Intellectual property is a type of incorporeal property and potential disputes can relate to the title and infringement of that property. Arbitration of IPR disputes deserves special consideration, because the award issued by the tribunal has effects in personam. The benefits of arbitration are more prominent than ever at present, given today’s globalised society.
Advantages of Arbitration
Firstly, arbitration resolves the issue of parallel proceedings in different jurisdictions, by providing a single forum to resolve the dispute. This brings clear advantages from a cost-efficiency perspective, because in such circumstances there are no additional costs associated with hiring foreign counsel.
Furthermore, witnesses would only attend one set of proceedings and expert evidence would similarly be required for one set of proceedings (or no expert evidence may be required at all if the arbitrators possess the relevant knowledge).
Arbitral awards are final and binding, and provided that the winning party seeks to enforce the award in a New York Convention jurisdiction, there should be no problems associated with enforcing IPR through state institutions such as various patent offices.
Secondly, it has been argued that the confidentiality of proceedings provides a significant advantage, as it helps the parties prevent business secrets and other sensitive information from reaching the press and public at large.
Whilst the jurisdiction and the statutory regimes are important factors to bear in mind in such circumstances, if the proceedings are confidential, it may be difficult for parties to rely on the award or parts of it in later proceedings. Furthermore, patent offices and other third parties would not be aware that arbitral proceedings took place.
Consequently, the issue of confidentiality is a complex one, as such provisions are not always implied in the arbitration proceedings and when they are available, they vary across jurisdictions.
In any event, parties are free to include confidentiality provisions in their arbitration agreement. When the agreement is silent on the issue, parties should check the arbitration rules applicable to their case. If the rules are silent as well, this will be a matter for the lex fori. It is important to note that the implications of confidentiality are two-sided.
Even though the advantages of preserving secret documents and sensitive information are of paramount importance, parties should note that their confidentiality agreement does not operate if the award is challenged. In this case, parties should consider options such as in camera proceedings and the redaction of the final judgement.
Thirdly, the ability to choose the arbitrators is a clear advantage in such a technical industry where IPR issues often overlap with regulation and competition law. The parties can avoid random case allocation and choose someone with the relevant expertise to resolve their dispute.
This can potentially help save the costs of appointing an expert. In this sense, arbitration provides for quality control, either directly through the parties’ choice or through panel selection by an arbitral institution, such as WIPO.
Finally, the arbitral tribunal might be more flexible than the courts in granting remedies. Even though, in theory, arbitrators may order remedies which are not available to courts, arbitral tribunals should exercise this power carefully.
This is mainly due to the fact courts will equally have the power to refuse recognition and enforcement of an award providing for a remedy outside their remit.
The use of arbitration has increased over the past few years. A recent international dispute resolution survey conducted by Queen Mary University of London together with Pinsent Masons shows that 51% of the respondents indicated that in the TMT sector, the majority of future disputes would relate to IPR and 43% stated that arbitration was their preferred method of dispute resolution.
The nature of IPR disputes is suitable for resolution by arbitration. Party autonomy is at the core of arbitration and therefore, parties have the power to tailor their arbitral proceedings. In this sense, it is of paramount importance that where arbitration is the preferred method of dispute resolution, parties take the time to draft their arbitration agreements carefully. They can thus ensure to include the details that are relevant to the different applicable laws as well as interlocutory powers and procedures.
 Tereza Kyselovská, ‘Arbitrability of Intellectual Property Rights Disputes’ in Alexander J. Bělohlávk and Naděžda Rozehnalová (eds), Conduct of Arbitration, Czech and Central European Yearbook of Arbitration (LexLata 2017), vol VII, p 85.
 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), Art II (1).
 Alexis C. Brown, ‘Presumption Meets Reality: An Exploration of the Confidentiality Obligation in International Commercial Arbitration, 16 AM. U. INT’L L.REV. 969 (2001), pp. 990-9.
 M.A Smith and others, ‘Arbitration of Patent Infringement and Validity Issues Worldwide’, Harvard Journal of Law & Technology, vol 19, issue 2 (Spring 2006), p. 316.
 Hassneh Insurance Co of Israel v Stuart J Mew  2 Lloyd's Rep.
 Sophie Lamb and Alejandro Garcia, ‘Arbitration of Intellectual Property Disputes’, Bird & Bird News Centre, 18 December 2007.
 Thomas E Carbonneau, ‘US’, in Frank-Bernd Weigand (ed), Practitioner’s Handbook on International Arbitration (OUP 2002).
 Queen Mary University of London and Pinsent Masons, 2016 International Dispute Resolution Survey: Pre-empting and Resolving Technology, Media and Telecoms Disputes.
 Bryan Niblett, ‘The Arbitration of Intellectual Property Disputes’, Worldwide Forum on the Arbitration of Intellectual Property Disputes (Geneva, Switzerland).