Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Dispute Resolution Needs and Experience Takashi Iwata Managing Director Fujitsu Techno Research Limited April 26, 2005 Conference on Dispute Resolution in International Science and Technology Collaboration World Intellectual Property Organization Arbitration and Mediation Center Geneva, Switzerland

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Fujitsu at a Glance Headquarters: Tokyo, Japan Revenue: 4.7 trillion yen (US$45 billion) R&D Expenditure: billion yen (US$2.4 billion) Employees: 156,000 worldwide Principal Business Areas: Software & Services, Computing & Communications Platforms, Electronic Devices Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. 2

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Dispute Resolution Needs 1. Options for dispute resolution Litigation ADR (arbitration, mediation, etc.) 2. It is better that various options are available for various situations 3. Advantages of ADR in general Flexible resolution Business resolution possible Decision by experts available Confidential, quick and inexpensive One-time resolution of all disputes 3

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED International Science and Technology Collaboration ADR : An arbitration clause (all cases) Fujitsu Case -- International Agreements (1) Joint Research and Development Agreements ADR (40%) No ADR (60%) 4

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED International Science and Technology Collaboration ADR : An arbitration clause (majority cases) A mediation clause (recently) cf. Domestic Agreements No ADR clause, but a good faith discussion clause (almost all cases) Fujitsu Case -- International Agreements (2) Patent (or other intellectual property) License Agreements ADR (54%)No ADR (46%) 5

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Dispute Resolutions for Various Situations 1.Collaboration Disputes Situations: After collaboration agreements are made, disputes arise regarding ambiguities of the provisions of the agreements. Disputes arise while collaboration activities are being done without written agreements. The best dispute resolution depending on the situation: Relationship with the other party Negotiation history Status of the projects, etc. 6

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Dispute Resolutions for Various Situations 2. IPR Infringement Disputes Situation: Usually, there is no collaboration or license agreement before disputes occur. It is difficult to agree on ADR after such occurrence. Dispute resolution: Litigation (typically) Court-led or -suggested ADR (mandatory or semi-mandatory) 7

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Fujitsu’s Experience CaseCourtWhy mediation?Mediator 1Patent Infringement Litigation (Electronic device patent) Virginia, US Agreement Upon suggestion of the court Magistrate Judge 2Patent Infringement Litigation (Computer peripheral patent) California, US Agreement after consideration obligated by the court rule Private mediator Successful Mediation 8

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Fujitsu’s Experience CaseCourtWhy mediation?Mediator 1Trade Secret Misappropriation Litigation (Certain computer system) New York, US Court rulePrivate mediator 2Patent Infringement Litigation (Flat panel display patent) California, US Agreement after consideration obligated by the court rule Private mediator 3Patent Infringement Litigation (Flat panel display patent) Delaware, US Court ruleMagistrate Judge Unsuccessful Mediation 9

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Fujitsu’s Experience 1. Reasons For Successful Mediation: Before the mediation, both parties had understood each other’s position to some extent. Both parties were prepared to compromise. 2. Reasons For Unsuccessful Mediation: Both parties insisted on their respective positions. Mediation was held untimely. 10

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED Effectiveness of Mediation Mediation is useful for resolution of disputes: Flexibility to return to the situation of disputes (cf. arbitration) Resolution on the parties’ initiative and decision Usefulness of business resolution Especially, in case of collaboration, the parties are not hostile and wish to, or are inclined to, continue business relationship. However, mediation may be useless if the parties do not understand each other’s position and are not prepared to compromise. 11

Copyright © 2005 FUJITSU TECHNO RESEARCH LIMITED