If you have a dispute in relation to your intellectual property, litigation is not the only option when it comes to resolving the dispute. A potentially useful and often overlooked alternative, particularly for SMEs, is mediation. On 21 March 2013, the Intellectual Property Office (IPO) launched a modernised mediation service to help businesses resolve their IP disputes more cheaply and quickly.
In his review of 2010, Professor Ian Hargreaves identified a number of barriers facing SMEs looking to make the most of their IP. Probably not surprisingly, a major issue was found to relate to the cost of resolving disputes whether it be enforcing rights or defending against alleged infringements. Many SMEs fear exposure to unlimited legal costs and damages claims if a dispute does not go their way. Also, small businesses may often not be able to afford the time and effort associated with litigation which may detract from other important business development activities.
As part of the UK Government’s ongoing commitment to providing SMEs with the economic environment and framework in which they need to grow, the IPO Mediation Service was launched in 2006 in order to help companies and individuals to resolve IP disputes as quickly, effectively and efficiently as possible.
The IPO has a team of accredited mediators who can help to resolve disputes relating to patents, trade marks, registered design rights, unregistered design rights and copyright. For example, the IPO Mediation Service can help resolve disputes relating to:
- Infringement of IP rights,
- Disputes about IP licensing,
- Trade mark opposition and invalidation proceedings on relative grounds,
- Disputes over patent entitlement and copyright licensing disputes between collecting societies and users of copyright material regarding the terms and conditions of licences.
If both parties agree to try mediation to resolve the dispute, they will be required to sign a mediation agreement to confirm that both parties agree to: using mediation to try and resolve disputes; using one of the accredited mediators; and the location and sharing of costs of the mediation.
On the day of the mediation, the mediator will meet with each party separately, and together, to discuss the issues. Mediation discussions are confidential and cannot later be used in court if the dispute is not resolved. The mediator’s role is to help find a solution that both parties can accept, rather than make a decision on the dispute.
If an agreement is reached, the mediator will encourage and assist recording of the main points of the agreement in writing to help reduce the risk of further disputes about what may have been agreed.
Potential Advantages Of Mediation
- Cheaper than litigation – may allow a resolution without delving into the minute details of the dispute.
- Quicker than litigation – less time spent away from other business activities.
- Flexibility to discuss issues outside of purely legal arguments helping each party to gain a better understanding of the other party’s position. This may also help in cross-border disputes that are not just a matter for UK law.
- Creative solutions/compromises – the mediator does not impose a judgment or make a decision.
- Reality check – the mediator can help make parties aware of the consequences and risks of pursuing litigation without resolving the dispute beforehand.
- Confidentiality – whatever the outcome, it will remain private. This may help to preserve business reputations, unlike court judgments that may be made public.
- High success rate – for mediations that took place up until June 2012, the service had a ‘success rate’ of almost 80%.
- Expediting subsequent litigation proceedings – the Patents County Court has the power to adjourn a case for a specified period of time to encourage and enable the parties to use alternative dispute resolution, such as mediation. An unreasonable refusal to mediate prior to beginning legal proceedings can also mean that the party at fault does not recover all their legal costs.
March 2013 Changes
In June 2012, the IPO initiated a consultation to establish why mediation was used infrequently and what more can be done to assist SMEs in resolving disputes before they reach the court system. As a result of the consultation, the IPO has introduced a reduction in mediation fees and a pricing structure with the aim of ensuring that the cost of using the IPO Mediation Service is proportionate to what is at stake. This includes a telephone mediation option for low-value disputes.
For example, the basic guideline fee for one hour telephone mediation, suitable for an approximate claim value of £10,000 or less, is £55 per party. The basic guideline fee for an eight hour session, for an approximate claim value of £50,000 or higher, is £650 per party.
For more information, please visit the IPO website.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.