The incomplete side of arbitration in IP disputesAAA IPRIGHT2
Although arbitration has many benefits as mentioned in the previous article, as can be seen from practice, not all IP disputes can be resolved in silence or peacefully. If we don’t discuss the nature of a dispute that is too significant or too aggressive, commonly, the ‘normal’ disputes still won’t be resolved due to the incomplete side of arbitration in IP disputes.
Arbitration is the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator).
The dispute will be decided by one or more persons (the ‘arbitrators’, ‘arbiters’ or ‘arbitral tribunal’), which renders the ‘arbitration award’. An arbitration decision or award is legally binding on both sides and enforceable in the courts unless all parties stipulate that the arbitration process and decision are non-binding.
The reason behind arbitrator’s unpopularity
Although arbitrator has many benefits, they are considered to be inadequate to solve big, multinational IP disputes and even some normal disputes domestically because of the following reasons:
Too much expertise: Although too good of a peacemaker might seem weird, in reality, that might be the problem for some parties. Because if a party has a weak case, they won’t have enough claims and reasons to present the arbitrator with detailed knowledge about every aspect of their cases. Accordingly, those parties will have the tendency to bring the matter to non-specialist judges because non-specialist judges tend to decide a case on their view of the perceived merits rather than technical arguments.
Limited publicity: Unlike mostly public court hearings, the arbitration, on the other hand, tends to have their cases solved in secret, unpublic. For some cases, like when one of the parties is relatively weak, they might want to the public the case to use the public attack as one of the bargaining chips against big corporations. Accordingly, for them, publicity is actually an advantage.
Power from the wealthy: On the other hand, from the big corporation’s point of view, they won’t want to settle disputes by arbitration that will mostly benefit the weak parties. Rather, they would like to use their power and money to force the opposing party to an early settlement, or in some cases, bankruptcy.
Not enough authority: With courts, the winning party can request an interim injunction from a court – such as in an interim injunction against infringement to ban and restrict the other party’s actions. However, with the arbitration, although there is a concept of an arbitration award, in practice, it doesn’t have many enforcing capabilities.
High cost: The cost of arbitration is normally cheap in comparison with disputes from multinational countries. However, depending on the type of case and the arbitrator(s), the cost can still be too high for some disputes.
Accordingly, these parties will tend to choose the settlement by themselves.
In brief, the choice to settle an IP dispute in court or through arbitration is largely dependent on the will of the parties involved and the circumstances of each case, whether it is national or multinational, the dispute can be solved peacefully or has it touched the core of the business and can’t be resolved otherwise, etc.
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