Young ICCA – WIPO Seminar on IP Arbitration

This Kat has vivid memories of when he ceased to receive invitations to Young EPLAW’s (legendary) annual gatherings because he had reached the club’s age limit (36 years). Fortunately for him, not all professional associations define “young” in the same terms (nor do they enforce the age limit as strictly), so he happily braved chilly weather to attend the Seminar on IP Arbitration jointly organized by the “young” section of the International Council for Commercial Arbitration (Young ICCA) and WIPO on 30 January 2019 at the WIPO headquarters in Geneva. The Seminar was a joint effort by Young ICCA’s Nhu-Hoang Tran Thang, WIPO’s Erik Wilbers and Ignacio de Castro and Alex McLin of the Swiss Arbitration Association (ASA). 

Geneva in winter

The event kicked off with a keynote presentation by Stavros Brekoulakis (Queen Mary University). Prof. Brekoulakis made the point that while IP disputes are rarely on the agenda of commercial arbitration conferences, a strong case can and should be made for arbitrating IP, in particular in the pharmaceutical industry and for disputes involving standard-essential patents (SEP).

Prof. Brekoulakis cited three main reasons for choosing arbitration over national courts in the field of pharmaceutical patents: speed, expertise and enforcement. When a right has a theoretical shelf-life of 20 years, of which the development and authorization process can take the bigger part, speedy decisions are of essence. Contrary to proceedings in national courts, parties to arbitration have some liberty to choose arbitrators based on their technical expertise or industry background, an important asset when the dispute goes into the heart of complex chemistry or when assessing infringement by equivalence. Finally, in disputes spanning many countries, one single award provides for more legal certainty than a patchwork of potentially contradictory decisions by national courts.

With regard to standard essential patents, the complex question of whether given licensing conditions are indeed “fair, reasonable and non-discriminatory” (or “FRAND”) involves complex and interdisciplinary rate-setting that a national court may not be ideally equipped to deal with. Here too, choosing the right expertise on the panel of arbitrators may well guarantee better results. Prof. Brekoulakis also made reference to the WIPO Arbitration and Mediation Center’s specific alternative dispute resolution framework for FRAND disputes, which in particular excludes interim injunctions – an important detail for prospective SEP licensees. Prof. Brekoulakis concluded that if, in the words of arbitration legend Gary Born, “winter is coming” to commercial arbitration, it is likely more the beginning of spring for intellectual property arbitration. 

Arbitration of Patent Disputes

The first panel was dedicated to the arbitration of patent disputes. Under the moderation of Heike Wollgast (WIPO), Philipp Groz (Schellenberg Wittmer) outlined the perfect arbitrator (spoiler alert: she does not exist) and the pros and cons of requesting interim relief from the arbitral tribunal, an emergency arbitrator or the national court (in spite of an arbitration clause). He concluded his presentation by illustrating the importance of strategy and choosing the right arbitrators and experts by providing a real-life example of a patent license arbitration in the medical device field.

Dorothee Schramm (Sidley Austin) completed the picture by outlining the differences between national jurisdictions in recognizing the arbitrability of patent disputes, especially when it comes to allowing arbitrators to weigh in on the validity of patents. If some of the most liberal jurisdictions (such as Switzerland and Belgium) go as far as registering invalidity awards with the national patent register, most jurisdictions only recognize inter partes effect of validity awards or sometimes declare the issue to be not arbitrable from the outset. Whether a favorable award will actually be enforceable in all relevant jurisdictions is therefore an issue that should be considered before even starting arbitration. 

Arbitration of Copyright and IT Disputes

The following panel, addressing arbitration of copyright and IT disputes, was moderated by WIPO’s Leandro Toscano. Alejandro Garcia (Clyde & Co.) focused on (non-ICT) copyright arbitration with a particular regard to issues in the audiovisual media industry. As a practical matter, when works are being created by multiple persons acting on a collaborative platform (which seems to be more often than not how animated movies are made these days), the risk of being shut out of the platform by your co-authors and not having access to evidence to even bring a dispute is very real. The IBA Rules on Taking of Evidence and similar sets of rules used in international arbitration seem ill-equipped to deal with such situations that require some creativity by the arbitral tribunal.

Kathleen Paisley’s (Ambos NBGO) presentation focused on ICT disputes. The original (and highly entertaining) talk made a strong case for mediation in general and the use of mediation-then-arbitration clauses in ICT agreements in particular. As information technology is especially short-lived, the adage “a bad settlement is better than a good lawsuit” proves especially true in this field. Arbitration clauses should be kept as simple as possible and no one should depart from the standard clauses proposed by the big arbitration institutions without having a very good reason. Finally, as data is abundant, confidential and complex, parties should be advised to explicitly exclude US-style discovery whenever the seat of arbitration is in the United States. 

Waiting for spring to begin
Arbitration of Trademark and Commercial Disputes

Under the moderation of Thomas Widmer (Lalive), the last panel focused on trademark issues arising in the realm of distribution and franchise agreements. Pascal Hollander (Hanotiau & van den Berg) presented the often underappreciated problem of arbitrability in distribution agreements. Arbitrability can in fact be doubtful whenever there is a risk that the arbitral tribunal will not apply mandatory legal provisions regarding the protection of the distributor (such as the compensation upon termination contemplated in Art. 17 of the Commercial Agent Directive or corresponding national statutes). Different European jurisdictions have handed down contradictory decisions on whether this leads to the dispute being non-arbitrable.

Isabelle Michou (Quinn Emanuel) closed the seminar with a talk on IP issues in investor-state arbitrations. Trademarks have been recognized as “investment” within the meaning of various bilateral investment treaties, most famously in various arbitral proceedings on plain packaging statutes for tobacco products. We have reported on the Australian case, the CJEU decision and covered the topic more generally here and here. Even though IP remains a niche issue in investor-state arbitration, past cases show that contract disputes can sometimes evolve into treaty disputes and that treaty arbitration can become an indirect remedy for (lost) commercial arbitration.

Young ICCA – WIPO Seminar on IP Arbitration  Young ICCA – WIPO Seminar on IP Arbitration Reviewed by Peter Ling on Friday, February 01, 2019 Rating: 5

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