats (word, pdf, others)
– Searchable by author, date, subject title
– Email alerts
• Case management information– Names and contact details
– Case overview
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO ECAF: Case File
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO ECAF: Case Management
Core case information at-a-glance
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO ECAF: Envisaged Benefits
• Case Communication and Management– Easy– Instant– Centralized– Location-independent– Secure
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
WIPO ECAF: Security
• Authentication
– ECAF username– ECAF password– RSA SecurID password
• Changing passcode generated by RSA SecurID (Valid only for 60 seconds)
• Encryption– Modern SSL (Secure Socket Layer) system
• Firewall protection
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LESI Manila Workshop, June 10, 2009, WIPO IP ADR, Erik Wilbers, WIPO Center, Geneva
More Information on the WIPO Arbitration and Mediation Center
• WIPO Center website: http://www.wipo.int/amc/en/
• WIPO Center email: