Mediation is a potentially efficient and cost-effective alternative to traditional litigation and arbitration. The use of mediation has become increasingly popular in several areas of dispute resolution and one such area is that of intellectual property (IP).
As the field of Intellectual property is vast, here the importance of mediation as an alternative to both litigation and arbitration in patent infringement disputes is discussed.
A patent can be defined as a set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited period of time in exchange for detailed public disclosure of an invention typically for 20 years during which the product or process cannot be exploited by others.
Patent disputes typically arise when patent rights are breached i.e Patent infringement occurs when a third party makes, uses, sells, offers to sell a patented invention without the patent owner’s permission. The scope of the patented invention or the extent of protection is defined in the claims of the granted patent. Therefore, patent infringement disputes involve courts interpreting and evaluating the claims of a patent on which the protection is sought. This is a complex procedure and the litigation process often become expensive and complicated. In the defense of infringement party allegedly responds with a counterclaim of patent invalidity and a defendant involved in patent litigation may ask to reexamine the patent being litigated. During re-examination the court will reconsider the validity of original patent and whether it meets the statutory requirements of novelty, inventiveness and non-obviousness. If a defendant successfully pleads the defence of a patent the patent owner will lose not only the case but also the patent itself.
Alternatively, mediation in patent infringement disputes can save time and money by avoiding the interpretation and reinterpretation of patent claims. Also, mediation removes the risk of patent invalidation and promotes creative solution in patent disputes. Moreover, unlike litigation, mediation process is confidential.
For example- A company holding patent rights for a technology founds that its competing company is selling the same technology without any license. The concerned company threatens to file patent infringement case in all jurisdictions in which the company is holding patent rights. But the mounting cost of legal action would take a toll on the company and the litigation process is very time consuming. In such a situation, mediation is instrumental in transforming a hostile situation in which the parties were preparing to engage in prolonged and expensive litigation into one in which they were able to conclude an arrangement which suits the business interests of both parties and ensures the profitable use of the technology in the service of those interests.
Mediation is a great idea and can offer people a way of working things out without spending lots of money which could be better spent elsewhere to grow a business.