As the number of international business transactions increases, so too does the risk of intellectual property disputes, particularly with the emerging trend of patenting inventions in multiple countries. In order to compare and contrast the different technology-related dispute resolution practices, the Arbitration and Mediation Center of the World Intellectual Property Organization (WIPO) conducted an international survey comparing arbitration and mediation to court litigation. The survey was distributed to a multitude of institutions including companies, government bodies, universities and law firms, among others, across a wide range of business areas. While litigation remains the default path, the survey revealed that mediation and arbitration offer attractive alternatives, especially with respect to the critical factors of cost and length of disputes.
In negotiating dispute resolution contract clauses, the survey found that cost and time are the major concerns in agreements both domestic and international. In agreements among survey respondents concluded in the last two years, court litigation was the most common stand-alone dispute resolution contract clause, followed by arbitration and mediation, a distant third. Yet, the survey found that mediation was significantly cheaper and quicker in settling technology-related disputes. Specifically, the average litigation in a home jurisdiction took 3 years and cost around $475,000. Litigation in another jurisdiction took around 3.5 years and cost over $850,000 on the average. Arbitration resolutions typically lasted just over a year and cost around $400,000. Mediation settlements, however, took an average of 8 months, and in most cases cost less than $100,000. Thus, it appears that the least utilized form of dispute resolution in stand-alone contract clauses best meets the primary concerns of parties negotiating such contract clauses. Furthermore, mediation is most often used by parties focused on finding a business solution, and the decreased cost and time involved in mediation allows business executives and others involved in such proceedings to spend more of their efforts on capturing business opportunities and remaining productive.
Although each transaction must be individually analyzed to determine the best dispute resolution method for any disputes that may arise, those negotiating dispute resolution contract clauses should give more thought to mediation, particularly when concerned with the cost and duration of any settlement proceedings.
Full results of the survey can be found here: http://www.wipo.int/export/sites/www/amc/en/docs/surveyresults.pdf.