Guide to ADR in Intellectual Property Cases
This guide provides brief descriptions of the various forms of alternative dispute resolution used in intellectual property disputes. You may learn more about how Merchant & Gould uses alternative dispute resolution to effectively resolve conflicts over ownership of intellectual property by also visiting our Alternative Dispute Resolution practice page.
Arbitration
Mediation
Mediation-Arbitration
Court-Supervised Settlement Conferences
Mini Trial and Summary Jury Trial
Early Neutral Evaluation
Arbitration
In arbitration, the parties agree to a private judging of their dispute. Together, the parties decide the rules for the arbitration, including whether the arbitration will be binding (no appeal) or non-binding. The rules established are typically more flexible and less formal than litigation. Because the parties' agreement to arbitrate governs the process, considerable attention to the terms of the arbitration agreement is needed to achieve the goal of resolving a dispute satisfactorily. Arbitration is best used when the parties want to create their own rules and timetable, and seek a court-like decision outside the court system. Because the parties can establish the required legal and technical experience for the neutral, arbitration can be an appealing option for selected patent disputes.
Arbitration can be complex because of its trial-like nature. A trademark or patent arbitration hearing can be administered by an arbitration organization, such as the American Arbitration Association, or it can be non-administered, with the parties selecting an arbitrator who typically runs the arbitration as directed by the parties. Details of an arbitration include: 1) the number of arbitrators; 2) the place of the arbitration; 3) the rules of the arbitration; and 4) the language of the arbitration.
In arbitration, typically one to three arbitrators determine pre-hearing procedures, and then conduct a hearing, usually following generally accepted procedures for introducing evidence, but not strictly adhering to all evidentiary rules unless the parties so agree. The hearing may last from several days to several weeks, much like a court proceeding. Arbitration can be binding or non-binding on the parties. Arbitration results in an "award," which may or may not be accompanied by a written opinion of the rationale for the award.
In a binding arbitration, one party "wins" and one party "loses," much like court litigation. Non-binding arbitration, on the other hand, generally forms one stage of a hybrid ADR procedure involving further settlement negotiations or mediation.
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Mediation
This is the most popular form of alternative dispute resolution. Mediation can occur when directed by a court, or by the initiative of the parties themselves. In mediation, the parties select a neutral individual to facilitate negotiation of an agreement. Typically, the mediator has no "coercive" power. Rather, the mediator brings a history of dispute resolution experience to the parties and assists the parties with reaching a mutually acceptable resolution. Typically, the parties meet separately with the mediator in caucuses, with the mediator shuttling between the parties with settlement proposals for the parties to consider. Factors that may motivate parties to mediate a dispute include saving legal fees and costs, and willingness to consider creative solutions to a dispute.
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Mediation-Arbitration
Med-Arb is a hybrid procedure in which the parties first seek a facilitated resolution of one or more issues during mediation. On issues not subject to mediation or where mediation of an issue is unsuccessful, arbitration is used. Med-Arb can be useful where mediation appears to be promising but the possibility of a second phase of arbitration is known to be available to address remaining issues incapable of resolution in mediation.
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Court-Supervised Settlement Conferences
This is a common form of alternative dispute resolution employed in both federal and many state courts. The settlement conference date is typically set by the court and presided over by the judge, magistrate or special master assigned to the case. The format is informal and attended by counsel and the parties. Usually, a representative of each party with settlement authority will be required to attend the conference.
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Mini Trial and Summary Jury Trial
In both these approaches, the parties select a neutral who directs counsel as they summarize their respective cases to the designated neutral or panel of jurors. The neutral selected acts as a judge, except as limited by agreement of the parties. The neutral can facilitate settlement discussions as well as make "trial-like" evidence rulings. The number of jurors and issues presented to the jury are set by agreement of the parties. Summary jury trial can be used to provide the parties a preview of the jury trial process. It also can be used where the likelihood of successful settlement discussions will be aided by an advisory jury verdict.
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Early Neutral Evaluation
This process provides an early assessment of the strengths and weaknesses of a case. A neutral selected by the parties provides a non-binding advisory opinion. This approach can be useful when the parties have very different views of the case but believe an open discussion may avoid extensive litigation.
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