Dispute Avoidance Planning and Dispute Management

Jane Lambert

Most IP disputes arise out of conflicts between competitors and competition is what businesses do. In fact, businesses are compelled to compete by law. Disputes will therefore happen unless precautions are taken to avoid them. The risk of disputes can never be eliminated entirely because folk miscalculate and act emotionally but if a dispute cannot be avoided it can at least be managed.

How Disputes arise and what can be done to prevent them

Disputes arise because of uncertainty as to the existence, extent or nature of an IPR or because one party believes that the other lacks the means or will to enforce its rights or defend its interests. In order to minimize the first risk businesses should ensure that they have obtained appropriate legal protection for their most revenue generating intellectual assets. To minimize the second risk they should ensure that they had sufficient funding through insurance or otherwise to enforce their rights or defend their interests. Those arrangements should be reviewed periodically (at least once a year in most cases) to ensure that they are adequate.

No Need to patent every Invention

That does not mean patenting everything in sight. It costs a tidy sum simply to acquire and maintain just a UK patent alone and a great deal more to obtain patent protection abroad. Few businesses can afford that measure of protection or even need it. There is a lot of varied data on the Invention Success Rates | Odds of Inventor Success page of the Invention Statistics | Invention Data website on how many patents are actually worked but none of the sources quoted on that page suggest that more than a small proportion of the inventions for which patents have been granted make serious money for their inventors. A more promising approach is to identify the income generating assets for which legal protection is appropriate and ensure that the optimum legal protection is in place in the relevant market.

Appropriate Legal Protection

That may be a patent or even a family of patents in different patent offices for the same invention but in some cases it may be the brand that attracts customers to a business for which case a trade mark is more appropriate. Moreover, even of it is technology that provides a competitive edge it can be protected in different ways. Trade secret protection perhaps or in the case of computer software copyright in the source code.

Identifying Intellectual Assets

The exercise of identifying a business's principal income generating assets and considering how to protect them should involve patent and/or trade mark attorneys but it is much too important to leave to them alone. ideally, it should be carried out by a multidisciplinary team of professionals and company management.

Flagging up other People's IP

If carried out correctly the exercise should flag up possibly areas of conflict over competitors' IP rights giving business owners the chance to plan for dealing with such conflicts as may arise.

Dispute Resolution Provisions

If a dispute does arise there are various ways in which it can be resolved. The default option is the court system but litigation is expensive and takes place in public. There are alternatives such as arbitration, expert determination and of course mediation and direct negotiation. If you want to use any of those alternatives to the court you will need the co-operation  of the other side which is a lot easier to obtain before a dispute arises than afterwards. Review the dispute resolution provisions of your licences and other agreements and insert arbitration or other dispute resolution clauses if appropriate.

Dispute Planning

Litigation can be planned for and managed just like a power outage, IT failure or any other disaster.  Make sure that you have your teams of outside legal advisers in place and that you and your staff know what to do. Information and documents are supposed to be exchanged and parties are expected to attempt to resolve a dispute without recourse to litigation if at all possible. There are also some definite no-noes such as threatening litigation which can result in  you or your company being sued for groundless threats.

Budgeting

IP litigation is expensive anywhere, particularly expensive in common law jurisdictions like England and Wales. Unless a business can fund its own and potentially its adversary's legal fees comfortably out of its earnings it should consider IP insurance or some other form of funding. I have written quite a lot of articles on that topic over the years in this blog and elsewhere.  A good starting point is IP Insurance Five Years On 23 Oct 2010 NIPC Inventors Club.

Periodic Reviews

The nature and frequency of these reviews will depend on the nature and size of your intellectual asset portfolio but for most businesses it should take place at least once a year.

Further Information

If you want to discuss this article or dispute avoidance planning and management in general, call me on 020 7404 5252 during office hours or use my contact form.