Mediation Matters in IP Matters

James E. McGuire, Esq., a JAMS neutral in Boston, has extensive experience in all aspects of ADR including mediation and arbitration, as well as serving as a special master and neutral evaluator. He can be reached at jmcguire@jamsadr.com.

Effective March 2013, the United States joined most other countries to provide patent priority to the first inventor to file, rather than the first to invent. This is the latest change to U.S. patent law created by the Leahy-Smith America Invents Act (AIA). The impact of the first-to-file rule on private resolution of disputes through mediation is likely to be minimal since most patent disputes do not turn on the priority of competing claims for the same invention. Other changes created by the AIA, notably the ability to terminate post-grant review procedures by settlement, will make mediation matter even more in resolving patent disputes.

The AIA became law in 2011 as the first major overhaul of the U.S. patent system in more than 50 years. The general goals of the AIA are to make the patent process more efficient, more transparent and to allow greater public participation in the process so that good applications result in strong patents and weak claims are weeded out.

The primary advantage of mediation is to avoid the costs and risks of litigation. A secondary advantage is the ability to tailor the resolution of the dispute to meet the true interests of the parties. The range of possible solutions is far broader than the remedies available through a court in litigation. These concepts apply with equal force to IP disputes.

Frequently, mediation is used early in the resolution process for copyright, trademark and trade secret disputes with great success: three out of four settle at or soon after the mediation. Most patent cases are resolved without a trial, but patent cases tend to stay in the legal system longer and accordingly consume more corporate and legal resources. Though some courts require early mediation of patent cases (before claim construction), in many cases the mediation occurs later in the litigation process. Experienced mediators recommend early use of mediation and encourage participants to think of mediation as a process to help parties narrow the range of disputes and streamline the conflict management process even if some disputes will still require the expertise of the Patent Trademark Office (PTO) or the assistance of the federal courts.

Flexibility in the mediation process helps the parties settle claims that do not require the assistance of the PTO or the courts. The ability to terminate post-issuance challenges adds to that flexibility. Consider using mediation early for maximum control and effectiveness.