Mediation - What is it? Can it be used to resolve IP disputes?

The traditional way of resolving IP disputes is via litigation through the Courts. However, in some circumstances it may be more appropriate to mediate an IP dispute.

The traditional way of resolving IP disputes is via litigation through the Courts. However, in some circumstances it may be more appropriate to mediate an IP dispute.

Mediation is a private choice and the process is usually entirely confidential. A mediator encourages the parties to talk openly about their positions and feelings about the case in issue. The mediator has no interest in the outcome of the dispute and will not offer the parties advice or reach a decision for them. The mediator does not act as a Judge or jury. The mediator's job is to help the parties to identify what they wish to achieve, assist them in considering possible solutions (which are not always financial) and, in a successful mediation, helps them to agree terms of settlement to reach a final resolution of the dispute.

Mediations are usually held on a "without prejudice" basis. This means that, if the mediation is unsuccessful and the matter proceeds to trial before a Court, the trial judge will not be told of the outcome of the mediation. The parties will also not permitted to raise at trial any disclosures or admissions made during the course of the mediation.

If a party has refused unreasonably to mediate, this refusal can be brought to the attention of the Judge at the end of trial, when he decides the level of legal costs that the parties should pay or receive.

In IP disputes the parties often do not consider mediation, usually because the party bringing the claim wants an injunction preventing the defendant from doing the acts of which complaint is made. If the defendant is not willing voluntarily to cease doing what the claimant wants the defendant to stop from doing, then the claimant's only option is to litigate the matter and to try to get an injunction from the Court.

However, the way in which litigation in this country works means that it is usually only one side that wins at trial. You either will, or will not, get an injunction (or, vice versa, as a defendant you either will, or will not, be injuncted). If you mediate then you at least have the opportunity of concluding a deal which creates a "win-win" situation for both of you. For example, as a claimant you may be willing to grant a licence to the defendant (whereby, the defendant will pay royalties to you, in return for the licence) and as a defendant you may be willing to pay those royalties, rather than risk the possibility that a Court will injunct you from doing what you want to do. Also, litigation is expensive, takes up a great deal of management time and means a lot of stress and inconvenience for probably 12-18 months before the matter gets to trial. There may also be a subsequent appeal, which may take another 6-12 months to be heard. During this time there is business uncertainty. For example, if you are the defendant, you will not know for certain for sometime whether you can do the things that you want to do. However, in our experience, most businesses want certainty. By mediating the dispute (and coming to a solution by way of a negotiation at the mediation) you can create the business certainty you require.

We do appreciate that mediation is not appropriate for all IP disputes. However, in our opinion, it is often very useful to consider when you are involved in an IP ownership dispute, or where there is a genuine issue as to whether or not the IP right in issue is valid and/or infringed. Even if there is an 'open-and-shut' case on validity/infringement, mediation is still worth considering (for example, when trying to agree on how much compensation, by way of damages or an account of profits, should be paid by the defendant to the claimant).

In conclusion, we at Ashfords LLP do not see litigation as a last resort. Litigation is often the best (and sometimes the only) option to take in the circumstances. However, if full-blown litigation can be avoided, for example, if you are willing to negotiate with the other side, rather than insisting on a "winner-takes-all" approach, then mediation is a very useful tool to use when trying to resolve an IP dispute.