Arbitration, Mediation and Expert Determination
Time- & Cost-Efficient Dispute Resolution Tools
Eun-Joo MIN
Arbitration and Mediation Center
World Intellectual Property Organization
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration and Mediation Center
•
Time & cost efficient resolution of IP and technology disputes, between
private parties, away from court
•
•
Established in 1994 as part of WIPO
Procedures
 Mediation
 (Expedited) Arbitration
 Expert Determination
 Combined procedures
 Specialized Procedure: Domain Name Dispute Resolution
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Trends in IP Disputes (1)
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Internationalization of creation and use of IP rights & globalization of
markets; need for cross-border solutions for disputes
 Accommodate different languages, cultures, (geographically limited) laws
 Avoid litigation in several jurisdiction
(cost; risk of contradictory results – Angiotech patent 2007)
 Avoid home-court advantage
 Need for cross-border injunctions
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Growth of complex long-term relationships; strategic alliances; need to
co-exist
 Licensing, cross-licensing, patent pooling, standards
 Need for mechanisms that preserve relations
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Trends in IP Disputes (2)
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Increasingly technical and specialized nature of IP
 Need for specific expertise of “neutral”
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Closely guarded relationships: confidentiality
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Highly competitive areas; Short product and market cycles
 Need for time-efficient procedures
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Dispute resolution as business decision
 Routine IP litigation on a multi-country front
complex, uncertain, protracted, expensive
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Preferred Processes for
Resolving Cross-Border Disputes
(Source: www.pwc.com/arbitrationstudy) (2006)
Litigation only
11%
Mediation and
Other ADR
processes
16%
Arbitration in
combination with
other ADR processes
44%
Arbitration only
29%
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Mediation, Arbitration, Expert Determination
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Mediation
A non-binding procedure in which a neutral intermediary, the mediator, assists
the parties in reaching a settlement of a dispute.
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Arbitration
A procedure in which the dispute is submitted to one or more arbitrators who
make a binding decision on the dispute.
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Expert determination
A procedure in which a dispute/difference (frequently discrete issues of
technical, scientific or related business nature) is submitted to one or more
experts who make a determination on the matter referred. A WIPO
determination is binding, unless the parties agreed otherwise.
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Mediation
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Non-binding procedure controlled by the parties
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Confidential procedure
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Interest-based procedure
(party-to-party communication)
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High success rate; low risk
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Mediation Process
Commencement
Appointment of Mediator
Request for Mediation (Art 3-5); Fees Art 21)
Role of the mediator (Art 13); Appointment
(Art 6-7)
Conduct of the mediation (Art 9-12)
Initial Conference
Meetings
Conclusion
Set up the first meeting; Agree on preliminary
exchange of document, if any
Agree on ground rules of the process;
Gather information and identify issues;
Explore the interests of the parties;
Develop options for settlement;
Evaluate options
80% success; costs USD 6,000-60,000;
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duration 1-7months
Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Mediation Example
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Patent infringement dispute
 R&D company holding patents disclosed patented invention to manufacturer
during consulting contract
 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?
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Parties submitted to WIPO Mediation
 Outcome: agreed license and new consulting contracts
 Total duration: 4 months
 Mediator’s fees: USD 24,000
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Arbitration
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Consensual & flexible procedure: choice of arbitrator(s)
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Party autonomy
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Neutral
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Confidential
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Efficient
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Interim Measures (WIPO Rules, Art. 46)
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Experts (WIPO Rules, Art. 48, Art. 55)
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Remedies (damages, performance, injunctions, declaratory relief,
costs, etc.)
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Final Award
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Award enforceable
 New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (142 States have ratified)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration
Request for Arbitration
Answer to Request for Arbitration (30 days)
Appointment of Arbitrator(s)
Statement of Claim (30 days)
Statement of Defense (30 days)
Further Written Statements and Witness Statements
Hearings
Closure of Proceedings
Final Award (3 months)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration Example 1
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License agreement between European software developer and
Japanese media company
 Platform for sale and licensing of mobile payment service in Japan
 WIPO Arbitration: one arbitrator, place of arbitration Geneva
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Request for Arbitration filed by Japanese party:
 Alleged breach of license: failure to provide technical service and support
 Claim for damages: +USD 2 million
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Interim measures: bank guarantee
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Conciliation conference suggested by arbitrator
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Settled
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration Example 2
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US university registers TM for email system in US, Canada, etc.
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CN IT manufacturer registers TM for computer products in 16 countries
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Opposition proceedings & litigation for 6 years
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TM coexistence agreement; WIPO arbitration clause
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US university’s TM application in CN refused, requests CN
manufacturer’s collaboration
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Request for specific performance (proxy registration & license); sole
arbitrator
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Interim award (specific performance)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration
Request for Arbitration
Answer to Request for Arbitration (30 days)
WIPO Expedited Arbitration
Request for Arbitration
and Statement of Claim
Answer to Request for Arbitration
and Statement of Defense (20 days)
Appointment of Arbitrator(s)
Appointment of Arbitrator
Statement of Claim (30 days)
Hearing (maximum 3 days)
Statement of Defense (30 days)
Further Written Statements and Witness Statements
Closure of Proceedings
Final Award (1 month)
Hearings
Closure of Proceedings
Final Award (3 months)
One exchange of pleadings ;
Shorter time limits; Sole arbitrator;
Shorter hearings; Fixed arbitrators
fees
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Expedited Arbitration Examples
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Financing Agreement





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Both parties see urgency and agree on short deadlines
Only one issue in dispute
One-day hearing
Final Award: 5 weeks
Arbitrator’s fees: USD 20,000
Exclusive Patent License
 Dispute involving 1 European and 5 US patents
 US party rejected Asian party (inventor)’s claim that its products embodies
technologies covered by licensed patents and refused to pay royalties
 Complex legal and technical issues (infringement, validity, enforceability,
contract defense)
 Business secrets, models, site visits (protective orders)
 12 procedural orders, 2 preliminary awards
 eight-day hearing
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 Final Award: 15 months
Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Expert Determination
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Accommodate expeditious resolution of disputes between parties,
concerning an issue of limited scope (e.g. royalty rate dispute) or
clarification of certain technical or scientific issues by a neutral third
party
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More informal, flexible and expeditious than arbitration
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Determination binding (unless parties agree otherwise)
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May be combined with other WIPO procedures
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Mediation, Arbitration
and Expert Determination (1)
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Party control / autonomy / consensual
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Flexibility : “à la carte”
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Expertise
 Party selection of neutrals; tailored appointment
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Neutral
 Arbitrator/mediator/expert, language, law, venue
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Confidential
 Existence, disclosures, result (WIPO Arb Rules Arts. 52, 73-76)
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Less adversarial than court litigation
 Restore a working business relationship
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Mediation, Arbitration
and Expert Determination (2)
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Single Procedure
 Multi-jurisdictional disputes in one proceeding
 No jurisdictional problems
 Time & cost effective (WIPO Arb Rules, Art 38)
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Arbitration: finality / enforceability of awards
 New York Convention

with limited exceptions (e.g. denial of due process), “automatic” enforcement of arbitral awards

142 signatories
 Inter-partes effect
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Mediation: commercial solutions
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Routes to ADR
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Court Annexed (in particular mediation)
 e.g. US District Court for the District of Delaware
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Voluntary decision of the parties
 Submission Agreement
 ADR Clause
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Drafting ADR Clauses
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Essential elements:
 Type of ADR
 Applicable rules
 Location, language of ADR
 Number of neutrals
 Governing law, if arbitration
 Place of arbitration: arbitration-friendly environment; modern arbitration act
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Use model clauses and modify only as necessary
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Combine options, including mediation
 High settlement rate
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“Make it fit” (e.g. expedited arbitration)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Recommended WIPO Mediation Clause
“Any dispute (…) shall be submitted to mediation in accordance with WIPO Mediation Rules. The place of
mediation shall be […]. The language to be used in the mediation shall be […].”
Recommended WIPO Arbitration Clause
“Any dispute, (…) shall be referred to and finally determined by arbitration in accordance with the WIPO
Arbitration Rules. The arbitral tribunal shall consist of [three arbitrators][a sole arbitrator]. The place of arbitration
shall be […]. The language to be used in the arbitral proceedings shall be […]. The dispute,
controversy or claim shall be decided in accordance with the law of […].”
Recommended WIPO Expert Determination Clause
Any dispute (…) shall be referred to expert determination in accordance with the WIPO Expert
Determination Rules. The determination made by the expert shall [not] be binding upon the
parties. The language to be used in the expert determination shall be […].
(http://www.wipo.int/amc/en/arbitration/contract-clauses/clauses.html)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Center: ADR Options
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Combined Procedures
Combining the Benefits
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Mediation followed by Arbitration
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Mediation followed by Expert Determination
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Expert determination followed by Arbitration
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration and Mediation
Case Experience (1)
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70+ mediations
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100+ arbitrations
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Parties from 18 countries (domestic & international)
 Austria, Canada, China, Denmark, Finland, France, Germany, Ireland,
Israel, Italy, Japan, the Netherlands, Panama, Romania, Spain, Switzerland,
UK, USA, etc.
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Place of Arbitration
 France, Germany, the Netherlands, Switzerland, USA
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Procedures
 English, French, German, Italian
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Arbitration and Mediation
Case Experience (2)
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Subject matter:
 Contractual: patent licenses (inc. standard-related), pharmaceutical
distribution agreements, R&D, joint ventures, software/IT, copyright collecting
societies, trademark coexistence agreements, art marketing, other
commercial relationships (construction, finance, employment).
 Patent infringement
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High success rate
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Value in dispute: USD 20,000 – USD 600 million
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
http://www.wipo.int/amc/en/center/caseload.html
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Role of the WIPO Center as an Administering Authority (1)
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Administered vs. Ad Hoc?
 Hard to agree on procedure once dispute arisen; do you know suitable neutrals;
which administering institution (do not combine)
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List of neutrals (arbitrators, mediators, experts)
 Over 1,000 mediators, arbitrators, experts
 70 nationalities
 Broad range of ADR, IP, and technical backgrounds
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Rules with IPR orientation
 Mediation, (Expedited) Arbitration, Expert Determination
 e.g. WIPO Arb Rules Arts 48-52: special rules on experiments, site visits, agreed
primers and models, trade secrets and confidential information, protective orders,
confidentiality advisor
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Model contract clauses
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Role of the WIPO Center as an Administering Authority (2)
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Competitive fees
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Efficient and cost-effective case administration
 Establishment of the Tribunal, challenges, support in appointment of experts,
management of fees and costs
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Hearing facilities
 Free of charge in Geneva and Singapore
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WIPO Electronic Case Facility (ECAF)
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International, institutional knowledge, guidance, supervision
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Design and operation of procedures for special categories of IP
disputes (UDRP)
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Schedule of Fees
(All amounts are in United States dollars)
Registration Fee
Administration Fee
*
Amount in
dispute
Any Amount
Up to $2.5 M
Over $2.5 M and up
to $10 M
Over $10 M
Arbitrator(s) Fees *
Up to $2.5 M
Expedited
Arbitration
$1'000
$1'000
Arbitration
$2'000
$2'000
$5'000
$10'000
$ 5,000
+0.05% of amount
over $10 M up to
a maximum fee of
$15,000
$10,000
+0.05% of amount
over $10 M up to a
maximum fee of
$25,000
$20,000
As agreed by the
(fixed fee)
Center in
Over $2.5 M and up
$40,000 consultation with the
to $10 M
(fixed fee)
parties and the
arbitrator(s)
Over $10 M
As agreed by the
Center in
Indicative rate(s)
consultation with
$ 300 to $ 600
the parties and
29 per
hour
the arbitrator
Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Electronic Case Facility (ECAF)
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Available for arb / med cases under
WIPO Rules
 Certain exceptions: America’s Cup Jury
Procedure
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Main features
 Web-based electronic docket
 Facilitation of party / neutral case
management
 Easy, instant, location-independent, secure
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User Information
 http://www.wipo.int/amc/en/ecaf
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Role of the WIPO Center
as a Resource Center
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IP ADR guidance
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Publications
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Workshops, conferences (upcoming events)
 WIPO Workshop for Mediators in Intellectual Property Disputes, May 26-27, 2008
 WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, May
29-30, 2008
 WIPO Arbitration Workshop, October 21-22, 2008
 WIPO Advanced Workshop on Domain Name Dispute Resolution, October 2324, 2008
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Center Domain Name Case Experience (1)
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Over 28,000 domain name cases
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Mostly under WIPO-initiated Uniform Domain Name Dispute
Resolution Policy (UDRP)
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Over 50 national domains (ccTLDs)
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Examples
columbiapictures.com, dreamworks-china.com, emiwarnermusic.com,
espn.com.au, ifpi.com, elpais.com, 産経新聞.com, jkrowling.ir,
mariovargasllosa.org, microsoft.org
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
WIPO Center Domain Name Case Experience (2)
UDRP
1999+2000
1'858
2001
1'557
2002
1'207
2003
1'100
2004
.info Sunrise
.name ERDRP
.mobi Sunrise
.mobi Premium
Names
Total
-
-
-
-
1'858
1'579
53
-
-
-
3'189
13'593
285
1
-
-
15'086
-
-
-
-
-
1'100
1'176
-
-
3
-
-
1'179
2005
1'456
-
-
1
-
-
1'457
2006
1'824
-
-
1
18
105
1'948
2007
2'156
-
-
1
-
-
2'157
Jan-Feb 2008
355
-
-
-
-
-
355
12'689
15'172
338
7
18
105
28'329
Total
-
.biz STOP
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008
Information
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Website: http://www.wipo.int/amc
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Emails: [email protected]
[email protected]
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Mailing list: http://arbiter.wipo.int/subscribe
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Seminar on Intellectual Property and Creative Small and Medium-Sized Enterprises in the Digital Environment
May 20 to 22, 2008