Commission thinks again about patent arbitration

In its latest paper on industrial property rights published last week, the Commission included alternative dispute resolution (ADR) in a list of concrete steps it can take to improve the workings of the European patent system.

The Commission said it wants to create a pan-European arbitration and mediation centre comprising mediators from all 27 countries in the EU, to help parties settle their patent dispute without having to go to court.

A recent Commission study argued that compulsory arbitration is the only economically viable solution, however many senior officials want to keep it optional.

Making it compulsory “could raise issues of access to justice”, said Margot Froehlinger, the top Commission official dealing with intellectual property issues at a Science Business seminar in May.

One option under consideration is to make arbitration or mediation voluntary, but to encourage judges to refer disputes to the mediation centre as a first step.

Avoiding the courtroom is especially important for SMEs, but also for big companies too, said Jonathan Zuck, president of the Association for Competition Technologies. Zuck has been lobbying for ADRs to be taken more seriously as a way of resolving patent disputes for many years.

It’s not just the financial cost of litigation; worse in some ways is the harm a courtroom dispute does to your relationships with the other party, who you often have to continue doing business with, Zuck said.

“It’s very hard for a business relationship to recover after a courtroom showdown. It’s much easier to keep things amicable if the dispute is resolved around a table with a mediator,” Zuck said at the Science Business seminar in May.

He welcomed the Commission's change of position towards ADRs.

The communication also touches on broader issues, in particular the creation fo a Community Patent and an EU-wide patent litigation area, but made no formal proposals to further their development.

These bigger challenges are under discussion in the Council of national government ministers, which is currently chaired by France.