Three things to know about mediating licensing disputes

Zela “Zee” G. Claiborne is an arbitrator and mediator with JAMS in San Francisco. She can be reached at zclaiborne@jamsadr.com.

The number of IP disputes resolved in mediation has continued to increase as attorneys make efforts to find speedy resolutions and cut litigation time and cost for their clients. Only a small percentage of costly patent infringement cases actually go to trial; approximately 90 percent of them are settled.

Business people and their counsel recognize that mediation is a cost-effective, low-risk process with a remarkably high success rate when conducted by an experienced mediator. In mediation, parties avoid the risk of trial and remain in control of the resolution. Mediation is a good way to preserve business relationships. In order to have the best opportunity for settlement, counsel should consider the following three points:

1. Bring the right people to the mediation. That might sound like common sense, but it is surprising how many mediations fail because the decision-makers are not present. Mediation is a dynamic process that cannot be adequately summarized on the phone or after the fact to an absent decision maker.

2. In advance of mediation, consider some possible business solutions that might be acceptable to your client and to the opposition. Look at various options, giving thought to how the dispute looks to the other side and analyzing what their needs might be. Considering only a specific dollar range is a mistake. Your client’s views may shift after the mediator points out weaknesses of your client’s position.  You may learn something new to cause rethinking of the settlement position. The benefits could be great because many licensing disputes involve an ongoing business relationship. Options could include something other than money.

3. Finally, do not leave the mediation without preparing a short list of the deal points agreed upon.  The end of the mediation is not the time to draft a lengthy final settlement agreement with all the appropriate legal provisions. Decide who will prepare the first draft and when it will be sent to the other side for review. All client representatives should sign the short-form document so there is a legally binding agreement.

Mediation is an opportunity to resolve an IP dispute by reaching a settlement that makes more business sense than a litigated outcome. Use your professional skill to assist your client in making the most of the mediation opportunity.