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This article is written by Ahamd Ziad, pursuing a Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho.

Introduction

The globalisation of cross-border trade and investment has resulted in more intricate connections between firms, investors, and governments. In today’s globalised and digitalised world, intellectual property is becoming increasingly important to economic growth and international commerce.  As some of those relationships unavoidably fail, the parties must determine the best way to resolve any potential disputes. Arbitration is highly effective in such situations. In several fields, arbitration has become the standard method for resolving disputes. International arbitration is becoming more common as a means of resolving intellectual property disputes. International arbitration is a form of binding dispute resolution before an impartial tribunal that emanates from the parties’ agreement. International arbitration is the preferred method of resolving transnational disputes. The impartiality it provides, along with the relative ease with which the awards of the tribunal may be enforced, make it a more appealing forum for disputes resolution than litigating in the national courts of contracting parties.

Copyright is a person’s exclusive right to reproduce, publish, or sell his or her original work of authorship as a literary, musical, dramatic, artistic, or architectural work. What is protected under copyright law is the “form of material expression” and not the actual thoughts, ideas, processes, or facts in a work. That is why work must be fixed in a tangible form in order to receive copyright protection. Original works of authors which are in tangible form, whether published or unpublished, are protected by copyright. Paintings, literary works, live performances, photos, movies, and software are all examples of works that are protected under copyright law. The fundamental purpose of copyright law is to protect and safeguard the time, effort, and creativity of the author. The copyright law grants the owner of copyright some exclusive rights, such as the right to reproduce the work, the right to distribute the copies of the work by sale, lease, or other transfer of ownership, right to display the work publicly. The copyright owner also has the right to delegate any of the above-mentioned rights to others. The copyright owner can also transfer his or her exclusive rights to others.

Copyright is acquired at the time of the creation of the work and does not require registration under the Berne Convention for the Protection of Literary and Artistic Works. While most countries follow this approach, some countries allow copyright work to be registered or deposited voluntarily, for example, the Library of Congress in the United States.

Rise of the importance of arbitration in copyright disputes

Copyright disputes are recognised as arbitrable in the majority of nations and challenges to awards based on non-arbitrability have a minimal likelihood of success. If the parties agree to arbitrate, any copyright-related contractual, infringement, and validity dispute can be settled through arbitration. Copyright-related contractual agreements, such as software licensing, are frequently structured as multinational contracts, emphasizing the need for international arbitration. As per the World Intellectual Property Organization (WIPO) statistics, copyright disputes account for 13% of the WIPO cases, which include, broadcasting, copyright collective management, art,  entertainment, film, and media copyright infringements.

When compared to court litigation, international arbitration has a number of intrinsic distinctive qualities that make it a more viable choice for resolving copyright disputes. The advantages of international arbitration, particularly in the context of copyrights disputes, include the following:

  • Specialised expertise 

Due to the technical nature of IP disputes, adjudicators should ideally have technical knowledge and expertise in the relevant subject. Contracts involving copyright are unique in terms of terminology and practice, and they cannot be understood or construed accurately without familiarity with the appropriate vocabulary and precedent. The right of a party to choose at least one of the arbitrators on a tribunal that will hear and decide their dispute is a key element that is viewed as a distinct advantage over the judicial system. One of the most significant advantages of international arbitration is that the parties have the option and flexibility to select an arbitrator with particular expertise in the subject matter. There are several international arbitration institutions that provide a specifically designated panel of expert arbitrators in copyright disputes for e.g. World Intellectual Property Organization (WIPO), Singapore International Arbitration Centre (SIAC) Panel of Arbitrators for Intellectual Property Disputes, American Arbitration Association (AAA), Conflict Prevention & Resolution (CPR) Panels of Distinguished Neutrals, and the Hong Kong International Arbitration Centre (HKIAC) Panel of Arbitrators for Intellectual Property Disputes, etc. Since International copyright laws involve several international copyright and related rights treaties, an Arbitral tribunal consisting of a copyright specialist adds significant value to the efficiency of the dispute resolution process.

  • Speed, efficiency, and flexibility 

International arbitration is often seen to be speedier than litigation. Many arbitration institutions provide expedited and emergency arbitration rules and processes, which might be advantageous in the case of copyright disputes. Another advantage is that arbitration provides freedom to parties to customize their dispute resolution process, freedom to agree on the conduct of the proceedings and select appropriate procedural rules. For example, parties can place limits on the amount of evidence admitted for copyright disputes, even choose the extent to which certain rules of evidence are to apply, deciding procedural timelines, procedural steps, discovery and document production, and so on. This is particularly important in times of crisis, because the parties may agree to relocate the hearings or hold them remotely, electronically, or through videoconference.

  • Urgency and provisional measures 

Another significant benefit of international arbitration is the ability of tribunals to provide interim remedies or injunctive relief, which is allowed as per the rules of most arbitration institutions. Interim relief or preliminary injunction is pivotal in copyright arbitration, for preventing or stopping copyright infringement, distribution, or transfer of rights to infringing copyrighted content, software, databases, and so on. Most leading arbitration institutions’ rules provide for the possibility to appoint an emergency arbitrator to deal with interim measures and these rules are increasingly used by the parties to request interim measures, for example, WIPO Emergency Relief Proceedings, SIAC Emergency Arbitrator and Expedited Procedure, ICC Emergency Arbitration, etc.

  • Confidentiality and finality 

The confidentiality of arbitration processes and awards are especially important in Intellectual Property disputes since the issues in question are generally sensitive, which a party wants to keep private. Parties do not want to expose their disputes in public and prefer to keep them confidential. In international arbitration, the parties have relatively limited appeals possibilities, which is another significant advantage over litigation. An arbitration award is binding on the parties and provides a certain and conclusive resolution to the dispute. Legal rulings can be reversed on appeal and judges with little technical knowledge may make mistakes. Arbitral awards, on the other hand, are intended to be final and definitive, and generally, awards are not subject to appeal. Courts are often hesitant to consider appeals or judicial review of arbitral awards on the merits since doing so would undermine the parties’ original intentions.

  • Enforceability 

Arbitral award in international arbitration is enforceable in a country that is a signatory to the New York Convention, 1958. Presently, 168 States are parties to the New York Convention and an award can be enforced in any of the Member States. However, an arbitration award concerning a specific Intellectual Property right may not be enforceable in a country that does not consider such Intellectual Property rights as arbitrable. For instance, copyright disputes are fully arbitrable under English Law and UK courts have broadly interpreted arbitration agreements. While in the United States, there is no law that specifically allows for binding arbitration of copyright issues, claims, including those under the Digital Millennium Copyright Act, have been found arbitrable by US courts. Even the validity of copyright is arbitrable in the US. In Canada, the Supreme Court of Canada has recognised that the parties to an arbitration agreement have autonomy in identifying the disputes which may be subjected to arbitration. Singapore, In Singapore, all the Intellectual Property disputes are arbitrable as per the Singapore Intellectual Property (Dispute Resolution) Act, 2019. Only a few nations, such as South Africa, entirely prohibit the arbitration of intellectual property disputes.

Conclusion

Arbitration is an expeditious method of dispute settlement, providing a neutral forum consisting of expert arbitrators and with a procedure that preserves privacy and confidentiality. Arbitration is certainly an effective method of dispute resolution with evident advantages. Accordingly, International arbitration is becoming more common as a means of resolving Intellectual Property disputes and is preferred over litigation as a more appropriate and efficient dispute resolution method. This has resulted in the setting up of international arbitration institutions which provide a specifically designated panel of expert arbitrators in Intellectual Property disputes such as the World Intellectual Property Organization (WIPO), Singapore International Arbitration Centre (SIAC) Panel of Arbitrators for Intellectual Property Disputes, American Arbitration Association (AAA), and Conflict Prevention & Resolution (CPR), etc. Parties should clearly define their contractual Intellectual Property rights and include a well-drafted arbitration provision at the start of any partnership or business transaction. Also, the issue of arbitrability must be considered before deciding the arbitration’s seat and the location of enforcement. 

References


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