What are the options for alternative dispute resolution (ADR) in patent cases? Are they commonly used? Are there any mandatory ADR provisions in patent cases?
The Federal Court of Australia may order mediation of IP disputes. The majority of court ordered mediations are conducted by Judicial Registrars who are trained and accredited by the Court. While it is possible to oppose mediation, if it is ordered by the Court, the parties must attend.
Arbitration is possible but rare in patent infringement matters. The main reason for this is that invalidity may not be raised as a defense with erga omnes effect. In addition, a technical lay judge is part of the deciding court, so the judges are typically technically qualified.
There is no mandatory ADR in patent cases and it is not commonly used in Brazil.
The most commonly used ADR procedures include negotiation, mediation, mediation-arbitration and binding or non-binding arbitration.
ADR requirements will depend on the governing courts system. The Federal Court does not presently require mandatory ADR in all patent cases, however ADR may be ordered by the Court or elected by the parties.
Other than litigation, the parties involved in the dispute can choose mediation or arbitration, but these options are not mandatory and commonly used.
The parties can voluntarily submit to mediation or arbitration. The Czech Arbitration Court is a body capable of handling patent related disputes.
The court can order mandatory mediation, however, this is not common in patent cases.
There is no mandatory ADR provisions in patent cases, but Courts are increasingly in favour of alternative dispute resolution and always suggest mediation on appeal.
Prior to or during patent litigation, the parties can agree on ADR rules. Further, German law provides for some rules of mediation. Such mediation is often even suggested by the courts in the course of the litigation proceedings.
However, ADR is only used in very exceptional cases. Basic reasons for ADR not being common in patent disputes is that German proceedings are comparatively cheap and quick.
In any case ADR is not mandatory.
Under the Greek Code of Civil Procedure, parties involved in infringement cases have the option of seeking an out-of-court settlement. Mediation and arbitration are also available means for resolving Intellectual Property rights disputes. Rules on arbitrations are provided for by arts. 867 et seq. of the Greek Code of Civil Procedure. However, neither mediation nor arbitration has been sufficiently tested in Greece. Recent Law 4512/2018 initiated compulsory use of mediation in legal disputes arising from patent, trademark and industrial design infringements. However, application of said law has been suspended. Interestingly, a recent decision of the of the Administrative Plenary of the Greek Supreme Court (Areios Pagos) has considered compulsory mediation in Civil procedures as contravening the provisions of the Hellenic Constitution. It remains to be seen how the new rules will be implemented and in which way this new practice will change the landscape in IP litigation.
Mediation is governed by the Arbitration and Conciliation Act, 1996 and by the Code of Civil Procedure, 1908. The mediation process can be initiated in the following ways:
- Pre-litigation mediation/ Non-suit mediation- A request for pre-litigation mediation can be filed by either party or it may be filed jointly, before institution of a law-suit. Mediation proceedings are confidential and a settlement agreement reached during mediation is also confidential, except where its disclosure is necessary for its implementation and enforcement. Proposals exchanged are “without prejudice”, unless parties agree otherwise.
- Mediation during the pendency of a lawsuit: The court may, on its own and with the consent of the parties, or at the request of parties, refer a dispute to mediation while the suit is pending under Section 89 of the Code of Civil Procedure Code, 1908. If the parties reach a settlement during ongoing litigation mediation, then the court passes an order recording the settlement.
The Arbitration Act 2010 gives effect to the UNCITRAL Model law on International Commercial Arbitration and where the parties agree to arbitration any awards made are enforceable and binding on the parties in accordance with this model law.
The parties can agree to resolve patent disputes through ADR. In addition, the court may of its own motion, or on application by any party to a dispute, adjourn proceedings in order to give the parties time to resolve the dispute by ADR.
Under section 14 of the Mediation Act 2017 solicitors are required to advise clients as to the benefits of ADR as an alternative to litigation, prior to the issuing of proceedings. When commencing proceedings, the solicitor is obliged to confirm by statutory declaration that he/she has complied with this requirement.
There are no mandatory pre-action steps for commencing patent action (for instance, issuance of a cease and desist letter to the infringer is not compulsory).
The period of limitations for commencing a patent infringement action is seven years. However, If the patentee were not aware of the infringement, for reasons beyond his reasonable control, the seven-year limitation period will only start on the day on which the infringement has become known to the patentee. Moreover, in case of a continuing infringement, only the ‘part’ of the infringement which took place prior to the seven-year period will be subject to limitations. The cause of action itself will not be lost. Thus, the patentee will be entitled to an injunction restraining prospective infringements and to damages with regard to the ‘part’ of the infringement which is not subject to limitations.
There are no limitation periods with regard to validity challenges.
Arbitration proceedings are possible in theory, although some debate has been going on as to whether patent validity can be devolved to arbitrators. This debate has little relevance in practice. As far as Italy is concerned, arbitration proceedings are far from common in patent matters.
The Japan Intellectual Property Arbitration Center (https://www.ip-adr.gr.jp/eng/), a private organization for resolving disputes in the field of intellectual property, provides mediation and arbitration services concerning intellectual property. It is rare for arbitration to be employed for a dispute between domestic Japanese corporations, whereas arbitration may be employed for international disputes. Further, intellectual property mediation proceedings by the intellectual property divisions of the Tokyo District Court and the Osaka District Court are also available. For such proceedings, new operations came into effect in October 2019, which involved utilizing television conferences with the aim of, for example, settling disputes within a minimum period of around three months by way of closed discussions facilitated by judges, etc.
ADR is never used in patent disputes relating to infringement and invalidity. There are no mandatory ADR provisions in patent cases. An infringement dispute may be settled by arbitration. This is however not possible for a dispute regarding the validity of a patent. Since invalidity often is used as defence against infringement it is for practical purposes not an option to use arbitration in infringement disputes.
There are several options for ADRs, including arbitration and mediation, the latter either within the framework of a pending litigation or outside of it – as a separate proceeding. ADRs are hardly ever used in Poland, though, mainly because of an attractive preliminary injunction system that encourages patent holders to initiate regular legal action instead of reaching to ADR.
The parties are entitled to seek alternative means of dispute resolution such as mediation or voluntary arbitration. However, this route is almost never used in relation to patent disputes. Yet often the parties manage to reach an alternative solution to litigation by executing an agreement either before or during pending proceedings.
Article 139 of the Arbitration Procedural Code provides that the parties of a court case may settle the case making a peaceful agreement to be approved by the court (in-court settlement), or to use the services of professional mediator. The Court must assist parties to find amicable solution. The parties of an infringement dispute can transfer the case for consideration of an arbitrage, or can also settle the procedure by an out-of-court agreement (resulting in recalling the suit). All these options are fully available to the patent infringement case pending before the court.
A patent validity case is much more limited in options to settle, since one of the parties in such proceedings is a governmental agency - the Russian Patent Office, which executes the administrative powers. Meanwhile, out-of-court settlements between the patent owner and opposing party may result in recalling of a pending action by one of the parties, or even be a ground for cancellation of RU PTO decision by the IP Court, if the patent validity is a circumstance of settlement.
After a patentee files a infringement proceeding with the IP Court, the IP Court will hold a non-mandatory mediation hearing, inviting both parties to explore possibility of settling the matter outside the court rooms. But most cases could not be settled at this stage and go further to the next stage.
Taiwan arbitration law does not preclude patent litigation from being resolved by an arbitration proceeding. In practice, however, arbitration is rarely used for patent litigation.
The IP&IT Court and the Department of Intellectual Property (under the Ministry of Commerce) each provide mediation services for dealing with intellectual property disputes. However, ADR is not commonly used in the context of patent disputes in Thailand.
The parties are always entitled to settle the issue amicably at any stage of the proceedings.
As to the arbitration, it is widely accepted that the disputes regarding the invalidation of a patent cannot be subject to arbitration since the results of ADR are only binding for the parties but such dispute relates to the official registry and the TPTO is not a party of the invalidation action.
On the other hand, it is accepted that declaratory action for non-infringement or infringement actions may be subject to ADR. However, ADR is still not as effective as the court proceedings.
Moreover, Turkey has recently adopted new legislation requiring application to mandatory mediation for monetary claims arising from trade law disputes, including intellectual property disputes. With the new amendments, mediation became a prerequisite for filing lawsuits concerning commercial disputes with monetary claims. Consequently, if a lawsuit is brought before the court without applying to mediation first, the case will be dismissed ex-officio on procedural grounds without any further examination of the merits of the case. Further to that, during the period between the application to the mediation bureau and the preparation of the final report by the mediator, the statute of limitations and lapse of time will be suspended.
Parties to litigation in the UK are encouraged to comply with the PD on Pre-Action Conduct and Protocols, as the court, when making case management directions and orders as to costs and interest on sums due, will take into account the failure by either party to engage in pre-action conduct. Whilst there are no mandatory provisions specific to patent cases, the PD states generally that litigation should be a last resort and that parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.
Parties are expected to exchange sufficient information to understand the other’s position and to attempt to settle the issues between them without recourse to litigation. They are therefore encouraged to consider ADR at the outset, however they are also encouraged to consider ADR and settlement generally throughout the litigation timetable.
The Practice Direction on Pre-Action Conduct and Protocols explicitly refers to mediation, arbitration, early neutral evaluation and Ombudsmen schemes as ADR options available for resolution of disputes. Further forms of ADR are set out in the ADR guidebook known as the Jackson ADR Handbook. In practice, while parties regularly settle patent disputes prior to trial as a result of negotiation, at present ADR mechanisms such as mediation and arbitration are not commonly used in patent cases. This may change, however, in respect of certain types of patent suit, such as in the increasing number of standard essential patent (“SEP”) cases that are now being litigated. For example, there now exist several specialised FRAND ADR centres (such as at WIPO), where parties are encouraged to mediate and/or arbitrate their FRAND disputes in a central forum.
Many courts require parties to engage in non-binding mediation at least once before a patent case goes to trial. Binding arbitration is an alternative to mediation, and is utilized in situations where, for example, the parties’ contracts require arbitration as a mechanism to resolve disputes.
Generally, the concerned parties can resort to arbitration or mediation. However, these methods are available only if both parties have contractually agreed to refer the matter to these methods.
Vietnam is currently drafting a law on mediation before the court. Once passed, the law is expected to reduce the backlog of suits at courts.
While parties are advised to consider ADR options including arbitration or mediation to resolve their disputes, there are no mandatory ADR provisions in Singapore relating to the resolution of disputes concerning intellectual property rights.
There may have been some apprehension with arbitrating disputes concerning intellectual property rights in Singapore. It may have been previously thought that such disputes may be non-arbitrable given that certain intellectual property rights (including patent rights) require registration. Further uncertainty arose from whether an arbitral tribunal’s award is binding over IPOS.
However, the IPDR Bill clarifies that disputes concerning intellectual property rights, including patent disputes, are arbitrable in Singapore. The Bill provides that disputes concerning intellectual property rights, including patent rights, are arbitrable regardless of whether such rights are registered or whether they subsist in Singapore. The Bill further provides that an arbitral award on IP disputes only takes effect on the parties to the arbitration and not on third parties.
Parties may also choose to submit their disputes to mediation. In particular, under the Enhanced Mediation Promotion Scheme established by IPOS, parties who choose mediation as an alternative to a hearing may receive funding towards mediation costs. Mediation providers which the parties can choose include the WIPO Arbitration and Mediation Center’s Singapore Office, the Singapore Mediation Centre and the Singapore International Mediation Centre.