Arbitration: International Commercial Dispute Resolution

Arbitration is the leading form of international commercial dispute resolution. However, public policy may be invoked to make certain subject matter inarbitrable. This article deals with one of these putatively inarbitrable areas: intellectual property. It examines from the point of view of general policy the question of whether, and if so, to what extent, there are limits on the subject matter of intellectual property disputes that may be regulated by arbitration. In addition, it surveys the current state of the law on the arbitrability of international intellectual property disputes in a selection of countries.

Although courts once often disapproved of party-driven dispute resolution that, in their eyes, circumvented judicial jurisdiction,

Kingston states in his book, “An important reason why intellectual property is far less effective for generating innovation than it could be is the excessively high cost of resolving disputes. This largely reflects the use of ordinary court arrangements to determine what are essentially technical issues.” Kingston also notes that in addition to the measurable costs of litigation, there also may be substantial unmeasured costs that take the form of “distraction, diversion of energy and misdirection of creativity that litigation imposes on innovatory firms.” Kingston proposed mandatory arbitration of patent disputes along with legal aid to the party that does not appeal the ruling to the courts. Kilb (1993) also recommended arbitration as a “…quick, efficient form of patent dispute resolution”...adding that “[A]n arbitration hearing before experts in the field allows the parties to avoid lengthy litigation that could leave the disputed patent out-dated before it reaches its

The long duration and high cost of patent litigation is primarily due to the prolonged period of discovery to address difficult technical issues and the costs of educating triers of facts sufficiently to understand the case, including costs of counsel and technical and financial experts. In principle, an arbitrator may be chosen who is already familiar with patent law and the technology associated with the particular patent(s) at