On Resolving Intellectual Property Disputes Through Arbitration

In view of the frequent international commercial contacts involving high tech, arbitration chosen as a means of objective and final adjudication of commercial disputes brings out its advantage to the best in the field of protection for intellectual property commerce. The paper discusses relative issues on arbitration for intellectual property disputes. Moreover, some advice is given for the development of intellectual property arbitration in China.Compared with litigation, arbitration brings out its advantages in resolving disputes of intellectual property. Arbitration is flexible, which fully reflects the intent of the parties. It is quick and less expensive due to the time and money it saves. It can maintain the corporate goodwill between the parties and meet the requirements of the parties for confidentiality. Furthermore, the arbitral award is more likely for overseas admission and implementation than court decision.Conventionally, in the field of Private International Law, disputes involving intellectual property are considered to be inappropriate for arbitration proceedings and should be decided by a court of law. With the development of economy and technology, the commercial disputes involving intellectual property increase consequently. In this situation, in order to resolve the disputes effectively, many countries extend the scope of issues appropriate for arbitration proceedings and admit the arbitrability of intellectual property issues by modifying their arbitration law successively. And some arbitration organizations accept the law cases of intellectual property. The arbitrability of intellectual property issue arising out of a contract dispute and the arbitrability of intellectual property infringement has been widely accepted. On account of public policy and administrative authority, intellectual property validity issues are excluded from arbitration all the while. After 1950s, many countries modify the definition of"public policy"making it more objective and quantized and put forward the concept of"international public policy", which results in the changes in attitude toward binding arbitration of intellectual property validity. 35 U.S.C§294 definitely regulates that issues of intellectual property validity are proper to arbitration proceedings, and the courts also provide for binding arbitration of copyright and trademark validity. However, on view of"public policy", the effect of arbitral award is limited. The arbitral award is final and binding only on the parties involved but shall have no force or effect on any other person. It also requires that notice of any award under section 294 be given to the commissioner of patents otherwise the award shall be unenforceable. And in the phase of implementation, the judicial review on the award shall be taken. No doubt, those regulations put an obstacle to the implementation of the arbitral award. Some countries, such as Italy, Argentina and Russia, still hold that issues of intellectual property validity are decided exclusively by the court of law. In a word, it is the tendency toward accepting the arbitrability of intellectual property validity by more and more countries. But it is to be slow in progress, because of different regulations on public policy among countries.It is necessary to discuss the issue of application of law for intellectual property arbitration, in virtue of recognition of arbitrability of intellectual property issues theoretically and practically. The paper mainly discusses the applicable law for arbitration agreement and substantive law for intellectual property. The law selected by the parties should be applied for arbitration agreement. When no selection is made by the parties, the principle of most closely related may commonly is used to decide the applicable law for arbitration agreement. Moreover, the law where the arbitral award would be admitted and implemented should be taken into consideration, due to the different regulations of arbitrable issues among different countries. Based on the principle of autonomy, the parties will select the substantive law for intellectual property. When no selection is made, the law should be decided by private international law, conflict rules or principle of most closely related.On the basis of analyzing the legislation and judicial practices of intellectual property arbitration in China, the paper gives some thoughts about some existing problems and put forward some advice.