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Alternative resolution a better option for IP

FINANCIAL STANDARD
By | November 16th 2010

By Sudi Wandabusi

After reading my article in this paper last week, one young entrepreneur called me for a cup of tea. But he also took this opportunity to ask a question that I believe has silently plagued many other Intellectual Property (IP) proprietors in this country – how does one litigate intellectual property infringement both internationally and locally in this world that has become a global village?

It is true that with globalisation, IP owners and practitioners have had to contend with the challenge of resolution of intellectual property infringement cases.

The development of IP on the global stage has come with the attendant challenges of ‘multiple litigation’ where disputes over the same protected subject matter and the same infringing material is resolved in parallel court proceedings in several countries.

Another major challenge with IP infringement cases, especially patent litigation, is that they are notoriously expensive. In the USA, patent litigation is estimated to cost more than Sh80 million. This, coupled with the need for the patentee to institute parallel proceedings in many countries poses a big problem to patentees that are small and medium-sized companies. Young companies, like my friend’s in developing countries like Kenya have ended up losing out on patents to big multinationals on account of this.

Kenyan entrepreneurs mainly look to the local judicial system as the main dispute resolution mechanism in all matters. However this is problematic especially in the area of IP. Litigation is generally too slow and you find that IP term of protection or its life cycle comes to an end before the infringement case has been decided.

Civil procedure

This makes many IP proprietors lose faith in the court process, as there is no guarantee of effective enforcement of their rights.

Courts have tried to help IP right holders in this predicament by providing for preliminary injunctions.

But this usually puts the courts in the dilemma of acting swiftly but on the basis of incomplete evidence than would be the case in ordinary proceedings, which may lead to incorrect decisions and ultimate unfairness to the defendants. The public nature of IP litigation is also problematic if one of the parties wants to protect his trade secrets. In the Kenyan civil procedure, it is the Chief Justice to assign the different judges to the various cases in court. This means that a judge is not necessarily a specialist in intellectual property and legal issues that are the object of litigation. This is especially so in patent, which is a highly specialised and technical field of law bringing about the risk of incorrect decisions.

The ultimate solution to these myriad problems is Alternative Dispute Resolution (ADR). Arbitration is perhaps the most popular and well-known ADR mechanism.

The advantage with this method is that the parties have a choice, by agreement, to refer the matter for arbitration rather than court.

The relevant laws may also provide for arbitration as the dispute resolution mechanism in the alternative to the court, and similarly, the court itself may order the removal of the matter from court to be resolved through arbitration. Negotiation is another ADR, common to nearly all disputes but which parties or counsel use without even realising that it is an ‘alternative’ dispute resolution method. Early neutral evaluation is yet another form of ADR entailing a preliminary assessment of facts, evidence or legal merits. It is designed to assist parties avoid unnecessary litigation and/or serve as a basis for negotiations.

Neutral person

Disputants may also consider expert determination where an independent third party, acting as an expert rather than judge or arbitrator, is appointed to decide the dispute or evaluate certain aspects of the dispute.

Better still, IP proprietors may opt for mediation, a voluntary, non-binding private dispute resolution process where the parties are assisted by a neutral person (the mediator) in resolving their disputes.

Any inventor or artist will tell you that they attach more weight to things such as fame and recognition than monetary compensation, hence will easily favour such ‘quiet’ resolution mechanisms.

The same is the case for inventors and companies that wish to protect their confidential information such as trade secrets.

And most importantly, IP disputes often transcend national borders.

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