Dispute Settlement: ALTERNATIVE DISPUTE RESOLUTION Chapter 3.
Alternative Dispute Resolution in Life Sciences€¦ · · 2017-07-25Alternative Dispute...
Transcript of Alternative Dispute Resolution in Life Sciences€¦ · · 2017-07-25Alternative Dispute...
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1 Life Science IP Seminar 2017
Dr. Esther Pfaff, LL.M.
Alternative Dispute Resolution in Life
Sciences
Attorney-at-Law | WIPO Mediator Counsel
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2 Life Science IP Seminar 2017
Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
ADR in the Life Science Sector
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3 Life Science IP Seminar 2017
Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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Introduction on ADR – Facts and Figures
Trend towards ADR in Life Sciences
• Alternative Dispute Resolution has become increasingly popular in the
Life Sciences Sector
• Proceedings are confidential/ Technical expertise of judges preferred
• Disputes are international – exceeding court jurisdictions, multiple
l itigation required
• Frustration about long duration of proceedings, litigation, e.g. including
electronic discovery, increasingly burdensome
• Scepticism towards the UPC
• Mediation more and more encouraged by judges (UK: Wright v. Michael
Wright Supplies Ltd. v. Another [2013] EWCA Civ 234)
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WIPO Cases
15% of cases filed with WIPO belong to the Life Sciences Sector
Introduction on ADR – Facts and Figures
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WIPO Cases: Typical Time and Cost*
Introduction on ADR – Facts and Figures
**Attorny costs not included
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WIPO Cases: Settlement Rates
Introduction on ADR – Facts and Figures
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Popular Fora:
• Assist in selection of mediators/
arbitrators
• Provide facilities to administer
proceedings
• „Lend“ their procedural rules
Introduction on ADR – Facts and Figures
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Options in case of
conflict:
• Talk to each other
• Talk with a mediator
• Let an arbitrator/expert
decide
• Let the judge decide
Introduction on ADR – Facts and Figures
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WIPO Working Group members advocate an
informed and considerated Process Design for
Conflict Management
• Which mechanisms shall be used for which dispute?
• Which dispute clauses shall be used when agreements are
concluded?
• Considering arbitral insitutions with a preferred case
managment system
• Establish a list of preferred arbitrators or mediators in the
relevant technical sector
Introduction on ADR – Facts and Figures
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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What is Mediation?
vs.
?
Mediation
Life Science IP Seminar 2017
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or rather:
Instead of:
Mediation
Life Science IP Seminar 2017
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Mediation is…
…in essence a moderated negotiation
…voluntary
…confidential
…resulting in a settlement by both parties, not a
binding judgment
Mediator acts as a neutral to structure and
facilitate the negotiation
Mediation
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„Getting out of the straight-jacket of litigation
towards a business solution“
Life/Dispute Interest 1 Interest 2
Deal
Deal
Deal
Position 1 Position 2
Judgement:
Position 1, 2
or 3
Mediation
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When is Mediation a useful tool?
• When the outcome of a legal dispute is not black and white
because
• In a grey area of law
• High complexity, it involves many different legal claims and
positions
• Poses factual/evidential challenges
And/Or
• When it involves some kind of long-term relationship
• Parties are close competitors
• Partners in a long-term project
• Parties to a long-term agreement
• Any element of „can‘t get away from each other“
Mediation
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Examples of such cases are:
• Conflicts within R&D projects or their dissolution
• License disputes
• Vindication claims – especially if there is an interest to
preserve relationships with inventors/research partners
• Disputes on employee inventions
• Infringement actions/Opposition/Nullitiy actions – if there is
an interest to preserve relationship with
competitor/potential other benefits from that relationship
• Biosimilar litigation – see above, it‘s a small world!
Mediation
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Constituting a Mediation
• Parties agree on a Mediator
• More technically revised – evaluative approach?
• More commercially oriented – facilitative approach?
• Co-mediation – best of both worlds?
• Parties sign a mediation agreement/ Agree on basic procedure
• Shuttle mediation?
• Sessions over the phone?
• Caucus sessions yes or no?
• Determine exchange of information/documents up-front
• The actual mediation session often lasts a single day
Mediation
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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Overview on Mediation Process
Mediation Phases
• Preparation
• Opening Session
• Exploration
• Negotiation
• Settlement
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Mediation Phases - Preparation
• Pre-talk by mediator with each party
• Filing of one position paper is common
• Find the right balance between „scripting“
and „no preparation at all“
• Explore best possible and worst possible
scenarios(BATNA/WATNA), ideally from the
perspective of both parties – find a counsel
experienced in mediation
Overview on Mediation Process
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Mediation Phases – Opening Session
• Introductory talk by mediator, going over ground
rules for the day
• Setting the tone for the meeting – gestures
matter!
• In US mediation opening sessions are becoming
less common - A lunch or dinner before the
session might be helpful in case of scepticism
towards opening session
Overview on Mediation Process
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Mediation Phases – Exploration
• Each party gets the chance to „venting“ the
dispute
• Collecting all relevant aspects of the case
• Structuring the upcoming negotiations by
prioritizing and categorizing controversial issues
• Ideally: Cause the „Columbo-Moment“, provide
the parties with a new/alternative perspective
Overview on Mediation Process
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Oh Sir, just one more thing…
Oh, sorry Lieutenant I didn't
recognize you. You look
different somehow.
Columbo with new coat:
I've had a haircut.
Overview on Mediation Process
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Mediation Phases – Negotiation
• Matter of timing- negotiations should not start before the
exploration has been exhausted
• Role of the Mediator: Facilitative vs. Evaluative approach?
- usually parties expect a style-drift during the day
• Stress-testing positions
• Guiding parties from analysis to contemplation to
experimentation to acceptance to solution dealmaking
Overview on Mediation Process
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Caucus Sessions – yes or no?
• Disliked in mediation theory - very common in
commercial mediation!
• Often extremely valuable to get to the core of the
matter, resolve a deadlock
• No face saving needed/no need to play a role
• Helpful tool to clarify understanding of the
situation, especially in a cross-cultural context
Overview on Mediation Process
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Mediation Phases – Settlement
• Each session ends with a term sheet to capture
the progress
• Helpful to involve lawyers already in the drafting
• The final settlement is not drafted by the mediator
– Parties are on their own again.
Overview on Mediation Process
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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What difference can this make? – a comment for the skeptic
„What difference can this make?“
• There have always been conflicts
• Mediation is a relatively recent phenomenon
Did our conflicts change?
Yes!
• Modes of communication changed
• The business landscape changed
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What business relationships used to be like:
International since a long time but:
• Rather long-term, stable
• Build on some kind of personal trust/ relationship,
• Personal meetings/Direct Communication
• “Business Partners“
What difference can this make? – a comment for the skeptic
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Business relationships today:
• Global communication is conducted electronically –
personal contacts are the exception
• „Commoditization“– trust is often set in a system or
company rather than in a person
• Relationships and partnerships change rapidly:
„ We have not spoken to the other party in months, Mr. XYZ
knew the tech department but he left the firm last year, and
also, since this year, the other party has been bought by a
Chinese enterprise…“
What difference can this make? – a comment for the skeptic
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The Culture Factor – there is more cultural
interaction on many levels:
• Global economy – different ethnic cultures are
concluding deals
• High degree of specialization – more deals
between universities, start-ups, big multi-national
companies, all with their own business culture
Communication has become more challenging!
What difference can this make? – a comment for the skeptic
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Consequently:
• There are less established channels of
communication
• Misunderstandings occur easily
• The atmosphere turns hostile and aggressive
relatively quick
• Even simple conflicts are therefore often not
resolved and get out of hand
What difference can this make? – a comment for the skeptic
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The Psychology of Conflict
• A party in conflict is under serious stress
• The „driver phenomenon“ – the perception of the
conflicted party is limited
• The mediator takes the parties emotionally off the
driver‘s seat while maintaining maximum party
autonomy
What difference can this make? – a comment for the skeptic
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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Mediation as a Management Tool
• Mediation can also be used as a preventive tool, to
keep conflicts from escalating
• A neutral can be appointed already when concluding
the agreement to „live with the agreement“ („In Life
Mediator“)
• Acts as a point of contact between the parties and
facilitates negotiations in case of a dispute
• Only if the In-life mediator cannot resolve any dispute,
the dispute clause is triggered
Mediation as Management Tool
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Always „Win-Win“?
• Maybe „Pain-Pain“
• But maybe still the best possible solution in the given
circumstances
• Sustainability of the settlement: Mediated conflicts are less
likely to lead to follow-up litigation
• If this got you interested, you may want this on your reading
list:
http://www.jonlang.com/pdf/pocket_mediator.pdf
Mediation as Negotiation Tool
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Alternatives
Think the dispute through! What is the way forward
when mediation fails?
• Consider splitting the dispute in a resolved and a
non-resolved part
• Resort to a state court?
• Resort to arbitration?
• Resort to a hybrid procedure?
Mediation as Negotiation Tool
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39 Life Science IP Seminar 2017
Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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Arbitration
When is arbitration a useful mechanism?
• When a binding decision is required
• Litigation shall remain confidential
• The conflict is global and would require multi-
national litigation
• The dispute is technically complex and shall be
decided by an expert
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Arbitration
Examples
• License disputes
• Disputes/dissolution of R&D Agreements
• Multi-national patent disputes (FRAND/patent pool
disputes)
• …
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
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Strategic Advantages
• More time efficient than state courts, Not necessarily
cheaper!
• Procedure can be adapted to the needs of the parties
• Interim injunctions remain possible, consider in advance
whether this would be a relevant aspect!
• One shot – no appeal instance except the parties agree
otherwise
• Internationally enforceable (New York Convention 1958)
Strategic Considerations
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„Forum shopping“
• Arbitration rules all follow a similar model
• Costs/fee structures may differ!
• Arbitrator selection procedures may differ!
• Note: Supplemented by the national law governing the
procedure!
• Seek legal consulation on „particularities and pitfalls“
• Mosaic-approach“ often followed in cross-border patent disputes
Strategic Considerations
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
Life Science IP Seminar 2017
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46 Life Science IP Seminar 2017
The Patent Mediation and Arbitration Center of the UPC
The Future Patent Mediation and Arbitration
Center
• Hosting Mediation/Arbitration in the context of UPC
litigation with seats in Ljubiljana and Lisboa
• And independent of that - competing with already
existing fora – relevance for commercial arbitration
still unclear, currently more recognized for
mediation in context of UPC litigation
• PMAC awards can exceed UPC territory, would
then be handled and enforced like any other
arbitral award
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Introduction on ADR – Facts and Figures
Mediation
Overview on Mediation Process
What difference can this make? – a comment for the skeptic
Mediation as Tool for Contract / Communication Managament
Arbitration
Strategic Considerations
The Patent Mediation and Arbitration Center of the UPC
Hybrid Procedures
Life Science IP Seminar 2017
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48 Life Science IP Seminar 2017
Hybrid Procedures
Arb/Med - Med/Arb
• Both tools can be combined freely
• Frequently, arbitration is preceded by mediation,
limited by a fixed term
• Parties can revert to a moderated negotiation any
time or give up and ask for a binding decision any
time
• Consider combinations up-front in your dispute
clause!
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Hybrid Procedures
Switching hats - The mediator as arbitrator and
vice versa?
Problem: Mediator as Arbitrator
May have obtained confidential information from one party in
caucus
Consider role-changes in the mediation agreement: exclude
caucus sessions?
Exchange in caucus at own risk?
Culture factor: Asian legal culture more open to role changes,
in-camera court hearings with one party not unusual
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50 Life Science IP Seminar 2017
Can an arbitrator wear two hats?
- Sec. 33 of the Hong Kong Arbitration
Ordinance
Hybrid Procedures
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Hybrid Procedures are attractive to save any
ground that has been gained
Sometimes used to make a party walk the „last mile“:
• „Michigan Mediation“
• „Baseball Arbitration“
• Deposit of Arbitral Award
• Expert Determination
Hybrid Procedures
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Thank you for your attention!
Dr. Esther Pfaff, LL.M [email protected]
Attorney at Law | WIPO Mediator Counsel