Secrets & Laws

Intellectual property (IP) disputes are ever more frequently being submitted to arbitration, and parties often raise questions about confidentiality. Of particular concern are issues surrounding patent disputes and the analysis of the compounds, formulas and processes they involve. Many IP disputes centre on techniques employed or business information, all of which are highly sensitive, and strict measures need to be implemented in the arbitration to protect the parties' rights.

The numerous benefits of arbitration range from the flexible nature of arbitral procedure, over which the parties have quasi-absolute control, to the ease of enforceability of arbitration awards and the fact that IPrelated issues can be resolved in a single set of proceedings rather than having to be litigated in every jurisdiction in which the IP right is allegedly infringed. Patent litigation on a large scale can be a drain on resources and produce unsatisfactory results. The mammoth Apple- Samsung patent dispute, for example, has involved over 50 lawsuits in nine countries that have in some cases produced inconsistent decisions.

Arbitration is not trouble-free. Potential perils of arbitration include the complexity of patent law, which can be difficult to manage for an inexperienced arbitrator; the uncertainty surrounding the application of res judicata in arbitration which may lead to separate arbitrations for each infringement; and a limited ability to appeal which may produce awards that deviate from accepted patent law (Ferguson, Cappella and Sandhu, 2014). Nevertheless, these dangers may be averted by selecting arbitrators and drafting arbitration clauses carefully and, on the balance, do not obviate arbitration's benefits.

One of the key perceived advantages of arbitration is confidentiality, of vital importance in IP disputes where parties are concerned about maintaining the secrecy of sensitive information. Issues may arise in the context of disclosure if parties invoke the confidentiality of certain information to refuse disclosing it to the tribunal or their opponents, who might require it in order to properly make their case. In these circumstances it is important to ascertain the extent of parties' disclosure obligations, to what extent documents' confidentiality can prevent disclosure and, on the other hand, how disclosure can be compelled.

Confidentiality: concept & definition

The meaning of confidentiality varies depending on the context: confidentiality may apply to the existence of the proceedings themselves, to the arbitral award and/or to documents used or referred to during the arbitration.

The confidentiality obligation which stems from the parties' agreement to arbitrate and not to divulge to third parties information which may be exchanged during the arbitration differs from the inherent confidentiality of some information, such as trade secrets. This inherent confidentiality has been recognised, for instance by the English court in the seminal case Michael Wilson & Partners v Emmott [2008] EWCA Civ 184, [2008] All ER (D) 162 (Mar) but there is no...

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