The Road Less Travelled: Why Arbitration is an Increasingly Attractive Alternative for Resolving IP Disputes

Holders of IP rights, including patents, copyrights, trademarks, and trade secrets, have traditionally filed IP-related disputes in court, and there’s no question that court litigation will continue to be the most popular forum for IP disputes for many years to come. But litigating IP disputes in court has its challenges. IP litigation can be very expensive and time-consuming; court proceedings are typically public; the judge assigned to the case may not have much, if any, experience with IP disputes; and it is often difficult to enforce a judgment in another jurisdiction. In a development that bears watching, arbitration has become an increasingly attractive alternative for resolving cross-border IP disputes. While not ideal (or even available) in every case, arbitration of IP disputes offers benefits to IP rights holders that will often outweigh its potential disadvantages. Additionally, recent updates to the arbitration rules in some jurisdictions (such as Singapore) have made arbitral forums even more appealing venues for IP disputes. In light of these developments, IP rights holders should consider adding arbitration to their IP enforcement strategies.

Keep in mind that arbitration is a creature of contract—that is, unlike litigation in court, arbitration is an option only when the parties have agreed to it. The agreement to arbitrate most often appears in a contract, such as a licensing agreement, that the parties executed before a dispute has arisen. While less common, parties may also agree to arbitration after a dispute arises.

Also keep in mind that some jurisdictions (such as Mainland China) prohibit arbitration of certain IP disputes, such as disputes regarding the validity of patents or registered trademarks. But the trend appears to be in the other direction. For example, Singapore passed legislation in 2019 expressly clarifying that IP disputes are arbitrable. The Singapore International Arbitration Centre (SIAC) has handled IP disputes for many years and the 2019 legislation simply codified what was already in effect. But this clarification of Singapore’s arbitration legislation will likely make the SIAC, which is already one of the leading arbitral bodies in the world, an even more attractive venue for IP disputes.

When available, arbitration has a number of advantages over litigation, as we discussed in a previous post. The advantages of arbitration are particularly significant when it comes to IP disputes. Chief among them are:

Selection of Arbitrators. Parties typically participate in the selection of arbitrators and may nominate arbitrators with a technical background relevant to the dispute, or at least experience in similar IP disputes. By contrast, a judge randomly assigned to IP litigation in court is unlikely to have the relevant technical background, and may not even have experience in complex IP matters.

Confidentiality. Arbitration proceedings are completely confidential, from their very existence to the evidence presented to any decisions (or awards) issued. The private and confidential nature of arbitration is especially attractive to parties in patent, trademark, copyright and trade secret matters given the highly-sensitive nature of the subject matter.