Arbitrability, the question of whether the subject matter of a dispute may be resolved through arbitration, arose in relation to arbitration of certain IP disputes. As IP rights, such as patents, are granted by national authorities, it was argued that disputes regarding such rights should be resolved by a public body within the national system. However, it is now broadly accepted that disputes relating to IP rights are arbitrable, like disputes relating to any other type of privately held rights. Any right of which a party can dispose by way of settlement should, in principle, also be capable of being the subject of an arbitration since, like a settlement, arbitration is based on party agreement. As a consequence of the consensual nature of arbitration, any award rendered will be binding only on the parties involved and will not as such affect third parties.

IPR and Agreement

Before the underlying suit, the parties entered into an agreement that called for arbitration. After commencement of the suit, the district court denied a motion to dismiss or stay because it ruled that the claims in the complaint were not covered by the arbitration agreement. The Federal Circuit affirmed. Intellectual property rights are as strong as the means to enforce them. In that context, arbitration, as a private and confidential procedure, is increasingly being used to resolve disputes involving intellectual property rights, especially when involving parties from different jurisdictions. Intellectual property disputes have a number of particular characteristics that may be better addressed by arbitration than by court litigation.

Scope of Arbritation

The Agreement was for promotion of a roofing product covered by certain intellectual property.  It called for arbitration of “any dispute or disagreement arising under this Agreement.”  The Court determined that the scope of the arbitration provision did not cover the intellectual property claims before the district court because the arbitration provision only covered the obligations established by the Agreement. The court also found that the appellant failed to preserve its confidentially based argument, which arguably was covered by the arbitration provision, by failing to argue those grounds in its opening brief.  Thus, the Court affirmed.

“When negotiating a service agreement related to intellectual property assets, arbitration clauses should be written broadly enough to encompass claims based on those intellectual property assets, assuming that arbitration is the desired forum.  “Any dispute or disagreement arising under this Agreement is insufficient.”

Wipo’s arbitration examples

 A WIPO Software Trademark Arbitration

A North-American software developer had registered a trademark for communication software in the United States and Canada.  A manufacturer of computer hardware based elsewhere registered an almost identical mark for computer hardware in a number of Asian countries.  Both parties had been engaged in legal proceedings in various jurisdictions concerning the registration and use of their marks.  Each party had effectively prevented the other from registering or using its mark in the jurisdictions in which it holds prior rights.  In order to facilitate the use and registration of their respective marks worldwide, the parties entered into a coexistence agreement which contains a WIPO arbitration clause.  When the North-American company tried to register its trademark in a particular Asian country, the application was refused because of a risk of confusion with the prior mark held by the other party.  The North-American company requested that the other party undertake any efforts to enable it to register its mark in that Asian country and, when the other party refused, initiated arbitration proceedings.

A WIPO Pharma Patent License Arbitration

A French pharmaceutical research and development company licensed know-how and patented pharmaceuticals to another French company. The license agreement includes an arbitration clause that provides that any dispute will be resolved under the WIPO Arbitration Rules by an arbitral tribunal consisting of three members in accordance with French law. Faced with the licensee’s apparent refusal to pay the license fee, the R&D Company initiated arbitration proceedings