Book Chapter
Reference
Alternative Dispute Resolution for Trademark Disputes
DE WERRA, Jacques
DE WERRA, Jacques. Alternative Dispute Resolution for Trademark Disputes. In: Irene Calboli and Jane C. Ginsburg. The Cambridge Handbook of International and Comparative Trademark Law . Cambridge : Cambridge University Press, 2020. p. 142-158
DOI : 10.1017/9781108399456.010
Available at:
http://archive-ouverte.unige.ch/unige:144057
Disclaimer: layout of this document may differ from the published version.
Alternative Dispute Resolution for Trademark Disputes
Jacques de Werra*
i i nt r od u ct i o n
The challenges and costs of litigating (multi-territorial) trademark (similarly to other intellectual property) disputes before national courts are well-known.1This explains the growing importance of alternative dispute resolution (ADR) mechanisms, specifically arbitration, for solving trade- mark2(and other intellectual property) disputes.3In an international dispute, ADR can particu- larly offer the advantage to centralize the dispute resolution process and thus avoid the fragmentation before parallel regional or national courts.4The increasing reliance on and trust in ADR systems for solving trademark (and other IP) disputes is not surprising: it mirrors the growing importance of ADR in the general dispute resolution ecosystem. The significance of
* Professor of Intellectual Property Law and Contract Law, School of Law, University of Geneva.
1This chapter will focus on trademark disputes, it being noted that similar issues arise with respect to other types of intellectual property rights; it is based on various papers by the author, most particularly Jacques de Werra,Alternative Dispute Resolution Mechanisms for Solving Trademark Disputes (Mediation, UDRP, Arbitration),inThe Law and Practice of Trademark Transactions 293(I. Calboli & J. de Werra eds.,2016).
2SeeAshlyn Calhoun,“It All Started with a Mouse”: Resolving International Trademark Disputes Using Arbitration,2018 J. Disp. Resol. 87–101 (2018); James Morrison, A Turning Tide, Arbitrating International Trademark Disputes and the Importance of the New WIPO Arbitration Rules,69 Int’l. Trademark Assn. Bull. 10(Nov.1,2014),http://
inta.org/INTABulletin/Pages/ATurningTideArbitratingInternationalTrademarkDisputesandtheImportanceoftheNewWIPO ArbitrationRules.aspx.
3See Joe Tirado & Alejandro I. Garcia,Reasons to Arbitrate IP Cases,Intell. Prop. Mag.(Dec.8,2014),http://
intellectualpropertymagazine.com/copyright/reasons-to-arbitrate-ip-cases-105157.htm; Miriam R. Arfin,The Benefits of Alternative Dispute Resolution in Intellectual Property Disputes,17 Hastings Comm. & Ent. L.J. 893,896(1995);
Jacques de Werra, Can Alternative Dispute Resolution Mechanisms Become the Default Method for Solving Inter- national Intellectual Property Disputes?,43 Cal. W. Int’l. L.J. 39(2012); Jacques de Werra,Arbitrating International Intellectual Property Disputes: Time to Think beyond the Issue of (Non-)Arbitrability,3 Int’l Bus. L.J. 299,311(2012);
Jacques de Werra,Intellectual Property Arbitration: How to Use It Efficiently?,Sing. L. Gazette, Jan.2012, at27–30, http://v1.lawgazette.com.sg/2012-01/304.htm.
4 An interesting recent example is the dispute between Pirelli and its former Spanish trademark licensee Licensing Projects SL, which led to an ICC arbitral award, and to litigation in Spain and in France, in which the arbitral award was annulled on procedural grounds (i.e. because of the principle of access to justice that may require admitting counterclaims that are raised by the defendant, here Licensing Projects SL, even if such party cannot pay the advance on costs as required under the relevant (ICC) arbitration rules).SeeGómez-Acebo & Pombo Abogados,Alicante Court Considers Trademark Infringement Stemming from Arbitration, Lexology (Nov.14,2012),http://lexology.com/library/
detail.aspx?g=9e7dc57d-6a08-4625-bf7a-f4e2ced6c3b5; Andrea Pinna,La Confirmation de la Jurisprudence Pirelli par la Cour de Cassation et les Difficultés Pratiques de Garantir au Plaideur Impécunieux l’accès à la Justice Arbitrale,2013-2 The Paris J. of Int’l. Arb. 479(2013).
ADR in trademark disputes is not, however, limited to international multi-territorial disputes;
ADR can also be of significant value for national trademark disputes.
One key institutional factor supporting the growing importance of ADR in trademark (and other IP) disputes results from the trend encouraging or even imposing the use of ADR that animates many IP offices around the world in cooperation with the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center, which plays a significant role in this respect.5As a result, ADR cannot and should not be considered as an unusual dispute resolution mechanism in trademark disputes: ADR rather constitutes a mainstream component of the trademark dispute resolution ecosystem.6
This chapter will distinguish between different ADR mechanisms. It will start by discussing ADR mechanisms outside of arbitration that may be used to solve trademark disputes with a focus on mediation and on the ADR system for internet domain name disputes (Section II). It will then turn to arbitration, which raises specific issues and thus calls for a separate discussion (Section III).
i i a l te rn a ti ve d i s p u t e r e s o lu t i o n f o r t r a d e ma r k d i s p u t e s ( o u ts i d e of a rb i t ra t i o n)
Trademark disputes can be solved by the submission to various ADR mechanisms outside of courtroom litigation and arbitration. Among various ADR tools, trademark disputes can be submitted to mediation (see Section II.A). Specific types of trademark disputes relating to internet domain names can further be submitted to tailored ADR mechanisms specifically developed for such disputes. This is the case of the now extremely well-established system of the Uniform Domain Name Dispute Resolution Policy which has guided the development of other similar ADR systems for internet domain name disputes (see Section II.B).
A Mediation
Mediation offers the parties in dispute the ability tofind an amicable settlement of their dispute by submitting it to a neutral third party who shall assist them in this process (without decision- making power). The advantages of mediation are essentially that it can help find creative, interest-based (i.e. focusing on the business interests of the parties more than on their legal positions), time and cost-effective solutions to certain types of trademark7 (and other IP) disputes.8Many IP offices have promoted the use of mediation for solving trademark (and other IP) disputes. This is particularly the case of the European Union Intellectual Property Office
5 SeeJoyce A. Tan,WIPO Guide on Alternative Dispute Resolution (ADR) Options for Intellectual Property Offices and Courts, WIPO2018,https://wipo.int/publications/en/details.jsp?id=4342,seeCh. IV at p.37(“Institutionalizing ADR for Intellectual Property Disputes”) and Annex A at p.51listing WIPO Arbitration and Mediation Center collaborations with IPOs and courts in multiple countries;see alsoWIPO,WIPO ADR for IP Office and Courts,https://wipo.int/amc/
en/center/specific-sectors/ipoffices/.
6 SeeJacques de Werra,Specialised Intellectual Property Courts–Issues and Challenges, Global Perspectives for the Intellectual Property System, Issue No. 2 Ctr.for Int’l Intell. Prop. Studies/Int’l Ctr. for Trade and Sustainable Dev’t.2016,15–41,https://archive-ouverte.unige.ch/unige:82262.
7 SeeManny D. Pokotilow,Why Mediation for Trademark and Unfair Competition Disputes Should Be Your First Choice of Dispute Resolution,72 Disp. Resol. J. 3(2017); David Bernstein,A Case for Mediating Trademark Disputes in the Age of Expanding Brands,7 Cardozo J. Conflict Resol.139(2005);see alsothe dedicated webpage of the International Trademark Association (INTA) on mediation,http://inta.org/mediation/Pages/Mediation.aspx.
8 SeeAsako Wechs Hatanaka,Optimising Mediation for Intellectual Property Law–Perspectives from EU, French and UK Law,49 Int’l. Rev. Intell. Prop. and Competition L. 384(May2018);see alsoNick Gardner,Mediation and Its Relevance to Intellectual Property Disputes,9 J. of Intell. Prop. L. & Prac. 565(2014).
(EUIPO; at that time it was still operating under the name Office for Harmonization in the Internal Market, OHIM) which launched intellectual property mediation services in October 2011.9The intellectual property mediation services offered by EUIPO initially resulted from a decision of the Presidium of the Board of Appeal of14April2011, on the amicable settlement of disputes.10The basic idea was to promote mediation (without excluding other available alterna- tive dispute resolution mechanisms).11 The mediator must be chosen from a list provided by EUIPO, whereby all the mediators are staff members of EUIPO.12Mediation is available only during the course of appeal proceedings and on relative grounds relating to conflicts between the private rights of the litigants.13It is consequently not available on grounds of public policy such as absolute grounds for refusal of European trademarks or designs.14
Many other intellectual property offices have started to offer diverse forms of mediation services. By way of illustration, the WIPO Arbitration and Mediation Center and the Patent Office of the Republic of Poland recently set up a joint dispute resolution procedure to facilitate the mediation of trademark opposition disputes pending before the Patent Office of the Republic of Poland (PPO) that shall be governed by the WIPO mediation rules.15As a rule, these mediation systems are conceived as voluntary-based dispute resolution systems. Some regulations have, however, attempted to make mediation a mandatory step before the initiation of formal court proceedings,16 but this obligation is uncertain to enforce because it may jeopardize the fundamental right of access to justice.17
Given that it is a relatively informal and non-adjudicatory process that does not lead to any binding decision by the mediator (in case of successful mediation, the parties can enter into a binding settlement agreement), the use of mediation for solving trademark disputes does not raise major legal or policy issues.18
9 See European Union Intellectual Property Office [hereinafter EUIPO], https://euipo.europa.eu/ohimportal/en/
mediation.
10 Decision2011-1, of the Presidium of the Boards of Appeal, on the Amicable Settlement of Disputes,https://euipo .europa.eu/tunnel-web/secure/webdav/guest/document_library/contentPdfs/law_and_practice/presidium_boards_appeal/
in_force/2011-1_presidium_decision_on_mediation_en.pdf; this decision was replaced by Decision2013-3of the Presid- ium of the Boards of Appeal of July5,2013, on the amicable settlement of disputes,https://euipo.europa.eu/tunnel-web/
secure/webdav/guest/document_library/contentPdfs/law_and_practice/presidium_boards_appeal/presidium_decision_
2013-3_en.pdf[hereinafter Decision on Mediation].
11See id. at recital2(“A friendly settlement should be easier to achieve with recourse to mediation, without prejudice to other alternative dispute resolution mechanism”).
12“The Office shall maintain a list of qualified members of its staff, who are suitably prepared to intervene in mediation proceedings in the sense of the present decision.”Id.at art.7, §1. For the list of mediators,seeEUIPO,https://euipo .europa.eu/ohimportal/fr/mediators.
13Decision on Mediation,supranote10, at art.1, §1. (“The request for mediation proceedings may be presented, by a joint declaration from the parties, at any time following the lodging of an appeal”).
14 Id.at art.1, §2.
15World Intellectual Property Organization, https://wipo.int/amc/en/center/specific-sectors/ipoffices/poland/
[hereinafter WIPO].
16 For a discussion, seeMark Vilenchik, Expanding the Brand: The Case for Greater Enforcement of Mandatory Mediation in Trademark Disputes,12 Cardozo J. Conflict Resol. 281(2010–2011).
17 In Greece the compulsory mediation system for IP disputes was successfully challenged,seeMarina Perraki,Mandatory Mediation Questioned–Greece(July17,2018),http://trademarkblog.kluweriplaw.com/2018/07/17/mandatory-mediation- questioned-greece/(indicating that on June28,2018, the Greek Supreme Court’s administrative plenary panel issued an opinion holding that the mandatory mediation introduced by law4512/2018according to which all disputes concerning trademarks, patents and industrial designs initiated before civil courts in Greece are subject to mandatory mediation is contrary to the Greek Constitution and the European Convention on Human Rights).
18 Even if the use of institutional mediation rules in a mediation, such as the WIPO mediation rules (https://wipo.int/
amc/en/mediation/rules/), can offer very valuable guidance and can significantly facilitate and support the mediation process.
B The Uniform Domain Name Dispute Resolution Policy and Other Trademark-Related Internet Domain Name Alternative Dispute Resolution Mechanisms
The Uniform Domain Name Dispute Resolution Policy (UDRP) is probably the best example of a successful global ADR system for solving (international) trademark disputes. The UDRP was adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on26August 1999.19 ICANN, a “California Nonprofit Public-Benefit Corporation,”20 is not a public state agency.21The UDRP, which was based on policy recommendations prepared under the aegis of the World Intellectual Property Organization (WIPO),22has been extremely successful in solving a phenomenal number of internet domain name cybersquatting disputes since its adoption. Its value and importance are clearly evidenced by the record number of cases brought in recent years.23In addition to the intrinsic quality of the UDRP’s design features, its success and innovation result particularly from the way the UDRP was contractually imposed in the domain name regulatory ecosystem.24 Among the contractual obligations imposed on all domain name registrars for generic Top Level Domains (gTLD) in order to be accredited with ICANN is the obligation on the registrars to contractually require from their own clients who register domain names to submit to the UDRP.25 The same obligation applies to cases where the registrars enter into agreements with third-party resellers who ultimately contract with end-customers.26 Consequently, submission to the UDRP is imposed on all internet domain name holders of gTLD in a hierarchical way, starting from ICANN (top) to the holder of a given domain name (bottom). In other words, a chain of mutual contractual obligations ultimately imposes the UDRP on the relevant domain name holders.
Even if the merits of a complaint under the UDRP depend on the complainant’s ability to show ownership or control over a trademark,27which generally consists of a registered trademark
19 See Internet Corp. for Assigned Names and Numbers, Uniform Domain Name Dispute Resolution Policy(Oct.24, 1999),http://icann.org/dndr/udrp/policy.htm[hereinafter UDRP].
20 ICANN,Bylaws for Internet Corporation for Assigned Names and Numbers(as amended June18,2018), Internet Corporation for Assigned Names and Numbers,http://icann.org/en/general/bylaws.htm[hereinafter ICANN].
21The independence of ICANN was reflected in“the Affirmation of Commitments”between the US Department of Commerce and ICANN dated Sept. 30,2009.See ICANN, The Affirmation of Commitments –What It Means (Sept.30,2009),http://icann.org/en/announcements/announcement-30sep09-en.htm#affirmation; ICANN is engaged in a complex multistakeholder process since the expiration of the contract between ICANN and the US Department of Commerce National Telecommunications and Information Administration (NTIA) to perform the Internet Assigned Numbers Authority (IANA) functions on Oct.1,2016; on this,see Stewardship of IANA Functions Transitions to Global Internet Community as Contract with U.S. Government Ends,https://icann.org/news/announcement-2016- 10-01-enandhttps://icann.org/stewardship-accountability.
22 WIPO Internet Domain Name Process (1999),http://wipo.int/amc/en/processes/process1/report/finalreport.html.
23See WIPO Cybersquatting Cases Grow by12% to Reach New Record in2018(Geneva, Mar.15,2019),https://wipo.int/
pressroom/en/articles/2019/article_0003.html.
24SeeNicholas Smith & Erik Wilbers,The UDRP: Design Elements of an Effective ADR Mechanism,15 Am. Rev. Int’l Arb. 215, 217–18(2004).
25SeeICANN,2013Registrar Accreditation Agreement, §3.8,https://icann.org/resources/pages/approved-with-specs-2013- 09-17-en(“During the Term of this Agreement, Registrar shall have in place a policy and procedures for resolution of disputes concerning Registered Names. Until ICANN adopts an alternative Consensus Policy or other Specification or Policy with respect to the resolution of disputes concerning Registered Names, Registrar shall comply with the Uniform Domain Name Dispute Resolution Policy (‘UDRP’) identified on ICANN’s website (https://icann.org/
general/consensus-policies.htm), as may be modified from time to time”) [hereinafter Registrar Accreditation Agreement].
26 See id. at art.3.12.2(“Any registration agreement used by reseller shall include all registration agreement provisions and notices required by the ICANN Registrar Accreditation Agreement and any ICANN Consensus Policies”).
27 UDRP,supranote19, at art.4a(i) (“[Y]our domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights”).
in at least one country, the UDRP is generally characterized by its delocalized nature, in terms of both geography and legal system.28In other words, the UDRP applies regardless of geographic localization factors and does not depend on the country(ies) or region(s) of registration of the relevant trademark(s), on the domicile/seat of the owner of such trademark(s) or on the domicile/seat of the registrant of the dispute domain name. The UDRP is also legally delocal- ized and essentially independent from any legal system because the substantive criteria the UDRP is based on and on the basis of which decisions are rendered are independent from any national or regional regulation, except for the existence and control of a trademark by the complainant.29 The substantive criteria of a decision under the UDRP essentially relate to the good or bad faith registration and use of the relevant domain name by its holder.30 Consequently, the UDRP creates a corpus of autonomous rules for internet-related trademark disputes that constitute a kind of globallex electronica.31
The adjudicatory power of experts appointed to decide a dispute under the UDRP is narrow in its scope; the decision can only grant the transfer or cancellation of the relevant domain name or, alternatively, reject the UDRP complaint.32 The UDRP also provides for the automatic enforcement of decisions ordering a transfer or cancellation of the disputed domain name by notifying the registrar. The respondent (the holder of the relevant domain name) may escape this outcome only if it notifies the dispute resolution entity within ten business days of the initiation of a lawsuit in the relevant jurisdiction.33The party may notify the dispute resolution entity byfiling appropriate evidence establishing the initiation of court proceedings, such as a copy of the complaint file-stamped by the clerk of the court.34 UDRP decisions (which are
28Unregistered trademarks may however suffice. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions,3rd ed. (“WIPO Jurisprudential Overview3.0”), §1.1.1., WIPO,http://wipo.int/amc/en/domains/search/
overview3.0/index.html.
29 This independence from national law may sometimes be challengeable, particularly when the parties in dispute are located in the same country; decisions nevertheless refrain from importing national law into the UDRP.See Administrative Panel Decision,Covance, Inc.v.Covance Campaign, Case No. D2004-0206(WIPO, Apr.30,2004), http://wipo.int/amc/en/domains/decisions/html/2004/d2004-0206.html(“As a matter of principle, this Panel would not have thought that it was appropriate to import unique national legal principles into the interpretation of paragraph 4(c) of the Policy. This is so even if the effect of doing so is desirable in aligning decisions under the Policy with those emerging from the relevant courts and thus avoiding instances of forum shopping”);see alsoAdministrative Panel Decision,Housing Ass’n, Ltd.v. Mr. D. Morgan, Case No. D2007-1461,1066(WIPO, Jan.18,2008),http://wipo.int/
amc/en/domains/decisions/html/2007/d2007-1461.html.
30 UDRP,supranote19, at art.4b & c.
31SeeGralf-Peter Calliess,Reflexive Transnational Law: The Privatisation of Civil Law and the Civilisation of Private Law, 23 Zeitschrift fu¨ r Rechtssoziologie 185–216 (2002) (Ger.) (evidencing the structural and conceptual differences between the UDRP andlex mercatoria, which applies in the international business context).
32UDRP,supranote19, at art.4(i) (“The remedies available to a complainant pursuant to any proceeding before an Administrative Panel shall be limited to requiring the cancellation of your domain name or the transfer of your domain name registration to the complainant”).
33UDRP,supranote19, at art.4(k). The complaint must“[s]tate that Complainant will submit, with respect to any challenges to a decision in the administrative proceeding canceling or transferring the domain name, to the jurisdiction of the courts in at least one specified Mutual Jurisdiction.”See alsoICANN,Rules for Uniform Domain Name Dispute Resolution Policy, art.3(b)(xii),https://icann.org/en/help/dndr/udrp/rules.“Mutual Jurisdiction means a court jurisdiction at the location of either (a) the principal office of the Registrar (provided the domain-name holder has submitted in its Registration Agreement to that jurisdiction for court adjudication of disputes concerning or arising from the use of the domain name) or (b) the domain-name holder’s address as shown for the registration of the domain name in Registrar’s Whois database at the time the complaint is submitted to the Provider.”Id.at art.1.
34 UDRP,supranote19, art.4(k) (“We will then implement the decision unless we have received from you during that ten (10) business day period official documentation (such as a copy of a complaint,file-stamped by the clerk of the court) that you have commenced a lawsuit against the complainant in a jurisdiction to which the complainant has submitted underParagraph3(b)(xiii)of the Rules of Procedure”).
rendered on the basis of the substantive factors of the UDRP) are however not binding on national courts which can decide the disputede novo(on the basis of their national IP law).
The UDRP consequently institutes and provides an autonomous dispute resolution mechan- ism for victims of unauthorized domain name registrations they consider to infringe upon their trademarks. It is essential to note that the UDRP is not imposed on victims (i.e. the claimants in UDRP proceedings) who have the option to resolve their disputes through domestic courts or other dispute resolution bodies (for instance by arbitration if the parties are bound by a pre- existing agreement with an arbitration clause). The victims may indeed have an interest in submitting their case to domestic courts or to other dispute resolution bodies rather than the UDRP if they wish to claim remedies unavailable under the UDRP,35such as damages resulting from online trademark infringement activities.
In contrast, even if the UDRP provides that parties can litigate their domain name disputes in other fora, the holders of disputed domain names – defendants in UDRP proceedings – are contractually obligatedto submit to the UDRP if a UDRP case is initiated against them by a third-party trademark owner.36The contractual obligation derives from the general terms and conditions of the domain name registrar. The registrar is, in turn, obligated to implement the UDRP based on its accreditation agreement with ICANN.37This consequently confirms that the UDRP is based on a chain of contracts, which reflects the point that important aspects of the internet governance ecosystem are based on contracts.38
As a result of its success,39 the UDRP has served as a global model for designing dispute resolution mechanisms for various categories of internet domain names with national or regional extensions such as country code Top Level Domain Names (ccTLDs).40
This is what was done (among many other examples) for the policy relating to disputes about
“.eu” domain names in the EU (the “EU Policy”). The EU Policy, which applies to“.eu”
domain names, is essentially based on a2004European Commission Regulation which estab- lished public policy rules concerning the implementation and functions of the“.eu”Top Level Domain and the principles governing registration.41The Commission Regulation874/2004will be repealed by Regulation (EU) 2019/517 of 19 March 2019 (Regulation 2019/517) on the
35 Id.at art.4(i) (see supranote32).
36 See id. at art.4(k) (“The mandatory administrative proceeding requirements. . .shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded”).
37 SeeRegistrar Accreditation Agreement,supranote25, at art.3.8.
38 SeeLee A. Bygrave, Internet Governance by Contract(2015).
39 It must, however, be noted that the UDRP has sometimes been criticized for being too protective of the interests of trademark owners.SeeMichael Geist,Fair.com? An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP,27 Brook. J. Int’l L.903(2002) (providing the solution to the forum shopping and bias issues);
Michael Geist,Fundamentally Fair.com? An Update on Bias Allegations and the ICANN UDRP,http://aix1.uottawa .ca/%7Egeist/fairupdate.pdf(providing a statistical update and reinforcing the solution provided previously).
40SeeEUIPO,Comparative Case Study on Alternative Resolution Systems for Domain Name Disputes(2018),6(noting that the domain name dispute resolution systems–except for the Danish Domain Complaints Board (.dk)–reach similar outcomes in selected scenario by comparison to the UDRP), https://euipo.europa.eu/tunnel-web/secure/
webdav/guest/document_library/observatory/documents/reports/2019_Comparative_case_study_on_alternative_reso lution_systems/Comparative_case_study_on_alternative_resolution_systems_for_domain_name_disputes.pdf.
41 SeeCommission Regulation874/2004of Apr.28,2004, Laying Down Public Policy Rules Concerning the Imple- mentation and Functions of the .eu Top Level Domain and the Principles Governing Registration,2004OJ (L162)40 (EC) [hereinafter the Commission Regulation874/2004];see alsoRegulation733/2002of the European Parliament and of the Council of Apr.22,2002, Implementation of the .eu Top Level Domain, art.1,2002OJ (L113)5(EC) (implementing the“.eu” country code Top Level Domain within the community); see also ADR Rules and Supplemental Rules, ADR.eu,http://eu.adr.eu/adr/adr_rules/index.php, for “.eu”domain name dispute rules that implemented the ADR system.
implementation and functioning of the “.eu” top-level domain name and amending and repealing Regulation (EC) No. 733/2002 and repealing Commission Regulation (EC) No. 874/2004 that came into effect on 18 April 2019 and will be applicable on 13 October 2022, except for a new right for EU citizens residing in non-EU countries to register .EU domain names, that applies since19October2019(Article20).
The Commission Regulation874/2004states that“[t]he Registry should provide for an ADR procedure which takes into account the international best practices in this area and in particular the relevant World Intellectual Property Organization (WIPO) recommendations, to ensure that speculative and abusive registrations are avoided as far as possible.”42Furthermore, it provides that“ADR should respect a minimum of uniform procedural rules, similar to the ones set out in the Uniform Dispute Resolution Policy adopted by the Internet Corporation of Assigned Names and Numbers (ICANN).”43 These references show that the ADR process must follow “the international best practices”and that the UDRP, as an element of these best practices, provides a valuable guidance in defining the procedural rules adopted under the EU Policy.
Despite the similarities the EU Policy shares with the UDRP, an important element where they noticeably differ is the nature of the rights that can be invoked by a complainant in such proceedings. While, as noted above, the UDRP only applies for the benefit oftrademarkowners, the EU Policy is significantly broader in its scope of protection. The regulation provides for a broad definition of protectable rights and includes“registered national and community trade- marks, geographical indications or designations of origin, and, in as far as they are protected under national law in the Member-State where they are held: unregistered trademarks, trade names, business identifiers, company names, family names, and distinctive titles of protected literary and artistic works.”44
Neither the UDRP nor the other internet domain name dispute resolution systems derived from it can be considered as arbitral proceedings.45The decisions rendered under the domain dispute proceedings are not enforceable as arbitral awards (under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958), and these proceedings are not mandatory.46In addition, contrary to the principle of confidentiality that generally applies to ordinary arbitration proceedings, the decisions rendered under these policies are published as a matter of principle.47
Beyond these regional or national implementations of the UDRP in various legal systems (such as the EU Policy as discussed above), the development of the internet domain name system has generated new types of trademark disputes and has consequently generated new types of protection mechanisms48 and new types of ADR systems for solving these disputes.49
42Commission Regulation874/2004,supranote41, at recital16; Regulation2019/517similarly provides for the submis- sion of disputes to ADR (art.4, para.4) and similarly states that (recital17)“[t]he alternative dispute resolution (ADR) procedures to be adopted should. . .take into account the international best practices in this area and in particular the relevant recommendations of the World Intellectual Property Organization, to ensure that speculative and abusive registrations are avoided as far as possible. Those ADR procedures should respect uniform procedural rules that are in line with those set out in ICANN’s Uniform Domain Name Dispute-Resolution Policy.”
43 Id.at recital17.
44 Id.at art.10.
45 SeePhilippe Gillie´ ron, La proce´ dure de re´ solution en ligne des conflits relatifs aux noms de domaine 26(2002).
46SeeUDRP,supranote19, art.4(k) entitled“[a]vailability of court proceedings”(under certain conditions).
47 Commission Regulation874/2004, art.22, §11,2004OJ (L162)44(EC).
48 SeeICANN’s Trademark Clearinghouse,https://newgtlds.icann.org/en/about/trademark-clearinghouse.
49A detailed description of these mechanisms would go beyond the scope of this chapter.
The creation by ICANN of new generic top-level domains (new gTLDs) has generated new types of disputes for which ADR mechanisms have been put in place to protect a variety of stakeholders and interests, including trademark owners.50The WIPO Arbitration and Mediation Center was appointed by ICANN as the exclusive provider of dispute resolution services for the category of“Legal Rights Objections (LRO)”under ICANN’s New gTLD Program.51The LRO was particularly designed to protect trademark owners.52The LRO leads to independent expert determinations so it constitutes another example of an ADR system for global internet domain name disputes similar to the UDRP even if the LRO is much more limited in its reach.
As the UDRP and its “progeny” clearly show, the digital borderless online environment constitutes a very ADR-friendly environment for solving cross-border trademark-related disputes which could apply beyond domain name disputes.53
i i i a r b i t ra ti o n o f ( i n t e r n a t i o n a l ) t r a d e ma r k d i s p u t e s
A Introduction
Not all types of international trademark disputes can be subject to arbitration (or other ADR mechanisms) because the submission to arbitration (and to other ADR mechanisms) is generally based on the consent of the parties. As a result, disputes relating to large-scale counterfeiting activities are unlikely to be submitted to ADR because the parties to such disputes are unlikely to agree on any consent-based dispute settlement and these activities may call for criminal sanctions which are not reconcilable with ADR.
The recourse to arbitration for solving trademark disputes requires certain conditions to be satisfied.
B Conditions
One preliminary question that arises is whether private arbitral tribunals have the power to decide on all trademark law issues and specifically on the validity of trademarks because this may fall under the exclusive jurisdictional power of domestic courts. This raises the issue of the objective arbitrability of the disputes; that is, the ability of certain subject matters to be submitted for decision to arbitration (see Section III.B.1). Even if trademark disputes can be submitted to arbitration, the parties in dispute must duly agree to submit their dispute to arbitration, raising the issue of the arbitration clause’s scope (see Section III.B.2). Due attention must also be paid to the choice of the governing law (see Section III.B.3) and to temporary injunctions (see Section III.B.4).
50 SeeICANN New Generic Top Level Domains,https://newgtlds.icann.org/en/.
51 SeeWIPO,Legal Rights Objections under ICANN’s New gTLD Program,https://wipo.int/amc/en/domains/lro/.
52SeeICANN Applicant Guidebook, §3.5.2,http://newgtlds.icann.org/en/applicants/agb/objection-procedures-04jun12- en.pdf. The independent panel will determine whether the potential use of the gTLD applied for by the applicant (i) takes unfair advantage of the distinctive character or the reputation of the objector’s registered or unregistered trademark or service mark (“mark”) or intergovernmental organization (IGO) name or acronym, or (ii) unjustifiably impairs the distinctive character or the reputation of the objector’s mark or IGO name or acronym, or (iii) otherwise creates an impermissible likelihood of confusion between the applied-for gTLD and the objector’s mark or IGO name or acronym.
53 On the use of ADR (and specifically arbitration) for trademark disputes in “virtual worlds,” seeBoris Shapiro, Trademark Arbitration: A First Rate Change for a Second Life Future,8 Chi.-Kent J. Intell. Prop. 273(2009).
1 Objective Arbitrability of Intellectual Property Disputes
In order to adjudicate international intellectual property and specifically trademark disputes by arbitration,54 the parties should have the power to remove these disputes from the court systems.55 This raises the issue of the objective arbitrability of intellectual property disputes, which has triggered a relatively intensive scholarly debate (which cannot be analyzed in detail in this chapter).56
According to a restrictive minority view, certain types of IP disputes raise concerns of public policy to the extent that only national courts should have jurisdiction to decide them, to the exclusion of arbitral tribunals, so that IP disputes would objectively (i.e. because of their very nature) not be arbitrable. This restrictive approach applies particularly to disputes relating to the validity of industrial property rights such as trademarks. It mirrors the rule that frequently applies to national courts, according to which only the courts of the country of registration of the relevant industrial property rights have jurisdictional power to decide on the validity of such rights.
A more liberal view tending to become mainstream considers trademark disputes and, more generally, intellectual property disputes, as arbitrable.57One argument supporting this approach is, in essence, that trademarks are rights under the control of their owners over which they can dispose. Many national arbitration regulations define the condition of objective arbitrability by reference to whether the relevant subject matter can be freely disposed of by its owner: if such matter can be disposed of by its owner, the matter is arbitrable.58 On this basis, given that IP rights and trademark rights are disposable, IP and trademark disputes should as a general rule be objectively arbitrable.59One practical way to promote the arbitrability of IP disputes is to limit the jurisdictional powers of arbitral tribunals that would have to assess the validity or nullity of trademarks so the decision shall only be effective between the parties (inter partes) and not against third parties (erga omnes).60
54 As reflected above, the recourse to mediation or other informal ADR mechanisms including mediation is obviously less problematic to the extent that the neutral third parties (the mediators), which take part in the proceedings to solve disputes, do not have adjudicative power, and thus do not impinge on the power of domestic courts.
55See, e.g.,Mehmet Polat Kalafatoglu, L’Arbitrabilite´ en Matie` re de Proprie´ te´ Industrielle, Etude en Droit de L’arbitrage International(2018); Bernard Hanotiau,L’arbitrabilité des litiges de Propriété Intellectuelle, inLa Re´ solution des Litiges de Proprie´ te´ Intellectuelle [Resolution of Intellectual Property Dis- putes] 156–74(Jacques de Werra ed.,2010).
56 See generallyNelson Holzner, Die Objektive Schiedsfa¨ higkeit von Immaterialgu¨ terrechtsstreitigkeiten (2001); Julian D. M. Lew,Final Report on Intellectual Property Disputes and Arbitration,9 ICC Int‘l Ct. of Arb.
Bull., 41–45 (1998); Stefan Liniger, Immaterialgu¨ terrechtliche Streitigkeiten vor Internationalen Schiedsgerichten mit Sitz in der Schweiz(2002).
57 SeeHanotiau,supranote55, for a detailed comparative overview of the issue;see alsothe dissenting opinion inScherk v. Alberto-Culver Co.,417US506,527(1974), which objected to the submission to arbitration of securities regulation claims and made the distinction between these non-arbitrable claims and trademark disputes that could be arbitrable (“There has been much support for arbitration of disputes; and it may be the superior way of settling some disagree- ments. If A and B were quarreling over a trade-mark and there was an arbitration clause in the contract, the policy of Congress in implementing the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as it did in9U.S.C. §201et seq., would prevail”).
58 The liberal Swiss arbitration regime, which is regulated under Chapter XII of the Swiss Act on Private International Law of Dec.18,1987, is a good example.SeeFrançois Dessemontet,Arbitration of Intellectual Property Rights and Licensing Contracts,inEnforcement of Arbitration Agreements and International Arbitration Awards:
The New York Convention in Practice 556(Emmanuel Gaillard & Domenico di Pietro eds.,2008).
59 See Anna P. Mantakou, Arbitrability and Intellectual Property Disputes, in Arbitrability: International &
Comparative Perspectives 263,266–67(Loukas A. Mistelis & Stavros L. Brekoulakis eds.,2009).
60The positions differ from one country to the other (whereby the position of Swiss law is very liberal in the sense that the validity of national industrial property rights can be decided by arbitral tribunals), for an analysis,seeHanotiau, supranote55.
It should, in any event, be emphasized from a practical perspective that in spite of its dogmatic interest, the concerns resulting from the risk of lack of objective arbitrability of IP disputes do not arise frequently in IP arbitration cases.61
If the validity of the trademark is not at stake, other types of disputes such as about the ownership, the transfer and/or the infringement of trademarks (for instance in the context of trademark coexistence agreements), are generally considered to be objectively arbitrable.62
2 Consent of the Parties to Submit to Arbitration: The Scope of the Arbitration Clause
“[A]rbitration is a creature of contract.”63On this basis, the consent of the parties to submit to arbitration is a key condition to submit a dispute to arbitration. This general principle is of particular importance for trademark (and other intellectual property) arbitration because the risk is that the agreement of the parties to submit a dispute to arbitration (generally in an arbitration clause) may not cover trademark disputes (see Section III.B.2.i). This risk can result from the sometimes misguided desire of the parties to exclude certain types of disputes from the scope of the arbitration clauses by way of carve-out clauses. Parties sometimes do it for IP disputes that shall consequently remain outside of the scope of the arbitration clause and thus be non- arbitrable, which may be complex to handle (see Section III.B.2.ii).
( i ) s c o pe o f t h e a rb i t ra t i o n c l a u s e s It is critical to carefully draft the relevant arbitra- tion clauses so these clauses are effective. It is important the clause encompasses not only classical contractual disputes and contractual claims64but also covers non-contractual disputes, such as disputes about the relevant trademark (or other intellectual property rights).65
61 Defining which law shall govern this issue is complex,seeTrevor Cook & Alejandro Garcia, International Intellectual Property Arbitration (Arbitration in Context Series), ch.4at48seq. (2010); for a recent and interesting discussion of this issue under Indian law,seeSaniya Mirani & Mihika Poddar,Arbitrability of IP Disputes in India–A Blanket Bar?,Kluwer Arbitration Blog(Mar.9,2019),http://arbitrationblog.kluwerarbitration.com/
2019/03/09/arbitrability-of-ip-disputes-in-india-a-blanket-bar/.
62 SeeAndrea Mondini & Raphael Meier,Patentübertragungsklagen vor Internationalen Schiedsgerichten mit Sitz in der Schweiz und die Aussetzung des Patenterteilungsverfahrens,5 sic! 289(2015).
63 Steelworkersv.Am. Mfg. Co.,363US564,569(1960).
64SeeAlexander Peukert,Contractual Jurisdiction Clauses and Intellectual Property,in24 Intell. Prop. & Private Int’l L. 55,57(Josef Drexl & Annette Kur eds.,2005), for a similar issue with respect to the drafting of choice of jurisdiction clauses; for a case discussing the scope of a choice of court clause (in a dispute involving contractual claims and non-contractual–i.e. copyright infringement–claims),see Phillipsv.Audio Active Ltd.,494F.3d378(2nd Cir.2007); it should also be noted that the trend supporting a growing freedom of parties to choose a court (beyond IP disputes) is confirmed by the case law of the ECJ,seeCase C-352/13,Cartel Damages Claims (CDC) Hydrogen Peroxide SAv.Akzo Nobel NV et al., EURLex62013CJ0352(admitting the validity of choice of clause provisions under art.23(1) of Regulation No.44/2001for actions for damages for an infringement of art.101TFEU and art.53of the Agreement on the European Economic Area of May2,1992, in contracts for the supply of goods, even if the effect thereof is a derogation from the rules on international jurisdiction provided for in art.5(3) and/or art.6(1) of that regulation, provided that those clauses refer to disputes concerning liability incurred as a result of an infringement of competition law).
65 See, e.g.,Rhône-Poulenc Spécialités Chimiquesv.SCM Corp.,769F.2d1569(Fed. Cir.1985) (interpreting the scope of an arbitration clause). In the case at hand, the arbitration clause provided that“[a]ny controversy or claim arising out of or relating to this Agreement or the breach thereof, shall, unless amicably adjusted otherwise, be settled by arbitration in Florida in accordance with the rules of the International Chamber of Commerce.”Id.at1571. The Federal Circuit determined that “[a]lthough the dispute involves claim interpretation, it arises out of the agreement. . .[and] hold that the determination of the scope and infringement of the’485patent are the quintessence of the agreement and that the parties intended such central determinations to be included within the scope of its broad arbitration clause.”Id.at1572;see also Simula, Inc.v.Autoliv, Inc.,175F.3d716,720–21,723(9th Cir.1999) (finding the nondisclosure of trade secrets to be a key part of the relevant agreements and therefore subjecting all claims“arising in connection with”those agreements to arbitration); for a recent example about the scope of an
While this principle sounds simple (or even simplistic), case law confirms this is not always put in practice. It is indeed (unfortunately) not uncommon that disputes arise about the scope of the jurisdictional power of an arbitral tribunal when the arbitration clause is drafted too narrowly, specifically regarding disputes arising after the termination of a trademark (or other IP) license agreement.
Parties should be wary of the risk that arbitral tribunals might be reluctant to admit their jurisdiction for post-contractual disputes relating to the infringement of the previously licensed intellectual property rights on the ground that the arbitration clause would be limited to contractual claims. This was decided in International Chamber of Commerce (ICC) case 4491,66 where the sole arbitrator held “the Plaintiff’s claims for damages and injunctive relief after the termination of the license agreement are not within the scope of the arbitration provisions of the licensing agreement,”67noting the arbitration clause had a somewhat unusual wording.68
This confirms the tremendous importance of taking all the required measures to avoid, or at least to minimize, the risks of diverging interpretations of the scope of arbitration clauses, which frequently materialize in international intellectual property-related transactions. This is shown by the high-profile dispute between a US group (AMSC) and its former Chinese partner and client (Sinovel), which was ultimately submitted to the Chinese Supreme People’s Court. This dispute raised contractual and intellectual property infringement issues (that is, infringement of copyright on computer source code for wind turbines) and led to various parallel judicial and arbitral proceedings in China. The Chinese Supreme Court held the non-contractual claims for copyright infringement were not covered by the relevant arbitration clause and were thus to be submitted to Chinese courts, and not to the Beijing Arbitration Commission as claimed by Sinovel.69
This case confirms that the jurisdictional interactions and the risks of conflicts between courts and arbitral tribunals can be complex and that courts and arbitral tribunals should work in a mutually supportive manner as a matter of principle.
( i i ) i n t e l l e c t u a l p r o p e r t y c a r v e - o u t c l a u s e s Parties to an intellectual property (and specifically a trademark) license agreement may be tempted to include sophisticated dispute resolution clauses in their agreement, under which they would carve out certain types of disputes from the scope of the arbitration clause in“intellectual property carve out”70provi- sions.71This can lead to intricate difficulties when a dispute arises between the parties since it is frequently complicated to distinguish intellectual property claims (excluded from the scope of the arbitration clause) from contractual claims (covered by the arbitration clause). This lesson
arbitration clause contained in a settlement agreement that followed trademark infringement proceedings,see Zetor N. Am., Inc.v.Rozeboom,861F.3 807(8th Cir.2017).
66As resulting from the excerpts of the award published in theJournal of International Arbitration, vol.75(1985).
67Id.at76.
68Id.at76, stating that“the arbitrator found that the matters to be arbitrated under the licensing agreement are‘possible disagreements between the (Plaintiff ) and (the Defendant)’[sic].”
69For a comment of the dispute,seeArthur Dong& Meng Li,Is an Infringement Claim within the Scope of Arbitration Clause under Laws of PRC?,Kluwer Arbitration Blog(May29,2014),http://kluwerarbitrationblog.com/blog/2014/ 05/29/is-an-infringement-claim-within-the-scope-of-arbitration-clause-under-laws-of-prc/.
70As formulated by the District Court,Oracle Am., Inc.v.Myriad Group AG, No. C-10-05604SBA,2011WL3862027,
*20(ND Cal., Sept.1,2011).
71 Carve-out clauses can (of course) arise in non-IP disputes and can lead to complex challenges,see, e.g.,Lombard N. Cent. PLCv. GATX Corp.[2012] EWHC1067(Comm) (UK).
