In this blog post, Bharat Rajvanshi, a student at Institute of Law, Nirma University and pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, compares and contrasts the advantages of Arbitration over Litigation in IPR disputes.
IPR is an emerging field of law which has taken a major pedestal to be the most lucrative of budding lawyers as well as the most intelligent legal minds across the world. Since the recognition of the property on incorporeal property started, the courts were there to protect such rights and the executive also enforced its powers so as to protect others from hampering other people rights with the help of it. The courts required some laws to identify the limits of such rights and to what extent people would be able to seek remedy in such matters in the court of law. The main motive was also to fulfil the principles of natural law and to deliver all round justice to the aggrieved and to make the people keep continuing their faith in the Indian Judiciary.
As such, several laws were made and sanctioned by the legislature so as to perform its role in the process of such rights’ identification. On the basis of many international treaties and convention, various countries formed rules limiting the scope and extent of all such rights. Arbitration is a creature of contract, whereas the violation of contract itself leads to litigation.
The World Intellectual Property Organisation (WIPO) also favours the concept of arbitration above the classic format of litigation in the resolution of disputes over the Intellectual Property Rights. Arbitration as a confidential and private procedure is being used a lot in resolving the disputes involving IPR, usually when the parties involved are governed by different jurisdiction. IPR disputes have a variety of different characteristics which can only be addressed through by the arbitration mode rather than by litigation.
There are a plethora of advantages of arbitration over litigation, firstly being on the basis of a basic feature of the IP dispute being international. On one hand, where the Litigation involves multiple court proceedings under different laws of different countries, and the results are always conflicting. There is always an upper hand of the party litigating in its home country. On the other hand, the arbitration procedure involves the decision on merits of the case and only the law that is applied by the common consensus of both the parties. The arbitrating body is not bound to follow a specific procedure and they can formulate their own procedures. Also, the nationality of this body is not specified as they would be considered neutral towards law. The language, as well as the institutional culture of both the parties involved in the dispute, is also to be left at the option of the parties.
Another important factor classifying arbitration over litigation is the technical factor. Most of the honourable judges in majority of the countries of the world are not young and such positions are only given to the people having relevant expertise in their field. IPR being a fairly new development in the field of law requires in-depth knowledge of the said subject. Therefore the judges in litigation might not have the required expertise in the field of IPR. Whereas, in arbitration, the parties can choose their arbitrator and hence only such a person is chosen as arbitrator who satisfies both the parties equally.
Considering the factor of urgency, where on one hand the litigation procedure goes on with the classic procedure of the courts which they are bound to follow in case of any of the disputes are mostly lengthy and tedious and run into generations. The result of such a delay in justice would not yield proper justice to the aggrieved. Also, there are no interim or interlocutory relief available in certain jurisdictions. In the case of arbitration, the arbitrators as well as the parties are at the option to shorten the procedure or elongate it for proper discussion as how and when they like. Arbitration would also be available with the option of interim relief to the aggrieved parties, which might not be binding on the parties. They can at any time go to the court to seek any such remedy.
The litigation procedure is never final unless the apex court of the country passes such orders either in favour or against. There is always a possibility of appeal by the parties against whom the order is passed, or a lesser compensation is granted. There is no finality of such decisions by the lower court. Considering the procedures of each court, or the adjudicating body, the final judgement might come even after many generations, as discussed earlier. In the case of arbitration, there is a limited or no appeal option which can be waived off at the option of parties. Arbitration decision is more final and absolute than the traditional litigation.
Also, the litigation proceedings of any case, except otherwise stated by law, are to take place publically, which also involves the narration of facts as well as the property description over which the dispute is required to be settled. This would make the secrets public and would result in huge loss of Intellectual Property to the aggrieved. Therefore, to ensure the confidentiality and trade secrets of the parties, and also to secure the reputation of them, the arbitration can be done in closed curtains and the proceedings as well as the awards can be made confidentially. This would ensure the complete and all round protection of the intellectual property rights of all the involved parties.
Lastly, the parties always have the option to approach the court for seeking any remedy if they are not satisfied with the decision of the arbitrator. Although the shortcomings would never encourage the parties to approach the court for any of such kind of disputes. There are a lot of other technical factors which ensure justice to the parties to such disputes over Intellectual property.
Customarily, arbitrability, the topic of whether the topic of a debate might be settled through discretion, emerged in connection to mediation of certain IP question. As IP rights, for example, patents, are allowed by national authorities, it was contended that question in regards to such rights ought to be settled by an open body inside the national framework. In any case, it is presently extensively acknowledged that questions identifying with IP rights are arbitrable, similar to debate identifying with whatever other sort of secretly held rights. Any privilege of which a party can arrange by method for settlement ought to, on a fundamental level, additionally be equipped for being the subject of an assertion since, similar to a settlement, mediation depends on parties’ understanding. As an outcome of the consensual way of intervention, any remedy rendered will bind on the parties included and won’t in that capacity influence outsiders or other third parties.
Although it might not be a practice, the judicial body might be corrupt and would not follow any natural principals to bring about justice. Mostly international contracts include arbitration clause so as to escape any such condition of uncertainty.
In an IP infringement case, the parties end up paying loads of money to the court for the procedure as well as the advocates to come up with arguments to win the case and make it possible for the party to extract the damages from the other. The arbitration process is comparatively cheaper and would not make a hole in the parties’ pocket. Also, to appear before a court, you need to hire a lawyer so that your case is put up before the court and the proceedings can go on. Whereas in the process of arbitration, the parties are free to either hire lawyers or they can themselves appear in person and ask the adjudicating officer to resolve their matter in a timely and legal fashion.
Therefore, there is a minimal damage to the parties and their commercial relations involved in disputes. They also have a high flexibility in granting remedy. Hence the advantages of arbitration outnumber the advantages of litigation, though there are not much advantages of litigation in the field of Intellectual Property Rights. In perspective of these improvements, it is critical that every one of the partners, and especially the parties and their insight, should get to be mindful of the sufficiency of intervention for explaining global Intellectual Property debate and might set aside opportunity to survey ahead of time the ramifications of utilizing discretion successfully to solve such matters. This requires moving past the threshold issue of arbitrability of IP disputes with a specific end goal to address the issues which can fundamentally influence the accomplishment of arbitration as far as cost, speed and effectiveness, especially the extent of the arbitration clause and the meaning of the administering law.
