Arbitrability of Intellectual Property Disputes

Arbitration has become a popular alternative dispute resolution method for intellectual property (IP) disputes, and the number of arbitration cases is increasing day by day . However, there is no uniform practice around the world, and arbitration is not accepted as an appropriate way for IP disputes in some jurisdictions. IP disputes can be distinguished as a contractual disputes and non-contractual disputes. The contractual disputes can be disputes arising from the license agreement or in the case of mergers and acquisitions if one of the subjects is intellectual property right. The validity, ownership or infringement disputes are examples of non-contractual disputes.

In general, contractual disputes and disputes arising from infringement of IP right can be resolved through arbitration. However, there are exceptions, as the fact remains that, in the case of infringement by third party, the possibility of resorting to arbitration is low because it is difficult to conclude an arbitration agreement with the infringer party after the infringement occurred.

Generally, it is considered that the invalidity of IP right is not suitable for arbitration due to public order and exclusive jurisdiction of court . Some countries such as France and USA accept arbitrability of invalidation disputes, but arbitral award is binding only for the parties . On the other hand, some countries such as Switzerland and Belgium accept arbitrability of invalidation disputes and arbitral award has erga omnes character according to these laws .

Domain name disputes differs from other IP disputes. Arbitration is frequently preferred to resolve disputes arising from domain name without any exceptions.

Criminal cases related to the infringement of IP rights are not suitable for arbitration because these cases fundamentally criminal cases.

Arbitrability of IP disputes is important matter for enforcement of arbitral awards. New York Convention dated 1958 regulates recognition and enforcement of arbitral awards. The application area of New York Convention is quite broad area, thanks to 164 Contracting States. Recognition and enforcement of an arbitral award may be refused due to be contrary to public order or not to be capable of settlement by arbitration under the law of country that recognition and enforcement is sought. So, it is important to consider the approach of the law of the country where enforcement is sought due to different jurisdictions approach.

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