1. 1 Theme 7: Alternative Procedures for Resolving Intellectual Property Disputes WIPO FORUM ON INTELLECTUAL PROPERTY AND SMEs FOR IP OFFICES AND OTHER RELEVANT INSTITUTIONS IN OECD COUNTRIES, HAGUE, JUNE 14-15, 2006 Eun-Joo MIN Arbitration and Mediation Center World Intellectual Property Organization (WIPO) Arbitration and Mediation Center http://arbiter.wipo.int

2. 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 Arbitration and Mediation Center http://arbiter.wipo.int

3. 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; more efficient use of judicial resources Dispute resolution as business decision Alternative to ADR?  Routine IP litigation on a multi-country front Arbitration and Mediation Center http://arbiter.wipo.int

4. 4 Trends in IP ADR (3) UK –“The [U.K.] Patent Office will be actively encouraging parties to consider mediation as a way of resolving their dispute. To this end, Hearing Officers will specifically consider whether mediation would be a better option whenever it receives requests to initiate litigation proceedings at the Office.” (Source: http://www.patent.gov.uk/about/ippd/mediation/proceedings.htm) Spain –Trademark Act, Art. 28: “Interested parties may submit any disputes that arise during trademark prosecution to arbitration…”; Mediation in opposition proceedings Arbitration and Mediation Center http://arbiter.wipo.int

5. 5 Trends in IP ADR (4) U.S. –Patent Act (35 USC 294: “A contract involving a patent or any right under a patent may contain a provision requiring arbitration of any dispute relating to patent validity or infringement arising under the contract. […] Any such provision or agreement shall be valid, irrevocable, and enforceable, except for any grounds that exist at law or in equity for revocation of a contract.” Switzerland –Federal Office of Intellectual Property holds that arbitral tribunals are empowered to decide on validity of patents, trademarks and designs. Arbitration and Mediation Center http://arbiter.wipo.int

6. 6 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 Arbitration and Mediation Center http://arbiter.wipo.int

7. 7 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 v137 signatories –inter-partes effect Mediation: commercial solutions Arbitration and Mediation Center http://arbiter.wipo.int

8. 8 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 international bureau of WIPO Procedures –Mediation –(Expedited) Arbitration –Mediation followed, in the absence of a settlement, by arbitration –Expert Determination –Domain Name Dispute Resolution Arbitration and Mediation Center http://arbiter.wipo.int

9. 9 WIPO Arbitration and Mediation Options Arbitration and Mediation Center http://arbiter.wipo.int

10. 10 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 […].” Arbitration and Mediation Center http://arbiter.wipo.int 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 […].” http://arbiter.wipo.int/arbitration/contract-clauses/clauses.html

11. 11 Mediation Process Arbitration and Mediation Center http://arbiter.wipo.int 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

12. 12 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 Arbitration and Mediation Center http://arbiter.wipo.int

13. 13 WIPO Mediation Example 2 US software provider licensed software applications to European telecom provider: –10 named users –WIPO Mediation followed by WIPO Expedited Arbitration –Place mediation: Paris; Applicable law: English Request for Mediation: –Alleged breach of license: more than 50 users –Outstanding fees: USD 10 million –European telecom asked to provide list of unauthorized users –No settlement, but issues narrowed down –Total duration: 2 months, mediator’s fees: USD 13,000 Arbitration and Mediation Center http://arbiter.wipo.int

14. 14 Arbitration and Mediation Center http://arbiter.wipo.int Party autonomy Flexibility Efficiency Rules on technical evidence Confidentiality provisions Two exchange of pleadings – Request & Answer – Statement of Claim & Defense WIPO Arbitration

15. 15 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 Arbitration and Mediation Center http://arbiter.wipo.int

16. 16 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 university’s TM application in CN refused, requests CN manufacturer’s collaboration Request for specific performance (proxy registration & license); sole arbitrator Interim award (specific performance) Arbitration and Mediation Center http://arbiter.wipo.int

17. 17 Arbitration and Mediation Center http://arbiter.wipo.int WIPO Arbitration WIPO Expedited Arbitration One exchange of pleadings ; Shorter time limits; Sole arbitrator; Shorter hearings; Fixed arbitrators fees

18. 18 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 Arbitration and Mediation Center http://arbiter.wipo.int

19. 19 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 Arbitration and Mediation Center http://arbiter.wipo.int

20. 20 Mediation followed by Arbitration Try mediation before arbitration, at least until –lapse of time period –termination Combining the benefits –arbitration well-prepared Arbitration and Mediation Center http://arbiter.wipo.int

21. 21 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 Arbitration and Mediation Center http://arbiter.wipo.int

22. 22 WIPO Arbitration and Mediation Case Experience (1) 45 mediations 49 arbitrations Parties from 16 countries (domestic & international) –France, China, Finland, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Panama, Romania, Switzerland, USA, etc. Place of Arbitration –France, Germany, the Netherlands, Switzerland, USA Procedures –English, French, German Arbitration and Mediation Center http://arbiter.wipo.int

23. 23 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 - 600 million Arbitration and Mediation Center http://arbiter.wipo.int

24. 24 WIPO Arbitration and Mediation Cases Arbitration and Mediation Center http://arbiter.wipo.int

25. 25 http://arbiter.wipo.int/center/caseload.html Arbitration and Mediation Center http://arbiter.wipo.int

26. 26 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) Flexible 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) Arbitration and Mediation Center http://arbiter.wipo.int

27. 27 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) Arbitration and Mediation Center http://arbiter.wipo.int

28. 28 Arbitration and Mediation Center http://arbiter.wipo.int WIPO Neutrals Over 1,000 experts 70 nationalities Broad range of ADR, IP, and technical backgrounds Appointment in WIPO Cases Referral Service

29. 29 WIPO Schedule of Fees (Arbitration) : Competitive Rates Arbitration and Mediation Center http://arbiter.wipo.int

30. 30 WIPO Electronic Case Facility (ECAF) Available for arb / med cases under WIPO Rules –Certain exceptions: America’s Cup Jury Procedure Main features –Web-based electronic docket –Facilitation of party / neutral case management –Easy, Instant, Location-independent, Secure User Information –http://arbiter.wipo.int/ecaf/introduction.jsp Arbitration and Mediation Center http://arbiter.wipo.int

31. 31 ECAF: Log-In Arbitration and Mediation Center http://arbiter.wipo.int

32. 32 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 Arbitration and Mediation Center http://arbiter.wipo.int

33. 33 WIPO ECAF Security WIPO ECAF Use Example 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 Arbitration and Mediation Center http://arbiter.wipo.int 1 US Claimant; Respondents in 3 (US and Europe) locations Claimant represented by 2 NY firms, 1 German firm; Respondents represented by 2 German firms.

34. 34 WIPO Domain Name Dispute Resolution Arbitration and Mediation Center http://arbiter.wipo.int

35. 35 Why the UDRP? Global Directly enforceable decisions Non-profit fees (USD 1,500 for 1-5 domain names) Fast – within 2 months Transparent – decisions publicly available Arbitration and Mediation Center http://arbiter.wipo.int

36. 36 Arbitration and Mediation Center http://arbiter.wipo.int Sampling of Disputed Domain Names volvoautomobile.com, mazda.com.mx dknymall.com gallerielafayette.com microsoft.li pfizerviagra.com madonna.com morganfreeman.com viagra.com.ve 三共.com 恒生指数.com fortunéo.com autos-yahoo.com, cn-yahoo.com, email-yahoo.com, greetings- yahooo.com, greetingz-yahoo.com, hotels-yahoo.com, jejuyahoo.com, music-yahoo.com, myanmaryahoo.com, news-yahoo.com, photos-yahoo.com, playhoo.com, play- yahoo.com, t-yahoo.com, www- yahooshop.net, yaawoo.com, yahaho.com, yahoobooting.net, yahoofinance.net, yahoo-greeting-cards.com, yahoogreetings.net, yahoohouse.com, yahooink.net, yahooselect.com, yahooshopping.net, yahootax.com, yahootravel.net, yaho-screen.com, yahosoft.com, yaho1004.com, yahwhoo.com, 123yahoo.com...

37. 37 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 15-16, 2006 –WIPO Advanced Workshop for Mediators in Intellectual Property Disputes, June 19-20, 2006 –WIPO Arbitration Workshop, October 17-18, 2006 –WIPO Advanced Workshop on Domain Name Dispute Resolution, October 19-20, 2006 Arbitration and Mediation Center http://arbiter.wipo.int

38. 38 Information http://arbiter.wipo.int arbiter.mail@wipo.int eunjoo.min@wipo.int Mailing list: http://arbiter.wipo.int/subscribe Arbitration and Mediation Center http://arbiter.wipo.int