Arbitration responds especially well to the needs of commercial dispute resolution mostly because it is private and confidential. Proceedings are not open to the public and awards generally do not contain reasons and as a rule, have been infrequently published. Arbitration is increasingly used to resolve intellectual property (IP) disputes based on its efficiency and expert-driven alternative to court. Intellectual property (IP) is the creation of the mind, such as inventions, literary artistic work names, and images used in commerce[1]. However, it is paramount to note that, not all IP disputes are arbitrable in every jurisdiction with some countries restricting arbitration for certain IP issues such as patent “validity”, and intellectual property disputes arising from the commission of crime are not amenable by private settlement.
Intellectual property infringement is a violation of the owner’s exclusive rights and can be categorized as either criminal (not arbitrable) or civil (arbitrable). This infringement can occur in cases involving copyright, trademark[2], patent[3], trade secrets[4], and industrial designs[5]. Many infringement disputes are civil matters, often involving remedies for unauthorized use. For example, in a civil copyright case, a dispute can arise between a software developer and a company that has used their software without a proper license. In response to allegations of copyright infringement, the developer may initiate arbitration proceedings against the company. During arbitration, an arbitrator or a panel of arbitrators will hear arguments and evidence presented by both parties. If the arbitrator rules in favour of the developer, they may award damages or other remedies based on the infringement of the developer’s copyright, in accordance with the arbitration agreement and relevant laws.
It is important to note the significance of an arbitration clause that specifies the dispute resolution mechanism in the business contract between the software developer and the company. An example of such a clause is as follows:
“When a dispute arises between the parties regarding [describe the nature of the dispute], the parties agree that the dispute shall be referred to and finally resolved by arbitration under the Arbitration and Alternative Dispute Resolution Centre Arbitration Rules of NICArb or the Arbitration Rules of the Nigerian Institute of Chartered Arbitrators. The number of arbitrators shall be [one or three], appointed by the Institute. The place of arbitration shall be [City and/or Country]. The language used in the arbitral proceedings shall be [specify]. The substantive law governing the contract shall be [specify].”
Arbitration in such cases provides a private and alternative method for resolving disputes outside of traditional court litigation. Unless otherwise agreed to by the parties, all information relating to a proceeding shall be kept confidential, except where disclosure is required (Section 76 (AMA) 2023). Privacy and confidentiality are interrelated concepts touted as major benefits of resolving disputes through Arbitration. In Myriad Group AG v. Oracle America, Inc. (2013)[6] Myriad Group Oracle was involved in a dispute over a software licensing agreement. The arbitration was conducted under the International Chamber of Commerce (ICC) rules. The arbitration proceeding and related documents were kept confidential, reinforcing that sensitive information disclosed during arbitration must be protected from public exposure. This case highlighted the importance of confidentiality in protecting property software and licensing terms.
ConocoPhilips v. Venezuela (ICSID Case No. ARB/07/30 Although primarily an investment arbitration case, this dispute involved significant IP elements related to the oil industry, including proprietary extraction technologies. The ICSID tribunal upheld the confidentiality of the documents from the arbitration proceedings, ensuring that sensitive IP information was not disclosed.
Given the complexity of intellectual property (IP) cases, the engagement of arbitrators with specialized knowledge and experience is essential for ensuring fair and well-informed decision-making. In arbitration, parties have the option to select arbitrators themselves or delegate this task to an appointing authority, the court, or an arbitral institution such as the Nigerian Institute of Chartered Arbitrators (NICArb). With a membership exceeding six thousand qualified arbitrators, NICArb offers expertise across various fields, including Intellectual Property. This allows the parties to have arbitrators who possess the necessary industry-specific and technical knowledge.
For instance, in the arbitration case Yahoo! Inc. v. Microsoft Corporation (WIPO Case No. D2000-0777), the dispute centered around similar domain names, with Yahoo! alleging trademark infringement by Microsoft. The arbitration proceedings were conducted under the rules of the World Intellectual Property Organization (WIPO). The appointed arbitrator, specializing in trademark law, swiftly identified key issues and applied relevant legal principles to reach a resolution. The decision required Microsoft to transfer the infringing domain names to Yahoo!, thereby safeguarding Yahoo!’s trademark rights.
The regulation of arbitration in Nigeria is primarily governed by the Arbitration and Mediation Act 2023. However, while this act does not explicitly address the arbitrability of intellectual property (IP) disputes, various circumstances allow for arbitration in such cases. These include contractual alternative dispute resolution (ADR) clauses, court-ordered arbitration, and specific legislation, such as the Copyright Act of 2022.
For instance, the Copyright Act explicitly permits arbitration to resolve disputes arising from the exercise of rights outlined within the act. The methods of resolution are determined by mutual agreement between the parties involved in the dispute. This provision underscores the flexibility of arbitration as a viable method for resolving IP conflicts, ensuring that disputes can be efficiently addressed in accordance with both statutory law and the parties’ contractual arrangements.
In conclusion, arbitration’s responsiveness to commercial needs, coupled with its confidentiality and expert-driven approach, makes it a compelling choice for resolving intellectual property disputes efficiently and effectively. As global reliance on intellectual property rights grows, arbitration continues to play a pivotal role in safeguarding these rights while providing a flexible and private alternative to traditional litigation.
[1] World Intellectual Property Organisation (WIPO)
[2] The protection of a registered mark or an expression that identifies a product to ensure no one not being a proprietor uses a mark identical or nearly resembling it to confuse the course of trade. Under section 67 of the Trade Marks Act, trademark means except in relation to a certification trademark “a mark used or proposed to be used in relation to goods for the purpose to be used in relation to goods to indicate
[3] Protection of invention that is new or essentially better than what was made before, or for a better way of making it. This protection is of great importance to technicians and technologists, medical scientists, lecturers and researchers and other professionals.
[4] Protection for confidential business information
[5] Protection for the visual design of objects.
[6] Myriad Group AG v. Oracle America, Inc (2013) https://www.findlaw.com accessed 13-07-24
