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The New Age of IP Mediation in India


Time for the Argumentative Indian to step down?

They say that time is money, but clearly no one seems to adhere to this adage in the Courts of law in India. It’s no news that shortage of judges, inefficient administration, delaying tactics adopted by lawyers and several other factors lead to massive pendency of cases in Indian Courts.

About Delays in Indian Patent Examination and Litigation

IPR disputes meet the same fate. In particular, delays in patent litigation are quite stark. The few cases that go to trial take forever to decide. And even the interim stage is dragged on endlessly. Causing a Supreme Court judge to once recommend abolishing the interim phase altogether in IP cases. (For more on this, see our previous post here. See also our series of posts on interrogating interim injunctions.)

Previously, SpicyIP reported that out of 143 patent infringement suits filed between 2005 and 2015, only five judgments had been handed down! In another post, where I discussed a Himachal Pradesh High Court judgment revoking a patent grant, I had pointed out that the suit had been filed 13 years ago and had barely received attention by the Court during this time period.

Not only do these delays affect the individual who is looking for speedy justice, they also have a deleterious effect on the business ecosystem which relies on speedy and effective transactions and whose operations are encumbered by long-drawn out litigation.

It’s clear that we need better alternatives.

And the Solution is…

Something that is now widely labelled as “ADR” or Alternative Dispute Resolution and defined by the World Intellectual Property Organization (WIPO) as a “neutral mechanism” that allows “parties to solve their disputes outside of court in a private forum, with the assistance of a qualified neutral intermediary of their choice”. ADR today includes a wide variety of dispute resolution mechanisms including mediation, arbitration and negotiation. While arbitration has been around for a while in IP disputes, mediation is slowly gaining ground. In a mediation, the mediator acts as a neutral intermediary to help the parties reach a mutually satisfactory settlement of their dispute. It is a non-binding, interest-based procedure controlled by parties and is confidential in nature. It must be kept in mind that IPR disputes are usually complex, involve technical knowledge and are business-oriented, hence requiring quick and flexible solutions to minimize delay and costs. Mediation, therefore, provides a perfect mechanism of resolving IPR disputes since it merely focusses on parties’ interests and on reaching a settlement, rather than delving into the rights of the parties and declaring a “winner”. However, mediation has to operate in the shadow of “formal” law to some extent—so it may not work well in areas, where the jurisprudence is yet to be developed in some way by courts. Pharmaceutical patent disputes in India are a great example of this, and we cautioned readers on the move to mediate these initially by the Delhi High Court. (To see our previous posts on the Roche-Cipla mediation controversy issue, click here and here).

India: Rise in Mediation of IPR Disputes

There is no gainsaying the fact that mediation of IPR claims and disputes is slowly gaining traction in India. In a positive move towards adopting alternative dispute resolution mechanisms for resolving IPR disputes and in order to deal with overwhelming backlog, the Controller General of Patent Designs and Trade Marks, in collaboration with the Delhi Legal Services Authority (DLSA), had referred around 500 pending oppositions and rectifications in the Trademarks Registry(TMR), Delhi, to mediation and conciliation via a public notice, dated 31st March 2016, under the Legal Services Authorities Act, 1987. In furtherance to this, the DLSA also released a Standard Operating Protocol on 13th May 2016 for introducing uniformity in such mediation processes in TMR, Delhi.

Another positive step towards mediation of IPR disputes is the introduction of Section 12A in the Commercial Courts Act of 2015 (“The Act”) via Chapter IIIA of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018 (“The Ordinance”) to mandate pre-institution mediation and settlement in cases where no urgent relief has been sought. (Under Section 2(c) of the Act, “commercial disputes” include disputes arising out of intellectual property rights.)The mediation can be conducted by authorities constituted under the Legal Services Authority Act, 1987. It is required to be completed within a period of three months and it may be extended by two months. A signed settled agreement between the parties is to have the same effect as an arbitral award under the Arbitration and Conciliation Act, 1996. Further, the Central Government, on 3rd July 2018 notified Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 for standardizing such mediation processes. This Amendment and the subsequent notification of the Rules are welcome steps since they are in keeping with the original aim of the Act i.e., to bring about reduction in delay of cases. These steps will also encourage parties to stop depending on external agencies such as Courts for resolving IPR disputes and take the matter into their own hands.

A recent example of an IPR dispute in India quickly and effectively wrapped up through mediation: In what seemed to signal the beginning of yet another messy, drawn out legal affair in the fashion world, designer Vaishali Shadagule alleged that Sanjay Garg of Raw Mango had copied her designs and she accordingly accused him of plagiarism. In return, Garg filed a suit of defamation against Shadagule in the Delhi High Court. The issue was then mediated before the Fashion Development Council of India in accordance to the parties’ wishes and the dispute was amicably nipped at the bud within four working days of the institution of the suit!

With our Courts and our institutions repeatedly letting us down with their continued inefficiency and delay, the status quo doesn’t seem likely to change and people need to resort to other viable options. The following quote from Prof. Basheer’s post on a related issue sums up my views on why mediation may, in many cases, be a better alternative to litigation:

To take the adversary out of the adversarial! And to be civil to even those that oppose us.

[Edit: For those interested in reading more about ADR mechanisms in IPR disputes, WIPO recently released their updated guide on “Alternative Dispute Resolution Options for Intellectual Property Offices and Courts” which can be accessed here]

Image from here

2 comments.

  1. Avatarkodandaram madihalli

    I agree with the author’s idea of an alternate system for timely and proper redressal of disputes pertaining to IPR. As my experience and observations reveal, the most disappointing factor in the Indian democracy, during its last 70 years of journey after freedom, has been the poor performance of our judiciary. The Judiciary has failed to deliver the constitutionally assured, timely fair justice to the needy in our country. The equality of justice has remained a distant dream. The Judiciary’s performance have turned out to be poorer and poorer by day, as well as biased towards the rich and the powerful. The deserving victims rarely get justice on time, whereas the powerful criminals go scot free. The haves get their bails / reliefs by getting heard during midnight, as though they are the emergency situations, but hundreds of similar pleas of the languishing accused victims, remain unheard for months. Is that the judiciary has no time for them, because they cannot afford? The people of our country have suffered enough due to delaying tactics adopted by the majority of the judicial fraternity. The People are afraid to petition the courts to seek justice and relief, as they are sure that decisions will take generations to obtain. Any such effort will results in waste of money, resources, time and added agony. It is the right time we free the judiciary of this disease. The irresponsible approach and delay on the part of the judiciary has decayed the whole machinery. On the issue of delay, when the fates of criminal cases are so bad, of the civil disputes, less said the better. The fate of the IPR issues cannot be different. There is need of a revolutionary movement to remove the ‘imposed’ ‘corroded British system’. We, instead of continuing the corrupt and rotten system, need to evolve a novel scheme, for our native requirements, based on our experience. We must go forward and strengthen alternate dispute resolution mechanisms.
    But even by mistake do not believe that increase in the number of Judges in judiciary will result in fair and fast justice. The faulty system we have will result in increase of the corrupt practices, which will hinder the very objectives assured in our constitution. Instead go for a new law, which without any role for the judiciary, acts independently in the interest of fair Justice for all the concerned.

    Reply

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