Intellectual Property Disputes And Alternative Dispute Resolution: The Way Forward

1. Introduction

1.1. As long as humans co-exist, conflict is inevitable. This statement remains a truism in all spheres of human endeavour, including Intellectual Property ("IP"). Since disputes are a necessary part of human relations, it is expedient to make provision for their resolution, especially when negotiating transactions. This is important because in absence of any specifically agreed dispute resolution mechanism by parties, the default method of dispute resolution i.e litigation will apply. This may, however, be undesirable for IP transactions, considering the need for confidentiality which is an important deal point.

1.2. In this article, we explore how Alternative Dispute Resolution ("ADR") mechanisms can be employed by parties to an IP transaction to better protect their interests.

2. ADR Mechanisms for IP Disputes

2.1. An IP dispute is a disagreement or conflict between two parties over the use, application, or extent of an IP right. All IP rights can be subject to disputes. Thus, there could be a dispute over copyrights, trademarks, patents, industrial designs, breeders' right, trade secrets, geographical indications, the right to publicity etc.

2.2. Alternative Dispute Resolution ("ADR") on the other hand is a general term for all methods of resolving disputes which do not involve the courts. It encompasses all forms of voluntary and flexible processes by which parties to a dispute can find a solution without using the traditional method of litigation. Some ADR techniques include Mediation, Arbitration, Negotiation, Expert Determination, Rent a Judge etc.

Arbitration

2.3. The Arbitration and Mediation Act 2023 (the "AMA") is the primary statutory law regulating the law and practice of arbitration and mediation in Nigeria. It is modelled after the United Nations Commission on International Trade Law model law on arbitration. Parties to an IP dispute may decide to resolve it by arbitration. S. 1(2) of the AMA states that parties to a dispute are at liberty to decide how their disputes may be resolved.

2.4. Under s. 1(3) of the AMA, an arbitration agreement is binding and enforceable to the exclusion of any other dispute resolution mechanism, unless the parties otherwise provide, or if the agreement is void. Thus, parties may decide to resolve an IP dispute by arbitration under the AMA.

Mediation

2.5. As an alternative to Arbitration, Part II of the AMA provides for Mediation as an ADR mechanism. S. 91 of the AMA defines Mediation as a process, "...where parties request a third person ("the mediator") to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship, but the mediator does not have the authority to impose upon the parties a solution to the dispute."

2.6. The major distinction between Arbitration and Mediation is that in Arbitration, the arbitrator has power to impose a binding decision (technically known as an Award) on the parties. The mediator on the other hand has no such powers. Also, unlike Arbitration, Mediation is a nonbinding procedure. However, under s. 82(2) of the AMA, when parties to Mediation have agreed on the terms of settlement and reached a settlement agreement, the settlement agreement is binding and can be enforced in Court as a contract, consent judgment, or consent award.

Expert Determination

2.7. Expert Determination is a procedure through which a dispute or difference between parties is submitted, by agreement of the parties, to one or more experts, who then decide on the matter referred to them. The outcome of the determination is generally binding, unless the parties agreed otherwise. It is frequently used in cases where technical expertise is required.

Negotiation

2.8. Negotiation is a strategic discussion that involves the parties to a dispute, in which they try to find an acceptable compromise mutually beneficial to resolve the dispute. The key feature of Negotiation is that it does not involve the intervention of a third party. It is strictly between the parties themselves. Depending on the nature of an IP dispute, parties may decide to explore negotiation.

3. Institutional Frameworks for ADR in IP Disputes.

3.1. There are also some institutions specifically established for the resolution of IP disputes. These are in addition to the general ADR frameworks used for resolving disputes. Some of them are discussed below.

The WIPO Arbitration and Mediation Centre

3.2. The leading institution which offers ADR services in relation to IP disputes is the World Intellectual Property Arbitration and Mediation Centre ("WIPO Centre"). The WIPO Centre is an international resource which resolves IP disputes using different ADR mechanisms. It was established in 1994 and has its headquarters in Geneva, Switzerland. It also has an office in Singapore.

3.3. The WIPO Centre offers a wide range of ADR services. It offers ADR services such as Arbitration, Mediation, and Expert Determination. It also has its own rules for these various ADR services (See WIPO Arbitration Rules 2021, WIPO Expedited Arbitration Rules 2021, WIPO Mediation Rules 2021, and WIPO Expert Determination Rules 2021). Since its establishment, the WIPO Centre has offered ADR services in respect of a wide range of IP disputes, including but not limited to patent and software licenses, trademark co-existence agreements, and distribution agreements for pharmaceutical products. It also handles non-contractual IP disputes such as patent and copyright infringement. WIPO disputes have involved parties based in different jurisdictions, Austria, China, France, Germany, Hungary, India, Ireland, Israel, Italy, Japan, Netherlands, Panama, Spain, United Kingdom, and United States of America, to name a few¹ . It also assists parties in the selection of arbitrators from its large database of over two-thousand experts with experience in dispute resolution and specialized knowledge in IP disputes.

3.4. In 2023 alone, the WIPO Centre was involved in the resolution of six-hundred and seventy-nine (679) IP disputes. Out of this figure, seventy-six percent (76%) were disputes over copyright and digital content, twelve percent (12%) were Trademark disputes while five percent (5%) were Patent disputes² . EUIPO Mediation Centre

3.5. The European Union Intellectual Property Office ("EUIPO") Mediation Centre ("EUIPO Mediation Centre") is also another important ADR institution in the field of intellectual property. It was launched on November 22, 2023, with its headquarters in Alicante, Spain. The EUIPO Mediation Centre provides different ADR services through a team of experienced mediators by assisting parties to reach an amicable solution to tailor their business interests. Its ADR services are free of charge to all parties and are also available online. The EUIPO Mediation Centre offers ADR services such as Mediation, Conciliation, and Expert Determination. It also has its own rules guiding its services.

Dispute Resolution Panel of the NCC

3.6. S. 78(1)(c) of the Copyright Act 2022 (the "Copyright Act") gives the Nigerian Copyright Commission (the "NCC") power to "investigate and redress cases of infringement of copyright and settle disputes of copyright, where those disputes have not been specifically reserved for settlement" under the Copyright Act. Thus, parties to an IP dispute involving copyright may, rather than resort to litigation, decide to refer it to the NCC. The NCC has power to resolve such disputes.

3.7. S. 90 of the Copyright Act also establishes a Dispute Resolution Panel (the "DRP") as an arm of the NCC to resolve disputes arising from (i) payment of royalties; (ii) terms of a license; or (iii) any matter in respect of which a determination by the NCC is required under the Copyright Act. The Copyright Act does not stipulate the specific dispute resolution mechanism to be employed by the DRP in resolving those disputes. However, s. 90(5) of the Copyright Act gives the NCC power to make regulations to provide for the practice and procedure of the DRP with the consent of the Minister of Trade and Investment. Pursuant to this, the NCC made the Dispute Resolution Panel Rules, 2007, which guides the practice and procedure for resolution of disputes before the DRP.

4. Case Studies/Famous IP Disputes Resolved by ADR

4.1. The resolution of IP disputes by ADR has become very popular in the commercial sector. There are several instances of famous IP disputes resolved by ADR, both in Nigeria and other parts of the globe. The case of C & J Clark v. Barth et. al. (WIPO Case No. D2023-2969) being one of the largest arbitration cases filed with the WIPO Centre in 2023 is worthy of mention³ .

4.2. The dispute involved C & J Clark, the company which owns the famous international shoe brand "Clarks", with headquarters in the United Kingdom. C & J Clark filed the dispute in the WIPO Centre against the Respondents, on ground that about one-hundred and nineteen (119) domain names used by the Respondents were confusingly similar to C & J Clark's domain name. C & J Clark also claimed that the Respondents used the disputed domain names in bad faith. The WIPO Panel found in favour of C & J Clarke and issued an order restraining the Respondents from using all the disputed domain names.

4.3. In 2018, giant tech companies, Apple and Samsung also settled their patent dispute by negotiation. The case, which was filed by Apple in 2011 involved a dispute over some designs and utility patents which Apple claimed was "slavishly copied" by Samsung. The suit originally ended in a $1 billion damages in favour of Apple. Samsung appealed and the amount was whittled down to about $539 million. However, in 2018, both companies announced that they had successfully negotiated and settled the case. Details of the settlement were however not made public⁴ .

4.4. Other instances of IP disputes which have been resolved by ADR abound. It is therefore no gain saying that the use of ADR for the resolution of IP disputes is now commonplace.

5. Benefits and Challenges

Benefits

5.1. The use of ADR in resolving IP disputes affords a lot of benefits to the parties. First, ADR protects the reputation of the parties. In some industries, particularly the music and movie industry, the success of a work depends on positive publicity. On the contrary, a high litigation profile is bad publicity and may discourage investors. Thus, to protect their reputation, brands may consider adopting ADR to resolve their IP disputes. This will ensure that they are not harmed by the adverse effects of litigation.

5.2. ADR also maintains confidentiality. Court cases and records are public documents. Thus, anybody can gain access to them upon payment of the necessary fees. However, by their very nature, some IP rights demand utmost confidentiality. For instance, it is commercially inexpedient to resolve a case involving unlawful exploitation of trade secrets by litigation. This is because once the case gets to court, the trade secret in question goes public. The moment this happens, it loses its character as a trade secret, and by consequence, its commercial value. Such a dispute is better resolved by ADR.

5.3. ADR is also time saving. Litigation takes time. Court cases may last for long as ten or twenty years. Resources are also spent on legal and other fees. Sometimes, the cost of litigation may be more than its eventual outcome. Also, because of high volume of cases in the Nigerian courts, cases move at a very slow pace, and delay is almost inevitable. These considerations make ADR an attractive alternative.

5.4. ADR also allows for predictability and party autonomy. With ADR, parties can reasonably predict how and when the dispute can be resolved. The parties get to work within stipulated timelines, thereby ensuring predictability. Also, ADR allows the parties to choose the applicable laws to govern their dispute, and the forum where the dispute would be resolved. These benefits are generally unavailable in litigation.

Challenges

5.5. Despite the above benefits, ADR also has some challenges. Some ADR processes like mediation are non-binding until an agreement is reached. This gives the parties the liberty to resile from the process midstream. This may have adverse effects, considering that such party may have obtained confidential information while they were part of the process.

5.6. ADR also thrives on the cooperation of the parties. So, when the other party to the dispute is unwilling, ADR is not possible. This is because ADR is a voluntary process, and one cannot be forced to participate. Litigation on the other hand is mandatory, such that if one fails to enter an appearance, judgment may be delivered and enforced against them in their absence.

5.7. Based on the above benefits and/or challenges, each dispute must be considered on a case-bycase basis to determine what is the best dispute resolution mechanism.

6. Conclusion

6.1. Despite its challenges, ADR affords benefits to brands and businesses for the resolution of IP disputes. It creates an atmosphere where the parties can dictate how disputes can be resolved— an opportunity which they may not have if they decide to use the regular courts. Brands and businesses should therefore consider employing ADR for the resolution of IP disputes to achieve a more effective outcome.

Footnotes

1. WIPO, "WIPO Arbitration and Mediation Center" https://www.wipo.int/amc/en/center/background.html#:~:text=Based%20in%20Geneva%2C%20Switzerland%2C%20with,commercial%20disputes%20between%20private%20parties . Accessed February 27, 2025.

2. WIPO, "WIPO ADR Highlights 2023" https://www.wipo.int/amc/en/center/summary2023.html Accessed February 27, 2025

3. https://www.wipo.int/amc/en/domains/decisions/pdf/2023/d2023-2969.pdf Accessed February 27, 2025

4. Reuters "Apple, Samsung settle U.S Patent Dispute https://www.reuters.com/article/world/apple-samsung-settle-us-patent-dispute-idUSKBN1JN2UA/ Accessed February 27, 2025.