Arbitration Saves Money And Patents In International Disputes
By Kirk Watkins
The advantages and disadvantages of arbitration versus litigation have been long debated. Because arbitration is a matter of contract, parties are free to adopt existing procedural and substantive rules or invent their own. This freedom can complicate comparisons. For example, the parties can include or exclude discovery, permit or prohibit direct testimony, and require prompt and detailed rulings – or not. Arbitrations have one advantage that is unquestioned – treaties make the international enforcement of arbitration awards easier and more likely than the informant of state judgments.
Arbitration has become a favored provision in certain industry contracts, including construction, securities, and labor. Arbitration is, on the other hand, rarely used in relation to patent disputes. While arbitration provisions are a part of many patent licensing agreements, most patent disputes are not between licensees and licensors. Even though the U.S. Supreme Court changed a pre-existing Federal Circuit rule to permit patent licensees to file declaratory judgments seeking invalidity against licensed patents in Medimmune, Inc. v. Genetech, Inc., 549 U.S. 118 (2007), this rule cannot prevent a stay for any dispute falling within the provisions of an arbitration clause.
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The advantages and disadvantages of arbitration versus litigation have been long debated. Because arbitration is a matter of contract, parties are free to adopt existing procedural and substantive rules or invent their own. This freedom can complicate comparisons. For example, the parties can include or exclude discovery, permit or prohibit direct testimony, and require prompt and detailed rulings – or not. Arbitrations have one advantage that is unquestioned – treaties make the international enforcement of arbitration awards easier and more likely than the informant of state judgments.
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| Kirk Watkins |
Arbitration has become a favored provision in certain industry contracts, including construction, securities, and labor. Arbitration is, on the other hand, rarely used in relation to patent disputes. While arbitration provisions are a part of many patent licensing agreements, most patent disputes are not between licensees and licensors. Even though the U.S. Supreme Court changed a pre-existing Federal Circuit rule to permit patent licensees to file declaratory judgments seeking invalidity against licensed patents in Medimmune, Inc. v. Genetech, Inc., 549 U.S. 118 (2007), this rule cannot prevent a stay for any dispute falling within the provisions of an arbitration clause.
Read more »
Labels: dispute, litigation, Patent
