Arbitrability Of Intellectual Property Disputes
Introduction
The rights which are granted to the people for their creative work are known as intellectual property rights. They provide the creator a sole, time-limited right to make use of their invention. Patents, trademarks, geographical indications, industrial designs, layout-designs of integrated circuits, plant variety protection, and copyright are all examples of intellectual property. IP can be acquired, inherited, traded, or purchased. Its complexity and incomprehensibility are the primary traits that distinguish it from other forms. IP can be considered to be the base of knowledge-based economy. It penetrates all sectors of the market and has been increasingly crucial in maintaining competitiveness.
Arbitration as a means to resolve Intellectual Property disputes
As IP owners and attorneys formerly tended to choose traditional, Arbitration and mediation were hardly ever used to their full capacity. However, things have evolved in recent years, and individuals have become more open to innovative methods of settling conflicts. With this, trademark holders may now defend their logos on the web as well.
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An arbitration as an alternative dispute resolution technique, efficient and effective method of resolving disputes, particularly business issues. However, some issues owing to their subject matter, may not be arbitrable, and it may even be argued that some disputes cannot be resolved through arbitration and that litigation is the only option. In India, the field of intellectual property (“IP”) law is developing rapidly, and the demand for effective dispute resolution involving these rights is increasing. Because no statutory provision specifies which disputes or subject matters are or are not arbitrable. The ambiguity surrounding this issue has resulted from conflicting interpretations, an absence of a defined precedent, and varied views by Indian High Courts of different states.
The Supreme Court held in its obiter dicta in Ayyasamy v. Paramasivam & Ors.[i] said that all disputes stemming from trademarks, copyrights, and patents are inherently unarbitrable. However, because this classification was limited to the Court’s obiter dicta, it cannot be relied on as definitive precedential authority. Various judgments show that there is no such absolute constraint on the arbitrability of IP concerns due to the presence of multiple schools of thought on the matter.
Existing legislative provisions
It can be noted that various issues maybe inarbitrable due to legislative requirements. Express statutory provisions safeguard intellectual property rights from violation, and as a consequence, statutory remedies are possible. For example, under Section 135 of The Trade Marks Act 1999, a trademark proprietor can seek legal action and claim damages in civil courts against an infringer. Likewise, Section 62(1) of The Copyright Act 1957 specifies any action or any civil procedure originating within this part in regard of violation of copyright in any work or violation of any other right granted by this Act should be commenced in the lower court possessing authority. Because the provisions acknowledge only civil courts, it is assumed that redressal can only be desired via the courts and not via arbitral proceedings. As a result, such provisions may generate considerable misunderstanding in this field. It should be emphasised, however, that these clauses do not specifically preclude arbitration, and issues relating in personal rights are arbitrable.
Advantages of Alternative dispute resolution in IP disputes
- A single procedure: There is a risk of conflicting outcomes in court litigation involving international intellectual property issues because there are numerous processes that can be used in various jurisdictions. The cost and complexity of multi-jurisdictional litigation can be avoided if the parties to a dispute agree to resolve it through alternative dispute resolution (ADR) in a single process.[ii]
- Party autonomy: On how they want their dispute to be resolved, the parties can agree. They are exempt from having to go through the customary legal process
- Neutrality: ADR acts as a neutral referee. Both parties are prohibited from using their domestic litigation benefits.
- Expertise: Parties being able to choose arbitrators who are professionals in their field is the best aspect of this unconventional method of dispute resolution.
- Confidentiality: ADRs are the best and safest way to settle disputes while maintaining confidentiality. Being party-focused, it places a high value on secrecy and confidentiality.
The Drawbacks of Using ADR
ADR is not without its flaws. It has some limitations:
- Certain disputes can only be resolved through formal litigation.
- Only the parties involved are required to abide by the arbitrator’s ruling.
- ADR is less appropriate when one or both parties refuse to cooperate because it is entirely cooperation-based.
Award Acknowledgement and Enforcement:
Arbitration cannot be used to settle disputes involving intellectual property unless it is recognised and upheld. Modern institutional arbitration laws have been adopted by many countries, favouring the arbitration of commercial matters and putting strict restrictions on the grounds for which a court may refuse to uphold even an award rendered domestically.[iii]
A judgement rendered in a domestic arbitration in India is conclusive and enforceable against all parties. There are, however, a number of reasons to decline to uphold the arbitral decisions. Foreign judgments are similarly conclusive and binding on the parties involved.
For intellectual property, quick
Interim Relief:
legal recourse must be available. Because they include every legal option available to define and protect the parties’ rights temporarily before a final arbitral decision, intermediate reliefs are crucial in intellectual property disputes. The majority of the property’s value will be lost if a prompt alternative to develop and implement intellectual property exclusivity is not available.
Conclusion
In conclusion, it is clear that ADR, particularly arbitration and mediation, is superior to litigation for the resolution of the majority of IP infringement claims. ADR is more flexible, more quality, less time consuming, more private, and less expensive.
It is important to note that there has been a lot of confusion in India regarding this area of the law, possibly as a result of a lack of parliamentary definition. Arbitration needs to be formalised. The institution should, among other things, create a welcoming environment and offer infrastructure and specialised assistance. Institutionalizing institutions will increase public confidence. People will often turn to arbitration or another form of ADR before going to court.
Author: Niyati Vishwakarma, A student of BALLB(Hons.), 4th year from Jagran Lakecity University, Bhopal (M.P.), in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.
References
[i] Civil appeal No. 8245-8246 of 2016
[ii] www.wipo.int
[iii] www.intelproplaw.com
