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Arbitration And Alternative Dispute Resolution Mechanisms In IP Regime (By-Swati)

Arbitration And Alternative Dispute Resolution Mechanisms In IP Regime

Authored By- Swati


As global commerce expands, the volume of cross-border commercial and intellectual property disputes has increased significantly. Contract, business, and intellectual property disputes are protected by laws that vary by region. The question of the proper forum to handle international litigation between parties located in different countries and across cultural divides naturally arises. Alternative Dispute Resolution (ADR) enables interested parties to consider alternatives to traditional judicial intervention in global commercial and intellectual property disputes.

This paper investigates alternative dispute resolution (ADR) procedures for resolving intellectual property (IP) disputes, with a focus on developing countries interests. ADR refers to a variety of methods for resolving disputes outside of formal court procedures. The formality, party control, and finality of these options vary. Furthermore, each option provides benefits that are specific to the circumstances. This paper focuses on two prominent ADR procedures: arbitration and mediation.

Keywords: Intellectual property disputes and Alternative Dispute Resolution


Developing countries are increasingly entering into the IP market, and multiparty, multinational intellectual property partnerships are becoming more common and even vital in the process of economic and socio development of the nation. Exchanging of academic, business, technological, creative and traditional knowledge is developing new transactions involving these relationships. However, rights which are protected also tend to increase the probability of disputes related to that right.[1] While parties strive to decrease the incidence of disputes by carefully managing their intellectual property rights and obligations, disagreements are unavoidable. When they do, it can have a detrimental impact on both sides. Both Parties which are involved in IP trades therefore, should be cognizant of dispute-resolution approaches and have a specific dispute-prevention and resolution policy.[2] Dispute-resolution measures often selected innocently even before when a relationship begins, and the actual dispute arises.[3] Often the dispute-resolution clauses will therefore have been inserted into contracts by parties no longer involved in the issues. Besides, clauses frequently are inserted with an incomplete awareness of their specific implications in a dispute-resolution situation.

“The most common way of settling the dispute is litigation, which is a formal and a public process before national courts. Litigation, particularly in international disputes involves risk, time-consuming, and expensive, with seemingly unlimited legal fees and management time. Also, a dispute taking place in multiple jurisdictions may result in different outcomes depending upon which court is deciding that particular case.”[4]


 1. Development of Disputes Resolution in Intellectual Property(IP)

Started in 19th century

“The practice of alternative dispute resolution in the dispute of intellectual property dated-back to the nineteenth century. In 1834 royal ordinance in Sweden made mandatory arbitration for patent recording oppositions and legal practitioners in the United Kingdom (U.K) also recommended arbitration for patent disputes in early 1855.

In twentieth century, arbitration was used by the United States for claims arising from design registration, and also for the patents involves in the aircraft industrial disputes.”[5] “Regardless of this early discussion, ADR was not widely popular for intellectual property disputes even up till the late 20th century.” [6]

Arbitration and Mediation Center Under WIPO

“The World Intellectual Property Organization (WIPO) is an agency of the United Nations which was founded in 1967, with the aim of protecting intellectual property through co-operation and promotion among States. In this greater framework of UN, the WIPO Arbitration and Mediation Center (WIPO Center) which was established in 1994 is an unprejudiced and also independent and non-profit dispute resolution working framework. It is one of the kind only international provider of specialized ADR services for intellectual property disputes. It is also the leading institution in the administrating the dispute on Internet domain name.” [7]

“The procedure of WIPO Center administers mediation, arbitration and expedited arbitration determined under the WIPO Rules.[8] Till 2015,

the WIPO Center has administered around 400 cases which values reaching from 20,000 to several hundred million USD. “ADR services that WIPO provide have been used by trades of all shapes, sizes and research organizations from more than sixty countries across the world. It has also developed perfect dispute resolution procedures for specific industries, and also provides training programs for mediators and arbitrators.

Not only that, the WIPO Center also established the joint dispute resolution procedures throw IPOs (Initial public offering) in country likes Brazil, Colombia, Philippines, Singapore and The Republic of Korea to expedite the use of Alternative Dispute Resolution. WIPO Center stands at the forefront of ADR for intelectual pr0perty disputes with its extensive netw0rk in IP and ADR experts and WIPO’s international impartiality.””

 2. Methodologies To ADR
The rewards or the prices which are participated by the dissimilar ADR courses are putatively have different characteristics to each of them. In personalized, the position of control that the parties have over the decision- making procedure and the ultimate outgrowth will significantly vary across processes. Also the different processes can be clubbed together.[9]

Generally, ADR processes fall into this three main categories:

Dispute Resolution on the basis on Assistance
“In mediation, the mediator’s aim is to only assist the parties in finding a solution to their dispute. The mediator cannot enforce a decision. The parties have complete control over the final consequence, and also substantial saying in the mediation process.

In assistance-based ADR procedure the party’s h0ld the topmost control over the conclusion- forming process and the final outcome of dispute. The processes are useful when the parties wish to create an outcome that is tailored to their interests.” [10]

Resolution on Recommendation bases
“A recommendation-based ADR process gives parties less control over the decision-making process and the final outcome than assistance-based ADR process. The simple example of recommendation-based process is expert determination.

In this, parties submit a specific issue to an expert, who renders a decision on the issues submitive. The parties can agree to accept the determination of neutral or expert as a final and binding decision, or take it as a non-binding recommendation.” [11] Recommendation-based pr0cesses are used in issues likes of royalty, valuation of intellectual property assets and the interpretation of patent claims.

Adjudication or Court room decision 
“The parties have limited control over the decision-making process and the final outcome in an adjudication-based ADR process out of the hands of parties. If we need to assess the difference, parties in litigation have little or sometimes no say in the resolution and decision-making process and the final outcome, because both of which are determined by the court of law.” [12] “In arbitration, although parties may have very little to say in the decision-making process, matters which deals with the scope of the dispute submitted to arbitration or procedural matters, but at the end they must accept the final decision which is made by the arbitral tribunal. Adjudication processes are useful when parties are unwilling or unable to negotiate a settlement.”[13]

 3. Benefits Of ADR
Jurisdictional Neutrality
Despite the operation of international treaties that harmonize the subsistence or registration of intellectual property rights are territorial in nature which exist as separate pieces of property under distinct domestic laws in multiple jurisdictions, including copyright, trademarks and patents across signatory countries. The rise in cross-border trade that also lead to the international exploitation of intellectual property affecting the disputes involving across multiple jurisdictions of  intellectual property. [14]

“Involvement multiple jurisdictions under IP litigation disputes lead to take separate proceedings, in those jurisdictions to address or enforcement intellectual property rights existing under them. Effect of this lead to complex conflict of law. ADoR allows multiple issues and rights arising under different jurisdictions to be addressed in a single process, such as arbitration and mediation, which leads to a binding award or settlement.” [15] When the parties are litigated in the same country and are in cross-border disputes, alternative dispute resolution is very useful as it value jurisdictional neutrality. ADR processes enable such jurisdictional impartiality over domestic courts because they promise a neutral forum for dispute resolution. Parties to the dispute can choose an ADR neutral as neutral law to govern the dispute, and agree on a neutral position. ADR rules, set by the WIPO Center, are also unbiased to the law, language and culture of the parties. Jurisdictional neutrality gives ADR processes a clear advantage over litigation for cross-border intellectual property disputes.

Independent Specialized Expertise
“Not every country has specialized intellectual property courts or judges as IP disputes can have complex legal issues which involve highly technical-scientific matters. Thus, when judges and juries absence of necessary experience and expertise to fully understand the complex accurate,

technical and legal issues at stake, considerable time and resources may be required to present the relevant tools and laws to them.

ADR processes allow parties to choose the fair expert with expert capability to act as a judgment-maker or a facilitator. Expert neutrals can employ their knowledge and moxie to give command during the ADR process, and to draft a effective resolution for the disagreement. When skillful experts are allotted, the parties offer benefits that would be otherwise unavailable through litigation.”[16]

Simplicity; Flexibility
When opposed to litigation, ADR proceedings are procedurally simple and clear and adaptable. ADR process gives parties the power to agree on how the procedures will be conducted and to choose suitable procedural norms. Parties can, for example, limit the amount of survey evidence permitted in trademark disputes and even choose whether or not particular rules of evidence should apply.” [17]

“ADR proceedings can also provide a simple framework possible for settling legally complicated intellectual property issues. Mediation, for instance, focuses only on the parties intentions and interests rather than their legal standing. This allows the parties to reach a suitable agreement as they focus on their shared interests rather than legality of the issues. Even though this planner does not erase the legal intricacies of the dispute, it can give appropriate assistance and support if the mediator has relevant legal and/or subject matter expertise and experience.”[18]

Cost Savings
Litigation over intellectual property can be an expensive affair, especially when it comes to foreign litigation and appeals. Many individuals or small businesses can not exercise their rights or defend themselves in intellectual property claims or against larger organizations as there is high cost of

litigation in some jurisdiction. [19]

ADR offers a reasonable and accessible path for parties to resolve their disputes as there are various advantages of ADR providing major cost savings, as parties can avoid expensive litigation reception and abroad, using expert neutrals that can dig straight into multifaceted property issues, and give out complicated and formalistic procedures. The time savings provided by ADR naturally translate into reduction in expenses also. [20]

Time Savings
“Intellectual property rights are often limited duration, such as patents, it may expire before a final judgment can be rendered. Market forces influence the profitable lifespans of intellectual property rights in all circumstances: patented products can be quickly rendered, and trademarks can be time-sensitive if they represent products with short life cycles trademarks can be time-delicate if they represent products with short life cycles.” [21]

One of the advantages of ADR is that it is substantial time savings. The process of ADR provide liberty parties to avoid 0verloaded courts and duplicative litigation at home, as well as other jurisdictions. Also expert neutrals do not require time-overriding and that flexibility and simplicity allow disputes to be swiftly resolved.

Privacy is frequently plays a dominant importance in intellectual property cases. As a result, parties may object to legal proceedings where trade secrets or exclusive information, are involved. The litigation and discovery process may lead to the public disclosure of such sensitive information, which could put irreparably harm the business prospects of the parties.

Confidentiality is again an important benefit of ADR because it allows parties to effectively control the disclosure and access of sensitive information. Exclusive information may be kept confidential by agreement between the parties and the arbitrator may issue a protection order to prevent the parties from accessing confidential documents.

This is helpful for parties who want to protect their name and business relationships.[22]

Diverse Solutions
Proceedings usually provide the parties with a limited choice of specific remedies. The parties may seek damages, injunctive relief, and other such remedies, but such solutions are usually useless and based on strict legal considerations or at the discretion of the court. Unlike mediation the parties do not have the freedom of choice to develop their own solutions or direct the court to make decisions within specific parameters.

In the arbitral proceedings, the content of the award is decided by the arbitral tribunal and the parties may agree on the scope and restrictions of the arbitration. For example, the parties may agree to limit the amount of arbitral award, and the arbitral tribunal may, at the request of the arbitral tribunal, specify the duration of the arbitral award. In addition to the final arbitral award, the parties may apply to the arbitral tribunal for provisional legal protection in the form of an injunction or cost guarantee. [23]

 4. The Arbitration Option
Arbitration procedure

The parties must sign an agreement to submit their existing or future disputes to arbitration. Such agreement forms the basis of the arbitration agreement. This shows the real will of the parties to settle the dispute through arbitration and limits the parties' right to bring the dispute to court.

Arbitration can be conducted in a variety of ways and it is up to the parties and the arbitrator(s) to decide how to proceed with the proceedings, subject to any applicable rules and public policy requirements. Parties may agree on the number of arbitrators, type of arbitration (ad hoc or institutional), place of arbitration, language of arbitral proceedings, and the applicable substantive law.[24]

Role of the arbitral tribunal

The arbitral tribunal works differently than a judge in a national court. Judges have the powers defined by national law. The power of the arbitral tribunal is limited to the power delegated by the parties. The arbitral tribunal may only determine disputes designated by the parties and using the powers granted by the parties through the arbitration clause and the rules adopted.[25]

Parties should, exert as much influence as possible on the establishment of the tribunal. Parties can be agreed upon the appointment of procedure, the number of arbitrators to be appointed, any needed qualifications of the arbitrators, and persons to be appointed as arbitrators.[26] When considering these factors, the parties need to balance cost and efficiency considerations with respect to the importance and complexity of the proceedings. The process of appointing an arbitral tribunal takes into account the legal, cultural and economic background of the parties.

Legal framework of arbitration

While arbitration is a private mechanism, it is not completely free from regulating by national laws. In international arbitration, different systems of law, most notably the law governing the substance of a dispute and the law governing the arbitration procedure, will typically interact. In general, parties are freedom to choose by the agreement, which laws will apply.[27]

Parties may also agree on which state laws should govern the substance of the dispute. Parties may also agree that the dispute be determined on the basis of what is just and good (ex aequo et bono).[28] In developing countries certain areas like agriculture, biotechnology and traditional knowledge, the legal system is evolving and the grounds and scope of rights and obligations can be challenged. In such cases, the ability to waive rights and resolve disputes fairly may be an attractive option.

The law applicable to the arbitration procedure (lex arbitri or arbitral law) is the law that governs the procedural framework. The arbitral law need not be the same as the law applicable to the substance of the dispute. A tribunal may, for instance, be subject to the arbitral law of Venezuela, but may be required, by party agreement, to apply Indian law to the substance of the dispute.

 5. Center Services Under The UNCITRAL Arbitration Rules
The UNCITRAL Arbitration Rules have been designed to facilitate the conduct and resolution of ad hoc arbitrations. The UNCITRAL Arbitration Rules were adopted in 1976 (revised in 2010) by UNCITRAL. Neither UNCITRAL nor any other institution plays any role in the administration of such ad hoc arbitrations. Parties can decide however to use the UNCITRAL Arbitration Rules to resolve their disputes and to make special provision to have the benefit of the Center’s institutional support, as Appointing Authority and Administering Authority.[29]

Under these specific services the Center will perform the following functions:

a) Appointment of Arbitrators

(i) Second Arbitrator in Three-Member Tribunals

Article 9(1) of the UNCITRAL Arbitration Rules state that if three arbitrators are to be appointed, each party shall appoint one arbitrator. When one party appoints an arbitrator, Article 9(2) allows the appointing authority, at that party's request, to appoint the second arbitrator in place of the other party if the other party fails to do so within the Rules' time limit. In such cases, the Centre will designate the second arbitrator without using the UNCITRAL Arbitration Rules (Article 8(2)).[30]

(ii) Sole or Presiding Arbitrator

Article 8(1) of the UNCITRAL Arbitration Rules allows the appointing authority to appoint the only arbitrator if the parties do not do so within the time limits set out in the Rules. The appointing authority may choose the presiding arbitrator if the two other arbitrators do not do so within the time frame allowed in the UNCITRAL Arbitration Rules. The Center will use the list procedure provided for in Article 8(2) of the UNCITRAL Arbitration Rules to designate a solo or presiding arbitrator unless, in accordance with the same provision, The Center uses a similar list procedure for the appointment of sole or presiding arbitrators in arbitrations administered under the WIPO Arbitration Rules.

 In the latter circumstance, the Center will appoint the sole or presiding arbitrator directly. The Center uses a similar list procedure for the appointment of sole or presiding arbitrators in arbitrations administered under the WIPO Arbitration Rules.

b) Challenges of Arbitrators

Article 12(1) of the UNCITRAL Arbitration Rules provides that an arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence. When such a challenge is contested, article 13(4) of those Rules provides for the decision on the challenge to be made by the appointing authority. A decision must similarly be taken by the appointing authority under Article 14(2) where disagreement exists as to whether an arbitrator has to be replaced. When called upon to make such a decision as appointing authority, the Center will take into account the specific circumstances of each challenge request[31].

c) Assistance in Fixing Fees of Arbitrators

Article 41(2) of the UNCITRAL Arbitration Rules provides that, in fixing its fees, the arbitral tribunal shall take into account, to the extent that it considers appropriate in the circumstances of the case, any schedule of fees that the appointing authority has issued for arbitrators in international cases that it administers. The WIPO (Expedited) Arbitration Rules contain a Schedule of Fees and Costs. In accordance with Article 41(3) of the UNCITRAL Arbitration Rules, the Center will, where a party so requests, determine the tribunal’s fees.

d) Advisory Comments Regarding Deposits

In accordance with Article 43(3) of the UNCITRAL Arbitration Rules, where a party so requests, the arbitral tribunal will consult with the Center with respect to the determination by the tribunal of the amounts of any deposits of costs or supplementary deposits of costs.[32]

 6. The Mediation Option
Arbitration is not the only means of proceeding. The parties can also choose mediation. This is a non-binding, confidential process that helps neutral mediators reach mutually satisfactory dispute resolution.

Mediation procedure

Same as arbitration, mediation also begins with the agreement of the parties to submit their existing or future disagreements to mediation. Once a dispute arises and there is an agreement to mediate, a party will initiate the process by informing the other party of the commencement of mediation. The mediation procedure is determined by the parties and mediator only.[33]

Role of the mediator

Unlike a judge or an arbitrator, a mediator does not have any power to enforce a settlement on the parties. The role of a mediator is to serve as the agent for party negotiations.[34] Mediators improve communication between the parties, help them clarify their understanding of each other's interests and concerns, examine the strengths and weaknesses of each party's legal position, and the consequences of disagreement. To help you discuss options for mutual agreement. Develop amicable solutions to their disputes.

WIPO Mediation Case Examples

A WIPO Copyright Mediation
A Dutch company has signed a copyright license with a French company and published a technical publication. The license agreement contains the WIPO arbitration clause. The licensee went bankrupt and defaulted on license-based royalties. When the licensor requested mediation, the Center appointed an intellectual property expert as the mediator after consulting with the parties and obtaining the approval of the liquidator or adjudicate appointed by the court. A settlement agreement was reached after two meetings between the parties and the mediator.


When a disagreement emerges between entities in developing nations and entities in developed countries, poor countries confront a number of obstacles. Developed-country companies will often have more financial resources and technological skills to pursue a successful dispute resolution. Because technology transfer is so intimately linked to economic growth, disagreements may elicit public outrage. Also, linguistic and cultural hurdles might obstruct efficient communication, and doubts regarding how the existing IP law can accommodate the rights asserted by emerging countries may arise.

A policy for dispute resolution can assist to alleviate these concerns. It can also bring strategic advantages and reduce the likelihood of increasing conflicts. As a result, dispute-resolution strategies should be tailored to the individual circumstances of the issue and the parties backgrounds. In an ideal world, a mechanism for reducing economic disparities between parties would be identified and implemented. Technical, commercial, legal, and social interests may need to be considered.

The paradigms of litigation, arbitration, and mediation are all extremely distinct. Parties should grasp the variations between the procedures and identify which is most relevant to the conditions of the disagreement before implementing the most appropriate dispute-resolution strategy for a future or existing dispute. Remember that going to court isn't your only choice. Arbitration or mediation may provide a long-term settlement that is acceptable to all parties.


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