In today’s global economy, intellectual property has become one of the most valuable assets, and its effective protection and use is of growing importance to successful businesses, WilmerHale’s Yoanna Schuch explores the growing use of arbitration in IP disputes.
Intellectual property (IP) results in a broad range of legal rights that enable owners to share, transfer and commercialise intangibles, such as ideas, inventions, or names. Well-known examples of IP rights are patents, trademarks, copyrights and trade secrets.
Although IP disputes can be resolved through court litigation, parties are, with increasing frequency, submitting disputes to arbitration. This article addresses the benefits of taking IP disputes to arbitration instead of litigation and sets out a few key points that counsel and parties should consider when choosing between IP arbitration and IP litigation.
WHY ARBITRATE?
IP rights have a limited territorial scope of application and can exist in parallel in different jurisdictions. IP rights that do not require registration, such as copyrights, may automatically subsist in all member states of the World Trade Organization (WTO), whereas IP rights that require registration, such as patents, can only come into existence in those jurisdictions where their registration is sought. For example, if a patent holder would like to protect his or her invention in five different countries, he or she would have to apply for a patent in each of these countries.
The territorial nature of IP has important consequences for the resolution of IP disputes which, in practice, often concern parallel IP rights subsisting in multiple jurisdictions. National court systems are incapable of resolving IP disputes on an international basis and therefore redressing infringements of IP rights in various countries entails litigation in multiple foreign courts.
In other words, if a patent is infringed in five different countries, the patent holder would have to initiate five different court proceedings in five different jurisdictions to fully protect its IP. The uncertainties inherent in parallel litigation are self-evident: different legal systems involve differing