Category Archives: Mediation

Three things to know about mediating licensing disputes

Posted on by Zela "Zee" G. Claiborne, Esq.
Zela "Zee" G. Claiborne, Esq.

Zela “Zee” G. Claiborne, Esq.

Zela “Zee” G. Claiborne is an arbitrator and mediator with JAMS in San Francisco. She can be reached at zclaiborne@jamsadr.com.

The number of IP disputes resolved in mediation has continued to increase as attorneys make efforts to find speedy resolutions and cut litigation time and cost for their clients. Only a small percentage of costly patent infringement cases actually go to trial; approximately 90 percent of them are settled.

Business people and their counsel recognize that mediation is a cost-effective, low-risk process with a remarkably high success rate when conducted by an experienced mediator. In mediation, parties avoid the risk of trial and remain in control of the resolution. Mediation is a good way to preserve business relationships. In order to have the best opportunity for settlement, counsel should consider the following three points:

1. Bring the right people to the mediation. That might sound like common sense, but it is surprising how many mediations fail because the decision-makers are not present. Mediation is a dynamic process that cannot be adequately summarized on the phone or after the fact to an absent decision maker.

2. In advance of mediation, consider some possible business solutions that might be acceptable to your client and to the opposition. Look at various options, giving thought to how the dispute looks to the other side and analyzing what their needs might be. Considering only a specific dollar range is a mistake. Your client’s views may shift after the mediator points out weaknesses of your client’s position.  You may learn something new to cause rethinking of the settlement position. The benefits could be great because many licensing disputes involve an ongoing business relationship. Options could include something other than money.

3. Finally, do not leave the mediation without preparing a short list of the deal points agreed upon.  The end of the mediation is not the time to draft a lengthy final settlement agreement with all the appropriate legal provisions. Decide who will prepare the first draft and when it will be sent to the other side for review. All client representatives should sign the short-form document so there is a legally binding agreement.

Mediation is an opportunity to resolve an IP dispute by reaching a settlement that makes more business sense than a litigated outcome. Use your professional skill to assist your client in making the most of the mediation opportunity.

The Present and Future of ADR

Posted on by Chris Poole

At the recent ABA Dispute Resolution Section conference in Chicago a panel that included myself, Debbie Masucci, past president of the DR section; India Johnson, CEO of AAA; and Dale Matschullat of Schiff Hardin, discussed “The present and Future of ADR.” The primary topics included the financial crisis in the courts, international ADR, online dispute resolution and diversity in ADR.

The budget cuts to the court system have perhaps been felt more severely in California. In March, California Chief Justice Tani Cantil-Sakauye lamented in a speech to the state legislature, “our judicial branch budget has been cut greater and deeper than any other court in the United States.” The roughly $1 billion in reductions have led to closure of a large percentage of civil courtrooms. The impact on ADR, however is less clear. The panel generally felt that the desire for swift justice would increase the demand for mediation and arbitration, but that hasn’t always been the case.

On the international front, there is a similarly mixed message. Changes like the 2007 Mediation Directive passed by the European Union have had little impact on the demand for ADR in Europe. In other parts of the world, arbitration has seen slow but steady growth, while mediation has yet to become a significant part of the ADR process.  Brazil was cited by the panel as a prime example of a rapidly expanding economy with an active and growing litigation market, but a lack of interest in commercial mediation.

Online dispute resolution (ODR) has become a hot topic in ADR. A number of ADR providers are exploring piloting online offerings. Although the panel was clear on the inevitable growth in ODR, interest and momentum is more apparent in smaller commercial disputes where human facilitators are often not involved.  The panel also felt that the use of ODR in more complex disputes will become more common as technologies and offerings improve.

The panel concluded with a robust discussion of diversity in ADR, highlighted by a recognition that the ADR industry reflects the same challenges as most law firms where women and minorities represent a small percentage of equity partners. JAMS, for example, recruits its neutrals primarily from the judiciary, but also from the senior ranks of law firms where the vast majority of partners are white males.  ADR providers have focused diversity programs in place, but are struggling to achieve as much progress on the demand side of the equation, where women and minority neutrals are not chosen proportionately to their population in those organizations.

We found it difficult to draw any single conclusion about the future of ADR. However, the message of slow, steady growth stood out as well as the need for ADR organizations to innovate in terms of efficiency, cost effectiveness and flexibility to adapt to changes driven by a more sophisticated clientele and an anemic domestic economy.

Mediation Matters in IP Matters

Posted on by Jim McGuire, Esq.
McGuire-James-900x1080

James McGuire, Esq.

James E. McGuire, Esq., a JAMS neutral in Boston, has extensive experience in all aspects of ADR including mediation and arbitration, as well as serving as a special master and neutral evaluator. He can be reached at jmcguire@jamsadr.com.

Effective March 2013, the United States joined most other countries to provide patent priority to the first inventor to file, rather than the first to invent. This is the latest change to U.S. patent law created by the Leahy-Smith America Invents Act (AIA). The impact of the first-to-file rule on private resolution of disputes through mediation is likely to be minimal since most patent disputes do not turn on the priority of competing claims for the same invention. Other changes created by the AIA, notably the ability to terminate post-grant review procedures by settlement, will make mediation matter even more in resolving patent disputes.

The AIA became law in 2011 as the first major overhaul of the U.S. patent system in more than 50 years. The general goals of the AIA are to make the patent process more efficient, more transparent and to allow greater public participation in the process so that good applications result in strong patents and weak claims are weeded out.

The primary advantage of mediation is to avoid the costs and risks of litigation. A secondary advantage is the ability to tailor the resolution of the dispute to meet the true interests of the parties. The range of possible solutions is far broader than the remedies available through a court in litigation. These concepts apply with equal force to IP disputes.

Frequently, mediation is used early in the resolution process for copyright, trademark and trade secret disputes with great success: three out of four settle at or soon after the mediation. Most patent cases are resolved without a trial, but patent cases tend to stay in the legal system longer and accordingly consume more corporate and legal resources. Though some courts require early mediation of patent cases (before claim construction), in many cases the mediation occurs later in the litigation process. Experienced mediators recommend early use of mediation and encourage participants to think of mediation as a process to help parties narrow the range of disputes and streamline the conflict management process even if some disputes will still require the expertise of the Patent Trademark Office (PTO) or the assistance of the federal courts.

Flexibility in the mediation process helps the parties settle claims that do not require the assistance of the PTO or the courts. The ability to terminate post-issuance challenges adds to that flexibility. Consider using mediation early for maximum control and effectiveness.

ADR to Help Administer Aid to Hurricane Sandy Victims

Posted on by Richard Birke
Richard Birke

Richard Birke

Natural disasters create a wide spectrum of pain and loss among a broad array of individuals and businesses and Hurricane Sandy is a recent example of the type of disaster. The federal government, through FEMA, has the ability to step in and administer relief programs, but sometimes the process is hampered by questions about who is entitled to disaster relief and who is not. These disputes can slow the process of providing relief and courts are simply not nimble enough to keep pace with rapidly evolving situations.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act was recently amended in late January to require that ADR (including binding arbitration) be used to decide who is eligible for disaster relief aid.

Section 1105(b) of the Act states (in pertinent part) that within six months, an ADR mechanism shall be created that allows any applicant to resolve dispute relating to eligibility for assistance.  This ADR mechanism may include binding arbitration by “an independent review panel.”   The panel must issue a written decision, but it may only set aside an Agency decision found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”  The standards are clearly quite high for a reversal of an agency decision, but nonetheless, the rights of applicants have been significantly expanded with the passage of this bill.

The results of the first 270 days of the program will be reported by the Comptroller General to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives to analyze the effectiveness of the program.

We send our best wishes to everyone who suffered losses as a result of Hurricane Sandy.