Mediating Intellectual Property Disputes

Today’s post comes from Alexander “Lex” Brainerd, a panelist in the JAMS San Francisco Resolution Center. Mr. Brainerd is well known for his ability to master complex facts quickly and has successfully resolved hundreds of mediations and arbitrations.

The acquisition and assertion of patents are important to protect innovation, in­vestment and creation of revenue. Defending those patents – through litigation – can involve high risk, expense, and business disruption. Although patent litiga­tion is a prime candidate for mediation, attorneys and cli­ents are sometimes skeptical.

Clients and attorneys who are reluctant to mediate pat­ent cases express concerns regarding whether or not mediation is a fit with the complex technology and issues often involved in today’s patent cases. They worry there will not be enough time in the process to consider these issues and that the mediator will just pass numbers be­tween the parties.  Mediators familiar with patent litiga­tion and armed with the right tools and techniques can address and overcome such concerns and produce a successful mediation.

Pre-Mediation Conference

Valuable work such as identification of crucial issues, discussion of logistic and personality problems, facilitation of vital information exchange, protection of confidentiality and establishment of procedures can be accomplished through pre-mediation conferences. While joint sessions can be time con­suming and risk creating strong emotions, they can be a valuable tool for educating each side about the other’s position about the position and often lead to productive dia­logue. However, if the parties are fierce competitors or have a history of personality conflicts, the risks might outweigh the benefits.

Mediation Statements

Statements should be exchanged between the parties so everyone has a clear vision of the other side’s case. Issues of con­fidentiality that arise can be handled in a confidential statement, let­ter or email to the mediator.

The Mediation Session

There are a few procedures and techniques that might enhance the possibility of a successful mediation in a patent case.

The first few caucus sessions should explore the critical issues with the me­diator to ensure that each party has a clear understanding of the other’s positions and appreciates the risks pre­sented. Initial caucus sessions should explore the facts and law relating to key issues, and identify each party’s strengths and weaknesses with respect to them.

For patent cases, it is vital that the plaintiff or defendant bring a proposed form of license to the mediation to allow terms and conditions to be discussed and resolved. This will prevent a potential set­tlement from failing for lack of specificity.

As caucus sessions move into dis­cussions regarding money and settlement structure, the mediator’s role is to deal with impasses by helping the parties explore alternative structures and solutions. During such exploration, a meeting between the executive decision makers can be extremely productive.

Post-Mediation

If settlement is not achieved at the first media­tion session, the mediator should work with the parties to identify a process and timetable to address needs and concerns, and establish a schedule for further negotiations. The parties may choose to schedule another mediation session or conduct further negotiations through conference calls or possibly a meeting between executives. Ideally, the media­tor should remain involved in the post-mediation process to assist driving negotiations to a successful resolution.