Growing reliance on technology as a means of procurement of goods and services has requisitioned the need for patent protection from threat of possible infringement. Redressing infringement of counterpart patents, copyrights or trademarks in various countries entails litigation in multiple foreign jurisdictions with different judicial systems and judges with varying degrees of experience and qualifications. Moreover, litigating is an expensive solution with chances of inconsistent results. Therefore, to avoid protracted legal battles, the Alternate Dispute Resolution mechanism has been highly recommended.

Arbitration is a process of dispute resolution wherein parties submit their dispute to at least one impartial “judge” who will render a binding decision. In arbitration, the parties agree that by submitting themselves to arbitration the decision rendered by the arbitrator will be binding and is“non-appealable” absent any defense of invalidity of the arbitration clause. To avail oneself to arbitration, a party must (1) enter into a contract containing an “arbitration clause” to preemptively attest their intent to arbitrate, or (2) produce a written agreement to arbitrate which may be executed independently of the contract either before or after the dispute arises.

Entering into a contract containing a carefully crafted arbitration clause provides a level of predictability with respect to the investment and liability associated with patent license and/or research agreements, thereby providing the respective companies a better estimation of the risk factors associated therewith. Specifically, when parties enter into an agreement to arbitrate they have the opportunity to obtain assurance through the careful drafting of the arbitration clause that any dispute arising out of the contract will be decided by a technologically knowledgeable neutral arbitrator in a manner that will be relatively inexpensive. Having this assurance can provide stability of the business relationship which is further strengthened by the knowledge that the proceedings will be confidential and the awards rendered will be final and non-appealable, so that the companies can quickly resume with their business transactions without concern for negative publicity or the uncertainty of appeals. Accordingly, using arbitration as a means to quickly and effectively settle patent disputes can not only be beneficial for both parties should a dispute arise, but can also provide pre-emptive benefits which remain even if the agreement to arbitrate is never enforced.

International Commercial Arbitration

“International Arbitration may be defined as the substitution of many burning questions for a smoldering one” -Ambrose Bierce(i). International Commercial Arbitration can be conceived as a real steal, expeditious and conclusive way of resolving international commercial disputes. It affords numerous benefits(ii) over adversarial litigation. Some of these are cited hereunder:
· Confidentiality
· Flexibility
· Expert attention towards specific disputes
· Promotion of business interests
· Swift control of proceedings
· Foreclosure of parallel proceedings in different jurisdictions

Arbitration also poses as a potential instrumentality in discharge of patent infringement and validity issues, that otherwise would have to be addressed in separate courts, applying anomalous procedural and substantive laws(iii) . In the age of Globalization and Privatization, it is highly recommended that the Multi-National Companies should consider International Commercial Arbitration in multifarious contexts including formulation of licensing policies.

Amelioration in the field of Science and Technology suggest that there is going to be no paucity of patent cases in future. Hence, an able dispute resolution mechanism becomes a pre-requisite. The Industries, Corporate Houses, Patent offices and above all the Creators of technology must prepare themselves to tackle such disputes in an efficacious manner. Despite show of enthusiasm among certain International players, arbitration has failed to reduce the patent caseload of public courts(iv) . Legal encumbrances, particularly in multi-jurisdictional patent controversies, are still encountered by parties interested in this method of dispute settlement.

Nature And Scope of Patent Dispute

As already discussed, patent rights are granted only for inventions, fulfilling the three-fold criteria of novelty, non-obviousness and industrial applicability. Hence, it could be asserted that patent disputes would involve the most abstruse and convoluted issues. The settlement of such issues is an uphill task pertaining to the time, cost and effort required.

Patent Disputes can be broadly classified into the following:
· Disputes regarding the grant of patent- The grant of a patent can be challenged by a“person interested” by way of Pre-Grant and Post-Grant Opposition proceedings. In many jurisdictions these kinds of disputes are considered non arbitrable for the reason that statutory rights cannot be decided upon by parties themselves(v) .

· Validity of the patent- The validity of a patent may be disputed if it does not fulfill the essential conditions, i.e. Novelty, Non-Obviousness and Industrial applicability.

· Infringement of the rights of the patentee- Disputes arise due to unauthorized making, using, selling, and importing of the patentee’s invention by a third party. They also include disputes pertaining to the license agreements, assignment of patent rights, etc.

Advantages of Arbitration Over Litigation

1. Speedy trial and Inexpensive- It helps in the speedy settlement of disputes. It is more cost- effective than the litigation proceedings in the courts. Statistics show that arbitration can save disputants up to 2/3 or more of the cost of litigation(vi) . According to a study conducted by AIPPI in 2006, the average expenditure in a patent dispute in any U.S Court came down to $2 to $4 million. On the other hand, the cost of arbitration was $1 to $1.5 million(vii) .

2. Forum Certainty- Since patent rights are territorial in nature, a lot of complexities might arise due to multiplicity of court proceedings. Despite well-meaning efforts to streamline and harmonize the patent litigation system, the reality is that multinational entities are forced to pursue parallel litigation in each country where disputes arise. However, international arbitration provides a single forum for settlement of multi-jurisdictional patent disputes(viii) .

3. Party Autonomy- In case of litigation, there parties do not have the discretion to choose any of the standard procedures. Whereas in case of international arbitration, the parties are free to choose the arbitrators, substantive law to be applicable, place of arbitration, language of the proceedings, etc. Thus, the parties have an opportunity to exercise greater control over the way their dispute is to be resolved. This makes the procedure of arbitration very effective. The parties are also free to challenge the appointment of the arbitrators on the grounds of their independence and impartiality. In litigation, for instance, the parties can neither challenge the integrity of the judge nor his technical expertise.

4. Neutrality- When two parties contest a legal battle internationally, one of the parties inevitably enjoys the home advantage. For example- one could say that in the recent case of Apple v. Samsung, which was filed under multiple jurisdictions, Apple was at advantage in U.S. On the contrary, Arbitration ensures neutrality and an unbiased approach since the parties can mutually decide upon the appointment of the arbitrators. There is absolutely no scope for favouritism or home advantage. As compared to litigation, arbitration is more fair, just and transparent.

5. Confidentiality- Patent disputes involve such information which if disclosed would be detrimental to the rights of the patent-holder. This includes technical information regarding the specifications, composition of the product, process or method, technical drawings, claims, etc. The proceedings of a court are carried out in open and not in camera. The documents submitted before the court become public and can be examined easily by any person. Sometimes special orders could be taken under some jurisdictions to restrain disclosure. However, disclosure of such sensitive information, even in a single jurisdiction, could prove fatal for such invention and the party concerned. Arbitration on the other hand, is a private and consensual procedure, wherein both parties and the arbitrators are under an obligation not to disclose sensitive and confidential information to third party. WIPO has formulated strict rules and regulations for the same.

6. Availability of Expertise- Inventions are highly technical in nature and require expert handling at every stage. Most of the times the judges and other jury members do not possess sufficient knowledge to decide patent infringement and validity suits. They may not be able to appreciate the substantial amount of hard work put into the invention, or analyze and decide on disclosures and scientific evidences submitted in each case. Thus, the probability of misjudgments would increase. However, in case of patent arbitration, the parties can choose an arbitrator who is competent and possesses the required qualifications. It cannot be denied that arbitration may not altogether be the best option for settlement of patent disputes. It also suffers from certain limitations. One of the major concerns in the employment is the recognition and enforcement of awards in different jurisdictions. We have already discussed how confidentiality of information poses as a great advantage in case of arbitration. But where a question of public policy has arisen, as in case of secrecy directions, information may need to be disclosed. Effective implementation and enforcement of award may also be the reasons for disclosure. Other disadvantages could be limited judicial review and lack of awareness.

Conclusion
Patent infringement cases have sky-rocketed in the modern times owing to the scientific and technological advancements in various field of study. Market competition has motivated the manufacturers to come up with inventions and thereafter get exclusive rights over them for economic benefits. Along with this competition comes a predictable brouhaha of patent infringement disputes which have led many parties to court.

It is a worldwide known fact that patent litigation can cost in millions. Moreover, patent infringement cases dealt through litigation get delayed over a long period of time especially because of the procedural and technical hazards. This further increases the cost. There are concerns over confidentiality as well, since the courts are generally open to the public. Many times the judges are ill-equipped to resolve the conflicting assertions. They might lack the required technical expertise. Therefore, the implementation of an alternative system for settlement of patent disputes is the need of the hour.

International Commercial Arbitration has a long way to go in the settlement of patent disputes. If implemented effective, it can play a significant role in the protection of rights of the patentee. However, we must understand the system of courts cannot be completed eliminated. But a certain shift is definitely required. The best way to decide between patent litigation and patent arbitration would be to look at the facts and circumstances of each dispute and then act accordingly.

References
i. Ambrose Gwinnett Bierce (1842-1914) was an American editorialist, journalist, short story writer, fabulist and satirist. His best known works include “An Occurrence at the Owl Creek Bridge” and “The Devil’s Dictionary”.
ii. Ibid
iii. Marion M. Lim, Note, ADR of Patent Disputes: A Customized Prescription, Not an Over-The-Counter Remedy, 6 CARDOZO J. CONFLICT RESOL. 155, 167-68 nn. 77-78 (2004)
iv. Ibid
v. Roohi Kohli Handoo & Yoginder Handoo, Partners, Handoo & Handoo, Legal Consultants, LLP,” Scope and applicability of Alternative Dispute Resolution procedures to disputes related to patent law – Is it appropriate to use arbitration or mediation to resolve patent disputes?”
vi. Anita Stork, Note, the use of arbitration and corporate disputes: IBM v. Fujitsu, 3 High tech. l.j. 241,254, (1988)
vii M. Scott Donahey, International Arbitration of Patent Disputes, Annual Meeting of AIPPI United States (2006)
viii. A.M. Anderson, C.A. Young and B. Razavi, International Arbitration: The Only Way to Resolve Multi-Jurisdictional Patent Disputes in a Single Forum, October, 2008