WIPO offers new ADR services

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Article

Reference

WIPO offers new ADR services

KAUFMANN-KOHLER, Gabrielle, GURRY-VEIT, Sylvie

KAUFMANN-KOHLER, Gabrielle, GURRY-VEIT, Sylvie. WIPO offers new ADR services.

Mealey's International Arbitration Report, 1995, vol. 10, no. 2, p. 19-24

Available at:

http://archive-ouverte.unige.ch/unige:155622

Disclaimer: layout of this document may differ from the published version.

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W/PO Offers New ADR Services

By

Dr. Gabrielle Kaufmann and

Sylvie Gurry-Veit

[Editor's Note: Gabrielle Kaufmann is a partner specializing in international arbitration and Sylvie Gurry-Veit is a local partner of Baker & McKenzie, Geneva specializing in the area of intellectual property. Replies to this commentary are welcome.]

Types of ADR Services Offered by WIPO

On October 1 st, 1994, the World Intellectual Propty Organization ("WIPO")Arbitration Center located at WIPO' s head offices in Gene va Switzerland, started offering services for the resolution of intellectual property ("IP") disputes. Aware of the

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COMMENTARY

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growing need for alternative dispute resolution (ADR) in IP matters, WIPO has established rules for the following dispute resolution methods (See December 1994, Page 13):

a) Ordinary Arbitration

The rules for ordinary arbitration have been drafted by a group of outstanding experts in arbitration. They represent the state of the art in present-day international arbitration. Sorne provisions deserve special mention because they are most often lacking in other arbitration mies, such as the provisions on the appointrnent of arbitrators in multiparty arbitrations or those aiming at avoiding that a party or its arbitrator may obstrue! the proceedings.

Other provisions are of particular interest because they are specifically framed for IP disputes, su ch as certain provisions on evidence ( see para. 2 d below) and confidentiality (see para. 2 f below).

b) Expedited Arbitration

This is a condensed form of arbitration, with shorter time-limits, Jess written pleadings, always a single arbitrator, and, subject to exceptions, no oral hearing.

Expedited arbitration may be considered for smaller scale disputes, when the parties cannot afford the financial or human resources required for court litigation or conventional arbitration. For the process to prove successful, the parties must be willing to cooperate and the arbitrator must be ready for an intense involvement over a short period of time.

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c) Mediation

Mediation is advisable between parties standing in an on going business relationship, who face a good faith dispute and are genuinely willing to reach a solution conducive to the continuation of the business relationship.

Under most circumstances, it may be good practice to provide the parties with an agreed fall back position such as the one referred to in the following paragraph for the event that the mediation fails.

d) Mediation Combined with Arbitration

This is a combination of the alternatives set forth in paragraphs a or b and c above. In this combined form, mediation is automatically followed by arbitration, if the mediation fails to produce a settlement within a given time-limit.

Consideration When Choosing WIPO ADR

When deciding whether to insert a WIPO ADR clause in a contract, or to submit to WIPO an existing dispute for which no contractual dispute resolution clause exists, what pararneters should be taken into account? The main reasons for choosing mediation have been briefly addressed in paragraph 1 c above. The following developments will thus focus on arbitration, whether ordinary or expedited.

It is submitted that the parties contemplating the use of WIPO ADR should consider the following factors:

a) Type of Dispute

First, ADR is certainly inappropriate in case of blatant infringement or when the title owner needs to set a signal in the market, for example to avoid the genericization of a trademark. It also implies parties dealing more or Jess at arms' length.

For ail other types of disputes ADR can be considered and provide real advantages. The WIPO rules contain no definition of the disputes which can be submitted to WIPO ADR. The reason lies in the difficulty of giving any workable definition. Indeed, many disputes involving IP rights also extend to other purely contractual aspects. These disputes may be submitted to WIPO and the institution's powers and the arbitrators' jurisdiction will not be limited in any manner under the rules.

b) Arbitrability

Ali IP rights are not equally arbitrable in ail jurisdictions. Can an arbitrator decide on the validity of a patent as a preliminary question to jurisdiction?

Generally yes. Can be declare a patent invalid? This depends on the applicable law. Does this declaration have any binding effect on a national patent office? This again depends on national law. If such issues are likely to arise then, before committing to arbitration, one should verify arbitrability under the law which the arbitrators and the courts at the likely place of enforcement will apply to this issue.

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Arbitrability questions are Jess or not likely to arise in the area of copyrights and trade secrets.

c) N eutrality

In international disputes - and IP disputes are increasingly international because of the international exploitation of IP rights - parties often seek to avoid each other' s national courts. They look for a forum that is neutral to the legal, linguistic and business culture of each party. WIPO being an international organization offers that neutrality.

Although the WIPO Arbitration Center is located in Geneva, the rules are intended for worldwide use. Hence, the place of arbitration may be located anywhere. If the parties nevertheless choose to arbitrate in Geneva, then they will benefit from WIPO's arbitration facilities and the specially user-friendly Swiss arbitration legislation.

d) Consolidation of Dispute in One Forum

The subject malter of intellectual property disputes will often be an invention, trademark, industrial design, or patent that is the subject of a number of .separate national titles. Arbitration represents a way of resolving the dispute

by starting only one procedure, rather than filing separate court actions in each country where the title is protected or at least in those countries that constitute major markets.

e) Expertise

IP disputes are often highly technical in nature. A specialized panel of arbitrators selected either by the parties or, if they fail to do so by WIPO among the specialists appearing on its list of arbitrators, will be in a much better position to deal with technical matters than national courts or even ad hoc arbitrators.

Not only are the arbitrators and the institution specialized in IP, but the mies have been drafted with IP disputes in mind: they contain specific provisions to deal with the technical nature of the dispute, for instance provisions on evidence dealing with experiments and agreed primers and models, in other words agreed references by which to assess novelty.

f) Confidentiality

Confidentiality is often crucial in IP disputes. For instance, it is the only protection of the value of a trade secret. But even when relevant information has been disclosed to the public in return for a monopoly, e.g. a patent, confidentiality may remain an issue. A licensor for instance rnay wish to avoid that a dispute with one of his licensees becornes known to the others.

The WIPO rules contain elaborate provisions aimed at protecting confidentiality. They cover two aspects: the protection of trade secrets and

1 the confidentiality of the arbitration proceedings. If disclosing certain information within the arbitration may cause serions harm, then a party may apply to the arbitrators to have such information classified as confidential.

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The arbitrators may then decide that such confidential information will not be disclosed to the other party. In exceptional circumstances, the tribunal will not itself make that decision, but will appoint a "confidential advisor,"

who will assess the confidential nature of the information and decide whether it should be disclosed to the tribunal or not.

The rules also protect the confidentiality of the arbitration proceedings. Under the rules, the parties (unless they agree otherwise), the arbitrators, and WIPO are bound not to disclose the existence and contents of the proceedings, nor the award, except when disclosure is necessary for challenging the award in court or when it is required by law.

g) Duration and Costs of the Proceedings

The costs of a WIPO ordinary arbitration are in line with those of other large arbitration institutions. Hence, resorting to WIPO arbitration will not yield savings compared to other types of arbitration. A comparison between costs of a WIPO arbitration and of court iitigation is difficult, because costs vary significantly from one jurisdiction to the other. In any event, parties who are particularly concerned about the costs of dispute resolution should definitely look to either expedited arbitration or mediation rather than ordinary arbitration.

The same considerations hold true with respect to the duration of the proceedings, with the additional comment that WIPO ordinary arbitration may end up being somewhat less time consuming than other arbitrations, because the rules contain many provisions intended to accelerate the course of the proceedings.

h) Interim Relief

IP battles are often won or lost at the interim stage. The WIPO rules give the arbitrators the power to grant interim relief. However, this is not an exclusive power to the extent that it does not prevent parties who have agreed on arbitration, from applying to the courts for provisional remedies. This opportunity to choose one' s forum for interim relief is obviously welcome.

In man y instances, a court order will be more effective, bec au se it will be quicker to obtain ( especially when the arbitral tribunal is not yet constituted) and more easily enforceable.

i) Standard Clauses

WIPO bas published standard clauses, which are printed at the end of this commentary. It is advisable to use these rather than self-made clauses. This will avoid procedural difficulties, because the standard language bas a well settled meaning and contains ail necessary elements of an effective dispute resolution clause.

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Recommended WIPO Clauses

Recommended WIPO Mediation Clauses

"Any dispute, controversy or ciaim arising under, out of or relating to this contract and any subsequent amendments of this contract, including without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual ciaims, shall be submitted to mediation in accordance with the 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, controversy or ciaim arising under, out of or relating to this contract and any subsequent amendments of this contract, inciuding without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual ciaims, 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 Ianguage to be used in the arbitral proceedings shall be . . . The dispute, controversy or ciaim shall be decided to accordance with the Iaw of . . . ".

Recommended WIPO Expedited Arbitration Clause

"Any dispute, controversy or ciaim arising under, out of or relating to this contract and any subsequent amendments of this contract, inciuding, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual ciaims, shall be referred to and finally determined by arbitration in accordance with the WIPO Expedited Arbitration Rules. The place of arbitration shall be . . . The language to be used in the arbitral proceedings shall be . . . The dispute, controversy or ciaim shall be decided in accordance with the law of ... ".

Recommended Clause for WIPO Mediation Followed, in the Absence of a Settlement, by Arbitration

"Any dispute, controversy or ciaim arising under, out of or relating to this contract and any subsequent amendments of this contract, inciuding, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual ciaims, shall be submitted to mediation in accordance with the WIPO Mediation Rules. The place of mediation shall be . . . The language to be used in the mediation shall be . . .

If, and to the extent that, any such dispute, controversy or ciaim has not been settled pursuantto the mediation within [60] [90] days of the commencement of the mediation, it shall, upon the filing of a Request of Arbitration by either party, be referred to and

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finally determined by arbitration in accordance witb the WIPO Arbitration Rules.

Altematively, if, before tbe expiration of tbe said period of [60] [90] days, either party fails to participate or to continue to participate in the mediation, the dispute, controversy or claim shall, upon tbe filing of a Request for Arbitration by the otber party, be referred to and finally determined by arbitration in accordance witb tbe 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 referred to arbitration shall be decided in accordance with the law of ... ".

WIPO also proposes standard language for agreements for tbe submission of existing disputes to ADR. Such language is reproduced together with the WIPO Rules, which are available from the WIPO Arbitration Center, P.O. Box 18, 1211 Geneva 20, Switzerland, telephone (41 22) 730 91 11, fax (41 22) 740 37 000 (See December 1994, Page 13). •

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