- Introduction
The significance of Intellectual Property (IP) rights in the global economy is beyond doubt. With technology playing an increasingly crucial role in delivering products and services worldwide, and the rapid expansion of high-tech industries, the protection of patents has become more crucial than ever. Similarly, establishing and promoting a brand identity that transcends language and cultural barriers has significantly increased the value of trademarks. Moreso, the advent of innovative methods for transmitting, receiving, and storing various types of content, such as text, sound, video, and images, has broadened the scope of copyright legislation.
To ensure the enforceability of intellectual property rights, an effective dispute resolution mechanism is essential. While many still rely on traditional courts to settle IP disputes, arbitration presents a viable alternative that can save time and cost, while ensuring expertise in the relevant subject matter. At the same time, as IP assets are marketed and exploited across borders, disputes involving these assets are likely to implicate multiple jurisdictions. In this article, the author intends to explore the advantages of opting for arbitration instead of traditional courts in resolving intellectual property disputes, as well as the limitations of resorting to arbitration.
- What is Arbitration?
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.1
Arbitration is basically a legal process used to resolve disputes outside the court system, it involves the use of a neutral third party known as an arbitrator, who listens to both sides of the dispute and makes a binding decision. The decision made by the arbitrator is legally binding and can be enforced by the court as judgment.
- The Advantages of Arbitration in Resolving Intellectual Property Disputes
Arbitration provides multiple benefits compared to court litigation as regards intellectual property, and they include the following:
- Single Forum: One of the barriers to the enforcement of intellectual property rights in courts is multiple proceedings in different courts resulting in conflicts of laws and various outcomes in the proceedings. Under arbitration however, parties can agree to resolve their multi-jurisdictional disputes in a single arbitral forum, and with a properly drafted arbitration clause or submission agreement, there are no jurisdictional issues because the agreement to arbitrate constitutes submission to the jurisdiction of the arbitrators.2 It is a single proceeding under the law determined by the parties.
- Expertise: Judges who preside over intellectual property disputes in courts are mostly oblivious to the subject matters before them and may be unable to fully grasp the intricate issues and details involving intellectual property rights and protection. Parties who choose arbitration can appoint arbitrators that are experts in intellectual property, particularly as regards the right they intend to enforce.
- Confidentiality: Arbitration ensures confidentiality between parties. IP disputes may involve trade secrets and commercial benefits. These are better kept confidential to avoid being exploited by the public and the possible loss of proprietary rights, unlike IP litigation. Confidentiality in arbitration can vary depending on the jurisdiction and the contractual agreement between parties. Arbitration offers a more private and discreet alternative to resolving disputes compared to litigation in a court of law.
- Neutrality: Arbitration can be neutral to the law, language, and institutional culture of the parties. It can thus eliminate any home court advantage that one of the parties might otherwise enjoy in the context of court litigation, where familiarity with the applicable law and local processes can offer significant strategic advantages.3 Also, arbitrators must be impartial, even when the agreement to arbitrate allows each party to designate an arbitrator. In Nigeria for instance the arbitral tribunal is to ensure that parties are treated equally, and each party is given reasonable opportunity to present their case.4
- Autonomy: Arbitration provides the parties involved with greater control in managing the resolution process for their disputes. It allows them to make decisions regarding the governing law, the venue, and the matters in the proceedings. They can opt for either ad hoc or institutional arbitration. Furthermore, they have the flexibility to customize procedural rules, including those on the disclosure of information, to suit their requirements.
- Wide range of reliefs: For instance, the arbitrator has the authority to award damages in cases involving copyright infringement and he can grant varying reliefs such as impounding or destruction of infringed copyrighted work that were produced or used in violation of copyright.
- Finality and enforceability of arbitral awards: Unlike court decisions, which can generally be contested through one or more rounds of litigation, arbitral awards are not normally subject to appeal. Their enforcement across borders is greatly facilitated by the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards of 1958, known as the New York Convention5, which requires all 137 Member States to recognize arbitral awards without review of the merits.6
- Limitations of Arbitration in Resolving Intellectual Property Disputes
Arbitration also has its limitations, some of which are as follows:
- While there are various laws for the recognition and enforcement of arbitral awards, in some cases parties will still have to go through courts to enforce arbitral awards.7
- The results of an Alternative Dispute Resolution (ADR) procedure, an arbitral award, or a settlement agreement, are in principle binding only on the parties involved. So, for example, if a party wished to obtain a generally binding decision that the claims of a particular patent were valid/invalid, the only means of obtaining such a "public" decision would be a court judgment.8
- Consent is very key in arbitration and if one of the parties to the contract does not agree to submit to arbitral proceedings, then they cannot be forced against that party.9
- Another limitation is that, unlike courts that can handle criminal aspects of an IP dispute presented before them, IP disputes of criminal nature are not arbitrable. Arbitration would therefore not be an option for parties that find themselves in such situations and it can be a ground for setting aside an arbitral award if parties go ahead and resolve such disputes through arbitration.10
- Arbitrability of Intellectual Property Disputes in Nigeria
Arbitration practice in Nigeria is primarily regulated by the Arbitration and Mediation Act 2023,11 and though there is no specific provision in the act on the arbitrability of IP disputes, there are instances that would allow arbitration mechanisms to be deployed in IP disputes such as Contractual ADR provisions, court-ordered arbitration and specific legislation such as the Copyright Act of 2022 for instance which offers the choice of arbitration for addressing any conflicts arising from the exercise of rights outlined within the Act, with the methods of resolution being determined by mutual agreement between the disputing parties.12
Nigeria is also a signatory to numerous international treaties in intellectual property. These include: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention),13 the World Intellectual Property Convention ("WIPO") of 1970,14 the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"),15 Rome Convention for the Protection of Performers, Producers of Phonograms & Broadcasting Organization,16 etc. The essence of this is that Nigerian awards are recognized and are generally capable of enforcement in other contracting states, in the same way as domestic awards emanating from those states.
Also, a framework for collaboration has been established between the Nigerian Copyright Commission (NCC) and the World Intellectual Property Organization (WIPO). This framework was formed when a Memorandum of Understanding (MOU) was signed in December 2020. The MOU facilitates cooperation between NCC and the WIPO Arbitration and Mediation Center with the aim of promoting awareness about alternative dispute resolution (ADR) methods as alternatives to court litigation for resolving copyright disputes within Nigeria.17
- Conclusion
Intellectual property and arbitration are indispensable components of our modern legal framework, supporting innovation, creativity, and fair competition. Intellectual property laws safeguard the rights of creators, incentivize innovation, and promote economic growth. Arbitration, on the other hand, offers an efficient and specialized dispute resolution mechanism that addresses the unique challenges of intellectual property disputes. By combining the protective power of intellectual property laws with the flexibility and expertise of arbitration, we can foster an environment that encourages creativity, rewards inventors, and resolves disputes effectively, contributing to the advancement of the country and its peoples.
Footnotes
1 See, 'What is arbitration?' available at https://www.wipo.int/amc/en/arbitration/what-is-arb.html accessed on 6th July 2023.
2 Joseph P. Zammit and Jamie Hu, "Arbitrating International Intellectual Property Disputes" available at http://arbitrationlaw.com/files/articles/aaa_arbitrating_international_intellectual_property_disputes.pdf accessed on 05th July 2023.
3 See, 'Resolving IP Disputes through Mediation and Arbitration' available at https://www.wipo.int/wipo_magazine/en/2006/02/article_0008.html accessed on 6th July 2023.
4 See, Section 30 of the Arbitration and Mediation Act, 2023 available at https://www.lawyard.org/wpcontent/uploads/2023/05/Arbitration-and-Mediation-Act.pdf accessed on 9th August 2023.
5 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/new-york-convention-e.pdf accessed on 7th July 2023.
6 See, 'Resolving IP Disputes through Mediation and Arbitration' available at https://www.wipo.int/wipo_magazine/en/2006/02/article_0008.html accessed 6th July 2023.
7 See, Section 57 of the Arbitration and Mediation Act, 2023 available at https://www.lawyard.org/wp-content/uploads/2023/05/Arbitration-and-Mediation-Act.pdf accessed 9th August 2023.
8 See, Resolving IP Disputes through Mediation and Arbitration available at https://www.wipo.int/wipo_magazine/en/2006/02/article_0008.html accessed 6th July 2023.
9 See, Section 3 of the Arbitration and Mediation Act, 2023 available at https://www.lawyard.org/wpcontent/uploads/2023/05/Arbitration-and-Mediation-Act.pdf accessed on 9th August 2023.
10 See, Section 58 (2)(b) of the of the Arbitration and Mediation Act, 2023 available at https://www.lawyard.org/wpcontent/uploads/2023/05/Arbitration-and-Mediation-Act.pdf accessed on 9th August 2023.
11 Arbitration and Mediation Act, 2023 available at https://www.lawyard.org/wpcontent/uploads/2023/05/Arbitration-and-Mediation-Act.pdf accessed on 7th July 2023.
12 See, Section 37(7) of the Copyright Act, 2022 available at https://placng.org/i/wp- content/uploads/2023/04/Copyright-Act-2022.pdf accessed on 8th August 2023
13 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/new-york-convention-e.pdf accessed on 7th July 2023.
14 Convention Establishing the World Intellectual Property Organization available at https://www.wipo.int/wipolex/en/text/283833 accessed 12th July 2023.
15 Agreement on Trade-Related Aspects of Intellectual Property Rights available at https://www.wipo.int/wipolex/en/text/500864 accessed 12th July 2023.
16 International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations available at https://www.wipo.int/wipolex/en/text/289795 accessed on 13th July 2023.
17 Mediation and Arbitration for Copyright Disputes in Nigeria available at https://www.wipo.int/amc/en/center/specific-sectors/ipoffices/nigeria/ accessed 9th August 2023.
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