Home > Topics > Monitoring, Enforcement, and Resolving Disputes > Alternative Dispute-Resolution Procedures: International View > Editor's Summary, Implications and Best Practices

As multi-national technology development partnerships become more common, so will disputes between the parties. Litigation, however, is not the only option for resolving such disputes. In fact, for partnerships between entities in developing and developed countries, litigation is a complicated, time-consuming, expensive, and risk laden process, and other options, such as arbitration and mediation, often promise to more effectively resolving such disputes.

These forms of dispute resolution do not work through formal legal systems, but are instead set up by the parties involved. They are established by dispute resolution clauses articulated right when a partnership is set up—before troubles might begin. The goal is to prevent trouble from arising in the first place and, if difficulties do arise, to provide a fair means for resolving disputes.

There are several elements unique to arbitration and mediation that can help parties resolve disputes, and these elements should be established through dispute resolution clauses early on in the partnership. For arbitration, the parties have the power to decide on the number of arbitrators, the type of arbitration (ad hoc or institutional), the place of arbitration, the language of arbitral proceedings, and the applicable substantive law. It should be noted that unlike judges, whose powers are defined by national laws, an arbitral tribunal’s powers are limited to those conferred by the parties. Mediation also involves the same kinds of choices, although unlike a judge or an arbitrator, whose mandate is to issue a binding decision or award, a mediator does not have any power to impose a settlement on the parties. Instead, the mediator serves as a catalyst for party negotiations.

The potential advantages of arbitration and mediation include the following:

• Through arbitration or mediation, the parties can agree to resolve disputes involving IP in a number of countries in a single procedure.
• In both arbitration and mediation, parties may resolve a transnational dispute on neutral territory; neither party is disproportionably subjected to foreign court procedures, laws, customs, languages, and prejudices.
• Arbitration and mediation are based on the consent of the parties. This gives autonomy to each party and a large degree of control over the dispute resolution process.
• Parties can select arbitrators/mediators.
• Parties to arbitration or mediation can keep the proceedings and any results confidential.
• Parties can resolve the dispute at hand and still maintain a working relationship.
• The protracted nature of litigation, which pushes parties into multiple rounds of appeals, is a common problem when litigating transnational disputes. The end result of arbitration, however, is a final, binding award.
• The mediator’s role is to broaden dispute resolution options, allowing the parties, with the help of the mediator, to craft innovative, common sense solutions that amicably settle the dispute.
• Mediation involves low risk. If a party feels that it is not making any progress, that the procedure is becoming too costly, or that the other party is not acting in good faith, the party may withdraw from a mediation process at any time and seek to resolve their dispute through litigation or arbitration.

Arbitration and mediation also give the parties greater power over costs, and if an institutional procedure is chosen they can take advantage of its resources.

The chapter concludes by providing a general overview of the kinds of concerns addressed by dispute resolution clauses. It also highlights the usefulness of arbitration and mediation for developing countries. These countries often lack the resources to pursue extended litigation, a process that also frequently places them on unfamiliar cultural and legal ground. By formulating dispute resolution policies, institutions in developing countries can place themselves in a fairer, less expensive, and less antagonistic forum for resolving disagreements. Finally, the chapter discusses extensively the activities and services of the WIPO Arbitration and Mediation Center.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Promote policies and advocate for laws that foster alternative dispute resolution procedures as viable, and indeed often preferable, approaches for settling differences between parties to an agreement.
• Court action is often stymied because of cost, length of procedure, legal uncertainty, a decision maker’s lack of expertise, confidentiality/publicity, the difficulty of seeking action in foreign jurisdictions, and the negative impact on existing business relationships.
• While arbitration is a private mechanism, it is not altogether free from regulation by national laws.
• Governments and public institutions can help make arbitration or mediation procedures accessible and available by identifying and supporting neutral institutions that can provide cost-efficient, timely dispute resolution services.

For Senior Management (university president, R&D manager, etc)

• Arbitration and mediation need to be set up through dispute resolution clauses in a partnership agreement. Model clauses are available from arbitration and mediation institutions.
• The success of an arbitration or mediation depends largely on the quality of the arbitrator(s) and mediator(s); the challenge is often to find candidates that have both arbitration/mediation skills and experience with the specialized knowledge of the disputed subject matter
• In an institutional arbitration or mediation, the institution can provide a procedural and administrative framework for initiating and conducting the procedure, and can oversee the integrity and independence of the process.

For Scientists

• If your institution conducts alternative dispute resolution procedures (such as mediation or binding arbitration), you might be called upon to participate, particularly if aspects of your research program are involved in the ongoing discussions.
• If your university or institution is in litigation with one of your partner institution with which you have ongoing collaborative research, don’t let such disputes interfere in your research and relationship with your colleagues at the other institution. Many companies, for example, litigate with others while, at the same time, negotiating on other licenses or joint ventures. Litigation is nothing personal and should never influence your research collaboration. Notwithstanding this, you should also be cautious as to what you say related to the specific topic of dispute. The best is never to comment on ongoing litigation matters.

For Technology Transfer Officers

• Particularly for transnational disputes, litigation is risky, frequently protracted, and requires seemingly unlimited legal costs and management time.
• Litigation, which is costly, risky and lengthy, should only be the last resort for settling a dispute. Therefore, when a dispute arises, alternative dispute resolution approaches, such as arbitration and mediation, should be thoughtfully considered.
• In arbitration or mediation, parties may resolve a transnational dispute on neutral territory.
• The success of arbitration or mediation depends largely on the quality of the arbitrator(s) and mediator(s); the challenge is often to find candidates that have both arbitration/mediation skills and experience with the specialized knowledge of the disputed subject matter.
• The consensual nature of mediation, and, to a certain extent, arbitration, accommodates a long-term approach to partnerships. Parties can resolve the dispute at hand and still maintain a working relationship.
• Arbitration allows parties to limit costs by expediting the procedure and by selecting cost efficient venues for meetings and hearings. In mediation, costs are more easily contained.
• Build capacity in your office in alternative dispute resolution principles and practice. This might involve training individuals in mediation and/or arbitration skills and techniques. Education in such skills should be both in class and in practice, that is, training in role-play sessions.