1 1/44 Taking Control of Your IP Dispute Using ADR Keum Nang Park 9 November 2014 APAA PENANG 2014.

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1 1/44 Taking Control of Your IP Dispute Using ADR Keum Nang Park 9 November 2014 APAA PENANG 2014

2 Court Litigation or ADR mechanisms? I. II. IP-dedicated ADR Institutions in Korea and Japan Benefits of ADR for IP Disputes III. Arbitrability of IP Disputes IV. How to Promote ADR for IP Disputes V. Contents

3 Ⅰ. 서론 Court Litigation or ADR mechanisms?

4 Comparison of Court Litigation and ADR Court LitigationADR International Multiple proceedings under different laws, with risk of conflicting results Possibility of actual or perceived home court advantage of the party litigating in its own country Single proceeding under the law determined by the parties Neutral to law, venue, etc. Technical Decision maker might not have relevant expertise Parties can select an arbitrator/mediator with expertise Urgent Procedures often delayed Injunctive relief available Parties can shorten procedure Require Finality Possibility of appealLimited appeal option Confidentiality/trade secret and risk to reputation Public proceedings Proceeding and outcome are confidential Source : WIPO Arbitration and Mediation Center

5 Court Litigation or ADR mechanisms? Neither Court Litigation nor ADR mechanisms can offer a comprehensive soluti on in all circumstances. Indeed, each transaction is likely to have its own dispu te resolution requirements. For international patent disputes, it is important to take account of any existing s pecialized courts and judges, bifurcation of proceedings, requirement and availab ility of injunctions, possible parallel litigation, and enforceability. Court Litigation ADR Time and Costs Expertise Confidentialit y Injunctions Enforceability

6 Ⅰ. 서론 Benefits of ADR for IP Disputes

7 Benefits of ADR for Resolving IP Disputes avoids the complexity of multiple court actions in the jurisdictions concerned. ADR is suitable for cross-border IP disputes. A single procedure ADR procedures are flexible and allow the parties to have full control, including timelines. Party autonomy save costs when compared to multi-jurisdictional and/or multi-instances litigation. Cost and time efficiency The parties can select arbitrators, mediators or ex perts with specific expertise in the relevant legal, technical or business area. Expertise

8 Benefits of ADR for Resolving IP Disputes Important in IP disputes where trade secrets are at stake Confidentiality Prevents forum shopping and potential perception of national bias Neutral Forum Arbitral awards are not subject to appeal and their enforcement is facilitated by the New York Convention Enforcement of arbitral awards High settlement figures especially in mediation Cross-licensing and joint development agreement Preserving long- term relationship

9 Relative Time and Costs of Dispute Resolution Source : WIPO Arbitration and Mediation Center. International Survey on Dispute Resolution in Technology Transactions The cost of foreign litigation typically exceeds that of ADR. Litigation in home jurisdiction takes around 3 years and costs about US$475,000. Litigati on in foreign jurisdiction takes around 3.5 years and about US$850,000. Mediation takes around 8 months, and typically costs less than US$100,000. Arbitration takes on average just over a year and costs about US$400,000.

10 How to Choose the Most Appropriate ADR? Negotiation Mediation Arbitration or Litigation

11 Ⅰ. 서론 IP-dedicated ADR Institutions in Korea and Japan

12 IP-dedicated ADR Institutions in Korea mediation of industry property disputes established by KIPO on 27 December 1994 Industrial Property Right Dispute Mediation Committee mediation of domain-name-related disputes established on 8 October 2004 Internet Address Dispute Resolution Committee mediation, conciliation of copyright disputes established on 23 July 2009 Korea Copyright Commission mediation between contents providers/users established on 28 April 2011 Content Dispute Resolution Committee mediation of design-related disputes established on 6 November 2012 Design Dispute Resolution Committee

13 Industrial Property Right Dispute Mediation Committee Invention Promotion Act Empowering Statutes The Vice Commissioner of KIPO is the Chairman of the IPRDMC. IPRDMC consists of 20 members Organization Idea, patent, utility model, industrial design, and trademarks, employee inventions Validity issues are excluded. Subject-matter 5.6 cases a year (107 submissions in total between ’95-‘13) Submissions 24% (27 out of 107) Success Rate

14 IPRDMC Mediation Procedure Source :

15 Internet Address Dispute Resolution Committee Internet Address Resources Act Empowering Statutes 30 or fewer committee members Organization disputes over the registration, holding or use of Internet addresses Subject-matter 40 cases a year Submissions 34 cases a year Decisions

16 IDRC Mediation Procedure Source :

17 Korea Copyright Commission Copyright Act Empowering Statutes between 20 and 25 commission members 7 panels (each panel comprises 3 members) Organization Literary works, musical works, paintings, photographic works, cinematographic works, computer programs, derivative works Subject-matter cases a year Submissions around 50% Success Rate KCC is the Korea’s agency solely dedicated to copyright-related affairs.

18 Contents Dispute Resolution Committee Contents Industry Promotion Act Empowering Statutes between 15 and 30 committee members Organization disputes over the transaction and use of contents Subject-matter 626 cases in 2011 → 3,445 cases in 2012 → 4,817 cases in 2013 Submissions 4 divisions(game, motion pictures, knowledge information, and cartoon/characters) Features

19 Design Dispute Mediation Committee Industrial Design Promotion Act Empowering Statutes 20 committee members 4 divisions(product, visual, environment, and multimedia) Organization Disputes over transaction and use of industrial designs and fair trade issues Subject-matter 14 cases as of May 2013 Submissions 5 cases completed out of 14 cases Success Rate

20 Korea Commercial Arbitration Board Korean Civil Code Article 32, the Arbitration Act of Korea Empowering Statutes 1,090 arbitrators as of Oct Organization any kind of commercial dispute Subject-matter over 800 cases a year in total less than 30 IP cases a year Submissions over 50% Success Rate

21 IP-dedicated ADR Institution in Japan Japan Intellectual Property Arbitration Center Consultation, Mediation, and Arbitration Originally founded in 1998 as the Industrial Property Rights Arbitration Center Patent right, utility model right, design right, and trademark right Japan Intellectual Property Arbitration Center Consultation, Mediation, and Arbitration Originally founded in 1998 as the Industrial Property Rights Arbitration Center Patent right, utility model right, design right, and trademark right

22 ADR is Not Actively Used for IP Disputes District Courts and Korean IP Tribunal Industrial Property Dispute Resolution Committee 2007~2011 invalidation 2,722 cases decided KIPT patent trials annually District Courts IP cases 1,500+ annually Settlement rate only 24.3% 1995~2013 only 107 Case submissions ADR is Not Actively Used for IP Disputes in neither Korea nor Japan

23 Reasons Why IP ADR Is Not Actively Used in Korea 39% cited lack of awareness and advertisement of ADR mechanisms for IP disputes. 36% pointed out that existing IP ADR institutions still lack technical expertise or management of time efficiency. 15% cited lack of reliability of ADR institutions when compared to court systems. Other opinions include the need for on-line ADR system for small disputes, the lack of enforceability, and confusion due to existence of too many institutions. 39% cited lack of awareness and advertisement of ADR mechanisms for IP disputes. 36% pointed out that existing IP ADR institutions still lack technical expertise or management of time efficiency. 15% cited lack of reliability of ADR institutions when compared to court systems. Other opinions include the need for on-line ADR system for small disputes, the lack of enforceability, and confusion due to existence of too many institutions. The majority of respondents are willing to actively use systematic, reliable and efficient IP ADR systems.

24 Other Reasons why IP ADR mechanisms are avoided Need for a preliminary injunctive relief IP right holders may need a preliminary injunctive relief. Injunctive relief is more likely obtained from a public court rather than from an arbitration tribunal. Strategic need for precedent or publicity An IP right holder or an alleged infringer may desire a public vindication of its rights. ADR simply is not available for IP disputes ADR depends on the consent of the parties. Many IP disputes, particularly infringement claims, are between parties with no pre-existing relationship and who are not inclined to agree to submit their dispute to ADR. Arbitrability Patent rights by nature include the power to preclude competition and require registration; only public courts, and not private arbitrators, may resolve IP disputes.

25 Ⅰ. 서론 Arbitrability of IP Disputes

26 Different Views on Arbitrability of Patent Disputes All patent issues are not arbitrable. restrict all aspects of a patent dispute, both infringement and validity issues, from being settled by arbitrators A rendered award will not be enforceable in that country South Africa restrict all aspects of a patent dispute, both infringement and validity issues, from being settled by arbitrators A rendered award will not be enforceable in that country South Africa Validity issues are inarbitrable. separate a private law claim from public one. Infringement issue is arbitrable because it addresses contractual rights and obligations. Validity issues are not arbitrable, Most countries separate a private law claim from public one. Infringement issue is arbitrable because it addresses contractual rights and obligations. Validity issues are not arbitrable, Most countries Both infringement and validity issues are arbitrable. Award cannot invalidate the patent but has an inter partes effect binding only between the parties. USA after 1983, Switzerland Award cannot invalidate the patent but has an inter partes effect binding only between the parties. USA after 1983, Switzerland

27 Arbitrability of Patent Disputes in Korea Supreme Court Patent Court Patent Tribunal Invalidation High Courts District Courts Infringement

28 Ⅰ. 서론 How to Promote ADR for IP Disputes?

29 How to Promote ADR Mechanisms for IP Disputes?

30 How to Promote IP ADR in APAA Countries?

31 감사합니다 Thank You Keum Nang Park