Alternative Dispute Resolution (ADR) for Intellectual Property in New Zealand

Recognizing the need for flexible and efficient solutions, IPONZ has collaborated with the World Intellectual Property Organization Arbitration and Mediation Center (WIPO Center) to raise awareness of ADR options in New Zealand.

The Strategic Advantages of ADR

The primary appeal of Alternative Dispute Resolution lies in its distinct departure from the rigidity of traditional litigation. ADR procedures are designed to prioritize time and cost efficiency, two factors that are often critical for businesses engaged in fast-moving markets. Unlike court proceedings, which can be public and adversarial, ADR focuses on preserving business relationships. This is particularly valuable in intellectual property cases where the disputing parties may have ongoing licensing agreements or collaborative partnerships that they wish to maintain.

Furthermore, ADR offers a level of specialized expertise that is not always guaranteed in general court settings. These procedures allow the parties to actively choose a mediator or arbitrator who possesses specific legal and technical expertise relevant to IP and technology. This ensures that the person facilitating or deciding the dispute understands the nuances of the technology or the specific IP rights at stake. That said, ADR provides a neutral forum. This is essential for disputes involving parties from multiple jurisdictions, allowing them to resolve cross-border issues through a single procedure rather than navigating multiple legal systems simultaneously.

Understanding Mediation: A Consensual Approach

Mediation is often the first step in ADR and acts as a flexible, non-invasive option for dispute resolution. It is defined as a non-binding, confidential, and consensual procedure. In this setting, a neutral intermediary, the mediator, assists the parties in settling their dispute. Unlike a judge or arbitrator, the mediator does not decide the outcome. Instead, they facilitate negotiation, helping the parties reach a settlement based on their respective business interests rather than strictly on legal positions.

The control in mediation remains firmly with the parties involved. The mediator cannot impose a decision, and the procedure may be terminated by either party at any stage if they feel it is no longer productive. If a resolution is reached, the settlement is usually recorded in a settlement agreement, which has the force of a contract.

One of the significant strategic benefits of mediation is its “safety net” nature. Choosing mediation does not close off other avenues for resolution. Because it is non-binding, mediation leaves open the option to proceed to court litigation or agreed arbitration if the parties cannot reach a settlement.

Arbitration, i.e. a Binding Resolution

For parties seeking a definitive conclusion without entering the court system, arbitration offers a robust alternative. Arbitration is a confidential and consensual procedure where the parties submit their dispute to one or more chosen arbitrators for a binding and final decision.

Unlike mediation, where the outcome is driven by business interests, an arbitration decision is based on the parties’ legal rights and obligations. The award rendered by the arbitrator is enforceable internationally, providing security for cross-border enforcement. However, parties must be aware that choosing arbitration generally forecloses court options. It is a substitute for litigation, providing a private, expert-led adjudication process that results in a final judgment.

The Role of the WIPO Center

The WIPO Arbitration and Mediation Center plays a pivotal role in facilitating these processes for New Zealand businesses. The Center can conduct ADR proceedings for disputes involving parties from New Zealand and offers crucial assistance in selecting mediators, arbitrators, and experts with specialized knowledge in IP and technology.

When parties are involved in an IP or technology dispute, the WIPO Center provides procedural assistance to them free of charge. This assistance is designed to facilitate direct settlement between the parties or to help them submit their dispute to WIPO mediation or arbitration as an alternative to court litigation. The Center’s experience is vast, having assisted a diverse range of entities including large businesses, inventors, entrepreneurs, artists, startups, R&D centers, universities, producers, and collecting societies.

Preparing for Future Disputes

Businesses can proactively manage potential conflicts by incorporating ADR mechanisms into their commercial agreements. To facilitate the referral of future disputes to WIPO ADR, the WIPO Center provides model contract clauses. These clauses can be included directly in contracts involving IP and technology, setting out a clear roadmap for dispute resolution before a conflict ever arises.

WIPO offers a Clause Generator tool to help legal teams draft these provisions accurately, ensuring that if a dispute occurs, the path to mediation or arbitration is pre-agreed and legally binding.

Managing Existing Disputes

ADR is not limited to pre-planned contract clauses. Even if parties are already facing a dispute and there is no existing mediation agreement, such as in cases of trademark infringement or matters already pending before the courts, it is not too late to utilize these tools.

In such scenarios, a party may submit a unilateral request for mediation to the WIPO Center. The Center can then assist the parties in considering this request. This mechanism allows parties to pause the escalation of a legal battle and attempt to find a resolution through a neutral facilitator.

Support for Small and Medium Enterprises (SMEs)

Small and Medium Enterprises (SMEs) constitute a significant portion of the IP landscape, representing 41% of the parties involved in WIPO ADR cases. Recognizing that SMEs may have different resource constraints compared to large multinational corporations, the WIPO Center has tailored its offerings to support this sector.

Experience has shown that mediation and expedited arbitration are particularly appropriate for resolving disputes involving SMEs. To make these services more accessible, the WIPO Center offers a significant financial incentive: a 25% reduction on its fees when an SME is involved in a dispute. This fee reduction reduces the financial barrier to accessing high-quality international dispute resolution services.

Case Administration and Logistics

The logistics of ADR are designed to be flexible and user-friendly. When initiating a proceeding, the parties may agree on the appointment of a mediator, arbitrator, or expert themselves, or they may request assistance from the WIPO Center to identify suitable candidates. These candidates can be selected from New Zealand or overseas jurisdictions, depending entirely on the specific requirements of the parties and the nature of the dispute.

In today’s digital business environment, geographic location does not need to be a barrier. Parties are free to choose where they want the mediation to take place, including the option to conduct proceedings remotely. To support this, the WIPO Center provides free online case administration options, which include an online docket for document management and videoconferencing facilities to host the sessions.

Finding Local Expertise

For disputes requiring local insight, New Zealand boasts a robust community of independent arbitrators and mediators skilled in intellectual property matters. Parties looking for local experts can utilize the directory provided by the Arbitrators’ and Mediators’ Institute of New Zealand Inc. By searching this directory and selecting “Intellectual Property” under the “Speciality Area” dropdown box, businesses can locate qualified professionals based in New Zealand or Australia to assist in resolving their disputes.

Alternative Dispute Resolution offers a sophisticated, flexible, and efficient alternative to traditional litigation. By leveraging the collaboration between IPONZ and the WIPO Center, New Zealand businesses can protect their intellectual property rights while maintaining the commercial relationships that drive their success.

Contact us for a free consultation.