Practice Area

Intellectual Property Disputes and Use of Arbitration

Author: Deshaipeta Aparna

Now a days ‘Intellectual property rights’ is one of the wide spread topic in legal world. Intellectual property right is a legal concept which deals with the creation of the minds for the recognition of exclusive rights. The Intellectual property has evolved when copyrights were brought alongside patents, trademarks, and designs under one group. Intellectual property rights are intangible and they are unable to touch and see. Intellectual property rights do not protects a physical copy; it protects the content or expression of the copy. For example, a copy right does not prevent one from reading a particular book but it will prevent from copying the content from that book and it protects the expression of the words and ideas in the book. Copyrights, Patents and Trademarks, Geographical indications, Industrial designs, Semi conductor chips and integrated circuits, and Trade secrets are different types of Intellectual property. The nature of the Intellectual Property may be territorial or international. The Intellectual property rights may be time limited or perpetual or subject to any conditions. Generally, most of the Intellectual Property Rights are creates by statutes and they exists as per the scope of legislation.

Use of Arbitration in resolving Intellectual Property Disputes:

And coming to Arbitration, it is a preferable method of resolving any type of disputes arising out of international commerce. How can we use Arbitration in resolving Intellectual Property Disputes? Generally, Intellectual Property Disputes arises when a person infringes one’s copy rights, patent rights or trade mark rights or any other kinds of Intellectual Property Rights. The Intellectual Property Disputes can also be resolved by courts. But the use of Arbitration in resolving Intellectual property disputes is quicker than by Courts and it is effective and easy to resolve by Arbitration.

The relative speed in resolving disputes is considerable advantage of using Arbitration in resolving Intellectual Property Disputes: In Intellectual Property Disputes time plays an important role. If we go for litigation in courts, the litigation may take more time than the product’s life span.  Time is crucial because Intellectual Property assets are granted for limited times and because market constraints and advancing technology will, in any event, often limits the useful life of a product.

Arbitrators may understand the subject matter of the dispute quickly: Judges may lack in technical understand of patent rights. But, arbitrators can understand the subject matter of the dispute and the flexibility of the arbitration allows the arbitrator to who lack knowledge of a specific subject to be educated quickly. For example, the arbitrators attended a four-day presentation by a computer science professor. The selection of arbitrators with technical expertise must be balanced against the need for an arbitrator with a command of the law and the process of the arbitration.

Arbitration offers confidentiality: Arbitration provides more protection and of confidential information which is the single importance in Intellectual Property Disputes. Confidentiality is provided with a well drafted Arbitration agreement in Arbitration with some potential exceptions.

Arbitration allows effective presentation of technical matters: The arbitration procedures of Intellectual property disputes are arranged in such a way that it allows the effective presentation of technical matters. Parties may agree to the admissibility of technological evidence.

Flexibility: The flexibility of arbitration allows the design of awards that are not generally available in litigation.

Though use of arbitration is effective some nations, especially developing nations refuse to allow arbitration in resolving Intellectual Property disputes and the courts of a number of nations hold that it would be against the public interest to allow the resolution of certain types of disputes through arbitration. The prohibited subjects often include patent and trademark issues, as well as bankruptcy, antitrust, marital, and employment issues.

Arbitral Process:

International arbitrations are controlled by the Arbitration Act of 1975, which implemented the New York Convention. The Arbitration Acts of 1950 and 1979, which govern domestic arbitration, supplement the Arbitration Act of 1975. Although the 1979 Act provides for judicial review of arbitral decisions with the parties' consent and at the courts' initiative, the parties have the right, by means of an exclusion agreement, to waive judicial review and to exclude the right of appeal. This is subject to certain exceptions which are unlikely to arise in an international intellectual property arbitration context.

The arbitral tribunal may make provisional or interlocutory awards under article14 of the 1950 Act provided there is no contrary intention expressed in the arbitration agreement. These powers may be reinforced by the courts, which have statutory powers under the 1950 Act to preserve property or evidence relevant to the dispute and to make interim injunctions.

There are no specific provisions of Arbitrality of Intellectual Property Disputes arise beyond the scope of patent statutes. However, the arbitrator would have freedom to rule wide range of issues like validity, provided the scope of the agreement permitted. The power of an arbitrator to grant prospective relief-for instance, governing the future use of a copyright-is recognized by the English courts, whose own powers the arbitral tribunal thus exceeds.

 Issues of intellectual property validity or ownership only arise as they touch on a dispute-in other words, for the most part, as defenses to infringement and breach of contract suits. The arbitrator's role is to resolve the dispute between the parties-no more, no less. From this perspective, it can be argued that an inter parties award can only implicate the order public if it does some fundamental violence to public policy. The grounds for determining such an extreme incursion on the public interest are already clear: an arbitrator cannot enforce a contract to perform a corrupt act, for instance. But an arbitral award on intellectual property questions can be said to leave the order public completely unruffled: those rights that are registered remain registered, and those rights that are inherent remain in place. All that changes is something in the relationship between the parties to the dispute alone. This is something that in virtually every case could be achieved by the lawful assignment of disposable rights. Because this argument may not be acceptable to all-although it is becoming increasingly acceptable in many countries-arbitrators and parties to arbitration should proceed pragmatically, attempting to envisage the difficulties that may arise, particularly at the enforcement stage.