Arbitration in Patent Disputes: To What Extent Is It Possible?

Arbitration in Patent Disputes: To What Extent Is It Possible?

Shaharyar Ashraf Khan (Manav Rachna University) and Ashita Alag (Supreme Court of India, India)
DOI: 10.4018/978-1-7998-1835-9.ch004
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The commercial disputes between business entities to boost international trade and technology will increasingly involve an aspect of patents. Among various modes of ADR, the arbitration is preferred more over litigation. Still, various arguments have been presented both in favor and against arbitration in patent disputes. Thus, this chapter deals with the scope of patent disputes that can be referred to arbitration, which needs to be analyzed and defined, keeping in mind the consequent advantages of arbitration in case of patent disputes over traditional litigation. Additionally, there are various procedural aspects related to arbitration that might be specifically relevant to an arbitration involving patents and may require special attention by parties involved in such arbitration have also been made subject and discussed in detail.
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As the world moves towards a high-technology society, it is only natural that the prevalence of patent litigation will increase. Technological innovations are entering almost all aspects of life, and this has resultantly increased competition between manufacturers to gain exclusive rights over new inventions (Paradise, 1995, Edwards, 1992, Cooper and Madigan, 1989). This competition would, as a consequence lead to an increase in patent litigation (Paradise, 1995; Kilb, 1993).

Many believe that traditional court litigation does not have the ability to deal with patent disputes, often involving complex issues requiring knowledge of the inventions, which in today’s day and age often involve complex technology. This lack of technical knowledge can lead to improper judgments (Paradise, 1995).

Arbitration is an alternative means of dispute resolution and can be understood as “[t]he reference of a dispute by voluntary agreement of the parties to an impartial person for determination on the basis of evidence and argument presented by such parties, who agree in advance to accept the decision of the arbitrator as final and binding.” (Goldsmith, 1971)

Many industries have made a paradigm shift towards arbitration, recognising the various advantages that it brings with it. We saw the world of sports take upon arbitration and move towards a Court of Arbitration for Sport. We also saw States adopt arbitration for investment disputes, (Kim and Khalil, 2016) which consequently lead to the rise in investor-State arbitrations.

Despite this, there has been reluctance in referring patent disputes to arbitration. (Paradise, 1995) This chapter will examine the advantages that arbitration brings with it for patent disputes and analyses the various approaches taken by jurisdictions across the world. The chapter will also look into some procedural aspects of the arbitration, which gain particular importance in case of a patent arbitration. This chapter will also analyse the extent to which arbitration can be permitted in patent dispute cases.

Key Terms in this Chapter

Award: The decision rendered in an arbitration.

Arbitrability: Whether a certain dispute or specific types of disputes can be resolved through arbitration; whether a certain dispute is not barred from being resolved through arbitration.

Litigation: The process of taking and pursuing a dispute in a court of law.

Patent: A sole right given on an invention, for a particular period, which precludes others from making or selling that invention without the right holder’s permission.

Discovery: Process through which a party to a dispute can obtain evidence from the other side through various mechanisms such as requests for admissions, depositions, requests for production of documents.

Seat of Arbitration: Is a legal concept and not a geographical one and refers to the jurisdiction whose national law will govern the arbitration proceedings; it is the legal jurisdiction to which the arbitration is tied.

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