The Pros and Cons of Arbitration for Patent Disputes

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The Pros and Cons of Arbitration for Patent Disputes

 

Patents convey legal ownership of a product or process to a person or company, and by obtaining a patent, you receive the exclusive right to monetize an invention by either making and selling it yourself or licensing it to others.  The process of obtaining a patent takes both time and money, so protecting your patent is crucial to preserving your legal rights to make money off it.

There are several ways to resolve patent disputes, including litigation, arbitration, voluntary settlement, etc.  Voluntary arbitration of a patent dispute has several advantages and a few disadvantages:

Pros of arbitration

Control.  The parties to the patent dispute are in full control of the issues to be decided, the procedures to be used, who will decide the outcome, and more.  Both parties can participate in the selection of an ADR organization, as different organizations may use processes that differ. From a strategic standpoint, it can be advantageous to be able to discern an arbitrator’s approach to the process beforehand — a benefit that is not available with traditional litigation.

Choice.  Both parties can participate in the selection of an arbitrator or panel of arbitrators to decide the dispute.  For example, you can decide whether it is important for an arbitrator to have a background in patent law, or one that is skilled in the patent’s subject matter.

Confidentiality.  While any final award involving a patent must be entered into the patent’s prosecution record, most of the other aspects of the dispute may be kept private.  If there are trade secrets involved or sensitive financial information being shared, confidentiality can be especially important.

Efficiency.  The rules of civil procedure inside a courtroom are vastly different than those in arbitration, so arbitration is often more expedient. In addition, less time spent on discovery and motions usually equates to significantly lower legal costs. The discovery process in litigation can be very time consuming; discovery in arbitration may be limited by the arbitrator, arbitration rules, or even by the parties themselves if spelled out beforehand in the arbitration agreement. The arbitrator may also impose limitations on motion practice, further shortening the process.

Cons of arbitration

Limited discovery and the lack of set procedures may be undesirable in some cases, depending on the complexity of the patent dispute.  Some plaintiffs prefer an open forum to ward off any potential future claims. 

Williams Mestaz, L.L.P., has the experience and reputation that you want when you are dealing with a business-related lawsuit. We are here to obtain the best possible outcome for your situation. Do not hesitate to contact Williams Mestaz, L.L.P., at (602) 256-9400, and see how we can help you resolve your legal matter.

 

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