1. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 1 Resolving Intellectual Property Business Disputes through Arbitration and Mediation Eun-Joo MIN Arbitration and Mediation Center World Intellectual Property Organization (WIPO) Geneva, Switzerland

2. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 2 Trends in IP ADR (1) 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 Avoid home-court advantage Growth of complex long-term relationships; strategic alliances; need to co-exist Licensing, cross-licensing, patent pooling Need for mechanisms that preserve relations

3. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 3 Trends in IP ADR (2) Increasingly technical and specialized nature of IP need for specific expertise of neutral Growth of IP/technology contracts Closely guarded relationships: confidentiality Highly competitive areas; Short product and market cycles Need for time-efficient procedures Increasing cost of multi-front litigation Dispute resolution as business decision Alternative to ADR? Routine IP litigation on a multi-country front

4. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 4 Litigation (1) Globalization: While the exploitation of IP is global, IP rights are still territorial. Enforcement is usually made on country-by- country basis. Overview of Litigation in Different Jurisdictions - Patents as an Example:

5. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 5

6. 6 Disadvantages of litigation: systems too different too expensive risk of contradictory results (eg Angiotech patent 2007) Possible Solutions: European Patent Litigation Agreement: setback on January 20, 2007 when the European Parliaments Legal Service decided that it does not comply with the standards of European law Brussels Convention on Jurisdiction and Enforcement on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters Hague Convention on Jurisdiction and Foreign Judgments was never agreed Litigation (2)

7. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 7 Cross-border injunctions granted by Dutch Courts: rejected by the European Court of Justice on July 13, 2006 Consolidation USA: Voda v. Cordis: District court allowed consolidation of foreign patent infringements, but the CA vacated the decision on February 1, 2007 Japan: in Fujimoto v. Newlon (May 13, 2003) the Supreme Court of Japan rejected that Japanese courts had authority to try infringements on foreign patents Alternative Options? Litigation (3)

8. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 8 Mediation, Arbitration, Expert Determination Mediation: a non-binding procedure in which a neutral intermediary, the mediator, assists the parties in reaching a settlement of a dispute. Arbitration: a neutral procedure in which the dispute is submitted to one or more arbitrators who make a binding decision on the dispute. Expert determination: a neutral procedure in which a dispute/difference (frequently discrete issues of technical, scientific or related business nature) is submitted to one or more expert who make a determination on the matter referred. A WIPO determination is binding, unless the parties agreed otherwise.

9. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 9 Arbitration and Mediation (1) Party control / autonomy / consensual Flexibility : à la carte Expertise Party selection of neutrals; tailored appointment Neutral Arbitrator/mediator, language, law, venue Confidential Existence, disclosures, result (WIPO Arb Rules Arts. 52, 73-76) Less adversarial than court litigation Restore a working business relationship

10. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 10 Arbitration and Mediation (2) Single Procedure Multi-jurisdictional disputes in one proceeding No jurisdictional problems Time & cost effective (WIPO Arb Rules, Art 38) Arbitration: finality / enforceability of awards New York Convention vwith limited exceptions (e.g. denial of due process), automatic enforcement of arbitral awards v142 signatories inter-partes effect Mediation: commercial solutions

11. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 11 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 Mediation followed, in the absence of a settlement, by arbitration Expert Determination Domain Name Dispute Resolution

12. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 12 Routes to ADR Court Annexed (in particular mediation) Voluntary decision of the parties Submission Agreement ADR Clause

13. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 13 WIPO Center: ADR Options

14. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 14 Mediation Process Commencement Appointment of Mediator Initial Conference Meetings Conclusion 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) 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; duration 1-7months

15. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 15 WIPO Mediation Example 1 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? Parties submitted to WIPO Mediation Agreed license and new consulting contracts

16. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 16 Party autonomy Flexibility Efficiency Rules on technical evidence Confidentiality provisions Two exchange of pleadings – Request & Answer – Statement of Claim & Defense WIPO Arbitration

17. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 17 WIPO Arbitration Example 1 [patent] Exclusive R&D and licensing agreement biotech co. and pharma co. Alleged delays development and regulatory approval biotech compound R&D entity terminated agreement started WIPO arbitration proceedings Arbitrator expert in biotech-pharmaceutical Two-day hearing Settlement agreement

18. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 18 WIPO Arbitration Example 2 [trademark] US university registers TM for email system in US, Canada, etc. CN IT manufacturer registers TM for computer products in 16 countries Opposition proceedings & litigation for 6 years TM coexistence agreement; WIPO arbitration clause US universitys TM application in CN refused, requests CN manufacturers collaboration Request for specific performance (proxy registration & license); sole arbitrator Interim award (specific performance)

19. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 19 WIPO Arbitration WIPO Expedited Arbitration One exchange of pleadings ; Shorter time limits; Sole arbitrator; Shorter hearings; Fixed arbitrators fees

20. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 20 WIPO Expedited Arbitration Example 1 Insurance Both parties see urgency and agree on short deadlines Only one issue in dispute One-day hearing Final Award: 5 weeks

21. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 21 WIPO Expedited Arbitration Example 2 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 Final Award: 15 months

22. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 22 Mediation followed by Arbitration Try mediation before arbitration, at least until lapse of time period termination Combining the benefits arbitration well-prepared

23. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 23 Expert Determination 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 More informal, flexible and expeditious than arbitration Determination binding (unless parties agree otherwise) May be combined with other WIPO procedures

24. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 24 Drafting ADR Clauses (1) 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 Use model clauses and modify only as necessary Combine options, including mediation High settlement rate If arbitration, make it fit (e.g. expedited)

25. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 25 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 […].

26. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 26 http://www.wipo.int/amc/en/arbitration/contract-clauses/clauses.html

27. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 27 Drafting ADR Clauses (2) Examples of defective arbitration clauses Arbitration in Geneva Any disputes shall be solved by arbitration between the parties; failing that, arbitration in the English language shall be conducted in Houston, according to the Paris Convention, which shall be final and binding upon the parties. Examples of creative arbitration clauses Disputes relating to patent infringement shall be finally determined in accordance with the WIPO Expedited Arbitration. Contractual disputes [different institution]. Disputes relating to US patents: US arbitrator. Disputes relating to European patents: EU arbitrator. Each award can be challenged by and finally determined by arbitration in accordance with WIPO Arbitration Rules. The tribunal shall consist of three arbitrators. And… WIPO arbitration with 3 arbitrators: amount in dispute USD 60,000

28. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 28 WIPO Arbitration and Mediation Case Experience (1) 64 mediations 70 arbitrations 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. Place of Arbitration France, Germany, the Netherlands, Switzerland, USA Procedures English, French, German, Italian

29. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 29 WIPO Arbitration and Mediation Case Experience (2) Subject matter: Contractual: patent licenses, 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 High success rate Value in dispute: USD 20,000 – USD 600 million

30. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 30 http://www.wipo.int/amc/en/center/caseload.html

31. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 31 Role of the WIPO Center as an Administering Authority (1) Administered vs. Ad Hoc? Hard to agree on procedure once dispute arisen; do you know suitable neutrals; which administering institution (do not combine) 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 Model contract clauses List of neutrals (arbitrators, mediators, experts)

32. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 32 Role of the WIPO Center as an Administering Authority (2) Competitive fees Efficient and cost-effective case administration Establishment of the Tribunal, challenges, support in appointment of experts, management of fees and costs Hearing facilities Free of charge in Geneva and Singapore WIPO Electronic Case Facility (ECAF) International, institutional knowledge, guidance, supervision Design and operation of procedures for special categories of IP disputes (UDRP)

33. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 33 WIPO Neutrals Over 1,000 experts 70 nationalities Broad range of ADR, IP, and technical backgrounds Appointment in WIPO Cases Referral Service

34. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 34 WIPO Schedule of Fees (Arbitration) : Competitive Rates

35. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 35 WIPO Electronic Case Facility (ECAF) Available for arb / med cases under WIPO Rules Certain exceptions: Americas Cup Jury Procedure Main features Web-based electronic docket Facilitation of party / neutral case management Easy, Instant, Location-independent, Secure User Information http://www.wipo.int/amc/en/ecaf

36. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 36 ECAF: Log-In

37. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 37 WIPO ECAF Docket Docket allows submission in most common formats (Word, PDF, JPG, etc.) All actors may view and search the Docket (by submitting actor, date, subject title) Email alerts communicated to all actors when new submission made

38. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 38 WIPO ECAF Case Management è Case Overview Contact Information Time Tracking Finance Overview Message Board

39. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 39 WIPO Domain Name Dispute Resolution

40. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 40 Role of the WIPO Center as a Resource Center IP ADR guidance Publications Workshops, conferences (upcoming events) WIPO Workshop for Mediators in Intellectual Property Disputes, June 11-12, 2007 WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, June 14-15, 2007 WIPO Arbitration Workshop, October 16-17, 2007 WIPO Advanced Workshop on Domain Name Dispute Resolution, October 18-19, 2007

41. A Business-Oriented Overview of IP for Law and Management Students - May 29 to 31, 2007 41 Information http://www.wipo.int/amc arbiter.mail@wipo.int eunjoo.min@wipo.int Mailing list: http://arbiter.wipo.int/subscribe