1. Panelist: Mr. Michael Gross Fraunhofer-Gesellschaft Munich, Germany 5.2 Dispute Resolution Needs and Experience 1

2. Fraunhofer Gesellschaft -------- German non profit R&D organisation applied research/worldwide 58 Institutes staff: 12,500 2

3. -------- turnover 2004: 1,000,000,000 € (> 900,000,000 € contract research) 2500 R&D-Agreements/year 240 License Agreements/year most popular Licensing Product: MP3 3

4. R&D - Dispute Resolution by an Arbitrator/Mediator/ Conciliator or negotiations by the R&D-partners? Two Cases - Case 1: - Case 2: Arbitration between two European R&D-partners Mediation between a German inventor and an US License partner 4

5. Case 1: Arbitration between 2 European R&D-partners "Acoustic Construction of a Concert Hall" I. THE PARTIES German Research Institute - Ministry of a European Country (contractor) 5

6. II. THE ARBITRATION AGREEMENT R&D Agreement of January 1995 Art. 11 = Standard ICC Arbitration Clause 6

7. R&D Agreement was established in > 2 versions: Art. 12: English and another European language (contractor's language) in case of disputes the text of the version of the other European language shall prevail 7

8. The parties did not agree on - the place of Arbitration was fixed by the Court: Paris - the language of the arbitration the Arbitrator ordered: English (written submissions in English accompanied by a version in the language of the contractor) 8

9. - the applicable law the Arbitrator ordered: UNIDROIT Principles of International Commercial Contracts shall be applicable 9

10. III. THE RELIEF REQUESTED Claimant:€ 191000 + interest at the rate of 5 % above the German base rate + costs of Arbitration 10

11. Respondent:"Although Art. 11 of the R&D Agreement provides for arbitration as a means of resolving all disputes arising out of the ontract, we also object to the jurisdiction of the Court of Arbitration, as such a general provision regarding arbitration cannot be valid." 11

12. IV. THE ARBITRATION PROCEEDINGS - Request for arbitration: 20 Dec. 2002 - Sole arbitrator - No request for an oral hearing by the parties 12

13. V. AWARD 6 October 2004:€ 191000 + interest + legal fees and expenses (of Claimant) + costs of arbitration (US $ 22000) 13

14. VI. PROBLEMS 1. ~ 2 years 2. Enforcement of the award in the country of the contractor pending! 14

15. Case 2: Mediation between a German inventor and an US Licensee "Monorail or rapid exchange catheter" (angioplasty procedures) I. THE PARTIES German Inventor - US Global Player (Licensor) (Lisensee) 15

16. II. THE AGREEMENT Patent License Agreement of June 1986 (3 Amendments) Art. XVI: Applicable Law = German law NO DISPUTE RESOLUTION CLAUSE 16

17. Licensee of 1986 sold its facilities to a competitor for $ 2,16 billion: 1998 New Licensee enforced the licensed patent several times in the US, e.g. by award against a competitor: July 2001 17

18. III. THE RELIEF REQUESTED Under payment of royalties: $ 16 million 18

19. IV. THE MEDIATION - Request for mediation: 24 July 2001 - Mediation: 16 August 2001 in Minneapolis, USA Start: 10:00 a.m. (16 August) Settlement: 1:00 a.m. (17 August) Result: ??? 19

20. Licensee purchased the licensed patent: US $ 80 million 20

21. V. PROBLEMS NO PROBLEMS! applause for the inventor!!! 21

22. R&D - Dispute Resolution by an Arbitrator/Mediator/ Conciliator or negotiations by the R&D-partners? 2

23. It depends! 23

24. Wild applause for the panelist!! 24